MANATEE COUNTY — It took Tony Zanoni three months to find warehouse space for his growing kitchen installation business.
He eventually found an 11,000-square-foot lot at the Sarasota-Bradenton Commerce Center on East 15th Street between Whitfield Avenue and Talevast Road in southern Manatee County.
“We store cabinets and furniture that are worth a lot of money,” says Zanoni, president of Lakewood Ranch-based Kitchens Direct. “We needed something that we knew was safe.”
Kitchens Direct is one of 20 companies currently occupying more than 575,000 square feet within the complex.
Notably, more than half of the space, or 350,000 square feet, was leased in the past 12 months.
“Everyone said we missed the market,” said Larry Feinberg, vice president of Southeastern leasing for Benderson Development Group, which owns the park. “They said the Commerce Center was the wrong product for Sarasota-Bradenton, and that proved to be spot on.”
When Benderson Development began construction on the nine-building complex five years ago, a handful of local commercial real estate brokers predicted the complex would be in permanent trouble.
They noted that the minimum space offered in the 680,000-square-foot complex is 8,750 square feet, twice the square footage needed by most businesses in the area.
Meanwhile, office prices were $10 per square foot and warehouse space was priced at $6 per square foot, well above the market at the time.
Some brokers even suggested that Benderson should stick to shopping centers, which it knows best, and leave the office warehouse market to developers who understand the space better.
Initially, these criticisms appeared to be correct.
The commercial center remained half empty until 2003, when Benderson appeared to have made a colossal $35 million mistake.
“What they were building was very different from what the market was used to, so both users and brokers needed to be educated,” said Sarasota-based owner Preferred Commercial. Carl Wise says.
Until Benderson came along, Wise said, commercial and industrial customers were primarily looking for shade and shelter. That meant cheap metal structures built above ground.
In contrast, commercial centers offered dock-level loading, extensive uninterrupted storage space, ample parking, and well-maintained landscaping.
But Wise said the most innovative aspect of the building is its 30-foot ceilings. Tenants who can take advantage of the height will benefit significantly financially.
“Users and agents alike were used to talking about rent per square foot,” Wise said. “The ceilings are high, so we started talking about rent per cubic foot.”
educate the market
Benderson executives refrained from early criticism of their business. But they knew the product would work in other markets and had enough money to wait.
“We've seen growth in this space,” says company founder Nate Benderson. “People love new things. When they come to town, they don't want broken down sheds.”
Still, the product only started to resonate with customers about 18 months ago.
The regional distributor found the warehouse well located in the middle of a fast-growing market, sandwiched between the equally fast-growing Tampa and Fort Myers markets.
The dealership also realized that the building's height gave it the flexibility to postpone looking for additional space as it grew.
“When a tenant moves in, you don't necessarily know how much space they're going to need,” Feinberg said. “You can avoid that problem by hanging it on a rack and taking advantage of the height.”
In addition to a better understanding of the product, demand for commercial center space increased as warehouse space began to become scarce across the region.
“Housing development is eating up land in this area,” Feinberg said. “There is very little that can be used for business.”
Feinberg said many of the users attracted to the Commerce Center were moving businesses and distributors.
The furniture warehouse, which serves up and down the Gulf Coast, spans 60,000 square feet. Global Organics, an organic produce distributor, is located on a 23,000 square foot site. The Hanover Snyder's store, which sells chips and pretzels, is 8,750 square feet. Meanwhile, All My Sons Moving & Storage has 17,500 listings.
Other companies participating in the center include Floors, which is owned by Home Depot and provides flooring to the giant hardware store's customers, and Storeflex Logistics, which is responsible for renovating Sweetbay Supermarket. .
“Some of our tenants come from existing retail relationships,” Feinberg said. “We've had a long-standing relationship with Home Depot on the retail side, and we lease space at Snyder's at Hanover in Buffalo.”
The commercial center still has more than 100,000 square feet of space left, but Feinberg is confident it will be available for lease soon.
“We're ahead of the market, and that's where you want to be. If we had started building all this a year ago, it might have been too late.”
