Texas Real Estate Business

FEB 2018

Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.

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30 • February 2018 • Texas Real Estate Business www.REBusinessOnline.com LAST-MILE LOCATIONS TOP INDUSTRIAL WISH LISTS INDUSTRIAL from page 1 transportation, proximity to a growing population and amenities that cater toward distribution-oriented tenants. 75/Wilmeth @ McKinney In August 2017, McKinney Eco- nomic Development Corp. (MEDC) and the City of McKinney selected Dallas-based Hunt Southwest to de- velop two new speculative facilities. The firm recently broke ground on 75/Wilmeth @ McKinney, a 202,270-square-foot speculative warehouse and is in the planning stages for a second facility, 75/380 @ McKinney, less than a mile away. Designed by in- ternational architec- ture and design firm Ware Malcomb, 75/ Wilmeth @ McKin- ney features 32-foot clear heights, 50-by- 52-foot column spacing, an ESFR sprinkler system, skylights and LED warehouse light- ing with motion sensors. "Tenants are looking to upgrade to Class A facilities with higher vis- ibility and higher clear heights," says T. Preston Herold, vice president of Hunt Southwest. "In general, they are looking for a nicer work environ- ment within the warehouse." 75/Wilmeth @ McKinney is located just south of the new PACCAR Truck Light Assembly Campus and adja- cent to the UPS McKinney hub. "We really like these sites for e- commerce," says Herold. "Their proximity to the high-income roof- tops of McKinney, Plano, Allen and Frisco make them good last-mile lo- cations. We're also seeing deals for assets next to a FedEx facility or UPS hub so the product can get out as late as possible and still make the cutoff." PACCAR suppliers could be ten- ants at the buildings, as could sup- pliers for the homebuilding industry and basic e-commerce users, says Herold. 75/Wilmeth @ McKinney is slated for a July completion; 75/380 @ McK- inney should wrap by year 's end. Port 10 Logistics Center In January, Pontikes Development, the development arm of Houston- based Satterfield & Pontikes Construc- tion Inc., broke ground on Port 10 Lo- gistics Center, a speculative industrial park situated on 246 acres in the south- east Houston community of Baytown. At full build-out, the park will to- tal 3 million square feet, 2 million of which will be directly rail-served. The property will also feature more than a half-mile of frontage along Interstate 10, port access and proximity to sev- eral chemical processing plants and re- fineries in the area, giving distributors the ability to ship goods to their final destinations via train, boat or truck. "There's high demand for industrial space — especially rail-served space — and buildings that are over 500,000 square feet," says Jess Arnold, vice president of Pon- tikes Development. "There's not a lot of those in Houston right now. It's a new phenomenon and we're hoping to ride that wave." Phase I of Port 10 will include two cross-dock buildings — one totaling 485,000 square feet and the other 295,000 square feet. The project will deliver big box warehouse space geared toward distribution. "E-commerce is changing the land- scape of industrial development in a lot of ways," says Arnold. "These ten- ants are looking for large, cross-dock distribution warehouses because that last mile is so important." Cross-docking reduces material handling and the need to store prod- ucts long-term, expediting the ship- ping process and getting goods to con- sumers faster and more efficiently. Designed by Houston-based Powers Brown Architecture, the development will include buildings ranging from 85,000 square feet to 750,000 square feet, flexible enough to capture a wide range of tenants, according to Arnold. "We like to have a variety of build- ing types and sizes so that at any point, we can build product that any tenant of any size wants to be in," he says. Pontikes expects to complete Phase I of Port 10 during the third quarter. Southpark Commerce Center At the end of January 2017, Ridge, the industrial development arm of Transwestern, delivered three build- ings within Southpark Commerce Center, completing the final phase of its 2.3 million-square-foot property. Designed by Austin-based STG De- sign, the new buildings range in size from 73,832 square feet to 162,232 square feet, and feature 24-foot clear heights, 50-by-50-foot column spacing and 467 parking spaces. The park is located near Interstate 35 and High- way 71, four miles from downtown Austin and eight miles from Austin International Airport. "There is a lot of population growth in Austin," says Ben Newell, senior vice president at Ridge. "Companies are working to get clos- er to consumers, and it's difficult to serve that growing popu- lation remotely from a warehouse in Dallas or Houston." Proximity to a growing population, plus strong fundamentals, makes Austin a smart choice for develop- ment, according to Newell. A hub for office and tech, Austin posted a 2.1 percent year-over-year increase in number of jobs added, and an unem- ployment rate of 3.4 percent, accord- ing to a third-quarter report from Col- liers International. In addition, Newell says, e-com- merce is pushing the size of tenants in the market. "The distribution models are chang- ing with e-commerce," he says. "Where 10 years ago a lot of tenants were 20,000 square feet or smaller, to- day you're seeing many more tenants that are above 40,000 square feet." Southpark Commerce Center is home to AT&T, Life Technologies Corp., Medline Industries and Sleep Experts. Newell says the new build- ings will target similar users. Enterprise Industrial Park Robinson Weeks is underway on Enterprise Industrial Park, a multi- phase project located within Titan Industrial Park in Schertz, roughly 22 miles northeast of San Antonio. . In December 2017, Robinson Weeks delivered Enterprise Industrial Park — Building III, a 359,200-square-foot, cross-dock building. Designed by San Antonio-based Beaty Palmer Archi- tects, it offers 32-foot clear heights, 70 dock-high doors, four loading ramps and dedicated trailer parking. December also marked the groundbreaking of Building V, a 188,500-square-foot, rear-load asset. "It will be geared toward a smaller, 25,000- to 35,000-square-foot user," says Welch of Robinson Weeks. "We've had a lot of interest from ten- ants of that size, but couldn't accom- modate them in the existing build- ings." Enterprise Indus- trial Park currently houses tenants like Major Wire, Wil- sonart and Berger Transport & Stor- age. San Antonio's central location makes it ideal for distributors eager to locate along the last mile, notes Welch. "We've seen a lot of activity," he says. "With Interstate 10 going out to Houston, we've got a nice, centrally located market that can handle that distribution demand, so we get a lot of regional distributors. It's a central- ized location in Texas that can hit Houston, Austin, up to Dallas." At full build-out, the development will include a fifth site — Enterprise Industrial Park — Building IV. Simi- lar to the first two buildings within the park, Building IV will target distribution-oriented tenants, whose space requirements range from 40,000 square feet to 120,000 square feet. "It comes down to building and tenant size," says Welch. "You've got to develop what that specific market needs and desires. Each market will have its own characteristics." n The timeline for shipping goods that have been stored at 75/Wilmeth @ McKinney can be extended, thanks in part to the warehouse's proximity to a UPS hub in McKinney. Located just four miles from downtown Austin, Southpark Commerce Center is well-positioned to service one of the country's fastest-growing consumer populations. T. Preston Herold Hunt Southwest Jess Arnold Pontikes Development Ben Newell Ridge David Welch Robinson Weeks

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