Searching for Large Rail Served Distribution Warehouses in Houston?Posted
Yes, there is a lot of large distribution warehouse space on the ground and being constructed in all areas of the Houston market. However, change the requirement to “large rail served distribution warehouses in Houston”, and your choices go practically to zero.
Once, Houston was a center of rail served speculative warehouse buildings with plenty of space alternatives for tenants. This is not the case now as in the example of a phone call I received yesterday. I was called by one of my clients looking for space of 150,000 square feet up to 300,000 square feet of rail served distribution warehouse space anywhere in Houston. They have product coming to their operation here and needed a place to get it stored immediately. I proceeded to survey the rail served projects with which I am familiar which I knew had this kind of space available. The result was: nothing is available in that size. The projects which had this kind of warehouse space available have been recently leased. There are rail served warehouse projects under construction which may work in the future, but our need was immediate. There are even warehouse projects available now with this much requested space, but again, not with rail service to the building.
This fact is very illuminating, and brought us to two conclusions: 1) there has been a LOT of leasing taking place in the Houston area and 2) the historic emphasis on rail service to distribution warehouses is no longer a factor.
Back in the day of the Southern Pacific Railroad and a very savvy fellow by the name of Bob Wadsworth who was the contact guy for the railroad here, developers like Trammell Crow, Vantage Company (John Eulich of Dallas), Hines Interests and others, built PRIMARILY rail served projects along Hempstead Highway and on the east side of the City. This is no longer the case!
Those multi-tenant speculative warehouse distribution project developers might do well to seek out whatever rail served sites are still available for their new construction efforts. The demand is there for sure. The railroads, however, are not as aggressive as the old Southern Pacific RR was, back in the “day” and perhaps that is part of the problem.
This industrial real estate market in Houston continues to evolve in interesting ways.
Stay tuned ……….. !
Michael Hill Properties offers more than 40 years of experience in brokering commercial industrial properties, such as distribution warehousing and manufacturing, for sale and lease in the Greater Houston Area as well as outside of Houston. For more information on Michael Hill Properties, visit mhprop.comor call (713) 960-6060.