Key Tronic to invest $28 million into Springdale site, add more than 400 jobs

Spokane Valley, Wash.-based electronics manufacturer Key Tronic Corp. will invest $28 million to relocate its Fayetteville plant to a 290,540-square-foot industrial building at 601 W. Apple Blossom Road in Springdale, according to a Thursday (Feb. 13) news release.

The move is expected to increase its U.S. production capacity by about 40% and create more than 400 jobs over five years as the company expands production to meet customer demand and mitigate tariff impacts.

On Feb. 4, Key Tronic, a publicly-traded company (NASDAQ: KTCC), announced plans to expand manufacturing in Arkansas and Vietnam to meet rising customer demand. The Feb. 4 news release notes the expansion is expected to help mitigate the “adverse impact and uncertainties surrounding the recently announced tariffs on goods manufactured in China and Mexico.”

“These initiatives reflect the longstanding trend to nearshore production away from China and may also help address the potential adverse impact of tariff increases,” said Key Tronic CEO Brett Larsen said. “Our U.S.-based production provides customers with outstanding flexibility, engineering support and ease of communications, and our Vietnam-based production offers the high-quality, low-cost choice that was associated with China in the past.”

According to the Feb. 13 news release, Key Tronic will lease the “largest vacant building in Northwest Arkansas” for an initial 10-year term. The company’s North American Manufacturing Center of Excellence will be its flagship manufacturing and research and development location.

“We are pleased to announce the expansion of our U.S. manufacturing operations in Northwest Arkansas,” Larsen said. “Our new center of excellence in Springdale will provide both our employees and customers with cutting-edge technology and the increased capacity necessary to accommodate expected growth.”

Palmer Hays, industrial and land specialist at Bennett Commercial Real Estate in Rogers, represented the tenant.

“The state of Arkansas continues to establish itself as a leader in attracting and retaining world-class manufacturing partners,” Hays said. “The state’s momentum is undeniable, and I’m confident there’s still significant growth ahead. Key Tronic’s substantial investment in Northwest Arkansas underscores their commitment to staying at the forefront of the contract manufacturing landscape, attracting top-tier talent, and thriving in a pro-business environment. This commitment speaks volumes to our market’s workforce, and the positive impacts of this investment will be seen for years to come.”

Nick Fasciana, senior vice president of U.S. operations at Key Tronic, said the company’s Fayetteville location will close by the end of 2025. The existing 130,000-square-foot facility at 3660 S. School Ave. has 270 employees, and he said all are expected to transition to the new Springdale location, which will have nearly 700 employees. The move is expected to start mid-to-late July and take two to three months to complete. The company established its Fayetteville location in 1985.

The Springdale building landlord is I49 Industrial LLC, led by Crossland Realty Group, a privately owned real estate investment firm based in Kansas and a division of Crossland Construction. The company completed the building in 2023 and two adjacent buildings within the 91-acre I-49 Logistics Park, which is south of the headquarters of Lowell-based J.B. Hunt Transport Services Inc. Crossland Realty Group bought the land in November 2020 for $5.2 million. A fourth industrial building is in the works.

“Crossland purchased the land … with a vision to build a modern, best-in-class facility, and we are grateful that Key Tronic has chosen this location to call home,” said Mattie Crossland, director of real estate for Crossland Realty Group. “This building is part of a larger business park, representing an investment of over $100 million in the Springdale community. Our goal is to provide spaces that allow our tenants to run their businesses efficiently while also contributing to the growth and future of the community.”

The landlord is represented by Marshall Saviers and Stephanie Farmer, both of commercial real estate firm Cushman & Wakefield/Sage Partners in Rogers. Saviers, the firm’s principal and CEO, said this project “will create significant job opportunities and further strengthen the region’s economic growth.

“This transaction underscores our region’s strong demand for industrial space, as reflected in Sage’s Q4 market report,” Saviers said. “The high level of activity has led Crossland Realty to kick off another building in I-49 Logistics Park that will be under construction soon and available for lease.”

In January, I49 Industrial received a commercial alteration permit valued at $7 million for tenant improvements that will be completed within the building’s existing footprint and include office space, manufacturing area and warehouse. Crossland Construction expects to complete this work in the third quarter of 2025. In May 2022, I49 Industrial received a commercial building permit valued at $23.12 million to construct the building shell. The city of Springdale issued both permits.

“Key Tronic has a long history of manufacturing electronics in Arkansas, and we are proud that the company has decided to expand their presence and increase production capacity in our state,” said Clint O’Neal, executive director of the Arkansas Economic Development Commission.

Key Tronic in February posted revenue of $245.4 million in the first six fiscal months of the year, down from $298 million in the same period of the previous fiscal year. The company posted a loss of $3.79 million in the first six months, below the $1.41 million gain in the same period of the previous fiscal year.