DCT® Featured on Houston Business Journal: ‘Scarcity of rail­served land’ prompts recent Houston industrial deals

May 19, 2017

An Article on Houston Business Journal by Cara Smith

'Scarcity of rail­served land' prompts recent Houston industrial deals

HOUSTON - Local dealmakers and major corporations have been executing larges leases in Houston's robust industrial market.

One of the busiest developers has been Houston ­based Avera Cos., which recently announced two significant deals.

Avera Cos. will develop a 500,006-­square­-foot facility for Vinmar International, a Houston based petrochemical marketer and distributor, near the Port of Houston. The build­to­suit facility will be within Cedar Port Industrial Park in Baytown on a 40-acre site on Sutton Road, off of FM 1405.

'It was a competitive bid proposal process with multiple development companies that were bidding,' said Avera's John Nicholson, who serves as executive vice president of development. 'Obviously, the Baytown economic incentives were of interest to the tenant.'

Nicholson, who joined Avera last year from Cushman & Wakefield, didn't disclose specifics of the incentives. Avera bought 40 acres in Cedar Port Industrial Park from TGS Cedar Port Partners LP for the Vinmar facility. John Feruzzo and Joel Michael with NAI Partners represented TGS Cedar Port Partners in the deal, and Kelley Parker and Kevin Snodgrass with Cushman & Wakefield represented Avera.

'Vinmar is one of the largest users of the expanded Panama Canal and as such justifies the Port of Houston vision in expanding its container terminals,' said William Scott, president of TGS Cedar Port Partners, in a statement.

Avera Cos. will also develop Bayport Logistics Park, a 143­acre industrial complex in Pasadena. Located within the Bayport Industrial District, the site is close to both Barbour's Cut and Bayport container terminals. It's also just south of Avera's Bayport Industrial Park, a three­-building, 738,610­-square-­foot project currently under development.

'Avera, as a company, (want) to be strategically placed in rail-­served land, and that's due to the petrochemicals industry,' he said. 'We feel there's a scarcity of rail­-served land … a lot of it is controlled by plants for future development and is not for sale.'

Nicholson said Bayport Logistics Park will offer rail-­served facilities between 400,000 square feet and 600,000 square feet and non-rail­-served facilities between 350,000 square feet and 1 million square feet.

Houston industrial market's construction pipeline is at 4.9 million square feet, per an NAI Partners report. Roughly 1.3 million square feet of those projects broke ground in 2017, and around 4.4 million total square feet is set to deliver this year, per the report.

Ninety percent of industrial construction activity is concentrated in the north, northwest and southeast submarkets, according to the report.

Other recent Houston industrial deals

• Houston­-based MRC Global Inc. (NYSE: MRC) inked a deal for a new regional distribution center and operational hub for the Gulf Coast area in La Porte at the Port Crossing Commerce Center. The distributor of pipe, vales and fittings signed the 15-­year leases with a unit of Liberty Property Trust (NYSE: LPT). The new property will include more than 400,000 square feet of warehouse space, more than 75,000 square feet of office space and an extensive pipe yard.
• Last week, Houston-­based United Equities Inc., a commercial real estate company and developer with more than 50 commercial properties throughout Texas, bought just under 8 acres at Sam Houston Tollway and Meadow Wood Drive in Pasadena. The developer has historically worked in the retail space.
• NAI Partners announced that Adkisson Group Inc. recently bought a 5­-acre site in Lakeview Business Park in Missouri City to build three industrial buildings. Both companies are based in Houston.
• And earlier this month, Wrist USA Inc. renewed its 68,833-­square­-foot lease at at East Belt Business Park in Pasadena. JLL represented Wrist USA in the renewal.
• On May 12, Denver­-based DCT Industrial Trust Inc. (NYSE: DCT) broke ground on a 222,000-­square­-foot facility for Ohio­-based DHL Supply Chain USA in La Porte, near the Port of Houston. The facility will sit on 13.2 acres between two existing DHL facilities totaling 312,000 square feet, said Justin Bennett, senior vice president at DCT Industrial.