WorldTrade Magazine

Site Selection Focuses on Second-Tier Markets

30 July 2007

As import activity surges ahead with rising transportation costs close behind, shippers big and small are  reevaluating their warehousing and distribution strategies to maintain a competitive edge. While the prime markets such as Los Angeles, Chicago, and New York continue to pack them in (at a premium price), a host of second-tier markets are becoming more attractive thanks to new intermodal hubs and less-congested roadways, which offer reliable access to major populations centers.

The new kids on the block

When it comes to industrial real estate development, several trends are continuing to drive expansion. Containerized imports from Asia—which are pouring in at major gateways along the U.S. West Coast (primarily LA-Long Beach) and increasingly through major East Coast seaports—show no signs of letting up. But space is tight near the ports, and expensive, which means cities like Louisville, Kentucky and Nashville, Tennessee, along with eastern Pennsylvania, for instance, are seeing tremendous growth. In fact, logistics has now replaced manufacturing as the bread and butter for the warehousing and distribution and it’s helping to revive cities, particularly in the Northeast, that not so long ago were ‘victims’ of globalization, while giving new opportunities to areas in the Southwest that were once heavily dependent on agriculture, such as California’s central valley.

According to global real estate developer ProLogis (www.prologis.com), eastern Pennsylvania has become one of the top four East Coast distribution centers. Along with a relatively short drive time to major seaports, the region has affordable housing, labor, and real estate, along with a highly educated work force, which has helped it attract a number of high-tech companies in recent years.

Sara Lee Corporation announced it June that it would construct a $24 million distribution center and regional customer service center on a 40-acre site in Pottsville, Pennsylvania. The company will also construct a 15,000 square foot, two-story office building at the site. The facility is expected to be up and running by October.

On the opposite side of the state, Seattle-based Recreational Equipment Inc. (REI) is building a 400,000 square foot distribution center in Bedford, about 250 miles west of Philadelphia. When it’s completed next year, it will handle 40 percent of the company’s total sales.

And earlier this year, Sears announced that it would lease a 1 million square foot, build-to-suit distribution facility in Lackawanna County to support its stores in Pennsylvania, New York, and New Jersey.

In the Midwest, Louisville, Kentucky, which boasts a major hub for UPS (www.ups.com) as well as a new 64,000 square foot service center for DHL (www.dhl.com) is another city that is attracting attention from shippers who want affordable, firstclass distribution facilities with exceptional infrastructure and proximity to key markets. The Louisville International Airport is the tenth-largest air cargo airport in the world and the city sits within
600 miles of two-thirds of the U.S. population. Rail carriers CSX (www.csx.com) and Norfolk Southern (www.nscorp.com) serve Louisville and the city is located near interstates 64, 65, and 71. Aside from UPS, automakers Toyota and Ford and GE Consumer Products are some of the major employers.

Kansas City’s SmartPort (www.kcsmartport.com) is another example of how import trade is supporting warehousing and distribution growth in the nation’s interior. The development is designed to serve multiple corridors—inbound from the West Coast, East Coast, or NAFTA corridors—and does so by rail, truck, air, and inland waterway. It’s also got the most space devoted to foreign trade zones than anywhere else in the U.S.

In May, The Allen Group (www.allengroup.com) announced that it had finalized land purchase rights with BNSF (www.bnsf.com) for the development of the Logistics Park-Kansas City intermodal rail hub, which is slated to open in 2009. Meanwhile, KC Southern rail (www.kcsouthern.com) has 1,300 acres, which is being developed by CenterPoint
(www.centerpoint-prop.com) for a logistics park that will target freight from Mexico. In addition, the Kansas City International Airport (www.flykci.com) is one of the largest available land airports in the country and has selected CB Richard Ellis (www.cbre.com) to develop about 700 acres of that for distribution. Some of the well-known retailers who have facilities there include American Eagle Outfitters, Target, Wal-Mart, and Lowe’s.

Although manufacturing jobs are dwindling in many states, in Indiana nearly one-third of the state’s economic output is tied to manufacturing and logistics combined. The Indianapolis International Airport is also home to the second-largest FedEx (www.fedex.com) hub in the world. Europe’s largest air cargo carrier, Cargolux, has a gateway there too and has added non-stops flights from Europe. However, you don’t earn the title “Crossroads of America” without having a highway system worth boasting about, and Indianapolis certainly does. Seventy-five percent of all businesses in the U.S. are within a one-day’s drive from the city and more interstate highways intersect in the Indianapolis region than anywhere else, including interstates 65, 70, 74, and 465.

