Grand Rapids will soon have an Area 52.
Robert Grooters Development Co. hopes to start construction on the first phase of a new project next to the Gerald R. Ford International Airport runways this fall. The entire project on Kraft Avenue, just off of 52nd Street SE, will be approximately 700,000 square feet in three buildings.
The company’s owner, Robert Grooters, said the outside of the buildings will be adorned with depictions of aviation history, with airplane art ranging from the Wright Brothers’ plane to the newest jet.
The Area 52 name is a play on the U.S. government’s secret Area 51 in Nevada and a nod to its location near 52nd Street.
“We like to have fun, too,” Grooters said with a laugh while walking on the nearly 50 acres of industrial space the company holds near the airport.
Grooters can laugh now as business is trending upward again following some hard times during the Great Recession, when “business basically stopped.”
The combination of the economy bottoming out and Steelcase shipping 11,000 jobs out of town left the industrial real estate market dry, with lots of empty buildings, Grooters said. A little more than eight years ago, Robert Grooters Development regularly maintained approximately 500 acres of land. It’s now working its way back up to the pre-recession levels.
The company owns developments of approximately 50 acres near the airport, 40 acres in Norton Shores, 85 acres in Walker and several acres near Tanger Outlets on 84th Street SE.
“As the economy cranks back up, we’re aiming to get back to our normal level,” Grooters said.
All the developments come in a standard, blank-slate building, many of which are 200,000 square feet, complete with utilities and loading docks so a company can move in without too much work. Construction costs vary based on the land type and property cost, but Grooters said RGD does its best to keep leasing costs to $3 triple net.
Costs are driven down by the volume RGD is constructing, allowing for lower construction costs and resulting in lower rents for tenants.
“They’re very flexible and designed to save companies money,” he said. “But once you’ve seen one, you’ve seen them all. We don’t want to be a little under our competitors; we want to be a lot under.”
RGD is finishing up a 100,000-square-foot facility for Stiles Machinery, a woodworking machinery manufacturer.
The company brought its production to West Michigan several years ago, landing in a 35,000-square-foot space owned by RGD. Since then, business has exploded and Stiles requested another 50,000 square feet from the development company. As construction continued, it blossomed into 75,000 square feet. A temporary tenant will move in until Stiles is ready to take the additional 25,000 square feet.
“It’s a good story for us, and it’s a good story for them,” Grooters said.
Grooters said placing a permanent tenant on one side of the building with a temporary tenant on the other is standard practice, allowing for an easy transition as the permanent tenant grows.
He said it was just a matter of time until industrial properties began to recover — aided by, at least in West Michigan, companies looking to bring production back to the U.S. to take advantage of some of the most skilled engineers in the nation.
Although property is the name of the game for a development company, Grooters said he’s driven by more than money — he wants the community to grow, too.
“We don’t just lease space,” he said. “We ask the clients what we can do to help them grow and develop.
“We aren’t here just for money. We’re here to help the community.”