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of 28 football fields, the largest
building of its kind ever built in metro St. Louis. This transaction alone, according to Cushman & Wakefield industrial broker
Rod Harkey, makes TRiSTAR party to the largest single real estate deal - as measured in newly developed square footage - in
metro St. Louis for the third consecutive year.
In 2001, TRiSTAR booked a build-to-suit deal for an 806,400-square-foot distribution center at Gateway for Procter &
Gamble. TRiSTAR later sold the building for $23.1 million to United Bank of Switzerland. In 2000, Dial Corp. occupied an
812,000-square-foot building at Gateway.
"Gateway is party to deals making the national headlines," Harkey said. "Companies are consolidating their distribution
centers, versus in the past where they would locate as many as 15 centers across the country. Now the trend is to establish
five 'super-regional' or regional distribution centers in locations relevant to the type of product or products they're
moving."
One company merging with or acquiring another, Harkey said, is another reason for eliminating redundant distribution hubs
and launching fewer but larger centers in ideal locations.
"Typically for national companies, one of these super-regional distribution centers is located in the central United
States, as a link in the chain of national connectivity," he said. "Companies these days are looking for maximum flexibility.
They want the new distribution centers to be tied into a strong national transportation infrastructure."
More than just access to an interstate is important, Harkey said.
"Within that maximum flexibility, multi-modal (forms of transportation) is really important to the users," he said. "If
they can choose which mode through which to ship product - truck, rail or barge, for example - they can leverage the various
options to get the least expensive, most efficient solution for moving their product."
In the not-too-distant past, Harkey said, metropolitan St. Louis really wasn't in the running when it came to grabbing the
attention of national manufacturers and distribution giants. But with the arrival of Gateway Commerce Center - which is still
being developed - all that has changed.
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"As far as site selection goes, our region really wasn't on the short list," he said. "Now, with Gateway, we're obviously a
legitimate choice. I think it's due not only to transportation systems and facility flexibility, but the huge available tracts
of ground."
Of the entire commerce center's 2,300-acre mass, Harkey said the giant distribution tenants already there only collectively
occupy about 300 acres.
Although Gateway's massive size puts it in three separate taxing boundaries - the city of Edwardsville, the city of
Pontoon Beach and the unincorporated town of Mitchell in Madison County - Harkey said the developing sites follow the boundary
lines of each of the municipalities.
To give Gateway boosted credibility among national buyers and brokers, renowned logistics consultant Art St. Onge performed
a network analysis, from which sophisticated marketing materials were created.
"Art St. Onge's statistics confirmed that St. Louis' and Indianapolis' metropolitan statistical areas are the leaders when
it comes to warehousing and distribution headquarters in the Midwest and are comparable in terms of land costs," Harkey said.
The life cycle of real estate deals of a Gateway magnitude, he said, are generally longer than two years, due to the many
layers of corporations looking to locate massive distribution headquarters.
"That's where we as brokers really have the opportunity to go into the deal and make a difference in terms of a potential
client's understanding," Harkey said. "Traditionally, brokers left these types of deals up to the client or the client's
broker to understand. It went something like, 'Here are the statistics - now you figure it out.' These days, to make the
national deals like Gateway happen, brokers need to do more, to not only present the numbers but to make them make sense to
the prospective buyer. And that's exactly what we're doing."
editor/publisher: Kerry Smith
email: ksmith@ibjonline.com
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