HOUSTON—Regardless of COVID-19 and drop in oil prices earlier this year, Adkisson Group has always anticipated demand for high-quality manufacturing space at a rental rate well below new construction pricing. The firm recently purchased a 158,700-square-foot manufacturing campus located at 6500 Brittmoore Rd. in Northwest Houston, near Highway 290 on Beltway 8 with ingress and egress to both Beltway 8 and Brittmoore Road.
The campus consists of eight manufacturing buildings on more than 13 acres, with overhead crane lift capacities of up to 100 tons and hook heights ranging up to 58 feet. Several buildings on the property have 100% HVAC, heavy power and lab space.
Robert McGee, Thomas Leger and Chase Cribbs of Lee & Associates-Houston represented the privately held real estate development firm in the transaction.
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"We saw this as a great opportunity for our client to own a manufacturing facility that can no longer be replicated," said McGee. "This is the type of facility that no one would ever build on a speculative basis."
The campus could accommodate one to multiple tenants plus each building can be sold separately.
"Northwest Houston has always been a prominent area for crane-served tenants and owners in this area," said Steve Adkisson. "With access off Brittmoore Road and Beltway 8, we felt we could compete with any existing building in the marketplace."
The Lee & Associates-Houston team will be marketing the property for lease. The property's infrastructure, location and flexibility promotes optimism about interest from manufacturing groups that realize how costly it would be to replicate this product type. E-commerce is not relevant to this particular site.
"We are targeting specialized manufacturing companies that need heavy crane capacity with above-average hook heights and clean room lab space, to name a few," McGee tells GlobeSt.com. "While there are plenty of manufacturing facilities available in our market, there are very few that can offer the same amenities in a manufacturing facility at the price point that we can."
During the last quarter, the Houston market has been reacting tentatively to the coronavirus pandemic,
both positively and negatively, with anticipated heavy turbulence on the horizon, according to a second quarter industrial report by Lee & Associates-Houston. Many transactions are getting done on the investment and purchase side but transactions in leasing have cooled either by delay/analysis or have been outright cancelled. As of late, Houston has not pushed out waves of sublease space or properties coming back to the market whose tenants handed back their keys. This is anticipated to occur more substantially in the third and fourth quarters.
On underwriting, lease-up risk and credibility of deals in general will likely affect loan terms more heavily than before. Once a borrower gets through underwriting, very favorable lending terms are to follow, especially with dry powder or a tenant in hand, says the report.
True performance has been masked by the PPP program which has kept many alive but funding should either be dried up now or very close to it. When the industry gets to the other side of the PPP loan program, expect more defensive decision-making, says Lee & Associates' report.
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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.
