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Challenge
- Restoration Hardware required a modernization of their distribution network and plans to launch a new kid’s line division in 2008.
- Restoration Hardware needed to accommodate increasing on-line sales while effectively reducing rising transportation and linehaul costs, and other supply chain-related expenses.
Solution
- After surveying 11 East Coast markets (14 developers) and sending RFP’s to four (4) markets, it was determined that Columbus, OH (West Jefferson County) was the best location for the facility.
- Duke Realty Corporation was chosen to develop the 805,125 SF Facility on 40 acres, including a 60 acre site for a 1.2 Million SF “Sister Facility.”
Building Specifications
- 1400’ long and 575’ deep flow-thru/X-dock facility, ESFR, 100% A/C Warehouse, 36’ Clear at first column line with 45’ high deck, 50’ x 56’6” column bay spacing and 60’ x 56’6” staging bays, Collateral roof loads for conveyance, T5 Motion sensor lighting, 195’ truck courts, 255 trailer parks, 177 dock doors, 33,000 SF Office , 8” slab with dowel baskets with Ashford formula, 200’ F-min 60 in aisles, Ballasted EPDM R-30 roof
Benefits
- 14 month process (11 markets surveyed, 4 city RFP) from Developer RFPs to TCO!
- Municipal Incentives:
- 15 year, 100% CRA property tax abatement
- 10 year job creation tax credit
- Approximate value of package: $13,000,000
- Profit Interest converted to tax free MHE allowance ($793,000)
- 2-year Expansion Option: same cost structure: Land, Developer, GC fees locked
- Developer Open Book converted to “lock-in” cost (excluding Allowances)
- On-time Building Delivery: $250k developer bonus OR $500k developer penalty plus week-to-week rental abatement
- Opex: Right to approve annual expenses and cap (controllable) expenses at 5%/year.
- Darby Watershed Issue: Duke extended warranty on all detention ponds for 3 years.
- Right of First Offer on "sister site": 1.2MMsf with an underground bridge tunnel connecting the 2 buildings
- Right of Early Occupancy: 110 days for installation of MHE
- Rent Abatement (2 mos.) in 200,000SF at neighboring Duke Facility to allow for business transition to Columbus market.
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