By J. Elias O’Neal, Richmond BizSense
An e-commerce retail giant known for its home furnishings and décor is adding to its network of distribution hubs with a new location in metro Richmond.
Boston-based Wayfair has signed a four-year lease to establish a 46,000-square-foot facility in the Rivers Bend Industrial Park at 805 Liberty Way in Chester, its first in the local market.
Trib Sutton, broker with Richmond-based CBRE who helped work the deal, said the warehouse would be used to distribute furniture and home goods, along with processing internet orders and returns.
He said renovations on the space are underway, and Wayfair is targeting a December opening.
“Wayfair looked all over the region for a new location before settling on this location,” Sutton said.
His CBRE colleagues Marc Allocca and Matt Anderson also worked the deal. David Williams, a broker with Colliers International, represented Wayfair in the lease.
Wayfair did not return emails for comment Thursday evening.
Launched in 2002, Wayfair reported nearly $1.2 billion in sales and 10.3 million active customers last quarter – an increase of 39 percent from the third quarter 2016, according to its most recent earnings report.
To meet customer demand, the company has a number of distribution hubs nationwide, including in North Carolina and Kentucky.
Wayfair’s entry into the region further marks metro Richmond as a logistics hub for regional and international companies such as Amazon and FedEx, which employ thousands in the area.
The area’s network of rail, roads and access to the Port of Richmond continues to drive large-scale distributors to the area, Sutton said. And it’s beginning to force demand for more industrial distribution development.
Vacancy at several distribution and warehouse facilities across the metro are approaching a decade low, helping spur new speculative development, mostly in eastern Henrico County near the Richmond International Airport, Hanover County along the I-95 and I-295 corridors, and southern Chesterfield and Prince George counties near the I-95 and I-85 split around Petersburg.
According to a third quarter 2017 CBRE market report, metro Richmond posted a 4.2 percent vacancy rate for its industrial properties – forcing rents to climb to about $5 a square foot.
“The market is tightening out there,” Sutton said. “Distribution has been very busy over the last 11 months … I think Amazon really put us on the map for third-party distributors.”
Amazon operates two fulfillment centers in Chesterfield and Dinwiddie and recently opened a 320,000-square-foot sorting facility in Hanover County.
With big names setting up in the region, outside developers are jumping into the market to build up the area’s industrial portfolio with more speculative, Class-A facilities.
California-based Panattoni Development Co. is constructing a 1 million-square-foot spec warehouse facility on 62 acres at 4701 Commerce Road, which was purchased from Phillip Morris.
Out at the Airport Distribution Center in eastern Henrico County, Indiana-based Becknell Industrial has broken ground on a 202,000-square-foot high-bay building, according to permits filed with the county’s planning department.
The first facility, a 216,000-square-foot building, was fully leased to Premier Fixtures in September 2016.
Another 153,000-square-foot building, delivered in early October, has been mostly leased to Bunzl – a distributor of food-related products and packaging – which has 114,000 square feet in the building, leaving about 40,000 square feet available for lease.
The third building, totaling 202,000 square feet, was fully leased to an undisclosed tenant and is under construction. Becknell would not disclose the name of the tenant.
Of the three buildings constructed by Becknell, less than 7 percent of the 572,000 total square feet remains uncommitted.