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Warehouse space in high demand in Fargo-Moorhead

This warehouse building under construction in West Fargo, which has nearly 100,000 square feet of space, is expected to be completed sometime this spring. Dave Olson / The Forum1 / 2
An architect’s rendering offers a glimpse of what buildings will look like in the Butler Business Park planned for Main Avenue and Interstate 29 in Fargo. The park will be a mix of warehouse, office and manufacturing space. Special to The Forum2 / 2

Fargo - The Fargo-Moorhead area’s robust economy is generating booming demand for something you can’t even touch.

“There’s such a huge need for warehouse space,” said Rick Flacksbarth, a commercial real estate agent in Fargo. He does leasing for Cityscapes Development, which is putting up a 30,000-square-foot building in north Fargo that will become warehouse and/or office space.

Flacksbarth said after the building is leased, construction will start on a second, identical structure in the same area of 14th Avenue and 47th Street North.

Other developers are also responding to the need for space, building warehouses on spec more than in previous years, commercial real estate agents say.

Business park

Work is gearing up for the Butler Business Park, an $18 million to $20 million project that will create nearly 200,000 square feet of warehouse, office and manufacturing space in the area of Main Avenue and Interstate 29 in Fargo.

Demolition of existing structures will begin soon, with new construction to start in the spring, said Ben Saucke, a commercial real estate agent who will handle leasing of buildings in the business park.

“What you’re seeing is the need and desire for more industrial-grade space,” said Saucke, defining industrial grade space as having higher-quality construction elements combined with aesthetically appealing design.

Flacksbarth said one factor driving new construction is that existing warehouse space has been gobbled up in recent years due to commercial activity locally, as well as spillover activity from the Oil Patch.

‘Seller’s market’

James Gilmour, director of planning for the city of Fargo, agreed.

“We’re becoming this regional trade center of warehouses that serves the eastern part of the state, which is growing, but also the western part of the state, which is also growing,” Gilmour said.

“Commercial Realtors say it’s really hard to find vacant warehouse space; it’s a seller’s market,” he said.

It may get even busier in the future.

“We know of several (companies) looking to expand,” Gilmour said. Potential projects include industrial warehouse space.

While such space is tight in the Fargo-Moorhead area, there is some to be had, particularly in places like West Fargo, said Konrad Olson, a commercial real estate agent who does annual surveys of the local industrial market.

Sustained demand

As an example of warehouse space that will soon be available, Olson cited a project nearing completion in a West Fargo industrial park. The warehouse space, which is owned by Dell Arneson Inc. and has nearly 100,000 square feet of new space, is expected to be ready for occupancy by early March.

When it comes to space for warehouses, West Fargo is limited, geographically, as to how much it can do, said Tim Solberg, senior city planner.

Still, he said a number of projects are in the works and there is talk of more in the near future.

“That sort of (warehouse) space is really sought after,” Solberg said.

Hundreds of thousands of square feet of new industrial space were built in the Fargo-Moorhead in 2014, but Olson said demand is still there.

“I don’t see us being overbuilt,” he said.

Dave Olson
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