Lease Deals Leave Duke Realty’s 23 MSF Texas Portfolio Full

Point North 8221, Houston. Image courtesy of Duke Realty Corp.

Duke Realty Corp. has recently completed lease deals totaling 1.1 million square feet with existing tenants Samsung in metropolitan Dallas and Starplast USA in Houston. With the closing of the two transactions, Duke is left with not a single square foot available for lease in its sprawling, approximately 23 million-square-foot Lone Star State industrial portfolio.

Everything is big in Texas—including the demand for industrial product. However, it’s a national trend that is at the core of the low vacancy rates across the state and the now zero-vacancy rate of Duke’s Texas portfolio.

“The need to get more products to consumers in a 24- to 48-hour window is driving the need for larger, state-of-the-art facilities,” Jeff Thornton, regional senior vice president & Texas market leader with Duke Realty Corp., told Commercial Property Executive.

“Experts are speculating that this will drive 750 million to more than 1 billion square feet of incremental demand for new warehouse space across the country in the next few years. That’s two to three years of normal demand in the U.S. Every headline you read about supply chain issues is a catalyst for more warehouse demand in the U.S. We don’t anticipate a slowdown in the near term. This activity across the country is indicative of what we are experiencing in Texas.”

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Samsung renewed its lease for approximately 815,900 square feet of space at Point West Industrial Park, Duke’s 2.1 million-square-foot industrial campus in Coppell, roughly 20 miles northwest of the Dallas central business district. Duke developed the three-building park, sited off I-65 and within close proximity of Dallas Fort Worth International Airport, in 2008, and Samsung first signed on for space in one of the facilities in 2009. Samsung renewed its commitment to its space within the roughly 1.1 million-square-foot Point West 400 building at 400 Dividend Drive.

Point West 400, Dallas. Image courtesy of Duke Realty Corp.

In Houston, Starplast inked a deal for additional elbow room at Duke’s Point North Industrial Park. Starplast has called Point North 8221 at 8221 Volta Drive home since signing a lease for roughly 168,900 square feet in the then-new facility in the first quarter of 2020. Now the company has inked a deal to occupy the entire 337,700-square-foot building. With the expansion lease, Starplast presently has a footprint totaling approximately 520,200 square feet in two buildings at Point North.

Duke Realty’s Matt Hyman and Bryan Parker spearheaded the lease transactions internally on the company’s behalf. Mark Becker and Jay Benner of Cushman & Wakefield represented Samsung in its lease renewal, while JLL‘s Ryan Fuselier and CBRE‘s Patrick Rollins and Ed Frantz stood in for Starplast in the expansion transaction.

Creating room

Currently, Duke’s only offering in Texas is a 24-acre suburban Dallas site at Sunridge Business Park in Wilmer that can accommodate a build-to-suit development of approximately 450,000 square feet. However, the pure-play logistics property REIT has every intention of accommodating the ongoing needs of users for modern leasable space.

“With a very strong regional economy in Texas and our selective locations near population density and key transportation corridors, our primary submarkets are realizing vacancy rates of 2 to 3 percent in Dallas and approximately 6 percent in Houston. We are continuously pursuing opportunities to meet companies’ warehouse and distribution needs through development and acquisitions in Texas,” Thornton said. “We are always looking for opportunities to add existing, yet modern, facilities to our portfolio as well as land to develop the state-of-the-art, sustainable facilities we are known for.”