TEXAS SNAPSHOT, APRIL 2006

Waco Industrial Market

Waco, Texas, is seeing significant growth in all property types throughout the community. “We attribute this growth to a number of factors: our location, steady growth from within, attractive and affordable real estate market, great quality of life, roadway improvements, aggressive incentives and a friendly business climate,” says Pat Nowotny, senior vice president of economic development for the Greater Waco Chamber of Commerce.

One property type, in particular, is especially active. Waco’s industrial market has grown with the development of big box distribution centers, as well as with the expansion of the aviation and aviation-related industries and manufacturing operations in the area.

“Our regional industrial parks have seen significant developments during the past 5 years and will see additional growth in 2006 and years to come,” Nowotny says.

For example, last year in the McGregor Industrial Park, Dell moved into a 52,000-square-foot existing facility and Ferguson expanded its existing location in the park by 200,000 square feet. In addition, Sanderson Farms is developing a processing facility and a hatchery this year at Waco International Aviation Park & TSTC-Waco, which is situated in the northeast quadrant of Waco along the Highway 84 corridor.

The majority of industrial development is taking place in the Southwest and Northeast submarkets at Texas Central Industrial Park and Waco International Aviation Park, respectively, due to new construction and highway improvements in both areas, Nowotny says. Texas Central Industrial Park, for example, has seen many new developments during the past couple of years, from a Wal-Mart Return Center and a Tractor Supply Company Distribution Center in 2003 to Caterpillar Work Tools and Services division in 2005.

Despite all of the activity, no new developers have entered the Waco industrial market. “The major projects within the past 5 years have been owner occupied, with the exception of Tractor Supply Distribution, and that particular developer is not new to Waco,” Nowotny says.

Currently, rental rates are ranging from $2.25 to $4.20 annually per square foot for large industrial space. Two significant leases that have closed recently include 106,000 square feet at 601 General Parkway to a plastics manufacturer and 105,000 square feet at 301 Schroeder to a general distributor. Vacancy rates are estimated to be between 15 percent and 20 percent, according to Nowotny.

In the near future, Northeast Waco in the Airpark area, particularly near Sanderson Farms and L-3, is the place to watch. Activity is expected to remain strong around McGregor Industrial Park and Texas Central Industrial Park where 500 acres is available along the Union Pacific railroad.

— Pat Nowotny is senior vice president of economic development with Greater Waco Chamber of Commerce in Waco, Texas.

©2006 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.