TEXAS SNAPSHOT, SEPTEMBER 2010

Waco

A large portion of the country’s real estate market has declined in the past few years, but Waco has faired better than most.

No real estate market has been completely insulated from the downturn. Fortunately, Waco is situated within the “Texas Triangle,” the distribution and tourism corridor located along the major highways that link Dallas/Fort Worth, Austin, San Antonio and Houston. Located along Interstate 35 and within 200 miles of the four largest MSAs in Texas, Waco has a significant advantage over other cities. Our location attracts both large and small corporations and allows us to retain those already here.

Retail

Some of the national big box retailers have closed; however, a few new retailers have entered our market. Atwood’s recently leased a 47,600-square-foot space formerly occupied by Winn-Dixie. Lack’s Furniture just finished a deal that will move them from their current location north of town to the heart of Waco’s retail corridor. New restaurants also have opened, including Raising Cane’s, Chipotle, Orange Cup and Chuy’s Mexican Food. The Central Texas Marketplace, a power center located at the intersection of I-35 and Highway 6, has done well, but there is still some space that has remained vacant since construction.

Office

There has been an abundance of office development in our downtown area as well as steady growth throughout greater Waco. At the top of the list is the recent renovation of the former Roosevelt Hotel. A local developer overhauled the vacant 99,000-square-foot building and transformed it into office space. Another project scheduled to break ground is a mixed-use, downtown development called Franklin Place. It will contain office, retail and multifamily housing. Other office projects include the new Texas Farm Bureau Conference Center, The Ridge Office Park, Wardlaw Claims Service and the soon-to-be-built Central Texas headquarters for Carter Blood Care.

Industrial

During the past 18 months, we have seen tremendous growth in our industrial sector. New additions have included Caterpillar Logistics, Associated Hygienic Products, Dakota Hardwoods and Coca-Cola Enterprise. Existing companies that have expanded include L-3 Communications, Caterpillar Work Tools, Tractor Supply Company, Coca-Cola North America, Allergan and Fleetwood Homes. There also has been a fair amount of new industrial inventory added to the market with the creation of warehouse space located at 700 and 800 Schroeder.

Healthcare

During this period, our local health care providers have expanded their operations. Hillcrest Baptist Medical Center recently opened its new $185 million, 75-acre campus at the intersection of Highway 6 and I-35. The National Pharmacy Contact Center, which will provide customer support from its new 52,553-square-foot facility, is under construction at the Waco Veteran’s Affairs Hospital. Providence Hospital also expanded its medical campus in a $48.5 million project.

Education

Waco is home to Baylor University, McLennan Community College and Texas State Technical College. The schools have grown steadily in the last few years. McLennan recently constructed state-of-the-art business and science buildings that are LEED certified. Baylor is in the first phase of constructing the Baylor Research and Innovation Collaborative, a high-tech research facility. With three institutions of higher education in the Waco market, we have access to a large pool of skilled workers needed to fill job vacancies in a variety of industries.

The health of the commercial real estate market in Waco is stable and will grow rapidly as we emerge from the recession. With an abundance of land, its location within the state and its low cost of living, Waco will continue to attract companies that seek an educated workforce and strong economic incentives for development.

— Erik Hill, CCIM, is a member of Coldwell Banker Commercial Jim Stewart Realtors in Waco.

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