Meritex Enterprises, Inc. today announced its 90th anniversary
August 15th, 2006 - Twin Cities based Meritex Enterprises, Inc. today announced its 90th anniversary. To mark the milestone in Meritex’ history, the Company will celebrate its 90 years of serving customers and focus on the Company’s future through a promotional campaign and various events throughout the year.
“Meritex has a long and rich heritage of providing storage, logistics and industrial real estate solutions that meet our customers’ changing needs,” commented Paddy McNeely, Chief Executive Officer of Meritex. “Through our ongoing innovation and repositioning of the portfolio in key markets throughout the U.S., we continue to provide space solutions to our customers as well as provide learning opportunities to our employees.” Harry McNeely, Jr., Chairman Emeritus added, “I am proud to have the third and soon to be fourth generation of our family working with such a talented and motivated team of professionals at Meritex. We look forward to continuing to serve our customers for generations to come.”
Meritex’ origin dates back to the St Paul Terminal Warehouse Company, which was founded in 1916 in Saint Paul, Minnesota by Harry G. McNeely as a warehousing and distribution business with a small sum borrowed from relatives. It grew to provide trucking services in the 1920’s and began to acquire and develop real estate in the 1930’s. The real estate portfolio continued to expand with acquisitions and development, including subsurface space. Meritex leveraged the earlier logistics business and continued to transform the Company into principally a real estate investment company. Meritex was a pioneer in the creation and development of underground warehouse distribution facilities by a real estate organization. The focus of the Company in the years to follow was built on the warehousing, logistics and real estate needs of users throughout the U.S.
Meritex will continue to expand upon its legacy of providing industrial space solutions to its customers in cost effective, well located properties in major markets throughout the U.S. “This is an exciting time for the entire team at Meritex,” said Paddy McNeely. “We see opportunity to grow our platform and we will continue to invest in our employees and infrastructure to ensure we deliver results that outperform the market.”
For more information download 90 years of Successful Direction and the Company Timeline.
By Julie Buzbee
If you're looking for a pillar of the business community in Kansas City, Missouri, think down way down -- more than 100 feet underground, to be exact, where Hunt Midwest SubTropolis has carved out the world's largest underground business complex in old limestone mines. In Kansas City and elsewhere in the U.S., engineers are working with architects, construction workers, and real estate developers to turn spent limestone mines into state-of-the-art business parks, where miles and miles of passageways stretch with gigantic pillars, painted white and numbered, serving as postal address markers.
When mining of limestone began in the late 1800s, industrialists quarried it with little regard for the shape their excavation left. By the 1950s, however, the goal had changed to that of leaving usable underground space behind. Miners carefully tunneled into hills and bluffs, removing 12-feet thicknesses of stone in grid-shaped patterns up to 150 feet below the earth's surface. Today's result: millions of square feet of space dominated by massive pillars holding up mine roofs. "The underground is a building in itself," says Dave Williams, an architect with Kansas City-based Finkle|Williams Architecture, a firm that works with SubTropolis in designing underground spaces.
The Kansas City area ranks as the leader in subsurface development with over 20 million square feet of commercial and industrial space, more than 10 percent of the total. Some 30 underground business parks populate the area, housing over 400 businesses. To give an idea of scale, SubTropolis covers 913 acres and has 6.5 miles of roads and 2.1 miles of rail corridors. It is owned and operated by Hunt Midwest Real Estate Development, which gets its name from noted industrialist Lamar Hunt, owner of the Kansas City Chiefs NFL team.
Another major player in the business is Meritex Enterprises, a real estate firm based in Minneapolis, Minnesota. Meritex has developed a complex in Lenexa, a Kansas City suburb, in recent years and also has a facility in Nashville, Tennessee.
Spreading the Wealth
But the underground is becoming big business in other parts of the country as well, as underground facilities have also sprouted around Pittsburgh, Pennsylvania; Louisville, Kentucky; St. Louis, Missouri; and Indianapolis, Indiana. And large real estate companies aren't the only ones playing the subsurface game. Gary Bruce, an electrical engineer with Bruce and Merrilees Electric, a consulting firm he owns just north of Pittsburgh, has joined the fray. Having worked with mines since 1958, Bruce recently teamed with family members to purchase Gateway Commerce Center in Wampum from Meritex. With another group of partners, Bruce also owns Bradys Bend Underground Storage, a 30-million-square-foot facility for storing records and vehicles in East Brady.
In addition, Kentucky Underground Storage lies in Wilmore, Kentucky, about 90 miles northwest of Louisville. They store paper records, magnetic data, videotapes, and microforms and specialize in disaster recovery. W.R. Griffin founded the company and passed it on to his five daughters when he died three years ago. Its unique 30-foot ceilings -- most are 12 or 16 feet -- allow it to serve as more of a warehouse facility. Bussen Quarries, Inc., a limestone mining company, owns Bussen Underground Storage in St. Louis County, Missouri east of the city.
