IRG Plans 1 MSF Build-to-Suit Project Near Port of Virginia

Port of Virginia. Image courtesy of Bruce Emmerling via PIxabay.com

Industrial Realty Group LLC will accommodate the logistics real estate needs of Unis LLC, a fulfillment and transportation services provider, with a new build-to-suit project on two sites within close proximity to the Port of Virginia. IRG will construct one industrial facility in Suffolk, Va., and another in Portsmouth, Va., for Unis to occupy under a lease agreement.

A strong driver of industrial real estate, the Port of Virginia posted its most productive year on record in 2021, having processed more than 3.5 million TEUs, marking a year-over-year increase of 25 percent, according to the Virginia Port Authority.

“Throughout the country, industrial space is in high demand and this market is no different,” Justin Lichter, vice president of Industrial Realty Group LLC, told Commercial Property Executive. “We are excited to offer tenants like Unis the space they need to thrive.”

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The facility in Suffolk will be an approximately 910,000-square-foot, cross-dock terminal. IRG has not disclosed additional details on the Suffolk project; however, the facility may be the two-building, 900,000-square-foot park the company had been planning at 271 Benton Road. IRG acquired the 72-acre Benton site in mid-2021 with the intention of building an initial phase of 450,000 square feet of speculative distribution space.

Roughly 20 miles away, in Portsmouth, IRG will construct a facility that will provide Unis with a 72,000-square-foot transload space. Both the Suffolk and Portsmouth locations will feature substantial trailer parking areas, a highly coveted feature for 3PL companies like Unis.

Slim pickings

Suffolk and Portsmouth are both part of the Hampton Roads industrial market, which is one of the tightest industrial markets in the U.S. As noted in a JLL report, in the fourth quarter of 2021, the average vacancy rate in Hampton Roads was just 1.6 percent for all classes of industrial product, and a mere 0.8 percent for Class A industrial product.

The conditions are not expected to change anytime soon. “Supply constraints will likely remain until 2023 as all development delivered [in 2021] or fully under construction had zero availability. These restrictions led to lease commitments in product yet to break ground,” according to the JLL report.

Unis, therefore, had few alternatives for facilities near the Port of Virginia beyond build-to-suit opportunities like that being provided by IRG. For IRG, it’s par for the course. Lichter added, “We will continue to provide creative solutions for job-creating companies in tight markets.”

Charles Dickinson of Harvey Lindsay Commercial Real Estate represented IRG in the build-to-suit lease transaction, while Jessica Chen of Kander Pacific stood in for Unis. IRG expects to commence construction of the Unis build-to-suit this spring and deliver the project in 2023.