Leasing and Development

Spokane Business & Industrial Park sees activity come back slowly

Journal of Business

By Mike McLean
Occupancy, revenues ascend, although still beneath 2005 levels

SPOKANE, WA- The Spokane Business & Industrial Park has seen its occupancy rate and revenues slowly improve over the last few years, although both measures have some ground to make up to reach prerecession levels, says Dean Stuart, director of marketing for Crown West Realty LLC, of Spokane Valley, which owns the 615-acre facility.

SBIP, headquartered at 3808 N. Sullivan, has a total of 5 million square feet of leaseable space in about 50 buildings. The Park currently has about 125 tenants.

"Given the economic climate we've had for the last six years, the occupancy rate is quite good at 91 percent," Stuart says.

Recent new tenants include Haywood, Calif.-based Coast Aluminum & Architectural Inc., which is leasing 24,000 square feet of floor space; Swedish company Sandvik Mining & Construction, leasing 20,000 square feet; and KGM Assemblers Inc., of Kent, Wash., leasing 12,000 square feet.

The peak occupancy at SBIP during Stuart's 13-year tenure with Crown West approached 96 percent in 2004 and 2005, he says.

After the recession hit, "It bottomed out in the neighborhood of 80 to 85 percent," he says. "In 2007 and 2008, a lot of companies went out of business, downsized, or left the market."

Now SBIP's annual revenues are trending upwards, though not at a steep rate, Stuart says.

Base lease rates fell by as much as 20 percent during the recession and have recovered only about halfway, he says, adding, "The pressure is still on keeping rents down."

That pressure can include tenant demands for a number of incentives and improvements.

"There are so many variables, every deal is different," he says. "The biggest concessions are in base rent and the length of lease terms."

Before the recession, five- and 10-year leases were the norm, Stuart says, adding that now, tenants are requesting one- or two-year leases.

"We don't like doing anything with less than three-year terms," he says. "If you have a property full of one- or two-year leases, it can be unstable, because there could be a lot of turnover all at once."

Stuart says SBIP rents are competitive, and Crown West regularly invests in the property to keep it updated.

Current monthly lease rates start at 18 cents per square foot for distribution and manufacturing space, he says. Annual rents for office and retail space range from $4.50 to $12 per square foot.

One good indicator that some current tenants are gaining confidence in the economy is they're expanding their current space, Stuart says.

Spokane-based companies Spokane Industries Inc., Hydrafab Northwest Inc., and Jubilant HollisterStier Contract & Manufacturing Services each recently expanded their respective leased space at SBIP by 20,000 square feet.

Spokane Industries now leases 260,000 square feet, Hydrafab leases 45,000 square feet, and Jubilant HollisterStier's expanded space at SBIP totals 40,000 square feet.

SBIP's largest tenant in terms of leased space is Inland Empire Distribution Systems, which occupies 300,000 square feet of floor space, Stuart says. On the other end of the scale, the park has tenants that lease spaces as small as 1,000 square feet, he says.

"We have a variety of different types of space," he says.

Stuart says one of the advantages the SBIP can offer is to increase space to accommodate tenants' growth.

"A lot of clients need more space in the middle of their lease," he says.

Other amenities at the park include on-site rail services and truck scales, Stuart says.

The tenant makeup in terms of industry sectors is 50 percent manufacturing, 40 percent distribution, and 10 percent retail and office.

"Manufacturing has gone down," he says. "In 2000, 65 percent of the occupancy was manufacturing."

Conversely, distribution and warehousing use has increased from 30 percent in 2000, and office and retail has increased from 5 percent.

SBIP has added more than 1 million square feet of space at the park since it bought the former U.S. Navy supply depot in 1997. Its most recently constructed building is a 110,000-square-foot distribution center, which was completed last year for American Tire Distributors Inc. in conjunction with a 12-year lease agreement with the Huntersville, N.C.-based company.

Stuart says Crown West has no plans on the horizon to construct more buildings at SBIP.

"At this point, we're out of available land," he says.

