Dallas developer banks on e-commerce with large industrial constructing east of Houston

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Dallas-based Hunt Southwest Actual Property Improvement is creating a 1 million-square-foot constructing in Baytown’s TGS Cedar Port Industrial Park with the hopes of signing an e-commerce tenant.

The lately introduced undertaking is among the many largest — if not the biggest — spec industrial buildings to interrupt floor within the Houston space.

Hunt Southwest bought 56 acres at FM 1405 and Borusan Highway in Chambers County from Trans-International Options, the operator of TGS Cedar Port Industrial Park, in October. The corporate broke floor on Cedar Port Commerce Middle in May, and plans to finish the constructing, which is being marketed for lease to a single tenant, in March 2021.The supply of products from the distribution heart straight to shoppers has taken on higher significance as COVID has accelerated on-line gross sales, stated Preston Herold, president of Hunt Southwest.

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“People were forced to go that route based on COVID, so you’re seeing great demand in that e-commerce fulfillment space,” he stated.

Hunt Southwest is focusing on a big e-commerce person with a constructing that is able to occupy, saving the time-consuming technique of going the build-to-suit route.

“That’s what we saw in Houston, that people weren’t building spec buildings in the million-square-foot space range,” stated Herold, who claimed the constructing is the biggest spec constructing ever to be developed in Houston.

Cedar Port Commerce Middle is being inbuilt one of many nation’s largest enterprise parks, spanning 15,000 acres within the Baytown space east of Houston. Different corporations with distribution and achievement facilities in TGS Cedar Port Industrial Park embody Dwelling Depot and Walmart.

The undertaking provides to 14.9 million sq. ft of business house underneath development within the Houston space throughout 69 properties at midyear, based on Transwestern Actual Property Companies. About 2.5 million sq. ft of that’s within the East-Southeast Far submarket, the place the emptiness price is 9 %, or 1.four proportion factors increased than the Houston common, based on Transwestern.

“Hunt Southwest has had success in spec development of large distribution facilities,” stated Stuart Showers, vice chairman of analysis at Transwestern. “In this instance, going over 1 million square feet on a spec development makes sense when you factor in close proximity to the port, a strong base of nearby large users including Ikea, Walmart, DHL and Home Depot, as well as a growing dependence on e-commerce.”

Whereas the constructing is giant — with sufficient house to accommodate 17 soccer fields underneath one roof — it’s not distinctive.

Quite a few buildings prime the 1 million sq. foot threshold throughout the Houston market, together with amenities in Katy and north Houston for e-commerce large Amazon, which additionally plans to open an 850,000-square-foot achievement heart in Richmond subsequent yr.

Different current build-to-suit developments embody a 1.three million-square-foot undertaking for Medline, a producer and distributor of medical provides, in Katy, and a 2.1 million-square-foot distribution heart for Ross Shops in Brookshire.

Greenback Tree lately opened a 1.2 million-square-foot distribution heart it developed in Rosenberg to serve a three-state area, based on the corporate.

Hunt Southwest’s Cedar Port Commerce Middle was designed by Powers Brown Structure with a 40-foot clear peak, and is being constructed by E.E. Reed Development. Jason Dillee and Nathan Wynne of CBRE are dealing with leasing.

On HoustonChronicle.com: COVID fueling demand for industrial house for e-commerce

The constructing is fitted to warehousing, distribution and achievement operations or manufacturing operations, Herold stated. The situation is close to the Grand Parkway, Interstate 10, State Highways 225 and 146, and Port Houston’s Bayport and Barbours Reduce container terminals.

Whereas Hunt Southwest sees promise on Houston’s east aspect, it put one other undertaking in northeast Houston on maintain amid sluggish leasing exercise. It’s in a submarket the place a number of different 500,000-square-foot speculative buildings haven’t but been leased but, based on Herold.

The corporate bought land at 17440 U.S. 59 for the event of 59 Logistics Middle final yr.

“We’ve completed all of the earth work and underground utility work, but for market reasons we’ve decided to pause that one,” he stated. “We’re waiting until we see some leasing to continue on with that project.”

katherine.feser@chron.com
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