The other benefit of second-tier markets is sheer cost, which in the current environment is all the more important given that rising fuel prices have put transportation, logistics, and distribution under the microscope. Simply put, industrial real estate is considerable cheaper in most of these markets, which means rents are lower. For example, last fall, property costs in eastern Pennsylvania averaged about $3.50 to $4.50 per square foot, compared to $5
to $6 per square foot in southern New Jersey and $7 to $8 in northern New Jersey.

Another state that has seen a turnaround in its economy, thanks to increased logistics and distribution activity, is Ohio. Near the state capital, Columbus, the Rickenbacker International Airport has positioned itself as a center for air cargo and multimodal transportation. One major project underway is a partnership with rail carrier Norfolk Southern (www.nscorp.com) to create an intermodal facility on and adjacent to the airport. The new Rickenbacker Intermodal Terminal is expected to be operational in early 2008. According to Grubb & Ellis (www.grubb-ellis.com), “The plans include bridge construction in several counties in Ohio and increasing tunnel size in Virginia and West Virginia, which will allow the double stacking of cargo containers on trains. This project will create new distribution routes between the East Coast and Chicago and is expected to create considerable job growth. It is estimated that this project will contribute 10,000 jobs to the central Ohio area in the next 30 years. Central Ohio is already recognized as a distribution center and this project will place an emphasis on the area as a top choice for prospective tenants looking to relocate/expand this operations.”

The intermodal facility will also link to the Heartland Corridor rail system, which will connect Columbus via double-stack train to the port complex in Norfolk, Virginia.

Columbus is within a one-day truck drive to 58 percent of the U.S. population and 61 percent of its manufacturing capacity, and 50 percent of the Canadian population. Columbus is the third-largest port of entry for textiles in the U.S. (Limited Brands is headquartered there), with more than 40 freight forwarding companies and 140 trucking firms
operating in the region.

As part of its plan to restructure U.S. distribution operations, Avon Products announced recently that it had selected Zanesville, Ohio, located 50 miles east of Columbus, as the site for its new distribution center. The new facility will employ approximately 500 people and will have the capacity to ship 50 percent of Avon’s U.S. beauty products volume when fully operational.

Payless ShoeSource, the largest footwear specialty retailer in the Western hemisphere, also chose Ohio for a new facility that will serve as the company’s distribution center for roughly 2,900 retail stores.

As further proof of the growing activity in and around Columbus, DHL recently announced the opening of a new service center to help support increased demand for package pickup and delivery operations in the area. The company also maintains an air and ground hub in Wilmington, Ohio, about one hour’s drive from Columbus.

Second-tier cities and regions also have more (and typically less expensive) land on which to build huge warehouses, which is another emerging trend. According to Cushman & Wakefield (www.cushwake.com), “The proliferation of very
large, million-square-foot distribution centers is a direct result of the increased importance of imports and container traffic on the supply chain.” In addition, “Strategically located distribution centers near ports or highways can lead to substantial savings by reducing two critical linkages—port to distribution center and distribution center to highway. This is especially true for larger retailers that have large volumes of goods from multiple vendors. In many cases, the efficiencies realized from super-sized centers result in a net cost savings even if an additional step is being added to the supply chain.”

Warehouse technology, including electronic stock management systems and RFID, are also making operations and inventory management more efficient at these huge warehouses, explains the real estate firm. At the same time, “Very large facilities also allow for the deployment of multiple shipping strategies within one facility based on the needs of the retailer or end-user. Some goods are quickly being cross-docked and shipped out immediately to regional distribution centers and stores; other goods are being transloaded, providing a mix of goods in single containers; while still other products are being stockpiled in order to ensure that seasonal demand can be met at critical times of the year. All of this can be accomplished if the facility is large enough and designed for these purposes with the proper clear-heights, door configurations, rail spurs and yard space.” wt

Sidebar: The ABCs of FTZs

What is a foreign trade zone (FTZ)? A foreign trade zone is a defined physical area within the United States that, for customs purposes, is treated as if it is outside U.S. borders. FTZs are often at ports, airports, or industrial parks. Companies may use FTZs for both storage/distribution activities or, after specific approval by the U.S. FTZ board, for manufacturing.

