The old reliable real estate saw — “location, location, location” — isn’t quite as sharp as it once was. At least, that’s how Alan Lewis sees it.
He points to a big cut of commercial land along Interstate 26 that his company bought this year. A previous plan — to transform the Summerville parcel into a major port-driven business park — failed to launch. And before that, a luxury international automaker took a pass on the woody property after kicking the tires.
Location is still critical, Lewis said. But in some cases, a big, ambitious real estate deal requires a kicker, a sweetener — in this case, timing.
“Timing is everything,” he said.
Lewis is a development partner with The Keith Corp. The Charlotte-based company plans to invest about $175 million to build more than 2.9 million square feet of manufacturing and warehouse space at its Charleston Trade Center site, between the Summerville and Jedburg exits on the eastbound side of I-26.
The project kicked off last week with the groundbreaking for the $19 million first phase — a 307,350-square-foot shell that’s being built speculatively, without a committed tenant or buyer.
“We hope that ... turns into something much larger,” said Lewis, referring to the option of expanding the launch building to 923,000 square feet.
In all, the new business park can accommodate five to six modern industrial mega-structures. The biggest would top out at 1.3 million square feet.
The Keith Corp.’s plan is the third full-court-press effort to develop the Summerville site. Timing, among other circumstances, worked against the previous attempts.
The property was one of the battlegrounds in an epic economic development contest in the early 1990s. State and local officials optioned the land and neighboring parcels as they sought to lure a Mercedes-Benz plant to South Carolina. The German automaker picked Alabama instead.
The dirt came into play again, right before the last recession took its toll. Ross Perot Jr.’s Hillwood Investment Partners of Dallas acquired it and branded it as the Charleston Trade Center. New York-based Clarion Partners invested in the deal as well.
Then, the land sat idle. According to Lewis, the previous ownership group “decided they’d had enough fun and wanted to redeploy their energy somewhere else.”
The Keith Corp. was standing by. The North Carolina development firm already knew the lay of the land in that neck of Berkeley County. In 2006, it took a hard look at buying a former nursery on the other side of I-26 for an industrial park, but ultimately it balked at the sale price.
“We said ... ‘We’re going to wait,’” Lewis said.
It would hold out nearly a decade, including the recession. When the Charleston Trade Center site came up for sale, Lewis heard from Lee Allen of Jones Lang LaSalle, the real estate broker for the Hillwood-Clarion venture.
“He came to me and said, ‘Hey, you guys ought to look at this,’” Lewis said,
They did, and this time they were all in. The sale closed in January, weeks before a critical, final piece of the puzzle fell into place: the start of the Sheep Island Interchange project less than a half-mile down I-26.
“We feel that is going to be phenomenal for access to this park,” Lewis said.
Global shipping trends also factored into the equation.
For example, the fast-growing Southeast is adding residents and manufacturers, two huge drivers of business at the port.
Also, the expansion of the Panama Canal — now scheduled for a late June opening — is expected to bring bigger cargo vessels to Charleston once the local shipping channel is deepened. In a related move, the State Ports Authority is investing heavily to build a new container terminal on the former Navy base.
On paper, at least, it all adds up to new demand for new industrial real estate.
“I think that the companies that come here will have very strong ties with the port,” Lewis said.
Times — and timing — have changed for the Charleston Trade Center property since the Mercedes-Benz sales pitch of 1993 and since the last commercial real estate downturn.
As Byron Miller of the SPA said at Tuesday’s groundbreaking, the Charleston region has embarked on “a new era of shipping and transportation,” and that “requires a new era of facilities.”
Contact John McDermott at 843-937-5572.