Northeast Arkansas is a prime location for warehouse and distribution facilities, and one development company is trying its best to make three dents in the market.
Haag Brown Commercial Real Estate Development of Jonesboro has already completed the first phase of a 263-acre e-commerce park in Jonesboro and is developing similar projects in Trumann and Paragould. The three cities are located within 35 miles of each other, and all are within a short driving distance from the steel mills of Osceola and the transportation hub of Memphis.
“We are a really good spot for warehousing and distribution,” said Joshua Brown, a principal with Haag Brown. “There is a trend there and there are really some good projects.”
Haag Brown announced the e-commerce park, located just off Interstate 555, in November 2021, and the first building of the expected 3 million-SF park was completed this year. Hytrol Conveyor Co. Inc. of Jonesboro is scheduled to move into its new 150,000-SF warehouse and distribution center later this month.
Brown said Haag Brown recently completed infrastructure improvements at the site that included sewer upgrades that should allow future work to proceed quickly. Potential new tenants, from inside and outside of Arkansas, have regularly contacted Haag Brown about getting facilities built at the park, he said.
“The theme of that has been ‘we need space as quickly as possible,’” Brown said. “It takes us a long time to go through planning and permitting and infrastructure.
“We are hoping to get to a spot where we can do [one] in nine months. For the next Hytrol, if someone wanted the exact same building that they are in, we’re hoping to be able to reduce that to nine months.”
Brown has a temporary solution for any company that wants in but finds the wait too long. He and his partner, Greg Haag, own a 40,000-SF industrial building adjacent to the park that was formerly home to FedEx; it now stands empty and ready for leasing.
Haag Brown has done a lot of development in fast-growing northwest Arkansas, and Brown said northeast Arkansas could see a similar effect. That’s because warehousing and distribution are vital needs for businesses, and northeast Arkansas offers location advantages other areas of the state don’t have: the proximity to Memphis and the steel centers of Arkansas.
“Most cities, their manufacturers are their bread and butter, their biggest employers,” Brown said. “This warehousing and distribution space is what we’ve seen is the No. 1 need.”
Manufacturers in northeast Arkansas can reduce costs and improve distribution by warehousing their products closer to where they are made. A lack of such facilities in the region leads to waste; one manufacturer has to ship its products to storage 45 minutes away, Brown said.
“There are multiple brokers that they don’t want to go to Memphis; they don’t want to go to West Memphis,” said Jeff Armstrong, Haag Brown’s leader of industrial brokerage. “They want here. [But] there is no space available.
“It’s trying to balance ‘we’re not going to build it in hopes they will come,’ but at the same time it feels like these folks want to be here and they are getting onboard with they may have to wait nine or 10 months.”
Armstrong said the infrastructure work on the Jonesboro site should streamline future developments.
The Jonesboro project led immediately to a multiuse project in Trumann, 16 miles south of Jonesboro on I-555. First announced in February, the Steel Creek project will be anchored by a warehouse and distribution center for Roach Conveyors. Groundwork on the 80,000-SF facility has been completed and Armstrong expected concrete to be poured this week.
If all goes as planned, the Roach facility should be ready to go in March 2024. After that first phase is complete, Steel Creek will offer office and retail space, restaurants and single- and multifamily housing at the 140-acre site.
Trumann isn’t the only new development inspired by the Jonesboro e-commerce park. Brown said officials from Paragould, 23 miles north of Jonesboro, contacted Haag Brown about a 20-acre site owned by the city’s Economic Development Commission.
“Paragould is really wanting this site developed,” Brown said. “It’s the most important thing going on in both of these counties.”
Paragould’s project seems close to fruition. Brown said an in-state manufacturer has committed to move to the development and lease about half of an 180,000-SF facility.
Brown said his company just needs to find another tenant to make the financial investment workable.
“We’re not completely there yet, but we are very close to starting the same project we’ve done in Jonesboro and the same project we got started in Poinsett County,” Brown said. “We want our bread and butter to be existing manufacturers to contact us to design and develop warehouse and distribution centers.
“We really need another piece of the puzzle to pull the trigger on it. You almost have to have a long-term commitment out of the gate to get the financing you need to do the project. You can’t build a massive warehouse facility. We’re just not there to be able to do that.”