West Michigan’s industrial sector remains a point of strength in the local commercial real estate market, with many employers hoping to expand in the region despite the lack of available space, which has prompted a range of new construction projects.
Across the region, 2.5 million square feet worth of industrial space was under construction as of the second quarter of 2022, according to brokerage firm JLL Inc.’s Industrial Insight report. Experts at the firm anticipate the construction pipeline to grow further given that the demand for industrial space far outpaces the current supply.
Several industrial projects taking place in the cities of Walker, Battle Creek and Coopersville showcase the diversity of projects underway.
Bay Logistics cold distribution center
- Location: 275 N. 68th St., Coopersville
- Construction manager: Pioneer Construction Co.
- Completion: July 2023
- Developer/owner: Bay Logistics Inc.
Pioneer Construction Co. broke ground last month on a 201,250-square-foot cold distribution center in Coopersville for Bay Logistics Inc. The company’s primary focus is the food and beverage industry, and it operates 14 distribution centers around Michigan with several out-of-state locations, said Kyle Haan, business development manager for Bay Logistics.
“The reason we chose Coopersville as the location is because it’s between Grand Rapids and the lakeshore, where we feel there are lots of opportunities,” Haan said. “We plan on hiring about 80-100 new employees at this facility. We’re building it for current customers and potential future customers.”
The building under construction will be able to hold about 35,000 pallets, Haan said. The project is taking a portion of the site’s 25 acres, which will allow Bay Logistics to add on another 150,000 square feet in the future, if needed.
“Everything has grown since the pandemic if it’s related to food and beverage,” Haan said. “We have other industries, but that has really spurred our food side of the business.”
Walker spec space
- Location: 3101 Fruit Ridge Ave. NW, Walker
- Construction manager: Wolverine Building Group Inc.
- Completion: Fall 2023
- Developer: Honeycrisp Ventures LLC
Honeycrisp Ventures LLC is embarking on a quasi-speculative industrial project at 3101 Fruit Ridge Ave. NW in Walker, which could go before the city for site plan approvals in November. The developer is engaged in “serious conversations” for a tenant interested in renting half of the 200,000-square-foot building, owner Ben Sietsema told MiBiz.
The company hopes to break ground on the project before the end of 2022 and have the building completed by fall 2023, Sietsema said. The site is 27 acres, but only about 12 to 13 acres of the property are buildable because a creek runs through the site, Sietsema said.
Project partners plan to seek tax incentives to support the build-out.
“We try not to do a purely 100-percent speculative project,” Sietsema said. “We try to come out of the ground with a company for at least a portion of the building that is extremely interested as a potential candidate.”
Honeycrisp Ventures plans to order some of the electrical equipment for the project before it even receives final approval because of extremely long lead times, Sietsema said.
“You take a risk on ordering things before the deal is said and done,” he said.
The Ada-based development company recently completed a similar project up the street at 3501 Fruit Ridge Ave. NW, which is now fully leased by ACME Marine, Irwin Seating and Material Handling Systems.
Battle Creek airport hangar
- Location: 15745 South Airport Road, Battle Creek
- Construction manager: Pioneer Construction Co.
- Completion: January 2024
- Developer/owner: Duncan Aviation Inc.
A $30 million expansion to Duncan Aviation’s existing maintenance hangar at Battle Creek Executive Airport broke ground this month. The project at the private airport will add 200,000 square feet and multiple buildings, including a vehicle maintenance center, a paint booth, upholstery hangar and support office space.
Customers who own their own airplanes can fly them to the Battle Creek airport to have them retrofitted or upgraded. The Lincoln, Neb.-based aviation company has 39 other facilities across the country.
“We’ve got a long history of doing projects in aviation,” said Chris Beckering, executive vice president at Pioneer Construction, which is managing the project construction. “Airplane hangars are typically very involved and we already own the cranes and equipment you need and we have the expertise. It’s a little niche for us.”
Duncan Aviation is Battle Creek’s largest employer with 660 workers, and the expansion project will increase the company’s capacity by 40 percent.
- Location: Mecosta County
- Construction manager: N/A
- Completion: 2029
- Developer/owner: Gotion Inc.
- Location: Holland, north of current plant at 875 E. 48th St.
- Contractor: W.G. Yates 7 Sons Construction Co., Philadelphia, Pa.
- Completion: 2024
- Developer/owner: LG Energy Solution Michigan Inc.
Two major battery plant projects announced this year for West Michigan would both support the burgeoning electric vehicle industry.
Most recently, global battery manufacturer Gotion Inc. identified property spanning two townships in Mecosta County for a $2.36 billion facility that could bring 2,350 jobs to the area. Referred to as a once-in-a-generation opportunity for the county, the project could spur further economic development throughout Michigan and help to retain talent from Ferris State University, project supporters say.
The project will include cathode and anode production facilities spanning more than 2 million square feet.
The Michigan Strategic Fund board last week approved project incentives that included $175 million in performance-based grants and a Renaissance Zone exemption valued at roughly $540 million.
Meanwhile, LG Energy Solution Michigan Inc. announced in March 2022 that it is expanding on vacant land that the company owns in Holland. The 1.4 million-square-foot project will support lithium ion battery manufacturing with a main manufacturing facility, material storage sites and a disassembly lab. The $1.7 billion expansion could create up to 1,200 jobs.
The Michigan Strategic Fund supported the project with $56.5 million in grants, a 20-year Renaissance Zone valued at roughly $132.6 million and a $500 million private bond inducement.