Stuart says Crown West is pursuing a number of prospects to lease additional space at SBIP. "I wouldn't count any now as highly likely, though," he says.

He asserts that demand is growing in the business community among companies that will need larger spaces, but many businesses are holding back due to uncertainty in the national political and financial outlooks.

"There's a lot of trepidation that's keeping people from taking action that they might take in a more certain environment," he says. "Sooner or later they are going to have to act, but right now a lot of people will just wait and see."

Crown West has a staff of about 40 people, fifteen of whom focus primarily on SBIP. "A lot of accounting is handled out of Spokane for properties all over the country," he says.

Crown West, a subsidiary of New York-based real estate investment company Petrus Partners Ltd., owns and manages about 3 million square feet of building space outside of SBIP.

"We have staff in Phoenix and Denver, and the East Coast is handled out of New York, he says.

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Leasing and Development

Manufacturer adds space, filter system

Journal of Business

By Jessica Valencia

Spokane Industries sees employment hold steady after sizeable jump last year

SPOKANE, WA- Spokane Industries Inc., a castings and metal fabricated products manufacturer recently installed a sizeable air filtration upgrade at one of its divisions, after expanding into available vacant space at its expansive quarters in Spokane Valley.

Spokane Industries occupies portions of three buildings in the northeast corner of the Spokane Business & Industrial Park, at 3808 N. Sullivan. The 250,000-square-foot facility is served by rail cars and big rigs that carry away finished products and also feed thousands of pounds of scrap metal into furnaces that will eventually turn the loads into molten metal.

The company, which operates three manufacturing divisions, employs about 300 people, says company spokesman Richard Palmer. That number is on par with 2012 but a sizeable increase compared with 2011, when it employed 230 people, according to data supplied by the company for the Journal's leading Spokane manufacturers list published in May of that year.

The company declines to disclose its revenue, but Palmer says the manufacturer is reliant on its biggest customer, Caterpillar, Inc., based out of Peoria, Ill.

"When Cat is doing well, we're doing well," Palmer says.

Palmer says all three divisions have performed well so far in 2013, adding that "The graphs have all been heading upwards over the least year."

The company installed the new industrial-sized air filtration system, also known as a baghouse, onto a building that its precision castings division occupies. That's one of three divisions that Spokane Industries operates.

Palmer declined to disclose the cost of the system.

The upgrade enables the company to filter out fine particulates and other pollutants generated in the production process at that division, improving the comfort and safety of its employees, and more than triples the filtration capacity of the former system, the company says. The new filtration system installed earlier this year is in addition to a much smaller air filtration system it had been using previously.

The system, situated on the northern side of the precision castings building, is a square blue tower that stretches to the roof of the plant. It enables the manufacturer to filter particulates out of air in a recent 10,000-square-foot expansion into existing vacant space at the building, in addition to a space it currently uses at the plant.

Along with the precision castings division, the company's two other divisions are steel castings division, which generates about two-thirds of the company's revenue, and the metal products division.

The steel castings division, the company's oldest division, focuses on making metal castings of parts for the construction, mining, and transportation industries, among others, he says.

The manufacturer also casts wear parts, which are parts used in heavy machinery that wear down over time due to continual use and friction, such as steel bars used to crush rock. Those bars can be melted down and recycled into other metal products, he says.

The precision castings division, Spokane Industries newest division that formed more than 20 years ago, manufactures much smaller metal parts used in applications such as hinges for dental office chairs and the articulating arms that hold dental tools, Palmer says. It also manufactures small wear parts used in the mining and construction industries in different types of metal, including stainless steel and brass parts that are formed using wax and ceramic molds.

The third division, created more than 30 years ago, specializes in steel tanks used by wineries and breweries. It also builds vessels for more industrial purposes, such as truck bed water tanks and fuel tanks.

"The metal products division, they live and die by the grape growing season," Palmer says, adding that its other customers help supplement its business with wineries. The tanks can be made as large as requested by a customer - as long as it's able to be rolled out through the division's roughly 20-foot wide bay doors, he says.

