BAYTOWN, TX—While industrial is better positioned than other commercial sectors to weather COVID-19 challenges, the tremendous effects on the energy industry and a lack of overall commerce will reverberate through the market in the coming quarters. On a positive note, e-commerce expansion and hiring during this time may help offset some of the negative impact, says JLL's first quarter industrial report.
One property that exemplifies e-commerce demand is Cedar Crossing Distribution Center, a 100% leased single-tenant 129,527-square-foot distribution facility in the Houston-area community of Baytown. High Street Logistics Properties recently purchased the asset for an undisclosed acquisition price.
Completed in 2009, Cedar Crossing Distribution Center is fully leased to Merih Cotton Corporation, a family owned and operated Houston-area cotton distributor in business for upwards of 35 years. The front-load building features a 24-foot clear height, 33 dock-high doors, one drive-up ramp and low office finish.
Situated on 7.37 acres at 3710 Cedar Blvd., the property provides access to the Port of Houston's two dedicated container terminals, Barbour's Cut (5.6 miles) and Bayport Container Terminal (9.4 miles). Cedar Crossing Distribution Center is also within the 15,000-acre Cedar Port Industrial Park, which is the largest master-planned rail-served industrial park in North America.
JLL capital markets marketed the property on behalf of the sellers, Mountain West Industrial Properties and American National Insurance Company. The JLL team was led by managing director Trent Agnew, senior managing director Rusty Tamlyn, director Charlie Strauss and analyst Ethan Goldberg along with senior vice president Richard Quarles, who leased the building on behalf of the seller.
"The Southeast Industrial submarket lacks optionality for smaller tenants, as most development in the area is focused on big-box buildings, so Cedar Crossing will always have significant interest from tenants that need to be near the Port of Houston," says Agnew. "We were extremely pleased with both the buyer's and seller's ability to execute this transaction during the COVID-19 pandemic."
The Port's demand was one of the largest determinants for the transaction, even during the health crisis, Strauss says.
"The Port of Houston continues to be a major driver for the city as we have seen consistent double-digit growth in container volume year-over-year," Strauss tells GlobeSt.com. "With most of the current speculative development in the submarket focused on larger scale tenants, Cedar Crossing fills the void for that smaller tenant base."
In 2019, the metro's biggest concern was potential overbuilding in the market. Five months later, Houston is very much in wait-and-see mode with global economies struggling to navigate the pandemic, according to JLL.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
