Nike, the sports retail and manufacturing giant, is again expanding in St. Charles County.
The company has signed a lease to occupy nearly 250,000 square feet of industrial space in a building at 101 Interstate Drive in Wentzville.
The building is owned by SparrowHawk Real Estate Strategists, a real estate investment firm based in Houston. Terms of the deal were not disclosed. According to JLL, typical leasing rates in the St. Charles County market hover near $4.60 per square foot. JLL’s Managing Director David Branding helped broker the deal on behalf of SparrowHawk.
Officials with Nike did not respond to requests for comment.
The space was previously occupied by Wainwright Industries, which moved last year into the 1.3 million-square-foot Wentzville Logistics Center as it expanded its operations to supply the General Motors plant nearby.
The Wentzville warehouse into which Nike will move will support its Air Manufacturing Innovation (MI) unit, which in late 2017 started on a 75,000-square-foot expansion of its factory at 8 Research Park Drive in St. Charles County.
The 222,575-square-foot plant in Missouri Research Park employs about 640 people and complements a plant near Nike’s corporate headquarters near Portland, Ore. Construction of the expansion is expected to be completed mid-2019.
Nike Air MI, a subsidiary of Nike, also makes custom plastic products for customers outside of Nike. Originally founded in 1964 as Tetra Plastics, Nike purchased the company in 1991.
The move to Wentzville also leaves an approximate 120,000-square-foot vacancy in Chesterfield. Scott Seyfriend, a broker with Pace Properties, who markets that space, said the vacancy should receive a great deal of interest because of its location.
SparrowHawk has been active this year in buying industrial properties. In February, it acquired a 500,000-square-foot warehouse in Sauget, Ill., for nearly $17 million. Then in March, it spent $3.5 million to acquire a 84,500-square-foot industrial facility in Park 370 in Hazelwood. In all, SparrowHawk owns nearly 1.5 million square feet of industrial space in the St. Louis area.
“We’ve been active in buying and selling in the St. Louis market since the early 2000s, and recently over the last few years, we’ve re-engaged with the market,” said Alfredo Gutierrez, president of SparrowHawk. “When you look at the Midwest markets St. Louis competes against, St. Louis fares well in both rental rates and vacancies. But most importantly we are seeing rental rates driving up more so than some of the other competitive cities like Indianapolis or Columbus (Ohio).”
Vacancy in St. Louis’ stock of industrial real estate has declined steadily over the last five years to 5.1 percent currently. Average asking rates have climbed to $4.15 per square foot, according to research from JLL.
A surge in speculative warehouse construction over the last two years in big logistics parks in Edwardsville, Hazelwood and St. Charles County has added more than 10 million square feet of new space to the market. A sign of good times, all of it has been absorbed as massive businesses such as Amazon have broken into the market.
Going forward, there’s about 2.5 million square feet of industrial space under construction and an additional 3 million or so on the drawing board.