Palmer says Spokane Industries took a hit during the recession, particularly when Caterpillar began cutting back on orders because of the economy.

"Our biggest customer just went away," Palmer says of Caterpillar during that time. "You don't know if it's going to come back."

Palmer says the company has since started to recover due in part to an increase in international sales.

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Leasing and Development

Absco Alarms anticipates continued growth

Journal of Business

By Mike McLean
Absco Alarms anticipates continued growth as it debuts second outlet here

SPOKANE, WA- Absco Alarms Inc., a Lynnwood, Wash.-based supplier of security surveillance systems, has leased 1,600 square feet of space in the Spokane Business & Industrial Park at 3020 N. Sullivan, in Spokane Valley, where it has opened a Spokane sales and installation outlet says Erick Slabaugh, Absco's CEO.

The company specializes in providing security systems for commercial, industrial, and government campus applications, Slabaugh says.

"We've done work in Spokane over the years, although we haven't had a physical presence in Spokane," he says.

Dean Stuart, director of marketing with the Spokane Business & Industrial Park, and Sam Morse, of the Spokane commercial real estate brokerage Cantu Commercial Properties LLC, negotiated the lease.

Absco currently employs a sales person and an installer at the Valley location, and likely will hire more people here before year-end, Slabaugh says.

"I think we'll add another salesperson in the next couple of months and then a couple of technicians," he says. "The volume we're doing east of the mountains is continuing to increase."

Slabaugh says Absco's 2012 revenues were 57 percent higher than the year-earlier revenues, and he's expecting another increase this year of at lease 33 percent.

The Valley location is Absco's second outlet and the company hopes to open additional outlets, he says.

"We got some expansion plans over the next couple of years," Slabaugh says. "The next location probably will be in Portland, but we're still doing market research."

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Leasing and Development

Coast Aluminum & Architectural Inc. leases 24,000 SF

Journal of Business

By Mike McLean

Coast Aluminum & Architectural Inc., a Hayward, Calif.-based metal products distributor, has leased 24,000 square feet of space in the Spokane Business & Industrial Park, at 3808 N. Sullivan,where it has opened a warehouse and sales office. Chase Breckner, of the Spokane Business & Industrial Park, and Vic Plese, of Plese Realty LLC, handled the transaction.

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Leasing and Development

Bartlett Motors moves into The Spokane Business & Industrial Park

Journal of Business

By Mike McLean

Bartlett Motors, a wholesale auto brokerage, has leased 5,400 square feet of space in the Spokane Business & Industrial Park, at 3808 N. Sullivan. Chase Breckner, of the Spokane Business & Industrial Park, negotiated the lease.

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Acquisition and Investment

Gladden Farms sold to NY developers

Inside Tucson Business: News
Roger Yohem,

The last remaining undeveloped parcels in the massive 1,350-acre master-planned community of Gladden Farms in Marana have been acquired byPetrus Partners Ltd. of New York at an undisclosed price.

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Acquisition and Investment

Petrus Partners acquires Gladden Farms; Dean Wingert and OK Rihl join the Petrus Group from Forest City Enterprises

Tucson, AZ – Petrus Partners Ltd. (“Petrus”) has acquired the Gladden Farms master-planned community, which includes 500 undeveloped residential lots in Phase I, and in Phase II, 370 acres of entitled residential land planned for 2,345 residential units and 123 acres of commercial property. Gladden Farms is located in the town of Marana, 24 miles northwest of the Tucson central business district. The seller was the Forest City Land Group, a subsidiary of Forest City Enterprises, Inc. (“Forest City”). Gladden Farms is Petrus’ 13th residential land acquisition in Arizona since 2008.

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Leasing and Development

WAXIE Sanitary Supply to open

Ed Clark's How's Business Report

WAXIE Sanitary Supply has leased approximately 4,000 square feet of space in Building 25 of the Spokane Business & Industrial Park at 3808 N. Sullivan Road, Spokane Valley. Their primary business at this location is warehousing and distribution of sanitary maintenance supplies.

