Secondary markets across the country are changing their approach to industrial development: they are building warehouse and distribution space on a speculative basis, or risk being dismissed by companies before site visits occur. Ted Branson, SIOR Industrial Division Director at Landmark Commercial Real Estate in Wichita, says the old mode, waiting for tenant demand before starting construction, now puts cities at a disadvantage when competing for national industrial users.
“When a company looks at Wichita, they’re looking at a lot of cities,” Branson says. “They come through and say, ‘Is there anything that exists? No, pass this up. We need to get buildings up because people need to see them. They have to touch it.”
Branson’s experience illustrates a practical change in industrial site selection. Major metros like Dallas, Chicago, and Kansas City have enough built inventory to remain options for relocating or expanding companies. In contrast, secondary markets without available buildings often lose out, regardless of incentives or location, simply because there is nothing physical for prospects to tour.
Branson advocated for a spec building program in Wichita several years ago, arguing that the city’s reluctance to build without signed tenants was holding it back. Drawing on nearly five decades in commercial real estate, he told city officials that companies cannot operate in markets without ready-to-occupy space. The city eventually approved the program, and Branson reports that “several spec buildings have been growing up routinely” since then.
The results are visible in Wichita’s landscape. Branson points to a wave of “mega warehouses” in Wichita, which means buildings from 100,000 to 500,000 square feet, now under construction or recently completed. “We’re seeing those pop up and more coming. I’ve got a couple being built right now in the one hundred to three hundred thousand foot range,” he says.
One developer in Park City, a suburb north of Wichita, has been especially aggressive, building about three million square feet over the past decade. According to Branson, this developer uses some for his own bonded warehouse business and leases out the rest, with vacancies quickly filled.
Spec construction carries financial risks for secondary markets that lack the deep capital pools and high absorption rates of major logistics hubs. Building on spec means committing millions of dollars before a tenant signs a lease, a risk many smaller cities and local developers have historically avoided.
Branson cites the ICT Twenty-One site, a former oil refinery at the corner of 21st Street and I-135, as a turning point. After environmental cleanup, the owner built three 200,000-square-foot warehouses and attracted a Love’s truck stop, turning the intersection into a primary trucking and warehousing hub. All three warehouses leased quickly, according to Branson.
The presence of new, high-quality industrial buildings is drawing outside investors to the Wichita area. Branson says he has seen increased interest from investment groups and developers from outside the region.
“There is a large fund that just bought a bunch of acreage with a local broker and decided they want to build some more,” Branson says. He believes the group is based in Colorado and notes that after buying and filling three large warehouses, they are now planning additional projects.
Branson also mentions working with a Colorado-based medical developer interested in acquiring an industrial park for its operations, with plans to build a 100,000-square-foot facility and a manufacturing building.
Wichita has also attracted national players. Amazon recently built a 1.3 million-square-foot facility in the area and maintains two other warehouses, establishing a significant presence in the market.
Branson describes the Wichita industrial market as stable rather than explosive. “It’s been steady for several years of steady activity,” he says, suggesting that the shift to spec building has created a more consistent pipeline of deals rather than large booms or busts.
For other secondary markets, the question is whether this model can be sustained. Spec construction requires patient capital, support from local governments, and a reasonable expectation that tenants will come. Cities without Wichita’s location advantages, such as its central position at the intersection of major highways, may face greater risks if absorption rates lag.
Landmark Commercial Real Estate recently launched a dedicated industrial division to focus on this growing segment. Branson says the division, created three months ago after years of preparation, is building a targeted marketing list of about 3,000 contacts.
The creation of a specialized industrial division at a regional firm signals that speculative construction has reached a scale where expertise and proactive outreach are required to succeed. Whether this shift is permanent or a response to current market dynamics will depend on future absorption rates and vacancy trends.
For now, Branson’s view is clear: in industrial real estate, having visible inventory is a prerequisite for even being considered by major tenants. Secondary markets that wait for pre-leased tenants before building risk being overlooked entirely. As Branson puts it, “Visibility precedes viability.” For cities outside the nation’s largest metros, speculative construction is quickly becoming the cost of entry in the competition for industrial tenants.
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