Honeycrisp Ventures closes on Zeeland property to add 1M square feet of industrial space
Media Mention
Originally published in MiBiz
By Kate Carlson
ZEELAND — Ada-based developer Honeycrisp Ventures LLC recently closed on a former 45-acre agricultural site in Zeeland that will be converted into nearly 1 million square feet of much-needed industrial space.
Developers say construction plans will move forward when at least one tenant is secured for the site.
“The site is unique in that there aren’t too many left in West Michigan that are pad-ready and can handle a building that is 800,000 to 900,000 square feet,” Honeycrisp Ventures owner Ben Sietsema told MiBiz.
Honeycrisp Ventures had a contract to purchase 800 Riley St. in Zeeland for about a year as the firm worked with the Michigan Department of Environment, Great Lakes and Energy to secure a permit to relocate a ditch running through the property, Sietsema said. Without relocating the ditch — which is part of the county drainage system — to the edge of the property, the company could have only constructed up to 500,000 square feet of industrial space, he said.
Honeycrisp Ventures officially purchased about 30 acres of the Zeeland property at the end of 2022, and closed on the last 15 acres this year for a total of $2.15 million. The company also worked with the city of Zeeland to rezone the parcel from agricultural to industrial. The city’s master plan designates the site for future industrial use, Sietsema said.
“We’re now in the marketing phase,” Sietsema said. “Interest is pretty strong and we’ve responded to a couple different proposals, so overall activity is quite high. Our plan is to find a lead tenant to kick the project off.”
Indeed, demand remains high for West Michigan industrial spaces and continues to outpace supply, as indicated by Grand Rapids’ industrial vacancy rate of 2.37 percent, according to a recent report from Colliers International’s West Michigan office.
Brokers expect the market to remain strong throughout 2023, but annual rent growth for the industrial market did plateau overall in the fourth quarter of 2022 after reaching all-time highs earlier last year.
While the site plan is not finalized, Honeycrisp Ventures plans to construct 800,000 to 900,000 square feet of industrial space on the property, which could involve multiple buildings or a single structure, Sietsema said.
The site’s proximity to I-196, as well as expanding employers nearby such as LG Energy Solution Michigan Inc. and Gentex Corp., adds to the property’s appeal, Sietsema said.
“It’s getting harder and harder to find industrial space that is pad-ready in the immediate Grand Rapids market,” Sietsema said. “I think people are willing to look a little bit further away to find these larger sites.”
Industrial rental rates in the Zeeland and Holland market have historically run 10 to 20-percent less than Grand Rapids, even though it costs the same or a little more to build projects there because of additional construction needs such as capacity in buildings to support larger snow loads, Sietsema said.
“We’re going to be patient with this project,” Sietsema said. “We’re thrilled with the site and the long-term play that we have there. We do have a goal to be moving dirt by the end of 2023 on a project.”
Wolverine Building Group serves as the contractor on the build out.
Honeycrisp Ventures has been a major player in industrial construction projects in West Michigan over the past couple of years. The developer also received site plan approval on Feb. 14 to construct a 150,000-square-foot industrial building at 1070 North Gateway Blvd. in Norton Shores. The site is currently vacant and Honeycrisp Ventures is similarly looking for tenants for the project, which would accommodate one or two tenants.
As well, the company recently broke ground on a 200,000-square-foot industrial building at 3101 Fruit Ridge Ave. NW in Walker. The whole building has been leased out with “very strong rental rates,” Sietsema said.
The developer completed a similar project up the street in 2022 at 3501 Fruit Ridge Ave. NW. As of October 2022, the 282,000-square-foot industrial building was fully leased by ACME Marine, Irwin Seating and Material Handling Systems.