HEARTLAND SNAPSHOT, MARCH 2005

Des Moines, Iowa Industrial Market

Dick Powell, Vice President and Sales Associate, CB Richard Ellis/Hubbell Commercial

Larger inventories of available space will continue to put downward pressure on industrial lease rates in the Des Moines area, according to Dick Powell, vice president and sales associate with CB Richard Ellis/Hubbell Commercial in West Des Moines. The market will continue to be highly competitive with very little, if any, new speculative space delivered in the foreseeable future.

During the last 18 months, the market has experienced smaller- to medium-sized developments ranging from 20,000 to 50,000 square feet. No major developments have taken place, with the exception of the 850,000-square-foot industrial distribution facility that was delivered and occupied by Firestone.

The northwest suburbs have experienced the majority of industrial development. During the last few years, developers have acquired available ground and constructed speculative facilities that range from 80,000 to 150,000 square feet. “The primary reason for the growth in this area is because of the availability of ground, decent interstate accessibility and a growing population,” Powell says.

One of Des Moines most significant recent leases occurred when The Jacobson Warehouse Company leased more than 180,000 square feet at 5701 Park Avenue. The range for rental rates in the Des Moines area is $2.50 to $3.25 per square foot. 

The Des Moines industrial market is in a recession cycle with little to no demand and no major tenant absorbing a majority of space. Vacancy rates are 11 percent on high cube space and approximately 13 percent on flex-space/office warehouse space.

Although there is very little demand in the industrial marketplace, Ankeny, Iowa, a northern suburb of Des Moines, is one area to watch in the near future. “The city is experiencing tremendous population growth and has available ground with excellent interstate accessibility to Interstate 35,” Powell says.

The area south and southwest of the airport along the newly opened Highway 5 Bypass, which connects I-35 in the southwest to Interstate 80 in the northeast, also continues to attract developers.

In addition, Grimes, a northwest suburb of Des Moines located along Highway 141, has recently delivered two flex buildings and will most likely continue to be an attractive location for smaller industrial and flex development.

There have been no new developers entering the Des Moines industrial marketplace, and properties are trying to attract high-tech, national and regional distribution centers and light manufacturing tenants to the area.

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.