Regions
Southwest | Dallas
Jun 24, 2009
By: Tonie Auer, Contributing Correspondent
National numbers show the industrial market tanking, but the Alliance Global Logistics Hub in Fort Worth, Texas, has already leased 1.9 million square feet this year compared to a total of 1.1 million square feet at Alliance in all of 2008. While the industrial market nationwide took a turn for the worse in the first quarter of 2009, with vacancy rising rapidly and absorption and construction activity plummeting, tenants are taking advantage of the situation—as evidenced by the half-million-plus-square-foot lease renewals ATC Logistics & Electronics just inked at Fort Worth’s Alliance.
With a total of 969,500 square feet, ATCLE represents one of the largest overall expansions at the Alliance Global Logistics Hub. The company first opened at Alliance in 1994 with 40,500 square feet in the Commerce Center 4 building. Details of the deals were not disclosed other than to call them “long-term.”
The Dallas-Fort Worth Metroplex has about an 11 percent vacancy rate for industrial properties while the national average is about 9.5 percent, said Grubb & Ellis Co's Industrial Trends first quarter newsletter. According to the report, net absorption totaling negative 40 million square feet was the largest quarterly decline of the decade. The volume of leasing activity fell 35 percent from the fourth quarter and 41 percent from the year-ago quarter while the average lease term of 44.2 months and the average lease size of 23,260 square feet were the lowest readings of the decade, signaling caution on the part of tenants. Deals abound for tenants, while landlords can take heart in the unusually rapid and thorough depletion of the construction pipeline as new starts have all but dried up.
With the ATCLE deals, Hillwood has already leased 1.9 million square feet at the Alliance Global Logistics Hub this year. In 2008, the company leased 1.1 million square feet at Alliance. The Alliance Global Logistics Hub is part of the 17,000-acre AllianceTexas development. ATCLE is a third party logistics and supply chain services provider and a division of Illinois-based ATC Technology Corporation
“We are in the middle part of the country and may be a little bit better positioned than other parts of the country,” Steve Aldrich, vice president of Hillwood Properties, told CPN. “While (business) is not as good as we’d like to see it over last 12 months, I think Texas and DFW are really good places to do business and the feel here is a little more upbeat.”
At Alliance, Aldrich said, “fortunately or unfortunately, we have quite a few openings where we can secure tenants longer term. That has contributed to the total number of square footage leased this year. It has attracted some new customers leasing new square footage.”
Because of the large development, Aldrich said the flexibility of Alliance allows existing clients to upsize or downsize as needed.
“We can work with clients. We’d like to see them flexing up, but we’ve seen it both ways. ATC is a perfect example. I don’t know if they would be here today if we hadn’t worked with them over the past years,” he added.
“Businesses right now are not necessarily talking about putting in a new building based on what is going on in the economy just this second,” Terry Clower, associate director of the Center for Economic Development and Research at the University of North Texas, told CPN.
“They are making those decisions based on what they see happening in the future. There are a lot of factors to it, but some of the appeal of the DFW area is that our economy overall is doing better than many other regions. We were one of the last major metro areas to enter recessionary type circumstances and ours will not be as deep as some areas of the country and we’ll be one of the first out of it,” Clower added.
Ryan Keiser of CB Richard Ellis Inc. represented ATCLE in the lease deal, while Aldrich represented Hillwood
By: Tonie Auer, Contributing Correspondent
National numbers show the industrial market tanking, but the Alliance Global Logistics Hub in Fort Worth, Texas, has already leased 1.9 million square feet this year compared to a total of 1.1 million square feet at Alliance in all of 2008. While the industrial market nationwide took a turn for the worse in the first quarter of 2009, with vacancy rising rapidly and absorption and construction activity plummeting, tenants are taking advantage of the situation—as evidenced by the half-million-plus-square-foot lease renewals ATC Logistics & Electronics just inked at Fort Worth’s Alliance.
Dallas-based Hillwood completed two leases totaling 556,000 square feet with ATC Logistics & Electronics (ATCLE), which first opened in the development in 1994. ATCLE renewed its lease in the 375,000-square-foot Gateway 5 building that it has occupied since 2005, as well as the lease at the 181,039 square-foot Gateway 31 building the company has occupied since 2007.
ATCLE also leases the 413,500-square-foot Gateway 19 building. The company signed a long-term lease on that facility in 2007, when it expanded to occupy the entire building. All three ATCLE facilities are in the Fort Worth section of the Alliance Global Logistics Hub.With a total of 969,500 square feet, ATCLE represents one of the largest overall expansions at the Alliance Global Logistics Hub. The company first opened at Alliance in 1994 with 40,500 square feet in the Commerce Center 4 building. Details of the deals were not disclosed other than to call them “long-term.”
The Dallas-Fort Worth Metroplex has about an 11 percent vacancy rate for industrial properties while the national average is about 9.5 percent, said Grubb & Ellis Co's Industrial Trends first quarter newsletter. According to the report, net absorption totaling negative 40 million square feet was the largest quarterly decline of the decade. The volume of leasing activity fell 35 percent from the fourth quarter and 41 percent from the year-ago quarter while the average lease term of 44.2 months and the average lease size of 23,260 square feet were the lowest readings of the decade, signaling caution on the part of tenants. Deals abound for tenants, while landlords can take heart in the unusually rapid and thorough depletion of the construction pipeline as new starts have all but dried up.
With the ATCLE deals, Hillwood has already leased 1.9 million square feet at the Alliance Global Logistics Hub this year. In 2008, the company leased 1.1 million square feet at Alliance. The Alliance Global Logistics Hub is part of the 17,000-acre AllianceTexas development. ATCLE is a third party logistics and supply chain services provider and a division of Illinois-based ATC Technology Corporation
“We are in the middle part of the country and may be a little bit better positioned than other parts of the country,” Steve Aldrich, vice president of Hillwood Properties, told CPN. “While (business) is not as good as we’d like to see it over last 12 months, I think Texas and DFW are really good places to do business and the feel here is a little more upbeat.”
At Alliance, Aldrich said, “fortunately or unfortunately, we have quite a few openings where we can secure tenants longer term. That has contributed to the total number of square footage leased this year. It has attracted some new customers leasing new square footage.”
Because of the large development, Aldrich said the flexibility of Alliance allows existing clients to upsize or downsize as needed.
“We can work with clients. We’d like to see them flexing up, but we’ve seen it both ways. ATC is a perfect example. I don’t know if they would be here today if we hadn’t worked with them over the past years,” he added.
“Businesses right now are not necessarily talking about putting in a new building based on what is going on in the economy just this second,” Terry Clower, associate director of the Center for Economic Development and Research at the University of North Texas, told CPN.
“They are making those decisions based on what they see happening in the future. There are a lot of factors to it, but some of the appeal of the DFW area is that our economy overall is doing better than many other regions. We were one of the last major metro areas to enter recessionary type circumstances and ours will not be as deep as some areas of the country and we’ll be one of the first out of it,” Clower added.
Ryan Keiser of CB Richard Ellis Inc. represented ATCLE in the lease deal, while Aldrich represented Hillwood
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