Warehouse rush gains steam
Stream Realty Partners has broken ground on a 411,000-square-foot speculative distribution center in Cypress, marking the second-largest project of its kind in greater Houston.
The Northwest Logistics Center is rising on 26 green acres at 6751 North Eldridge Parkway, a few miles southwest of U.S. 290 and Beltway 8.
The facility will feature 32-foot-tall ceilings, a fastresponse sprinkler system, docks on both sides of the building and storage space. Rosenberger, the project’s general contractor, is expected to finish construction in June.
The massive size of Stream Realty’s spec distribution project is eclipsed only by Oakmont Industrial Group’s nearly 700,000-square-foot project in Katy, which broke ground earlier thisyear.
Including these projects, there are now five spec distribution projects totaling 1.8 million square feet under construction in the Houston area, according to commercial real estate brokerage Colliers International.
Historically, a spec in---
dustrial project in Houston averaged somewhere between 50,000 and 100,000 square feet. With the rise of e-commerce, developers are building 200,000-square-foot and larger distribution centers — many on spec — to accommodate retailers looking to deliver goods directly to online shoppers.
Stream Realty was looking to enter the northwest Houston market for the past five years, broker Mat- teson Hamilton said. Since 2008, the real estate company has developed 5 million square feet of industrial space in the Bayou City.
Northwest Houston, with its growing residential population, accounts for a third of the city’s industrial real estate inventory, most of it driven by distribution needs. The vacancy rate in the northwest is a low 4.7 percent, according to Stream Realty.
“Most of the largest consumer goods distributors like to be as close as they can be to the surrounding rooftops,” Hamilton said. “That’s why you see many distribution centers in the northwest.”
Stream Realty’s Northwest Logistics Center can accommodate one to five tenants seeking space of 75,000 square feet and larger. Hamilton and Justin Robinson, who are leasing the project, said they have already received a few inquiries from interested tenants.
Stream Realty is “very confident” it can lease up its spec project despite growing competition, Hamilton said.
There are many tenants looking for space between 300,000 and 500,000 square feet, hesaid.
“Based on the demand we’re seeing in the market today and in the next 12 months, we feel very strongly we’ll get it leased up in no time,” Hamilton said. “We feel good about it.”