The speculative industrial building under construction by Avon-based Condyne LLC at 275 John Hancock Road in Taunton’s Myles Standish Industrial Park will contain 238,000 square feet of space.

When it comes to commercial real estate, Condyne LLC is thinking big these days – and that’s exactly how they build, as well.

Based in Avon, the company has emerged in the past four years as one of the region’s leading industrial developers, with the firm having completed millions of square feet of manufacturing and warehouse space, the bulk of it in Southeastern Massachusetts. In most cases, the projects they build are on the Jurassic Park scale, properties that dwarf the buildings one typically sees in the office, multifamily or hospitality sectors.

“We advise our clients to go as high as possible,” Condyne President Jeffrey C. O’Neill acknowledged last week. “It’s much more efficient.”

Whereas older industrial space tended to have ceiling heights of 24 feet or less, the institutional-grade facilities of today require a minimum of 30 feet, offering more cubic space for storage of materials or product. Condyne takes that notion to the extreme, with ceilings of one property at 455 John Hancock Drive in Taunton rising 50 feet high, and the firm often recommending heights in the 40-foot range.

But Condyne buildings not only rise upward, they are large in every sense of the word. The firm, for example, recently completed a 275,000-square-foot distribution center in Taunton for Agar Supply Co., a 300,000-square foot office and distribution center in Fall River for the TJX Cos., and a 350,000-square-foot structure for Trader Joe’s in Taunton. In terms of new construction, Condyne’s biggest deal was the 330,000-square-foot distribution and call center completed in Taunton in 1997 for Chadwick’s of Boston Ltd.

Originally founded in 1979 by O’Neill’s father, Donald J. O’Neill, Condyne LLC had shifted its focus in the early 1990s away from real estate and into owning and operating cold storage warehouses, as well as providing transportation services to retail and food service centers throughout the Eastern Seaboard. Condyne Freezers operated two refrigerated warehouses and distribution centers in Avon and Taunton, for example, while it also owned a fleet of refrigerated trucks for commercial deliveries.

The relationship with food service companies and other retailers ultimately proved valuable in building up the real estate business, O’Neill said, explaining that it helped the company learn early on when a client might be considering their own facility. Condyne’s expertise in that arena enabled it to better understand the real estate needs of its customers, he added, giving Condyne officials the confidence to design such facilities in-house using their own architects and design team.

“It has definitely opened a lot of doors for us,” O’Neill said of the firm’s background in storage and distribution. Interestingly, problems in the real estate industry from the crash of the early 1990s had led the company to shy away from real estate, instead focusing on its other operations. But the company’s recent success in developing industrial space has steeled Condyne to dive back into commercial real estate full bore. In February, the O’Neill family sold Condyne Freezers and Condyne Logistics to P&O Cold Logistics, leaving only the real estate portion of the business remaining.

Condyne LLC’s strategy includes a mix of buying and repositioning older facilites, plus pursuing new construction when it makes sense or if a client is seeking a build-to-suit facility. The Trader Joe’s project was initially a speculative undertaking in which the former Decatur Hopkins industrial building at 800 John Quincy Adams Road in the Myles Standish Industrial Park was acquired in conjunction with LaSalle Investment Management. The existing building was renovated and a new, 109,000-square-foot addition was grafted alongside to provide the space needed by Trader Joe’s.

LaSalle has once again teamed up with Condyne on the construction of a speculative building at 275 John Hancock Road, also at Myles Standish. Condyne usually will use a financial partner only if the project is being done on spec, according to O’Neill.

But Condyne is not merely looking to do buildings on a one-off basis. Similar to a pattern employed by its chief competitor, the Campanelli Cos., Condyne plans to develop its own industrial parks, beginning in Taunton. The firm is presently in the permitting stage for two parks there, the first of which would yield 1 million square feet of space, and a second aimed at double that size. “There’s definitely a need for more industrial parks,” said O’Neill, who hopes to complete permitting of the Taunton parcels sometime next year.

Working Smarter
A combination of cheaper land sites, plentiful labor and solid highway access has driven the industrial/distribution market into Southeastern Massachusetts in recent years, and O’Neill said he sees no sign of that trend changing in the near term.

Suburban broker Peter Richardson of Spaulding & Slye Colliers concurred that the region has become a mecca for industrial development, and said Condyne has clearly demonstrated its ability to build state-of-the-art, high-quality facilities for tenants. Campanelli and National Development are among the most recognized firms in the area, Richardson said, with Condyne quickly establishing itself in the upper echelon as well.

Richardson, who brokers both office and industrial properties, said the latter is much stronger fundamentally at present. “The industrial market is very healthy,” he said. “It comes and it goes, but there are a lot of requirements out looking right now, and developers like Condyne are definitely benefitting from that.”

Condyne is not merely aiming to develop industrial sites, however. The company, which in the past has developed a few retail properties and apartment buildings, is once again pursuing the multifamily market. The company feels demand is sufficient to create opportunities, O’Neill said, so much so that it recently formed a residential division. As with the industrial division, the residential group both will look to buy existing product and build new apartment communities. The target will be for projects with 50 units or less.

“We are keying in on a couple of sites,” said O’Neill, who said the firm felt multifamily would be a solid complement to the industrial development.

As for the industrial piece of the company, O’Neill agreed there has been a slowdown in demand for space during the past few months, but stressed that the supply/demand equation continues to be in balance, especially compared to the office market. According to Spaulding & Slye Colliers, for example, the overall vacancy rate for the region’s 52 million-square-foot industrial market currently stands at a healthy 6 percent, up only slightly from the 5.2 percent posted in the first quarter. Rental rates average $7.83 per square foot, up from $7.60 per square foot in the first quarter.

“You have to work harder and smarter to solicit clients, but we’re still active and we think we will continue to be,” O’Neill said.