Warehouse & Distribution

Farm co-op plows ahead with plans for former Toys R Us building

The vacated Toys R Us Kansas City distribution facility in Lee’s Summit made national headlines when the retailer folded in early 2018. However, brisk demand for large, tenant-ready industrial space meant that the property sold quickly.

“The amount of interest from all over the country was quite impressive,” said Joe Accurso, executive director of Cushman & Wakefield. “The availability of a high-quality, fully racked, industrial building of this size doesn’t come along very often.”

More than two dozen potential buyers toured the 725,000-square foot facility at 420 SE Thompson Dr. near U.S. Hwy 50 and Mo. 291. Coincidentally the first company to come calling, Mid-States Distributing LLC, emerged as the winning bidder for the 41-acre property.

“This facility was an ideal fit for our rapidly growing company. When we learned of its availability, we knew the stars were aligning for us in a very special way,” said Mid-States President & CEO Tom Mahlke. “The Toys R Us situation, while very unfortunate for many, became our great fortune. We worked hard and aggressively because this was a great location geographically for our members.”

The leading farm and ranch retail store cooperative plans to invest more than $35 million in the distribution center, which will service a network of 39 member companies and nearly 700 retail locations in the U.S. and Canada. Mid-States will commence operations in the facility by the end of the year with immediate plans to hire between 30 and 35 employees within the next month to launch the operation.

Lee’s Summit Economic Development Council President Rick McDowell said the high level of interest in the former Toys R Us space signals ongoing strength in the warehouse and distribution market and room for more activity in south Lee’s Summit.

“We had tremendous interest in that building,” McDowell said. “That leads me to believe that the addition of Mid-States will serve as a catalyst for ongoing business expansion and attraction in Lee’s Summit’s south side commerce corridor.”

Added Cushman & Wakefield’s Joe Accurso: “This property has created a wealth of opportunity for Lee’s Summit. I’m happy to see the building and area full of activity again.”

Olathe pioneer spec building sells to investors

The region's first large speculative industrial building at 167th Street and Lone Elm in Olathe has sold to a Dallas investment group. Developed by Kessinger/Hunter, the 600,000+ square foot warehouse and distribution facility at 22101 W. 167th St. in I-35 Logistics Park is fully occupied by FedEx and Bushnell Corp.

Developer Dan Jensen of Kessinger/Hunter saw the current industrial real estate wave coming over a decade ago and worked with Sun Life Assurance to get the building approved, financed and out of the ground.

“This was the first large spec building in our market. It was very rewarding to take this project from an idea back in 2007, through design, permitting, construction, leasing, management and finally sale ten years later," said Jensen, who brokered the building's recent sale to Sealy & Co.

When Jensen first proposed the Lone Elm spec, commercial real estate investment was in a deep freeze. Nonetheless, Jensen persisted and successfully made his case about the potential for growth in Kansas City due to its interstate highway access and central U.S. location. Today, the metro is one of the top 10 industrial markets in the country.

"It is incredible the way the Kansas City metro has exploded with quality big box distribution facilities over the past 10 years. I do not see this slowing down anytime in the near future," Jensen said.

Jensen, meanwhile, continues to ride the wave he helped create. Kessinger/Hunter just announced construction plans for its third warehouse facility in I-35 Logistics Park, a "semi-spec" project that is partially pre-leased. For those keeping track, that brings Jensen's team to just under 2 million square feet of industrial space developed in South Johnson County.

Holliday Fenoglio Fowler, L.P. (HFF) negotiated the sale on behalf of the buyer. Kessinger/Hunter will continue to manage the Lone Elm building.

Overstock.com leases 517,000 SF in KCK, plans to hire 200

Overstock.com has leased 517,000 square feet for a new distribution center at 5300 Kansas Ave. in Kansas City, Kan. 

Luke Burbank and Kyle Roberts with Newmark Grubb Acres in Salt Lake City led the national site search for Overstock.com. Mark Long and John Hassler with Newmark Grubb Zimmer teamed with Newmark Grubb Acres to provide assistance with lease negotiations in the Kansas City region.  The building is owned by BH Properties based in Los Angeles, California. 

