Houston-based Archway Properties and Ridgeline Property Group of Atlanta have teamed up to build a 685,400-square-foot speculative warehouse northeast of Houston to meet a growing demand from e-commerce tenants.
The building, designed to accommodate one or two tenants, will go up on 40 acres within Archway Properties’ 111-acre Park Air 59 mixed-use project at the northeast corner of U.S. 59 and Will Clayton Parkway in Humble. Completion is planned in the second quarter.
“We’re seeing really low vacancy rates across the Houston market and a lot of population growth and projected growth over the next 5 to 10 years,” Archway Properties development manager Ben Allen said. “That’s driving a lot of the demand for warehousing.”
The deal follows another spec project in Baytown, a two-building distribution center totaling 390,000 square feet at Interstate 10 and Thompson Road announced by Investment & Development Ventures and Sealy & Co. Thursday.
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The Park Air 59 building will be constructed with 40-foot clear heights, enabling goods to be stacked higher. Such heights are common in Dallas, a major regional market for distribution space, but the top height is Houston is typically 36 feet, Allen said. The building’s extra weight will require a thicker-than-normal slab of 8 inches.
Ridgeline Property Group will purchase the land from Archway Properties, which will partner with Ridgeline in the development, Allen said. The project is a few miles east of Bush Intercontinental Airport.
Houston’s industrial vacancy ticked up to 5.7 percent in August, brokerage firm NAI Partners said.
In the past 12 months, developers have broken ground on 8 million square feet of distribution space including recent deals by Conn’s HomePlus in north Houston and Best Buy in Missouri City.
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The strong market means developers are confident to build before securing commitments from tenants. Of the 10.9 million square feet of industrial space under construction across the Houston region, 43 percent has been preleased, according to NAI Partners.
Also in Park Air 59, Jackson-Shaw is developing a three-building industrial project with Thackeray Partners on a spec basis. The buildings, totaling 320,000 square feet, won’t directly compete with the 685,000-square-foot warehouse, which is targeting larger users, Allen said.
Once the land sale is closed, Archway Properties will have 20 acres along both U.S. 59 and Will Clayton Parkway remaining for lease or sale in Park Air 59. The project contains Rooms To Go, Sunoco and an upcoming medical office building for Vital Heart & Vein just west of the latest planned warehouse.
The newest project is expected to break ground in the next couple of months, Allen said. JLL is marketing the project.