By John Nelson
Southeast Real Estate Business: October 2023 | Volume 24, Issue 7
Growth Capital Partners (GCP), an industrial development firm based in Birmingham, Alabama, launched a $300 million investment vehicle in 2022 that supports land acquisition and industrial development in high-growth markets in the Sun Belt.
As part of the fund, GCP determined to develop PortNorth, a 402,825-square-foot cross-dock bulk distribution warehouse in Portland, Tennessee, approximately 30 miles north of Nashville. The 25.5-acre site, which is approximately two minutes from I-65 near the Tennessee-Kentucky border, is being developed into a Class A speculative building in line with the investment guidelines of its fund.
Michael Flynn, development manager at GCP, says that the developer broke ground on PortNorth in July 2022.
“At the same time that we were evaluating this site for potential development, we discovered that the adjacent property was for sale,” says Flynn. “We elected to move forward with both the development of PortNorth at 1211 Vaughn Parkway and the acquisition of the 750,000-square-foot property at 1171 Vaughn Parkway in 2022.”
PortNorth is situated in Nashville’s North industrial submarket, which is primarily used by bulk distributors. Flynn says the North submarket is less than 4 percent vacant with lower rents than the market average.
“The North submarket is the newest location for industrial growth in the Nashville market and is primed to see aggressive growth over the coming years,” says Flynn. “Tenants are beginning to recognize that the North submarket offers lower rates and superior transportation networks.”
PortNorth is designed to have 36-foot clear heights, 81 dock doors and four ramp doors, and Flynn says if the market pivots and calls for more shallow-bay products, the building can be easily demised. The project team includes general contractor Vardaman Construction, architect Carlile Coatsworth Architects Inc. and civil engineer Klober Engineering. Phelan-Bennett Development is GCP’s development partner, and Synovus Bank provided construction financing.
John Ward of Cushman & Wakefield’s Nashville office is handling the leasing assignment at PortNorth. Flynn says that the site’s proximity to I-65 has been a draw for prospective tenants.
“We have received a number of RFPs for this project over the last several months and are in active discussions with a prospect to lease a large portion of this facility,” says Flynn. “We anticipate fully leasing the facility within the next few months.”
Outside of PortNorth, GCP recently completed industrial projects in San Antonio and Houston earlier this year and are in various stages of completion for developments in Charlotte, Jacksonville and Houston.
“We expect that the remaining Fund II equity capital will be fully committed by year-end,” says Flynn. “We have begun raising equity for Fund III and hope to start investing those funds in similar projects around the Sun Belt in early 2024.”
Originally posted in Southeast Real Estate Business: October 2023 | Volumn 24, Issue 7.