Why would I want to consider manufacturing in a FTZ? When you manufacture in a FTZ, your company is treated (for purposes of customs duties) like it’s located outside the United States. That can mean that U.S. import duties don’t have to be paid on imported components coming to your factory. If your finished product is ultimately shipped to the
U.S. market, you may have the option of paying the finished product duty rate rather than the component duty rate. (Many finished products have lower duty rates—or are duty-free—than their components.) And, if you re-export the finished product, you don’t ever pay any duties on the component materials. There are other potential savings, too, like avoiding duties on imported materials that become scrap, and possible administrative savings and efficiencies.

What is involved in getting authority to manufacture in a FTZ? To manufacture in a FTZ, you work with your local foreign trade zone to put together an application. The U.S. FTZ Board has created simplified procedures to make the benefits of the FTZ program accessible to a broad range of companies. The FTZ Board can then use the information from those forms to make decisions on whether to approve individual applications.

What does the FTZ Board base its decisions about applications on? The Board reviews applications to make sure they are not inconsistent with U.S. trade policy and that the proposed activity would have a positive impact on the U.S. economy.

Do I already have to be located in a FTZ to apply? No. If it’s practical, you may choose to relocate to an existing FTZ site—there are more than 200 FTZs all across the United States, many of which encompass multiple sites. However, if it’s not practical for you to relocate to an existing site, the FTZ Board has a procedure for you to work with your local FTZ to create a “subzone” at your facility.

Is there a fee to apply? There is no fee for manufacturing authority within an existing zone. For subzone applications, there is a one-time fee (either $4,000 or $6,500, depending on the number of products.)

For more information, visit the Import Administration at the Department of Commerce online at http://ia.ita.doc.gov/ftzpage/, or call the FTZ staff at 202.482.2862.

Logistics Online

The Allen Group Retains Two Dallas Area Contractors For Initial Building Construction At The Dallas Logistics Hub

26 July 2007

The Allen Group, developer of the Dallas Logistics Hub (The Hub), a 6,000 acre logistics park in Southern Dallas County, recently announced it has selected two Dallas area contractors for the construction of its first two spec
warehouse/distribution buildings, 3i Construction, LLC and MYCON General Contractors, Inc.

3i Construction, LLC, a Dallas based minority owned general contractor has been retained for the construction of DLH Building 2, a 192,850 square foot warehouse building. In addition to being selected as the lead on DLH Building 2, 3i Construction has also been selected to provide additional construction services for The Hub’s DLH Building 1.

MYCON General Contractors, Inc., of McKinney, Texas has been retained for the construction of DLH Building 1, a 635,000 square foot cross-dock distribution facility.

“Both MYCON and 3i Construction are pleased to join the Dallas Logistic Hub team and bring vertical life to this important project,” said Micheal Williams, CEO & President of 3i Construction. “Our companies look forward to delivering high quality environmentally sensitive buildings that compliment the unmatched logistical infrastructure at The Hub.”

Construction of Buildings 1 and 2 will commence in late July 2007 and be completed by February 2008.

“We are pleased to announce the addition of 3i Construction and MYCON General Contractors, Inc. to the team at the Dallas Logistics Hub,” said Daniel J. McAuliffe, President of Allen Development of Texas. “It was imperative that we find qualified and experienced partners, such as the two selected firms, to help us start building one of the most
sophisticated logistics parks in the country.”

The Allen Group continues to demonstrate its commitment to the community and minority participation. The Company is the only commercial developer in the Dallas Fort Worth Metroplex with a publicly stated minimum minority participation goal of 25 percent on private projects and a minimum 25 percent on public projects.

3i Construction LLC, the first African-American construction management firm to construct a $10 million facility for the Dallas Independent School District, has expanded its business to include the construction of stadiums, educational facilities, financial institutions, as well as religious buildings, restaurants, airports and fire stations.

MYCON General Contractors, Inc. specializes in integrating construction management services, including re-construction planning, conceptual estimating, tenant interior coordination, value engineering, permitting assistance, design/build, and post-construction needs. MYCON’s construction portfolio consists of industrial, office, retail, golf clubhouse and church facilities.