“Selecting Kansas City as the home of Overstock’s newest fulfillment center allows us to offer over 99 percent of our US customers two-day shipping options, improving shopping experiences by getting orders into the customer’s hands as soon as possible,” said Carroll Morale, Overstock.com vice president of supply chain. “We’re extremely thankful for all of the support and collaboration we’ve received from state and local officials and the Kansas City Area Development Council during this expansion process.”

Check out the official news release from KC SmartPort!

Chris Gutierrez, president of KC SmartPort, led economic development incentive efforts with regional partners including the State of Kansas Department of Commerce and the Wyandotte Economic Development Council. Overstock.com will begin to move in immediately and will employ up to 200 people.

“Kansas offers a great central location and the best workers in the country for any company looking to relocate here. We are thrilled that a successful company such as Overstock has selected Kansas City for its latest distribution center,” said Kansas Gov. Jeff Colyer, M.D. “Opening for business in Kansas will provide Overstock.com with an excellent strategic location and creates hundreds of well-paying job opportunities for Kansans.”

Metropolitan Warehouse & Delivery trucks into KC market

New Jersey-based Metropolitan Warehouse & Delivery is expanding into the Kansas City market, leasing 20,000-square feet at 3518-3522 Enterprise Dr. near Interstate 435 and Interstate 70.

Metropolitan Warehouse & Delivery offers "white glove" in-home delivery and packaging of high-end furniture and antiques and works with retailers Costco and Restoration Hardware. The company has an estimated 2 million square feet of warehouse and distribution space under lease nationwide, including facilities in Wichita, Denver, and Dallas.

"The Kansas City lease rounds out the company's Midwestern footprint," said Ben Boyd of NAI Heartland, who represented Metropolitan Warehouse and Delivery in the transaction. "They try to set up distribution hubs every 200 to 300 miles, and proximity to the I-70 trucking corridor is obviously very strategic."

Metropolitan Warehouse and Delivery took occupancy of the building at Stadium Industrial Park Sept. 1. Mark Fountain of True North Industrial Realty, LLC represented the landlord in the transaction. 

"I believe that as more and more companies develop their 'last mile' strategy, they will find that Stadium Industrial Park is an ideal location," Fountain said.

Florida healthcare technology company expands to metro with new Lenexa distribution center

Convey Health Solutions has expanded into the Kansas City region with a new 38,000-square foot distribution facility at Lackman Business Center, 106th Street and Lackman Road, in Lenexa. The leased space will accommodate the company’s expected growth in the government sponsored healthcare market, allowing Convey to more than triple its shipping capacity.

“As we continue to provide end-to-end OTC solutions for major health plans in the Medicare and Medicaid markets, we want to operate in a central location to provide better service to our clients and their members,” Convey Executive Vice President Jonathan Starr said. 

Convey’s benefits program is designed to help members better manage their day-to-day health while at home. With volume projected to grow more than 50 percent in 2019, the company’s new location will include the latest logistics technology to increase efficiencies and streamline the distribution process.

Convey plans to hire 40 employees at its Lenexa facility. Phil Algrim of Jones Lang LaSalle represented Convey in the transaction; Joe Accurso and Rob Holland of Cushman & Wakefield represented the landlord. Additional partners included the State of KansasCity of LenexaKansas City Area Development Council, and KC SmartPort. 

“Kansas City continues to attract distribution centers due to our access to markets and customers throughout the U.S., and Convey recognized this locational advantage,” said KC SmartPort President Chris Gutierrez. “We expect to see another great year of locational decisions in KC with manufacturing, regional distribution and e-commerce facilities.”

“It is always exciting to welcome a fast-growing company like Convey Health Solutions to our region,” added KCADC President and CEO Tim Cowden. “The KC region continues to rise to the top of the list of cities that are ideal for logistics, supply chain and distribution operations and we’re honored to be the newest home for Convey.”

Additional comments from project partners:

“Our state’s central location always makes Kansas the prime choice for companies looking to locate a distribution center, and combined with the Kansas City area’s already strong concentration of healthcare service companies, Convey Health Solutions couldn’t have picked a better location for its new facility,” said Kansas Governor Jeff Colyer, M.D. “We are excited to have this pioneering technology company expanding in Kansas and look forward to our continued partnership.”

“We are very pleased that Convey Health Solutions has chosen Lenexa for their new facility,” said Lenexa Mayor Mike Boehm. “This operation will feature top of the line technology and will serve as a showcase for the industry. I think Convey will be a great addition to the region.”