Issue 2 :: 2010
ProLogisBROKER
update
Featured Broker
Region Spotlight
Doug Kiersey, Senior Vice President, Midwest Region
With this issue, Broker Update wraps up its tour of the United States
and Canada, talking with ProLogis’ region heads about the dynamics and
distinctives of the company’s four regions. These spotlights are intended to
give brokers perspective on a variety of markets, including their own, and
greater insight into trends that influence customer decisions and drive deals.
This issue we converse with Doug Kiersey, senior vice president for the
Midwest Region.
Broker Update: What are some of the unique characteristics of the
Midwest Region?
Doug Kiersey: The region spans a large, central area that constitutes the heart of North American commerce,
both geographically and logistically, stretching from the South to just beyond the Canadian border. Several of
the markets can be characterized as regional distribution markets. Rail service, both direct and intermodal,
is a major demand driver in the region, as is the presence of the UPS hub in Louisville and FedEx’s presence
in Memphis and Indianapolis. The region also benefits from its proximity to large population centers in the
East. Many of our Midwest markets are within a days’ drive of fifty percent of the U.S. population. Chicago
is of singular importance in the U.S. supply chain, as it is the only market served by all six Class I railroads,
being located roughly at the center of the continental U.S. population. Like Rome, all roads (and rail lines)
literally lead to Chicago.
BU: How is ProLogis currently performing in this region?
DK: We have approximately 4.2% of the competitive base
in the ten markets that constitute the Midwest Region.
We are over 92% leased as of the end of May, having
closed 137 transactions thus far this year. Our customer
retention ranks at a remarkable 80% -a testament,
I believe, to the outstanding service our customers receive
from the entire team-property managers, maintenance
technicians, market representatives and market officers.
BU: Who are your top customers, and how are their
needs changing the dynamics of the market in the
Midwest Region?
DK: We count a plethora of household names among
our top customers: Kraft Foods, Sears, Amazon.com,
Kimberly-Clark, Johnson Controls, Home Depot, Procter
& Gamble, Cardinal Health, Unilever, UPS, Kellogg’s,
Subaru, BMW, SC Johnson, Best Buy ... the list goes
on. Many of the challenges of serving these and all our
customers in this region are primarily weather-related.
Most of our markets are in the Snow Belt, so snow removal
is a major point of emphasis for customer service. It’s
hard to run your business if there is a foot of snow over six
inches of ice in the truck court.
continued, next page
Mike Spencer
Ruscilli Real Estate Services
Columbus, Ohio
Mike Spencer, Vice President of
Ruscilli Real Estate Services, has over
16 years of experience in industrial
and commercial real estate brokerage,
development and construction. His real
estate transactions to date, focusing
primarily on industrial properties,
logistics facilities and development
sites, comprise almost 19 million square
feet and are valued at $300 million.
He was particularly instrumental in the
successful launch of Gateway Business
Park, a 343-acre tax-abated commercial
and industrial development in southern
Columbus, Ohio.
A member of SIOR and CSCMP,
Mike is averaging nearly 2 million
square feet annually in industrial
leasing and sales throughout Ohio.
He has been recognized twice for the
largest industrial lease transactions
in Columbus (1998 and 2007) and
for the second largest industrial lease
transaction in the nation (2007).
This spring he brokered the leasing
of approximately 680,000 square
feet at ProLogis Park 70 Etna in two
transactions. Representing COTY
Inc., the world’s largest perfume and
fragrance maker, and Exel Logistics,
Mike conducted a multi-state search for
space that provided multiple economic
incentives, state of the art distribution
design, an extensive TI package and an
environmentally conscious development,
continued, next page
Region Spotlight (continued)
Our property management teams spend a good deal of time working with vendors to ensure we get the
timeliest service. Our scale helps drive customer service, since we are generally one of the largest, if not the
largest, customers of our snow removal vendors. In addition to the recent Nashville flood, we’ve had building
damage from straight line winds as well as a tornado, both in Memphis-just in the last two years. In all
cases, our risk management, property management, marketing and project management teams have worked
seamlessly to deliver excellent customer service.
