Portland-based Bob’s Red Mill to double distribution space

After 16 years at Gramark Industrial Park on Southeast International Way in Milwaukie, Bob’s Red Mill simply needed more space.

The Portland-based producer of natural whole grain products will move its distribution facility a mile down the road to Commerce Park. The move will mean Bob’s Red Mill will nearly double its warehouse and distribution capacity from about 34,000 square feet to almost 65,000 square feet.

Dennis Gilliam, executive vice president of sales and marketing for Bob’s Red Mill, said the need for space reflects the company’s double-digit growth over the past few years. He said the company’s recent success is actually due to the slow economy.

When times are tough, people move away from the more esoteric, more frou-frou foods and move back to the basics where they perceive a full value and good nutrition, Gilliam said. People are looking for more value for their food dollar.

Bob’s Red Mill, which produces stone-milled flours, cereals and baking mixes, offers more than 300 products sold in grocery stores across the United States and in Canada. Gilliam said all of the company’s finished goods will be stored at the new distribution center.

Although Bob’s Red Mill is vacating its distribution space, the company will still keep 82,000 square feet at Gramark for its manufacturing facility, retail store and visitors center. The center, which opened last fall, features an 18-foot-tall operational water wheel, displays of historic milling equipment, a working stone mill, a bakery, a cafe, a bookstore and a classroom and full kitchen for cooking classes.

Gilliam said the company chose Commerce Park for its distribution center because it was nearby and offered room to grow. The six-year lease includes an option to expand into roughly 35,000 square feet of additional space.

Commerce Park includes four buildings totaling 348,249 square feet of space. In November, Commerce Park’s main tenant, Unisource left the park to lease space in Gresham. Unisource had occupied more than two-thirds of the park.

Matthew Kayser, a senior associate for Trammell Crow Co., said he’s pleased to see Unisource’s former space in Commerce Park getting gobbled up. Edge Logistics also recently leased 38,400 square feet of space at Commerce.

We feel good about the fact that we had more than 200,000 square feet of space come on the market and we managed to suck up 100,000 square feet of space within two months of the tenant vacating. We’re pretty excited that we’ve had that much of a head start, said Kayser.

He said there is continued activity and interest in the park.

Kayser, along with John Fettig of Trammell Crow, represented Commerce Park owner SSR Realty Advisors in the Bob’s Red Mill deal.

Mike Merino and Blake Hering of Norris Beggs & Simpson represented Bob’s Red Mill. Merino said the company looked at a few different locations but didn’t spend a lot of time shopping around.

This facility met their requirements. It’s a larger, much more functional space, Merino said.

He said the lease deal included quite a bit of landlord incentives that range from abated rent to a comprehensive tenant improvement package.

He said improvements to the space will include more overhead gas- based heaters, a dividing wall, and re-carpeting and painting the 1,000-square-foot office area.

The building was advertised at 34 cents per-square-foot for the warehouse space and 60 cents per-square-foot for the office space, not including operating expenses.

Bob’s Red Mill plans to move in April 1.