NAIOP Georgia Chapter’s 2017 Industrial Deal of the Year honors the massive showcase distribution center Majestic Realty Co. is developing for UPS.
In a deal that closed in the fourth quarter of 2016, the Atlanta office of southern California-based Majestic Realty Co. entered into a 50-year participating ground lease with Fulton County, an agreement under which Majestic gets the use of 314 acres adjacent to Fulton County Airport (a.k.a. Charlie Brown Field), a county-owned airport located just north of Interstate 20 at Fulton Industrial Boulevard and Martin Luther King Jr. Drive, approximately 10 miles west of downtown Atlanta.
Majestic then closed on a lease with United Parcel Service Inc. (NYSE: UPS) for 250 acres of the site, upon which it is developing a 1.3-million-square-foot facility for the Atlanta-based parcel carrier. The facility will be UPS’ largest ground package hub worldwide.
Construction on the facility began a little more than a year ago. Last month, UPS took early possession of part of the building. It will continue moving in through June 2018, when the building will be fully operational.
According to company officials, this high-profile UPS deal was the largest industrial transaction Majestic has completed in its 69-year history. The deal was brokered by Darren Ross, senior vice president in the Atlanta office of Colliers International, who represented UPS. Majestic’s in-house negotiating team was comprised of Executive Vice President and Board Member Stan Conway, Senior Vice President Scott Brown, and Vice President Will Lombard. The facility is being built by Majestic’s in-house general contractor, Commerce Construction.
An extensive public-private partnership that included Invest Atlanta, the City of Atlanta, the Georgia Department of Economic Development and Fulton County was an important part of making the ground lease and the UPS deal a reality.
Upon completion, the UPS facility will be able to process up to 100,000 packages per hour, increasing the company’s ability to meet the growing logistics needs of consumers, especially those generated by the burgeoning of e-commerce. The site will also include a truck maintenance facility and a UPS retail store.
“This will be a showcase facility for UPS,” Lombard said. “UPS is headquartered in Atlanta, and a big part of this deal was that they wanted to have their marquee facility right down the street from their headquarters.”
Majestic’s UPS project is projected to be a catalyst for new development on Fulton Industrial Boulevard. At full capacity, the facility is projected to employ approximately 3,000, a definite economic revitalization boost to the area. And the property will generate substantial property tax revenues for Fulton County over time, after having been off the tax rolls for years.
“This project is obviously a game-changer for e-commerce, logistics — and especially Fulton Industrial,” said Bilijack Bell, partner in Wilson, Hull and Neal/ISG, as well as director of governmental affairs at NAIOP Georgia.
Activity generated by the new UPS facility will revitalize the area. “And it will also likely provide opportunities for use of some of the smaller, less-functional buildings in the area, breathing some new life into that segment of the market,” Bell said.
The building will be constructed to “Three Globes” status with Green Globe, which is a certification similar to Leadership in Energy and Environmental Design (LEED) that requires incorporating various elements of sustainable development. For the UPS project, these include LED lighting; a complex building management system controlling HVAC and power usage; a construction waste-management policy that incorporates use of recycled construction materials, implementation of a waste diversion plan; and access to public transportation.
The UPS deal capped a five-year process of negotiations, entitlement-seeking, and design work by Majestic. The strategic location of the then-fallow site had caught the attention of Conway as far back as 2007, according to Brown, “and then we started working on it on a daily basis starting January 2012.”
The complexities of the ground lease transaction with the county-owned airport, which included restrictive covenants mandating the land be utilized directly as an airport-related facility, as well as the number of entities needed to get the deal done, helped save this site over the years for what’s going there now, he notes.
“Had this just been a piece of dirt anyone could have bought — as opposed to one that required a complex public-private partnership to get this deal done — this site would have been bought and developed years ago, although not nearly at the highest and best use, as it is being developed now,” Brown said.
It took a company like Majestic to secure and develop the site, something they’ve done many times in that part of the metro area, Bell said.
“Majestic came into this market [in 1996] with fresh eyes from California, and proceeded to really create that south Fulton industrial market,” he said, citing major developments including the 16-building, 8.5-million-square-foot multi-phased Majestic Airport Center, the largest concentration of class A distribution space under single ownership in the metro area.
“They are a forward-thinking organization,” said Bell, “and they are great participants in NAIOP and also make substantial contributions to the Atlanta community as a whole.”
Majestic has been a longtime sponsor of NAIOP Georgia, in addition to regularly participating in its meetings and events. Lombard has also coached Georgia Tech’s NAIOP School Challenge team
for the past two years.
Conway serves on the board for the Georgia World Congress Center. Each member of Majestic’s Atlanta team has made sizeable donations, through the Majestic Foundation, to local nonprofits including The Woodruff Arts Center, Families First, Refugee Family Services, the Dana G. Smith Fund at Piedmont Hospital, Cure Childhood Cancer, House Proud Atlanta, and Project Open Hand.