Aside from weather, our biggest challenge is a tendency for oversupply due to an abundance of developable
land. The exception, and it is a large one, is the Toronto market, where land supply is very much constrained
by a number of factors: land use laws, robust development charges and proximity to Lake Ontario on the
south side of the Greater Toronto Area, with a green belt on the other side. As a consequence, land is scarce
and very expensive. Not coincidentally, rents are significantly higher than any other market in the region.
BU: What are your most active markets, and which are “best kept secrets”?
DK: Chicago is the largest market in the region both in terms of total platform (more than 25 million square
feet) and activity. We are pleased that our occupancy has been in the mid 90s over the last several quarters.
We are outperforming the overall Chicago market in terms of occupancy by at least 700 basis points.
Our best-kept secret is Louisville, Kentucky. This smaller market, a fifth of the size of Chicago, continues to
perform very well-over 98% occupied at April 30. We serve some of our most important customers in this
market (Kellogg’s, Johnson Controls, UPS, Konica Minolta Business Solutions, Best Buy and Amerisource).
With its strong economic fundamentals unfazed throughout the downturn, Louisville just might be one of the
best kept secrets in all of North America, not just the Midwest Region.
BU: What recent success have you had serving customers in your region?
DK: ProLogis’ commitment to customer service was aptly demonstrated recently by Ed Vanasdale, one of
our maintenance technicians in our Columbus market who has been with us over 13 years. An employee for
one of our customers inadvertently started a fire during a welding procedure; when the fire became more
advanced than an extinguisher could handle, the sprinkler system kicked in and doused the blaze. That was
the end of the fire, but not the end of the customer’s need. And that’s where Ed came in.
Featured Broker
(continued)
all on an extremely tight occupancy
deadline.
“Building #3 at our distribution park
offers nearly 524,000 square feet of
LEED® Silver certified space ideally
suited to COTY’s requirements,”
comments Brian Marsh, Senior Vice
President for ProLogis’ Ohio market.
“Mike’s extensive knowledge of state
and local incentive packages and our
excellent working relationship with him
to execute the complex TI’s helped
make this deal a success for all parties
involved. As the listing broker for
Building #1, Mike’s success in leasing
our remaining 156,000-square-foot
suite to Genco brings ProLogis Park 70
Etna to 100% leased.”
Mike received his B.A. in Finance from
Westminster College in New Wilmington,
Pennsylvania, and has studied real
estate law, marketing and logistics at
Ohio State University in Columbus.
When not analyzing real estate, Mike
enjoys traveling, playing golf and hosting
Ohio State football tailgate parties.
Ed received notice from the fire system monitoring service that there was water flow in two different systems
at our facility, International Street Commerce Center #1, which told him this was a real fire-not a false
alarm. He immediately dropped what he was doing and headed to the property. On the way, he contacted the
property manager assigned to the park, as well as all necessary third parties needed to help the customersprinkler contractors, roof contractors and HVAC system contractors-to alert them of the situation. Long story
short, within four hours of the incident, the building was back on line, and the customer was able to safely
resume operations. This is just typical of the way our people think: not just “putting out fires” (literally this
time), but also thinking ahead to make sure customers’ business objectives are fully met.
Featured Property
Featured Availabilities
Market
Property Name
Availability
Central Valley
Tracy Phase 1, Bldg 2
353,750
Chicago
ProLogis Park 55 #2
216,036
St. Louis
Westport Distribution Center #3
95,600
Houston
Kempwood Business Center #6
36,750
Pennsylvania
Lehigh Valley Distribution Center #7
30,607
San Francisco, South Bay
Bayside Corporate Center #7
26,809
Tampa
Tampa Airport Distribution Center #2
25,000
Reno
Reno Aircenter #5
17,000
For a full listing of our availabilities, please visit www.prologis.com and select Property Search.
www.prologis.com
Exit 7A Distribution Center #2
Hamilton, New Jersey
396,410 square feet available
105,10 SF office space
88 parking spaces
Conveniently located near 195, Route 130
and the New Jersey Turnpike at Exit 7A