Darin Ferguson, Executive Vice President, Ferguson Commercial Real Estate Services

Businesses in the Des Moines industrial market are shifting from leasing to ownership, according to Darin Ferguson, executive vice president with West Des Moines-based Ferguson Commercial Real Estate Services. “The only industrial development is in the build-to-suit arena,” he says. “There are no speculative buildings under construction.”

During the past few years, the majority of new development has taken place in the northwestern suburbs due to the abundance of ground adjacent to office parks and due to the proximity of Interstates 80 and 35. This trend should continue with the Interstate Distribution Center, a 550,000-square-foot industrial facility being redeveloped by Super DSM, which is attracting national attention at below-market rates.

Panattoni Development recently completed an 800,000-square-foot distribution facility for Firestone on the northeast side of Des Moines. Firestone will vacate between 600,000 square feet and 800,000 square feet of industrial space in an older facility also on the northeast side of town.

“For the first time in decades, there are three properties in excess of 400,000 square feet available at the same time,” Ferguson says. “This may be a blessing in disguise. If proper marketing is done, many distributors and manufacturers may find new facilities at wholesale prices.”

Landlords are trying to attract any type of industrial tenant, but the majority of tenants that have absorbed space in the past 18 months have been trucking/logistic companies. “These companies typically only sign leases on short-term intervals,” Ferguson says.

Rental rates in Des Moines currently range between $2.10 per square foot triple net lease to $3.15 per square foot triple net lease. The vacancy rate is approximately 15 percent.

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