Winston-Salem and the Triad appear increasingly to be the scene of an economic tug-of-war between Charlotte and the Triangle.
Although the encroachments are being seen primarily in Lexington and Alamance County, some analysts and economists say that within a few decades the 10-county region may be absorbed into a mega-metropolitan area.
Rob Gage, a senior vice president with Brennan Investment Group of Rosemont, Ill., said last week he recognizes that reality, though he believes the Triad will be able to maintain its identity because its culture is different from those of Charlotte or the Triangle.
Until then, Gage said Winston-Salem’s and the Triad’s central location within North Carolina and along the East Coast, along with access to five interstates, makes it “very, very attractive” for capital investments.
“I don’t have to tell you that North Carolina is on everyone’s radar for corporate relocations and business investment,” Gage said.
“Specifically, when you look at Forsyth County and the Triad, you have the infrastructure, the highway system. It’s as good here as it is in any part of the country.”
Brennan is putting its money where its mouth is with plans for a 110,163-square-foot speculative building at 4043 Reynolds Court.
Brennan also bought in March the next-door 82,000-square-foot building at 4035 Reynolds Court. The affiliates paid a combined $2.95 million for two tracts.
Brennan said that Whitaker Park fits its investment portfolio since it involves “research, technology, manufacturing and distribution users seeking to locate near top research universities, major interstates, and populations with high-disposable incomes and high-educational attainment levels.”
The goal is having the 4035 Reynolds building available for a tenant by July and the speculative building by year’s end.
Gage expressed confidence that both buildings would have tenants secured before opening, with the speculative building having between one and four occupants. Gage said the range of new jobs for the speculative building could be between 50 and 200.
Another Brennan entrance point into the Triad came in November when it paid $16.3 million for a 324,650-square-foot distribution facility at 210 N. Pendleton St. in High Point from Mannington Mills.
“We really like in-fill locations that offer access to downtowns and interstates, and being able to offer modern buildings that have the flexibility to subdivide into multiple tenants,” Gage said.
“Because most areas don’t have a lot of new buildings near their downtowns, this project will allow our tenants to draw a labor force from both nearby and surrounding counties, as well as offering them the ability to make or distribute their products from a central location for the Triad and the state.”
Brennan background
Since 2010, Brennan has acquired or developed $5 billion in industrial real estate in 30 states with 11 regional offices.
The company’s current portfolio spans 50 million square feet with another 37 million square feet in various stages of development.
“From a dollar perspective, new construction is typically a bigger expenditure,” Gage said.
Gage said Brennan has close to a 50-50 split in terms of adaptive reuse of existing buildings and new construction.
“We represent a variety of different investment groups, some of which like new investment and others favor reuse,” Gage said.
Gage said that while Winston-Salem and the Triad currently benefit from rental rates that are 20-30% lower than in Charlotte and the Triangle, the lack of facilities similar to what Brennan plans locally could serve to shrink the rate gap.
“One point that doesn’t get made enough is that for companies who want to serve both markets with limited resources, you can do that in the Triad,” Gage said.
“There’s always going to be people looking for an economic bargain. When you offer the quality of these buildings and the quality of this location, it’s compelling.”
WPDA foresight
The nonprofit Whitaker Park Development Authority was created by Winston-Salem Business Inc., the Winston-Salem Alliance and Wake Forest University for the sole purpose of shocking a heartbeat back into the campus after Reynolds American Inc. pledged in 2015 to donate the 1.7 million square feet of space.
Whitaker Park, named after former Reynolds Chairman John Whitaker, had more than 2,000 middle- and upper-middle class workers at its peak.
Not included in the donation was the central property, where Reynolds has tobacco processing and warehousing operations. Those consist of 18 buildings and 100 acres.
“Virtually all of Whitaker Park will be redeveloped in the fashion we intended when the project began,” Winston-Salem Mayor Allen Joines said last week.
All of which has Bob Leak Jr., president and chief executive of WPDA, marveling at the phoenix-like status of Whitaker Park.
“Timing is everything in economic development, particularly a project as challenging and as rewarding as Whitaker Park,” Leak said.
“We never saw this as a white elephant, but rather a unique opportunity for Winston-Salem.”
Don Flow, who was WPDA’s chairman at the time of the 2017 donation, said “we’re confident that this project will yield more than 10,000 good-paying jobs for the community, creating new energy and vitality to this historic site.”
“This was the public sector, private sector, nonprofits, university coming together to accelerate the re-purposing of this property,” Flow said.
“All of those groups not only believed in the future of Winston-Salem, but invested in it as well.”
WPDA praise
Gage praised the WPDA’s vision for the overall revitalization to include residential housing and retail for the more than 1,000 projected new employees to the campus.
He cited the on-campus projects involving Cook Medical, Nature’s Value, Second Harvest Food Bank and the Harrison multi-purpose complex as convincing Brennan officials that its two tenant buildings would be viable options.
“We really like being a key part of a vibrant revitalization effort,” Gage said.
“We also studied the demographics of the region, the commercial real estate activity on the rise, and what we saw were new buildings having tenant commitments before they were completed. We expect the same for our buildings.
Gage also mentioned the region’s quality of life, manufacturing workforce and educational systems.
“These things resonate when we go to investors in Chicago, New York, San Francisco, who can invest their millions of dollars pretty much anywhere, and they are making commitments to do it here,” Gage said.
“They view your press clippings. They fly in and meet your people and they buy in because of the infrastructure, the relationships.”
Other projects
Besides the Brennan projects, the Whitaker Park campus includes:
*Cook Medical bought Building 601-1, which contains 850,000 square feet, in 2019. Cook plans to move its local workforce of 650 to the facility, as well as pledging to add 50 jobs over 10 years.
*Nature’s Value paid $10.5 million for the 426,800-square-foot 601-11 building, where it plan to relocate its headquarters and consolidate production beginning in the first half of 2023. Nature’s Value has pledged to create more than 183 new jobs along with relocating 50 jobs from Lexington.
*Second Harvest has opted for a start-from-scratch approach to its new 140,000-square-foot facility that is projected to begin operations by fall 2022. The project represents a planned $10 million investment.
*Residential renovation work for Whitaker Park Lofts is underway on the historic Buildings 2-1 and 2-2 by developer Chris Harrison. The plan is creating 164 residential units.
Mark Owens, president and chief executive of Greater Winston-Salem Inc., said the Whitaker Park projects have helped serve to invigorate interest in Winston-Salem and Forsyth County.
“We have over 65 active projects, and I will be shocked if we don’t have a lot of great tenants looking at this building before the walls are all the way up,” Owens said.
“We need to keep telling the story, as exampled today, that Whitaker Park is open for business, we have options and we’re ready to go.”
PHOTOS AND VIDEO: Whitaker Park groundbreaking, April 26, 2022
Rob Gage, senior vice president at Brennan Investment Group, speaks April 26 during a groundbreaking of a planned 110,000-square-foot speculative building at Whitaker Park.
A poster of a rendering of Brennan Investment Group’s planned 110,163-square-foot speculative building at Whitaker Park, at 4043 Reynolds Court in Winston-Salem.