Bridgestone and Volkswagen join the tenant list at Dallas-area park
Hillwood's AllianceTexas project, a 15,000-acre business and residential development located north of the Dallas/Ft. Worth International Airport, has added two high-profile tenants. Nashville, Tenn.-based Bridgestone/Firestone Inc. has leased a 608,322 sq. ft. build-to-suit distribution center. Dallas-based Hillwood is the developer of the build-to-suit, which is slated for completion in third-quarter 2002. Brett Tremaine of Industry, Calif.-based Lee & Associates and Trey Fricke of Dallas-based Henry S. Miller Co. represented Bridgestone/Firestone in the deal, while Bill Burton represented Hillwood in-house. Terms of the lease were not released.
Meanwhile, Auburn Hills, Mich.-based Volkswagen of America Inc. has opened a 360,000 sq. ft. distribution center developed by Hillwood, also located in the AllianceTexas development. The building features 44 shipping docks, and serves 51 Volkswagen and 23 Audi dealerships in Texas, Arkansas, Colorado, Kansas, Louisiana, Mississippi, Oklahoma and New Mexico.
At the Pinnacle: Wilton Industries leases Illinois distribution center
Woodridge, Ill.-based Wilton Industries has leased Pinnacle II, a 441,562 sq. ft. distribution center in the 800-acre Pinnacle Business Center in Romeoville, Ill. The Pizzuti Cos., Columbus, Ohio, was the developer of the project. The building was completed in November, and occupancy began the same month. Jeff Fischer, Kirk Armour, Bill Frain and Fred Freeman of New York-based Insignia/ESG represented both parties in the lease, the terms of which were not disclosed.
Pinnacle II features 30 ft. clear ceiling heights, 44 docks, four drive-in doors, an early suppression fast response (ESFR) sprinkler system and parking for 147 cars, a total that can be expanded.
Let the relatively tough times roll, says ‘Emerging Trends’ report
Some tough times are ahead in 2002, but the industrial sector is poised to rebound whenever the economy gets back on track. That's the conclusion of “Emerging Trends in Real Estate 2002,” the annual joint report of New York-based Lend Lease Real Estate Investments and New York-based PricewaterhouseCoopers. “Expect values to flatten or even decline slightly in markets with bigger vacancies,” the report says. “Rent growth will be curtailed. But these properties will bounce back nicely with the economy.”
On the plus side, the report notes that the industrial sector almost never gets overbuilt and that relatively brief project development cycles allow developers to put the brakes on production when demand drops. Also, “owners love the solid income returns and low capital requirements,” the report says. “Buyers are always plentiful for these core investor favorites.”
As for the sector's weaknesses, the report concludes that industrial markets will grow softer as declining consumer confidence slows distribution center activity. “Big-box warehouses, designed for single-user, high-tech companies, have been especially vulnerable to tenant blow-ups,” the report notes.
Meanwhile, buyers should be on the lookout for good deals in weakened markets. The report says to avoid certain properties, such as older buildings that feature low ceilings and no cross-docking facilities, and industrial parks without a great deal of truck accessibility. Also, single-tenant buildings that are 500,000 sq. ft. or bigger and are not easily converted are at-risk properties, the survey concludes.
Investment Recommendations by Property Type
For their “Emerging Trends in Real Estate 2002” report, Lend Lease Real Estate Investments and PricewaterhouseCoopers surveyed 150 commercial real estate professionals about their investment recommendations for the coming year. The chart below is a summary of those results.
|Community shopping centers||48%||16%||36%|
|Research & development||24%||28%||48%|
|— Source: Lend Lease Real Estate Investments, PricewaterhouseCoopers.|