WAXIE Sanitary Supply has 21 Inventory Centers strategically situated in nine western states. Other locations in the northwest are Seattle, Portland, Boise and Idaho Falls. Each inventory center carries a full supply of sanitary products, janitor supplies and equipment. The website is

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Leasing and Development

Schweitzer Labs opening Valley office

The Spokesman Review

From staff reports

Schweitzer Engineering Laboratories will open a Spokane Valley office in September.

It is the company's first office in Spokane County. About 40 employees commute from the Spokane-Coeur d'Alene area to Schweitzer Engineering's Pullman headquarters, and many of them could work at the new office, company spokeswoman Tammy Lewis said.

The engineering and manufacturing company is renovating a 7,000-square-foot office space at 3808 N. Sullivan Road. The company will lease the space - which had been a National Car Rental office - from Crown West Realty, according to a Monday news release from Schweitzer Engineering.

The new office will house research and development functions.

Dave Whitehead, vice president of research and development, said it makes sense for employees to "work in the office nearest to their homes," if their job function allows it. Within the past year, Schweitzer Engineering built a 109,000-square-foot manufacturing facility in Lewiston, also largely to accommodate commuting employees. Some 132 people work there.

The Spokane Valley office will accommodate up to 48 people.

Schweitzer Engineering, which manufactures protection, monitoring and automation devices for the electric power industry, is owned by its employees.

Lewis said decisions about further expansion in Spokane would be governed by whether "it makes sense to our customers and our employee owners."

The company hasn't had trouble recruiting to Pullman, she said.

Schweitzer Engineering employs more than 3,400 people worldwide, the news release said. About 1,900 people work in the company's 11 buildings in Pullman.

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Leasing and Development

A growth in inventory

Journal of Business
By Treva Lind

Spokane Valley provider of storage, distribution reports uptick recently

SPOKANE, WA-Inland Empire Distribution Systems Inc., a Spokane Valley-based warehousing and distribution company, has seen a rise in the inventories it handled at the end of 2011 and early this year. It's the fastest growth pace since the recession hit about four years ago, says Jim Ewers, the company's president and CEO.

The privately-held enterprise also has plans to expand into other Pacific Northwest cities by next year, Ewers adds, although he declines for competitive reasons to say specifically what cities it's targeting.

IEDS is a large third-party logistics provider of warehousing, distribution, and transportation services with its headquarters in the Spokane Business & Industrial Park, at 3808 N. Sullivan. The majority of its 60 employees are in Spokane, but it also has operations in Pacso and Lewiston.

In the first quarter of this year, Ewers says, the company saw a 14 percent year-over-year revenue growth. He says it also experienced significant growth in the fourth quarter of last year, but that the pace of distribution and inventory services has also slowed somewhat for this quarter.

"We surpassed our projected revenue," Ewers says, about the first-quarter 2012 results. "We've seen a surge in distribution in addition to growth in inventories. We've seen inventory coming back from the downturn of 2008 and 2009. During a recession, manufacturers, wholesalers, and distributors will pull back inventory very quickly."

He says typically, companies want to see inventory turning fast or have solid projections that will do so before they're willing to stock up significantly.

"When there's an uptick in activity with inventory, it's a pretty good market-leading indicator," he says. "This past recession was so severe that a lot of inventory we saw was what you'd consider hand-to-mouth, which means manufacturers make just what they're confident will turn."

The company provides services for clients in four market sectors: industrial, forestry, chemical, and consumer grocery products.

For the industrial sector, its service related to the aerospace industry has become robust, Ewers says, but he adds that the aerospace segment never really slowed during the recession. "I'd say for a good three, four years, it's been good," he says.

Additionally, a Canadian company recently became the first customer to use a foreign trade zone established in late 2002 at the IEDS Spokane Valley site, which has 324,000 square feet of warehousing space.

The Spokane International Airport's board of directors first established a foreign trade zone here in 1997 in hopes that it would be an economic development tool, and later extended the zone to IEDS in Spokane Valley.

