| FEATURE ARTICLE, NOVEMBER 2008
INDUSTRIAL ROUNDUP
By Lindsey Walker
Panattoni Plans 1 Million-Square-Foot Airtex Industrial Center
Sacramento, California-based Panattoni Development Company recently acquired nearly 60 acres in North Houston with plans to develop a 1 million-square-foot Class A industrial park called Airtex Industrial Center. The project is located at the intersection of Airtex Drive and Interstate 45, immediately north of the Beltway 8 toll road.
“Airtex Industrial Center is offering high cube, Class A, light industrial space to the North submarket with the user in mind,” says Justin Bennett, who is spearheading the project for Panattoni. “This site was particularly attractive given its direct access and freeway visibility to IH-45. We have designed our Building A to the marketplace by providing users with a facility that is extremely functional, offering the flexibility of trailer storage, outside yard storage and expansion capability.”
Phase I will include a 486,720-square-foot speculative distribution facility. Panattoni broke ground on this facility in early September; shell completion is estimated for next April. Phase I is being designed and constructed to meet LEED specifications for core and shell.
“By constructing a big box facility that is shallow enough to accommodate users of varying size requirements, we are offering extremely functional space that demises well, should the market dictate a multi-tenant leasing strategy,” Bennett says. “Through designing the building pursuant to LEED specifications for core and shell, we hope to provide users with systems that will lower operating expenses as well. We are constructing our building utilizing current trends with respect to clear height, column spacing, staging areas and truck court depths.“
Gary Mabray and Walker Barnett of Colliers International are leasing agents for Airtex Industrial Center. Panattoni Construction Inc. is the general contractor.
“For users in the North submarket, there are no options for new Class A distribution space with more than 475,000 square feet under roof,” adds Bennett. “We are providing the single- building, cross-dock solution for users that desire to be located at a logistically superior staging point without the sacrifice of quality and expense.”
Proterra Adds Two More Buildings to Valley View Business Center
Dallas-based Proterra Properties recently broke ground for two new buildings in Valley View Business Center, a 73-acre business park near Dallas-Fort Worth International Airport in Irving, Texas. The two facilities, Valley View I and Valley View IV, will total 555,560 square feet of mostly speculative space, and they will add more than $20 million of build-out value to the park.
Valley View I will span 140,000 square feet on 7.5 acres at 5385 FAA Boulevard. The front-park, front-load facility will feature 28-foot clear heights. Valley View IV will have 414,960 square feet of space, with Omega Environmental Technologies Inc. leasing approximately 25 percent. Valley View IV will feature a cross-docked design with 80 doors and 30-foot clear heights, and the facility will be located on 22.5 acres at 1401 Valley View Lane. The two new buildings are scheduled to deliver in early first quarter 2009.
The park’s two other buildings, Valley View II and Valley View III, total 206,874 square feet. Located at 5325 and 5375 FAA Boulevard, respectively, the two facilities boast more than 90 percent occupancy.
Microsoft Opens San Antonio Data Center
Microsoft Corporation recently opened a new data center in the Northwest San Antonio suburb of Westover Hills. The $550 million, 477,000-square-foot facility houses large-scale, worldwide Web services for Microsoft’s Online and Live Services businesses, which have seen rapid growth during the past 4 years.
“Microsoft is thrilled to continue our long-term relationship with the San Antonio community, working together to build the area as a center of innovation,” says Mike Manos, Microsoft’s general manager of data center services for Global Foundation Services. “Microsoft looked at 31 variables in narrowing its site selection to San Antonio, including the availability of fiber optic networks, affordable energy rates, and work and life balance for our employees that the city offered.”
The new data center is one of Microsoft’s greenest projects to date, with eco-friendly features such as using approximately 8 million gallons of recycled water per month for the center’s cooling needs.
The Martifer Group Plans Wind Turbine Manufacturing Plant in San Angelo
Portugal-based Martifer Group, through Martifer Energy Systems, began construction in September on a wind tower factory in San Angelo, Texas. This marks the second wind tower factory the group has constructed in 4 years.
The factory, which represents a total investment of approximately $40 million, has been awarded a $12 million incentive package by the COSA (City of San Angelo) and COSA DC (City of San Angelo Development Corporation). Texas Governor Rick Perry also has announced a $945,000 award from the Texas Enterprise Fund (TEF) to Martifer Energy Systems.
Construction is scheduled for completion in the second half of 2009. The factory is expected to create 225 jobs.
Caterpillar Makes Progress on Distribution Center in Waco
Caterpillar Logistics Services, Inc. (Cat Logistics), a wholly owned subsidiary of Caterpillar Inc., continues work on its new facility in Waco, Texas. The more than 500,000-square-foot parts distribution center will employ between 140 and 180 people upon completion in early 2009.
Once open, the center will replace the company’s smaller, regional distribution centers in Dallas and Kansas City, Missouri. The facility will process dealer stock, emergency orders and inbound parts.
The new Texas distribution center also will handle inbound processing of parts directly from suppliers, whereas currently most parts are routed through a single, global entry point in Morton, Illinois. Existing Cat Logistics facilities in York, Pennsylvania, and Denver, Colorado, will extend their services to do the same.
The Texas project marks the beginning of the company’s multi-year expansion and enhancement of service parts distribution network throughout North America.
Insight from the experts:
Q: How are Texas’ industrial markets performing, in light of the current economy?
Turner: We’re approaching that next plateau of 700 million square feet of space in Dallas. We’re a top four market in the United States, and I’m bullish that over time Dallas will become a top one or two industrial market in the nation because of how well-situated it is. At the moment, we’re seeing the tail end of a few spec projects that got started in the first part of this year, and there are a handful of projects that are announced to be started. For the most part, right now, everyone is focusing on leasing their projects. The rental rates are holding up pretty well. They are more competitive in the big boxes, but the smaller buildings seem to be holding up. In this economy, there are a lot of RFPs out there, and there have been over the past 12 months, but decision makers have been slow to act in Corporate America because the economy is so uncertain. It’s a wait-and-see, extremely cautious environment right now.
Milstead: The general Austin business economy is still very active. We are still seeing good user activity in the Austin industrial market, with many businesses looking to expand their operations by buying buildings or leasing space. Landlords are becoming more aggressive by reducing rents and offering free rent to get the quality tenants they really want. The tight credit markets have stopped any new industrial development that is not already started, which is probably a good thing.
Talhelm: The Houston industrial market has continued to perform adequately, in spite of the current financial problems. Houston’s industrial sector is somewhat insulated due to the predominance of the petrochemical industry in this area. In addition, due to continued growth in population, the demand for goods and services in the area continues to support the warehouse markets. Overall, Houston’s industrial market is in balance between supply and demand. The immediate impact of the current financial situation has been a slowdown in new developments due to unfavorable terms from the financial industry. As the financial situation corrects itself, the financing available to acquire new sites — coupled with the terms for construction loans — will have a strong influence on future development in all of our submarkets.
— Jeff Turner is executive vice president, South Region, with Duke Realty Corporation in Dallas; Mark Milstead is an industrial specialist for NAI Austin in Austin, Texas; and John Talhelm is senior vice president for Jones Lang LaSalle in Houston. |
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