Underground space offers several advantages. "We don't have to deal with the elements," Williams says for starters. It provides a naturally cool, protected, and secure environment and saves on construction and energy costs. Limestone is three times stronger per square inch than concrete, allowing for storage of extremely heavy items. With disaster recovery becoming more important since the terrorist incidents of 9/11/01, companies can house computer systems underground to back up their records. In the most secure vaults at Kentucky Underground Storage, a person must go through six layers of security, plus video cameras, before entering.
But even with the advantages, engineers and others must deal with several issues unique to limestone mines to make the spaces safe and desirable. Some companies that develop and market underground parks have engineers on staff, while others bring in outside consultants, and some do a combination of both. Ventilation becomes a primary concern. Bruce reveals, "There's pretty good air flow in most mines because you usually have more than one entrance, and there's a difference in elevation."
To the uninitiated, entrances often rise up unexpectedly, and from a distance, trucks seem to disappear into the hillside. However, some facilities, such as SubTropolis, have multiple well-marked entries smack-dab in the city center. Others are more rural and may have several ways to get in and out but use one main entrance to control who comes and goes.
Varying entrance locations also contribute to fluctuations in temperatures, which typically average a constant 54 degrees F. underground. (Some underground parks hold 5K running races -- runners love the predictable, moderate temperatures). "When you have a difference in temperature from the inside to the outside of the mine, it contributes to air flow," Bruce states. Engineers use steel doors and industrial fans to stop or move the air according to each tenant's needs, he adds.
Check the Roof
On another front, Roof control can also present a serious challenge. "You have to make sure the roof is secure and safe," Bruce explains. Older mine facilities like Bradys Bend usually are quite stable, he says, but new areas still being mined require constant checking.
Developers use different methods to ensure the rock ceilings aren't shifting. "We have bore holes we can look up into and see the strata in the roof, so we can look for laminations or loose layers," Bruce says. Engineers also use sensitive instruments equipped with warning flags developed to measure earth movement to the thousandth of an inch. "There's natural movement in the earth. If a separation begins in the stone, a flag drops down."
At Meritex Enterprises' Lenexa facility, Operations Manager Ralph Nyquist says he and his crew watch for loose rocks or any changes in the rock walls on a daily basis. Measurements are carefully checked and recorded quarterly as well.
Nyquist says air quality also ranks as important to some tenants such as those that store food products or archive records. "Every month we do air-quality checks," he says, noting particulates, radon, and carbon monoxide as items being monitored. As one way to help ensure its air quality, SubTropolis requires electric forklifts instead of the exhaust-emitting propane-powered variety.
Humidity and temperature control also present engineering and architectural challenges. "You must be able to dehumidify and bring the rooms to temperature," Bruce states, adding that records storage demands keeping humidity levels within one to two percent over the course of a year and maintaining a constant temperature.
Ironically, subsurface development has evolved as a win-win situation for limestone mine owners and subsurface developers, with each scratching the other's proverbial back. The two main supplies used to construct individual buildings in underground business parks, cement and concrete blocks, are made from limestone, and these constitute the primary uses for the sedimentary rock. "Basically, down here it's concrete floors, concrete block walls, sprinkler systems, lights, and doors and then you're in business," Nyquist quips. The irony doesn't escape Dave Williams. "They're building their buildings by digging them out," he says. But the stone's use in construction is certainly nothing new, as lime, or calcium carbonate, has been used in construction for over 3,000 years.
In the U.S. and United Kingdom, limestone is widely available and relatively inexpensive, so it is excavated and crushed for use in concrete and asphalt production and a host of other everyday uses. Many Kansas City-area buildings, roads, and highways including the runways at Kansas City International Airport were built using rock removed from the SubTropolis mine. Limestone also is used to refine sugar, manufacture glass, make paint and brown paper bags, coat chewing gum, and as an ingredient in toothpaste. Powdered limestone takes on environmental uses in neutralizing acidic lakes and rivers, soils, and gases from industrial processes.
Fire Protection Learned the Hard Way
When businesses construct underground facilities, sprinkler systems come as standard nowadays. This has resulted largely from the case of Americold Services Corporation in Kansas City, where fire broke out in an underground storage area in 1991. At the time, Americold ranked as the world's largest underground food storage facility with freezers. Their facility had no sprinklers and also contained cleaning compounds, pesticides, paper goods, and cooking oil, contributing to a blaze that approached 2,000 degrees F. and took weeks to burn itself out despite continuous firefighting efforts.
Today's underground storage facilities operators keep close tabs on items stored there. They are suitable for light industry without chemical use, warehouse space, records storage, and offices. "We don't store anything flammable," Nyquist proclaims. If a fire were to break out, he says local fire officials would respond within about three minutes because technology in place automatically monitors the premises and alerts authorities.
