(Read more on the industrial market.)
FLOWER MOUND, TX-Hillwood has begun construction on the final two buildings at Lakeside Trade Center, a five-building warehouse-distribution complex on 137 acres in this rapidly growing city about 20 miles northwest of Dallas. The buildings, which are slated for completion in December, will total nearly 800,000 sf, bringing the project total to about 2.2 million sf.
"These are pure spec plays," says David Pelletier, director of communications for the Dallas-based developer. "The three buildings that have been built are 100% leased. The market here is very strong right now."
The first three buildings, also developed on spec, were completed last October. Tenants include Maytag Corp., Best Buy Co. Inc. and Stacy's Furniture & Accessories, a retailer from Grapevine that maintains both a distribution center and outlet store at Lakeside. Pelletier tells GlobeSt.com that Hillwood has several prospective tenants for the upcoming space but none he can reveal.
Though Pelletier says company policy prohibits discussing building financials, according to Mark Miller, president of Dallas-based NAI/Robert Lynn Co., who is leasing the project along with Robert Lynn associate Adam Curran, the annual asking rate for the new buildings is $3.35 per sf, triple net. Of the new construction, Building 4 will have 333,372 sf, while Building 5 will have 456,950 sf.
Among the more attractive features for tenants, says Pelletier, are tax incentives the developer was able to negotiate with both the City of Flower Mound and surrounding Denton County. "They will be paying the lowest tax rate in north Texas," he declares, adding that tenants will also benefit from what is known as "triple Freeport" tax exemption, which allows school districts, cities and counties to exempt business inventory from taxes if goods are shipped out of state within 175 days.
According to Pelletier, Hillwood now has more than five million sf of commercial space under construction in North Texas, the majority of it industrial. This includes close to two million sf at AllianceTexas, 1.3 million sf in Victory and a recently announced 550,600-sf speculative building in DeSoto. He says another one million sf is planned for completion in Q1 or Q2.
"Lakeside Trade Center has proven to be one of the top locations for distribution centers in North Texas," says Dan Tatsch, senior vice president of Hillwood Investment Properties, which is overseeing the development. "The credit goes to the town of Flower Mound, Denton County and Tarrant County for creating a tremendous business atmosphere in the development."
According to Melissa Glasgow, Flower Mound's director of economic development, Hillwood's decision to go forward with the project's final phase so quickly after completing the initial phase speaks to the strength of the local market. "We look forward to the added economic development it will bring to the town," she says. "Hillwood has more than satisfied their incentive obligations on the first phase of this project and continues to be a tremendous development partner."
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