The Dallas Logistics Hub (“The Hub”) is the largest new logistics park under development in North America, with over 6,000 acres master-planned for the development of 60 million square feet of distribution, manufacturing, office and retail uses. Given its unmatched intermodal, rail and highway access, The Hub positions Dallas as the premier trade hub in the Southwestern United States and will serve as the primary gateway for the distribution of goods to the major population centers throughout the Central and Eastern United States. The Hub masterplan will include warehouse and distribution facilities, light manufacturing, and retail support services, business-class hotels, restaurants, as well as single- and multi-family housing.

The Hub is located adjacent to Union Pacific’s Southern Dallas Intermodal Terminal, a proposed BNSF intermodal facility, four major highway connectors (I-20, I-45, I-35 and the future Loop 9/Trans-Texas Corridor) and Lancaster Airport, which is in the master-planning stage to facilitate air-cargo distribution. The Hub is also a key component of the NAFTA infrastructure and will serve as a major “inland port” bringing products for regional and national distribution from the Ports of L.A./Long Beach, Houston, and the new deep-water ports in western Mexico.

For more information on the Dallas Logistics Hub, please log on to www.dallashub.com

Traffic World

Allen Group Picks Builders

24 July 2007

Dallas Logistics Hub developer The Allen Group selected two Dallas-area contractors to build the first two speculative warehouse-distribution facilities at the 6,000 acre park.

3i Construction will build the 192,850 square foot DLH Building 2 and will provide construction services on DLH Building 1, a 635,000 square foot cross-docking facility to be built by Mycon General Contractors of McKinney, Texas.

3i Construction is a minority-owned business. Its selection partially fulfills a pledge by The Allen Group to achieve at least 25 percent minority participation on both public and private projects.

Construction of Buildings 1 and 2 will start in late July and should be complete by February 2008.

The Dallas Logistics Hub will eventually incorporate 60 million square feet of distribution, manufacturing, office and retail development. It is located adjacent to Union Pacific’s Southern Dallas Intermodal Terminal, a proposed intermodal project by BNSF, four major highway connections and Lancaster Airport in south Dallas County. It is planned to be a component of the NAFTA infrastructure and as an inland port serving U.S. West Coast and developing Mexican seaports.

Dallas Business Journal

Dallas Logistics Hub –the New Buzz in Southern Dallas

19 July 2007

As most industry experts will acknowledge, the three most important success factors in real estate are “location, location, location.” This statement is especially true in the context of global trade and transportation trends, all taking place around Dallas, Lancaster, Wilmer and Hutchins –home to the new Dallas Logistics Hub (“The Hub”).

The Allen Group, one of the nations’ fastest growing privately held real estate firms, is responsible for the creation of one of the most sophisticated logistics parks in North America, with over 6,000 acres master-planned for the development of more than 60million square feet of distribution, manufacturing, office and retail uses.

The Dallas Logistics Hubs’ unique infrastructure access includes: Union Pacific’s Southern Dallas Intermodal Terminal, a planned BNSF Intermodal facility, four major highways and the possibility of a future air-cargo facility at Lancaster Airport. The Hub will position Southern Dallas County ad the premier trade hub in the United States and will serve as the gateway for the distribution of goods to the major population centers throughout the Central and Eastern United States.

Slated to be one of the biggest economic engines in North Texas, the Dallas Logistics Hub, at full-out, will create approximately 31,000 direct and 32,000 indirect jobs and have a $68.5 billion economic impact to the Dallas/Fort Worth Metroplex.

“Transfers to inland ports are becoming more frequent, driving demand for larger, exceptionally well-located distribution and logistics facilities such as the Dallas Logistics Hub,” said Edward Romanov, President & Chief of The Allen Group. “This is due o the fact that the sheer volumes of goods that flow through our nation’s seaports have overwhelmed the port’s capacity to process the goods.”

Because of their structural limitations or technological shortcomings, many of the facilities at surrounding ports are too aged, outmoded and illequipped to meet the challenges of the 21st century. Additionally, the cost of land and lease rates around the major sea port markets have increased dramatically, creating an over-developed and overpriced market.