Other fire protection measures are taken as well, often in combination with other functions. Portal and ventilation fans are set up to alleviate smoke or fire. Individual tenants have the ability to manually control pressurization and exhaust, and smoke corridors have been placed carefully throughout the facility. A centralized computer monitors SubTropolis' state-of-the-art fire sprinkler systems, and security officers patrol the site around the clock. At Kentucky Underground Storage, each storage vault for archival records has its own smoke and motion detectors and closed-circuit cameras. At Bussen Underground Storage in the St. Louis area, the warehouse has safety features for fire and smoke detection, carbon monoxide detection, and fresh air ventilation.
Although the former limestone mines are so massive they are, well, cavernous, those in the underground business don't like the word "cave" used in conjunction with them. "People automatically will say 'You're out in the caves.' But we like 'underground,'" Nyquist says. "This is not like the environment of a cave." Whatever you call them, underground business parks have proven a worthy alternative to the above-ground variety and even offer a few advantages. And not everybody can tell their friends or family they work underground ... in pleasant surroundings.
Julie Buzbee is a freelance writer and editor in Topeka, Kansas
For more information on underground business parks:
Hunt Midwest SubTropolis - www.huntmidwest.com
Meritex Enterprises - http://meritex.com
Bradys Bend in Pennsylvania - www.bradysbend.com
General - www.subsurfacebuildings.com
Editor: Tom Gibson
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©2006 Progressive Engineer
March 2, 2006 - FINANCE AND COMMERCE THURSDAY,
L.J. Melody, First Minnesota Bank complete financing deals
The Twin Cities office of L.J. Melody & Co, a financing subsidiary of CB Richard Ellis, closed a couple of substantial loans early this year. Here are the details from this early-2006 financing package.
Meritex seeks flexibility, better risk profile
St. Paul-based Meritex Enterprises, Inc. completed a $32.2 million refinancing last month on a pair of industrial portfolios in the Twin Cities and Columbus, Ohio. The combined portfolios include more than 1.1 million square feet of multi-tenant industrial properties.
The 90-year old company acquired those properties in the last 2 1/2 years, continuing Meritex' transition away from the large bulk warehouses and office buildings that were the company's stock-in-trade for decades. "We've been moving to fill our portfolios with multi-tenant industrial properties," said Dan Williams, Chief Investment Officer at Meritex. "That gives us a more diverse tenant base, and that's attractive to wider audiences of potential buyers and lenders, which means we can be liquid."
That liquidity strengthens the company's risk profile. That was the goal as Meritex started shopping for a permanent financing package for the portfolios, which constitute about 12 percent of its holdings. "We financed a $38 million portfolio in 2004 with a 12-year term loan, which was a long term for a company that was accustomed to shorter bank borrowing," said Chief Financial Officer Tom Hotovec. "This time, Meritex was looking for a loan package with a shorter term and additional prepayment flexibility, to add interest rate risk protection on its whole portfolio." Hotovec looked to insurers rather than conduits to provide that tailored approach, as well as to build a financial relationship that could accommodate any course changes that came up during the loan. He chose L.J. Melody, who had brokered Meritex' 2004 financing, to help in the search. "We have good relationships with other brokers, but we offered this to Melody exclusively because we thought they'd be able to court enough lenders to give us the selection we wanted," Hotovec said. "And Murray Kornberg (a director in Melody's Minneapolis office) worked on the borrowing side of the table in the past. We know he understands what we're looking for." Meritex finally chose Principal Global Investors and MassMutual as lenders for the two portfolios.
Hotovec didn't disclose the loan costs, but he said that by bundling the properties into larger portfolios, the firm was able to coax lenders into more aggressive pricing. "Meritex gained another pricing advantage by cross-collateralizing the properties," Hotovec said, "which conferred the top properties' risk profiles with the whole portfolio." Included in the Twin Cities portfolio are two warehouses — one in Minneapolis and the other in Rogers — totaling 387,000 square feet and a 240,000 square foot warehouse-distribution center in Shakopee.
January 6, 2006 - Meritex announces the addition of three new buildings, totaling 250,000 square feet, to its real estate portfolio during the month of December, 2005.
The acquisitions included two buildings totaling 145,600 square feet in suburban Atlanta, Georgia as well as 4.9 acres of land available for development. Additionally, Meritex announces its expansion into the Houston, Texas industrial market with the purchase of a 104,000 square foot, single-tenant property. The recent acquisitions bring the total Meritex industrial portfolio to 9.53 million square feet.
“We are pleased to acquire these high quality buildings as we expand our holdings in the important markets of Atlanta and Houston,” said Paddy McNeely, Chairman and CEO. “Through acquisitions such as these, Meritex is meeting its strategic objectives of diversifying its market holdings in opportunistic markets throughout the United States.”
August 15, 2006
March 2, 2006
January 6, 2006
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