It’s an exciting time for industry in eastern Henrico. Since 2015, more than 2.6 million square feet of industrial real estate space has been built in eastern Henrico. While new market entrants like Facebook’s Henrico Data Center and Polykon attract headlines, existing businesses like San-J International and Fareva have also made major expansions of their own, opening up new product lines and hiring hundreds of new employees. Fueled by reasonable land prices, low operating costs, a strong local workforce, and record activity at Richmond International Airport, eastern Henrico is primed for continued record growth.
Richmond International Airport (RIC) Sets the Pace
Richmond International Airport, located in eastern Henrico, finished 2017 with record-breaking passenger traffic as well as growth in cargo traffic and operations. In its 90th anniversary year, RIC set a new passenger traffic record of 3,657,479, breaking the previous record set in 2007 by almost 23,000. Cargo volume also broke records, with more than 135 million pounds of total cargo handled in 2017.
Carrying forward the momentum, RIC recently reported its busiest January ever, attributing the steady growth to cost-effective, efficient facilities and newly announced direct flights to Denver, Orlando, Fort Lauderdale, and Nashville.
“Airlines show confidence in a market by increasing seats, and an ever-increasing number of travelers have been taking advantage of the expanded offerings conveniently available from RIC,” says Capital Region Airport Commission President and CEO Jon E. Mathiasen, AAE.
New Industry Digs into Eastern Henrico
Facebook’s Henrico Data Center – The first steel of Facebook’s new 970,000 square foot data center in White Oak Technology Park was erected at the end of February 2018 – a mere five months after multi-phase project was announced. The project has sped along thanks to Henrico’s Fast-Track permitting program and the development-ready site at White Oak. The first phase of the data center is expected to be completed in 2019, with future additions anticipated to reach 2.5 million square feet in total.
“When considering new data center locations, we not only look for clean and renewable energy solutions, but great partnerships within the local community, a strong pool of local talent, excellent access to fiber, and a robust electric grid,” explained Rachel Peterson, Director of Data Strategy for Facebook. “Henrico County and the Commonwealth of Virginia have it all.”
Polykon at White Oak Technology Park – In February 2016, Polykon – a joint venture of international Air Liquide subsidiaries Seppic and Schülke – announced it would invest $60 million to establish its first U.S. manufacturing operation in eastern Henrico County. The 70,000-square-foot state-of-the-art facility, which is scheduled for completion in late 2018, will produce ingredients for cosmetics and pharmaceuticals.
“Our U.S. expansion project is an exciting opportunity for future growth,” explains Lionel Genix, Air Liquide Medical Systems General Manager. “Not only is this location in close proximity to most of our U.S. customers; it also provides us with a foundation for future strategic growth and expansion.”
Airport Distribution Center – Becknell Industrial, a national real estate development firm focused exclusively on industrial buildings, is in the final phase of its 572,000-square-foot addition to the Airport Distribution Center in eastern Henrico. The logistics park, located along South Laburnum just south of Richmond International Airport at the I-64 & I-295 interchange, was pre-leased prior to finalized construction, featuring tenants such as Bunzl Distribution, West Rock, Graybar, Premier Fixtures, Veritiv, and others.
Demand for Class-A warehouse and industrial space is at an all-time high in the Richmond region, with industrial vacancies reaching a decade low of 4.2 percent, according CBRE’s third-quarter research. Accordingly, speculative development in the area has increased, with new tentative development just north of Airport Distribution Center.
Existing Business Expansions Wrap Up
San-J Dips into Henrico Again – San-J, a leading producer of tamari soy sauce, is nearing completion of a $38 million expansion first announced in 2015. As consumer demand for the lower-sodium, gluten-free alternative to soy sauce has grown, San-J chose Henrico’s Seven Hills industrial center as its best opportunity for increasing production.
While San-J had many suitors for its location, the company’s final choice was strongly influenced by Virginia’s and Henrico County’s robust incentive opportunities – especially Enterprise Zone. “The Henrico Economic Development Authority was very helpful,” said Masaki Nakagawa, Director of Administration, Production Control, Sales & Marketing for San-J International. “They answered the regulation and expansion questions we had and directed us to the proper people. They offered an excellent incentive package for us, which influenced our decision to expand here.”
Fareva Enters Aerosol Manufacturing Territory – Fareva is one of the world’s largest contract producers of household, cosmetic, industrial, and pharmaceutical products, employing more than 700 hundred people since purchasing its eastern Henrico manufacturing site from Pfizer in 2011. Fareva’s newest expansion, – a $40 million investment in a new processing line to make aerosol products – was completed in 2016 and is in full production mode.
Fareva’s expansion took advantage of the Enterprise Zone in eastern Henrico as well as hiring assistance from the Capital Region Workforce Development Board’s Business Solutions Team. To meet Fareva’s staffing needs, the Business Solutions Team designed a hiring and training program tailored to Fareva’s required skill set, including a weekly recruitment effort nicknamed “Fareva Fridays.”
Primed for Growth
While eastern Henrico has experienced rapid growth in recent years, the area still offers significant development potential. Henrico’s access to Class-I rail, major U.S. interstates, convenient air transportation, and the Port of Virginia position it as an optimal location for industry. Between White Oak Technology Park, the I-64 corridor, and airport industrial area, eastern Henrico has an enviable inventory of zoned, development ready sites. Given low operating costs, including industrial rents 30 percent lower than national averages and competitive business taxes, the quality growth and development in eastern Henrico is only beginning.