KDC Completes Volkswagen Facility on Texas Gulf Coast

November 13, 2024

The hub is part of Port Freeport.

Aerial view of Volkswagen's new facility in Freeport, Texas. — Volkswagen’s new facility in Freeport, Texas, comprises more than 200,000 square feet across several buildings. *Image courtesy of KDC*

KDC has completed a $114 million facility in Freeport, Texas, for Volkswagen Group of America. The development includes several buildings totaling more than 200,000 square feet, as well as asphalt parking for more than 16,000 vehicles, trucks and rail cars.

Located on 120 acres at Port Freeport, some 60 miles south of Houston, the new hub will import and process as many as 140,000 vehicles each year, including Volkswagen, Audi, Bentley, Lamborghini and Porsche brands.

KDC partnered with PRP Real Estate on the project which broke ground in late 2022. Steward Development & Construction served as general contractor on the development, while Goree was the architect. The automaker inked an initial 20-year lease at the rail-served facility, with the assistance of JLL.

Facilitating the consolidation of two smaller Texas facilities, which were in Houston and Midlothian, Texas, the new Volkswagen hub will support about a third of the firm’s U.S. retail dealers, or about 300 dealers in the western and central parts of the country.

KDC president Eric Hage notes that the facility will allow the car maker to deliver vehicles more quickly and efficiently to those dealerships. Its location in Port Freeport also helps Volkswagen Group’s goal of improving the environmental footprint of its global logistics, since the port can handle—not all ports can—Volkswagen’s low-emission liquefied natural gas vessels.

Dallas-based KDC has developed more than 150 corporate build-to-suit office, data center and industrial projects totaling about 40 million square feet since its founding in the 1980s.

Earlier this month, KDC completed construction of a 422,000-square-foot distribution center for Oncor Electric Delivery Co. in Midlothian. Other current projects include the Bank of America Tower at Parkside in Uptown Dallas, the new Wells Fargo office campus in Irving, Texas, and a JPMorgan Chase operations center in Ruston, La.

Port Freeport sees $16.7B in capital investment in five years

Port Freeport, which is about 3 miles from the Gulf of Mexico where the Brazos River meets the ocean, is a major handler of crude oil and natural gas liquids exports, and ranks sixth nationally in the volume of chemicals, 15th in total foreign waterborne tonnage, and 26th in containers.

A 2022 Economic Impact Study by Texas A&M Transportation Institute reported that Freeport Harbor Channel has a total economic output of $157.3 billion, serving a host of companies, including Volkswagen Group in the auto sector, but also Ford Motor Co. and General Motors.

The Freeport Harbor Channel is a deep-water channel with a 46-foot depth, and plans for deepening, and is the shortest channel transit on the Texas coast. Since 2019, the broader area near the port has seen significant infrastructure and operational investments, according to the report, both from Port Freeport and local industry. These projects have brought in over $16.7 billion in capital investments.

Though Volkswagen’s expansion at Freeport isn’t directly related to the disruption of auto import logistics earlier this year of the collapse of the Francis Scott Key Bridge in Baltimore, smaller U.S. ports—at least those that can handle autos—are benefiting from the redirection of such imports, according to Automotive Logistics.