May 24, 2022

A North Dakota developer plans to bring multiple industrial buildings and a new retail area to northwest Sioux Falls.

The development, called Griffith Park, is an 80-acre parcel of former family-owned farm land east of Career Avenue and north of 60th Street North.

It’s being developed by North Dakota-based Enclave Cos., which also is developing the 287-unit Millstone Commons apartment complex on the east side of Sioux Falls. It’s scheduled to open its first phase this year and be finished next year.

The northwest Griffith Park development includes five lots along 60th Street North. One of them will be the recently announced Aldi grocery store.

“We see Aldi being there as an anchor that’s going to drive a ton of economic value to that area, a ton of traffic, and we see other commercial retailers following suit,” Enclave developer Tim Gleason said.

The lots also could become office space, he said.

The rest of the property is slated for industrial use, with three buildings planned.

One, a 97,000-square-foot facility, already has a lease in place from a Fortune 500 company that will occupy the entire building as a distribution center, Gleason said. The tenant hasn’t announced the move yet but will be expanding from another site in Sioux Falls, he said.

Construction will start soon, with a groundbreaking planned for 11:30 a.m. Thursday, and the building is scheduled to be done next summer.

Another building at 145,000 square feet will start construction at the same time and doesn’t have a tenant yet.

It likely will lease to one or two companies, Gleason said.

A third building at 60,000 square feet also is part of the future development plan.

“We’ve done speculative (building) in the past, and I can say we haven’t opened a building without being fully occupied by opening day,” he said. “So we’ve had success with spec industrial in the past in the Fargo market, and expanding that to Sioux Falls, we felt Fargo was a strong indicator.”

Enclave is the second North Dakota company to announce spec industrial space in recent weeks. Fargo-based Great Hall Properties announced last month a 200,000-square-foot building not far from Foundation Park, with enough land to build more.

“Sioux Falls is experiencing an extremely tight market,” Gleason said. “The vacancy rate for Class A industrial is hovering just over 1 percent, which is effectively zero space if a company was looking to expand or occupy new space. And the other thing is the strong employment base, future job and population growth makes Sioux Falls an optimal market for supply chain growth, which is what a lot of these industrial users are looking for.”

The pandemic has pushed so-called last-mile delivery as consumers increasingly seek home delivery, and “warehouse has been a bottleneck for a lot of national users, so looking at Sioux Falls to expand or consolidate distribution centers into a single location often is what these corporations are looking for,” Gleason said.

Enclave was formed in 2011 and has grown from two employees to 180, completing more than 100 multifamily, commercial and industrial projects representing more than $1 billion in value. The company functions as developer, contractor and property manager.

Enclave entered the Sioux Falls market in 2017 with a 230-unit apartment complex, Silverthorne Flats, on the east side of Veterans Parkway south of 26th Street.

For Griffith Park, the company is partnering with Valor Contracting, a North Dakota-based builder that uses a concrete tilt-up build method by which large concrete panels are cast on-site and raised into position by a crane.

A preengineered metal building is then used as the interior of the space.

The tilt-up method allows for locally sourced materials, better energy efficiency, more controlled pricing and lower maintenance, Enclave said.

“Being in control of our own concrete wall fabrication schedule is a huge advantage,” said Michael Gullickson, president of Valor Contracting. “With lead times on traditional precast concrete walls being 12 months or more, having the ability to fabricate walls in as little as six weeks provides our clients with a streamlined schedule.”