Majestic Realty Co. is living up to its name with a giant warehouse on its drawing board.
- The warehouse is the size of almost 13 football fields;
- It could store 10 Statute of Liberties;
- The amount of steel used to construct it could build 1,883 Priuses;
- The asphalt required could build a 20-foot-wide road that stretches from downtown Denver to DIA;
- It will require enough concrete to build 1,504 driveways; and
- The dirt in the development could fill 2,453 swimming pools.
As the Colorado Real Estate Journal reported a week ago, Majestic Realty Co. this June will start construction on a 701,500-square-foot warehouse in its Majestic Commercenter at Interstate 70 and Tower Road in Aurora.
The $30 million warehouse, with the nondescript name of Building 15, is anything but undistinguished, as it will be the single largest spec industrial building ever constructed in the Denver area.
To put the size of the building in perspective, it can be comfortably subdivided to handle a 150,000-sf tenant. That is not much smaller than the first building constructed in Majestic Commercenter in 1996, which spanned 180,000 sf.
Given the appetite for big ecommerce users such as Google and Amazon, it is even possible that one company could devour the entire warehouse enchilada.
Not that the size of Building 15 is a surprise.
When initially planning Majestic Commercenter in the mid-1990s, it was always envisioned that single buildings could be even bigger, topping 800,000 sf, Randy Hertel, an executive vice president of Majestic Realty, told me this week.
And going forward, it is possible that Majestic might build a single building approaching 1.5 million sf in size, said Hertel, who has been with Majestic Commercenter since the initial 650 acres were purchased in 1995. (Majestic Realty, by the way, is owned by California billionaire Edward Roski Jr. Roski is partner with Denver-based Philip Anschutz on such high-profile ventures as the L.A. Kings hockey team, the Staples Center in Los Angeles and L.A. Live, a sports and entertainment district surrounding the Staples Center).
Majestic Realty now owns 850 acres in Majestic Commercenter, with 450 acres to still develop. In addition, last year, Majestic Realty bought another 500 acres of adjoining land, giving it control of 1,350 acres of industrial along Interstate 70, east of Tower Road.
There is enough land for another six buildings, each with 1 million sf, he noted.
“Across the country, you don’t find too many buildings bigger than a million square feet, although you might find some 1.5 million sf in a big industrial city like Chicago,” Hertel said. “For one thing, it takes 50 acres of land to build a million-sf building and not every city has that much vacant property available.”
Currently, there are 14 buildings, 100 percent leased, with a total of 3.4 million sf of space at Majestic Commercenter. JP Morgan Chase is providing the construction financing for Building 15, which will open in 2018. Majestic uses in-house architects to design properties in its nationwide portfolio.
“I think what surprises me more than the size of Building 15 is that in 15 months we are going to increase the size of Majestic Commercenter by half what took us 22 years to build,” Hertel said.
Talking to him, I did not get the impression that Majestic has an attitude of “if you build it, they will come.”
Rather, Majestic is meeting demand, which speaks volumes about the growth in Denver area from everything from the strength of homebuilders who need storage space to e-commerce giants.
“I think it says a lot about our economy, the number of people moving here and our low unemployment rate,” Hertel said. “And while our overall industrial vacancy rate of about 4 percent may not be an all-time low, it is below the 5 percent vacancy rate, which is considered equilibrium.”
The size of the Building 15 also speaks to the attractiveness of the Majestic Commercenter.
“When we first opened, there were a lot of industrial parks at places like Stapleton, which were considered more attractive to users because they were closer to Denver than us,” Hertel said.
“Now, we are really an infill site and most of our competitors are to the east of us,” he said.
The one thing you won’t find in any of the existing or new buildings in the Majestic Commercenter are weed warehouses.
Majestic prohibits any marijuana operations in the industrial park.
“We provide Class A space for major national and international names,” which don’t want to have neighbors in the marijuana business, he said.
Even if they allowed growhouses or marijuana storage, it’s unlikely there would be any takers.
“The marijuana business typically takes Class C properties like old, vacated factories,” he said. As those buildings have been snapped up, marijuana operators have been moving into Class B buildings, but even then, they don’t need a 200,000-sf warehouse, he noted.
Majestic Realty is a true long-term owner. It has not sold any of the buildings it has constructed, although it has sold about 150 acres in Majestic Commercenter, primarily to users that want to own their own buildings.
“We have been very patient over the years,” Hertel said.
“During the down times, we put a hold on development and now during the good times, we are building. After 20 years or so of had work, we are an overnight success.”