Hines Nabs Houston Logistics Park
- Apr 03, 2017
La Porte, Texas—Talk about a growth spurt, Hines recently tripled its footprint in the metropolitan Houston industrial market with the acquisition of the 2.2 million-square-foot Underwood Distribution Center in La Porte, Texas. The international real estate firm purchased the five-building park, which also features three development parcels, from BlackRock.
“We have been targeting the southeast market for some time, and this opportunity presented a good match for our recently expanded industrial investment platform,” Palmer Letzerich, senior managing director with Hines, said in a prepared statement.
Underwood is quite a catch. For starters, the portfolio is 100 percent leased. Additionally, it’s relatively new, with the buildings having been developed between 2005 and 2008. The Class A collection consists of Underwood Distribution Center I and II, which encompass 915,000 square feet and 710,100 square feet, respectively; Underwood Business Park – 10051 Porter Rd., a 225,000-square-foot facility; the 198,800-square-foot Underwood Business Park – 10052 Porter Rd; and the 131,300-square-foot Underwood Business Park – 10100 Porter Rd. The total square footage of the industrial buildings includes roughly 100,000 square feet of office accommodations.
Hines financed the purchase with the assistance of a seven-year, fixed-rate loan of approximately $80.4 million through Jackson National Life Insurance Co. With the closing of the acquisition, Hines rebranded Underwood as Independence Logistics Park and revealed plans for one of the property’s development parcels. The company will erect a sixth building on the site, adding 167,000 square feet of space in a front-load distribution building scheduled to reach completion in the fourth quarter of 2017. Hines has inked a deal with commercial real estate services firm CBRE Group to stay aboard to handle leasing at the park.
Presently, Hines’ Houston portfolio consists of the 971-acre Pinto Business Park, which currently features buildings totaling 1.6 million square feet, and the 75-acre Beltway Southwest Business Park, which is presently home to an approximately 740,300-square-foot facility at the moment. Like Independence, Pinto and Beltway offer room for growth. At full build out, Pinto will provide as much as 7 million square feet of distribution, light manufacturing and corporate campus options, and Beltway will be able to host as much as 950,000 square feet of light manufacturing and distribution space.
Letzerich added, “With Pinto Business Park in the north, Beltway Southwest in the southwest and now Independence Logistics Park in the southeast, we are happy with our continued growth in Houston.” And it appears it’s a good time to grow in the city. The local economy, while still shaking off the effects of the collapse in oil prices, is reflecting signs of a turnaround, according to a report by commercial real estate services firm Cushman & Wakefield, which represented BlackRock in the transaction with Hines.
And the industrial sector is expected to continue to perform well compared to other property types this year.
Image courtesy of Hines