"We have a Canadian customer utilizing our foreign trade zone and that moved 2,000 tons of sugar into our operations in Spokane between December 2011 and February of this year," Ewers says, adding that equates to about 85 semi-truckloads.

Foreign trade zones are established throughout the U.S. to allow a company to defer duties, which are taxes on imports, until that company is ready to ship its products elsewhere. IEDS works closely with U.S. Customs and Homeland Security in the handling of inventory, Ewers adds.

As the company progresses through the second quarter, Ewers says the company and other U.S. third-party logistic companies are seeing inventory leveling off.

U.S. wholesalers restock inventories in March, but at a slower pace than in earlier months, a recent graph in the Wall Street Journal showed.

An accompanying explanation cited U.S. Commerce Department data that the value of inventories climbed 0.3 percent from February and 8.4 percent from a year ago to $480.4 billion. "Companies have been restocking goods such as vehicles and lumber since last summer, thanks to higher sales and increased confidence. But that restocking appears to be easing," the graph explanation said.

Ewers adds that the one reason given by industry experts for the slight slowing of goods is a warmer East Coast winter, so a number of goods that typically move in the spring already have been distributed.

He says that other experts forsee a cautious pace of economic recovery because of the federal debt and its potential impact on taxes, interest rates, and inflation.

What's going on in the marketplace has impacts as well, Ewers says.

"It's usually someone at the end of the market who is buying less," he says. "The market slows down, so it makes it more difficult to forecast inventory levels."

IEDS handles goods for manufacturers, wholesalers, and distributors. Items it handles include forest products and building materials, as well as finished goods that go directly into the retail market and raw materials that go to manufacturers.

For the industrial sector, IEDS typically handles raw material for infrastructure projects or manufacturing, such as steel that goes into building bridges, and steel coil for furniture.

Kimball Office, which has a furniture manufacturing site in Post Falls, is one customer of IEDS, as is Kaiser Aluminum Corp.'s Spokane Valley Trentwood Works plant.

Beyond traditional warehouse services and storage, IEDS offers inventory programs, packaging, and cross-dock loading, which is a practice in logistics of unloading materials from incoming semi-trailer trucks or railroads and loading those materials directly into outbound trucks, trailers, or railcars, with little or no storage in between.

Secondary railroad lines from both the Burlington Northern Santa Fe and the Union Pacific Corp. lead into the company's Spokane Valley facilities for individual railcar loading and unloading.

"We have one of the few locations in the entire Pacific Northwest that's serviced daily by both railroads," Ewers says.

He says more than 100 railcars a month are loaded or unloaded at its Spokane Valley facilities. Goods may be put in storage or loaded immediately onto semi-trucks.

The company provides less-than-truckload delivery within a 150-mile radius of Spokane, as well as freight management, which is a brokerage transportation service to arrange transport of goods to any point in North America.

The company employs18 truck drivers among its 60 employees, in addition to a handful of contract truck drivers.

Ewers says that regionally the company has more than 500,000 square feet of combined space, with a mixture of leased and owned facilities.

In addition to five warehouse facilities that it operates here and two rail yards, the company owns 30 acres of rail serviced property at the southwest corner of Flora Road and Trent Avenue, at the northeast corner of the industrial park, for future expansion of its rail service facilities, he adds. The Pasco operation includes five warehouses, while the Lewiston office services a transportation contract IEDS secured in 2008 with the consumer products division of Potlatch Corp., which now operates under a spin-off company, Clearwater Paper Corp.

IEDS was founded by Ewers' dad, Bert Ewers, in 1983.

Today, it's led by Jim Ewers and two brothers, Dan Ewers, general manager in Spokane, and Matt Ewers, vice president of business development, also based in Spokane.

Ewers claims IEDS is the largest third-party logistics storage and distribution provider in Eastern Washington, Idaho, and Montana. "There may be some companies who do part of what we do, but don't provide all the services or serve all the market sectors we serve," he asserts.

Looking ahead, Ewers says the company had aspirations prior to the recession to expand its operations, but now sees that happening because of its clients requests.

"We have customers who would like us to do that," he adds.

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