First Industrial Completes $20M Rust-Oleum BTS

KENOSHA, WI-First Industrial Realty Trust has completed a $20-million build-to-suit for Rust-Oleum. The 600,000-square-foot distribution building, at 8505 50th St., was constructed by Principle Construction Corp. over the past year. First Industrial will own the building, for which Rust-Oleum has signed a 15-year lease, sources say.

“Rust-Oleum was interested in building their distribution center there because the size and location worked out for them,” Alex Olen, senior project manager with Principle, tells GlobeSt.com. “This area is good for any distribution center because it’s just a few miles off Interstate 94. It has good access for any kind of logistics operation.”

Rust-Oleum’s new property is just ten miles away from its existing plant in Pleasant Prairie, Olen says. The building is located in the southeastern Wisconsin submarket, where asking lease rates for warehousing and distribution space are around $4 per square foot, net, according to Cushman & Wakefield’s year-end industrial report. Occupancy rates in the submarket are around 85%, the report said.

“It’s halfway between Chicago and Milwaukee but it’s still considered the Chicago market,” Olen says. “It was doing really well in the last several years with new parks. Of course this year, however, it’s kind of in a holding pattern.”

Olen says Principle constructed the building with the paint company’s needs in mind. “It’s a pretty unique building, since it is intended to store paint, which is a highly flammable material,” Olen says. “That system is capable of containing and extinguishing a major fire, and we decided to give the building a chance to fight for itself. Its fire protective systems give the building a good chance to survive and still be functional.”