TEXAS SNAPSHOT, MAY 2005

AMARILLO, TEXAS

The commercial real estate market in Amarillo, Texas, is experiencing continued growth in new development in the major sectors. According to Steve Pritchett, vice president of the Amarillo Economic Development Corporation (EDC), “Each of the past several years has set a new record for total dollar value of new construction.” While the retail sector may be lagging behind, there is significant activity in the office and industrial markets.

“Most commercial and residential development is occurring in the southwest and northwest quadrants of the city,” Pritchett notes. During the past few years, development has moved into west Amarillo, where there is available land to support growth.

Several developers are busy with projects in Amarillo. According to Pritchett, some of the more active commercial developers in the area include Dick Fausset, George Chapman and Eddie Scott.

The new Point West Business Campus by Dick Fausset is underway; it is located just west of the Harrington Regional Medical Center. The infrastructure for the master-planned, 166-acre business park has been completed and BlueCross BlueShield of Texas has acquired an 11-acre tract of land on which to build a new $20 million, 100,000-square-foot customer service center. Within the Harrington Regional Medical Center, BSA Healthcare is constructing a $60 million patient tower. The acute-care hospital should deliver in December 2006.

As in many other cities in Texas, the industrial sector is picking up steam as well, notes Pritchett. The EDC owns 340 acres of property in Amarillo that is being prepared for development as a distribution and industrial park. “The site already has transportation infrastructure with access to Interstate 40 and the individual tracts of land will be rail-served via the Burlington Northern Santa Fe mainline,” Pritchett says. A 53-acre tract was recently conveyed to Ben E. Keith Inc., a distributor of food service products, for the construction of a new distribution center. The 274,000-square-foot project is valued at more than $20 million and is expected to be complete and fully operational by summer 2006. Also in the works is the Phase 3 expansion of Bell Helicopter Textron’s aircraft assembly and hangar facilities at its Amarillo Assembly Center. According to Pritchett, the $16 million project will more than double the size of Bell’s existing flight hangar.

An interesting civic development underway in Amarillo is the new Globe News Center for the Performing Arts. The $30 million venue — which will be home to the Amarillo Symphony, Lone Star Ballet and the Amarillo Opera — will be complete this fall.

The leasing of existing space has not performed at the level of new development in Amarillo, yet existing vacancies are manageable in the stable office and industrial sectors. Existing office space boasts an occupancy rate of 87 percent. The most notable office lease of late involved the law firm Sprouse Shrader Smith P.C. leasing 20,000 square feet within the Bank of America building. The industrial market is slightly better, with an occupancy rate of 90 percent. Anderson Merchandisers, a wholesale distributor, recently leased 70,000 square feet at the McCarty-Hull Distribution Center. The retail market continues to trail behind; the current occupancy rate is 78 percent.

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