What does it take to bring a build-to-suit development to life? In this week’s episode of Built on Better Decisions, host Andrew Taylor is joined by representatives from Buffalo Rock Company, J.H. Berry Commercial Real Estate, and Taylor & Mathis for a behind-the-scenes look at the site selection, financing, lease negotiations, and construction of Buffalo Rock's 350,000-square-foot Gulf Coast distribution center in Santa Rosa County, Florida. Taylor & Mathis developed and owns the property, which was designed around Buffalo Rock's operations and leased under a 20-year agreement.

Buffalo Rock's plans to modernize its distribution network created the need for a larger Gulf Coast facility. The 125-year-old beverage distributor was consolidating product-picking operations from 14 locations into fewer regional centers. Buffalo Rock identified a 50-acre site northeast of Pensacola that became available after FedEx abandoned its planned development. With much of the site due diligence completed and design-build contractor Vardaman already involved, the plans were adapted to Buffalo Rock's needs.

Edwin Moss and Hamilton Reynolds explain how Taylor & Mathis was selected through a competitive process and how the transaction was structured. They discuss the 20-year lease, tiered profit sharing, a purchase option if Taylor & Mathis decides to sell the property, and how the team secured financing after its initial lending arrangement fell through.

Attention shifted to design and construction costs. Taylor Harren and Jeremiah Owen explain how Taylor & Mathis, Buffalo Rock, and Vardaman identified 35 to 40 cost-saving opportunities, resulting in approximately $2.5 million in savings, or $7 per square foot.

As Buffalo Rock's operational needs evolved, the development team adjusted the design while planning for future growth. The facility includes 40,000 square feet of office space, a separate 17,000-square-foot fleet maintenance building, infrastructure for future automation, and room for a 150,000-square-foot expansion.

Key Takeaways

• Developer selection involves more than price.Taylor & Mathis stood out in a competitive selection process by understanding Buffalo Rock's requirements and offering a profit-sharing arrangement that worked for all parties.
• Lease structure affects the entire development. The 20-year lease, negotiated rent increases, tiered profit sharing, and purchase option were important considerations for both Taylor & Mathis and Buffalo Rock.
• Financing required a change in plans. When the initial lender couldn't secure a participating bank, Taylor & Mathis worked with another lender to finance the development.
• Collaboration delivered $2.5 million in savings. Taylor & Mathis, Buffalo Rock, and Vardaman identified 35 to 40 cost-saving opportunities while maintaining the facility's requirements.
• The design allows Buffalo Rock to grow. Taylor & Mathis worked with Buffalo Rock and Vardaman to incorporate infrastructure for future automation and allow for a 150,000-square-foot expansion, even as Buffalo Rock's immediate needs changed.

Connect:
- Matthew Dent — President & CEO, Buffalo Rock Company https://www.buffalorock.com/company/

- Jeremiah Owen — Executive Director of Strategic Infrastructure Support, Buffalo Rock Company

- Edwin Moss — Executive Vice President & Partner, J.H. Berry Commercial Real Estate, https://www.linkedin.com/in/edwinmoss/

- Hamilton Reynolds — Partner at Taylor & Mathis, leads the industrial division https://www.linkedin.com/in/hamilton-reynolds-15013514/

- Taylor Harren — Vice President of Development, Taylor & Mathis, https://www.linkedin.com/in/taylor-harren-34359891/

Andrew Taylor, President, Taylor and Mathis
https://www.taylormathis.com/

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