The Dallas Logistics Hub is a key component of the NAFTA infrastructure and will serve as a major “inland port” bringing products form the Ports of L.A./Long Beach and Huston, as well as the western deep water ports in Mexico for regional and national distribution. This prime location in the southern sector of Dallas has very little congestion issues; thereby preventing additional distributions in the supply chain process.

Just days after the successful Dallas Logistics Hub opening in April 2007, with over 1,000 people in attendance, The Allen Group announced they had executed an agreement granting BNSF Railway Company the right to purchase the land within The Hub as the next step in elevating the possibility of a new intermodal facility at this location.

“Under the agreement, BNSF has the right to purchase a minimum of 387 up to a maximum of 530 acres of land within The Hub for construction of an intermodal facility,” explained Daniel McAuliffe, President of Allen Development of Texas. “The site under option fronts 8,000 feet of BNSF track in the Cities of Dallas and Lancaster and represents a portion of the 2.5 miles of BNSF track frontage located within The Hub.”

Additionally, in early June, INVITE, an entity of the State of Nuevo Leon, Mexico, signed a historic Memorandum of Understanding (MOU) to increase the competitiveness of the Interpuerto and the Dallas Logistics Hub. INVITE is simultaneously developing an inland port and manufacturing facility of their own, and the new international  partnership will focus on improving the security, speed and efficiency of moving goods between these two major logistics centers –thus creating an efficient new trade corridor between Mexico and the United States.

Furthermore, the MOU establishes a collaborative of the parties on several issues, including the designation of a customs pre-clearance zone for the development of integrated logistics systems connecting the Interpuerto in Monterrey –Saltillo, Mexico and the Dallas Logistics Hub in Southern Dallas County, Texas. INVITE has also initiated the creation of improved logistics systems between the states of North Eastern Mexico and Texas, designated as NEMEX-TEX, including the development of Monterrey as a Logistics Gateway.

“The objectives on both sides of the boarder are to improve the competitiveness of enterprises established at both locations, as well as to bring the goods movement through the area,” said Leslie Jutzi, Director of Government Affairs and Community Relations for Allen Development of Texas.

The Allen Group anticipates that this proprietary transportation system and formalized relationship with INVITE will result in better delivery times and an increase of competitiveness with Mexican goods being delivered to the Dallas Logistics Hub.

In addition to the MOU signing, The Allen Group has begun construction on two spec warehouse/distribution buildings –192,500 and 633,500 square feet respectively. Commencing this summer, the first two spec buildings are slated for completion in February 2008.

As inland port locations are quickly becoming huge markets for the regional distribution of goods to population centers throughout the U.S. it is important that companies undergo due diligence when searching for industrial , office, warehouse and/or build to suit options and select locations that offer multiple transportation options such as the Dallas Logistics Hub.

Notably, there are only a few prime locations in this country that can accommodate true inland ports. Highway systems have largely been built out and large land positions are limited, expensive and difficult to assemble. Those who are successful at distribution and logistics in the decades to come will be companies that capitalize on identifying large logistical sites, strategically at the nexus of our interstate highway systems.

The Allen Group specializes in the development of high-end industrial, office, retail and mixed-use properties throughout the United Sates. The company’s major focus is the development of logistics parks –“inland ports” –that are strategically situated adjacent to some of the most sophisticated rail, intermodal and highway infrastructure in the country. The Allen Group has developed over one billion dollars in project, ranging in size up to 1.7 million square feet and currently has over 8,000 acres under development across the United States.

For more information about The Allen Group, please log on towww.allengroup.com or for more information about the Dallas Logistics Hub, visitwww.dallashub.com.

Dallas Business Journal

Southern Dallas County: Living the Dream

19 July 2007

Thanks to an ideal geographic location and excellent transportation infrastructure, Cedar Hill, Desoto, Duncanville and Lancaster together known as Southern Dallas County, are among the newest cities in DFW that stand to benefit excessively from current logistic trends which are being driven by global trade.

Due to the proximity to major interstates, the Union Pacific Intermodal and the new Dallas Logistics Hub, a 6,000-acre logistics hub being developed by The Allen Group, these cities have opportunities available that may have dreamed about 20 years ago, but never thought would actually come to fruition – and certainly not this quickly.

Each city is hustling to prepare for the quick growth they are beginning to see with new industrial, housing, retail and office space.

City Growth

Between 1990 and 2004, the population in Southern Dallas County, also known as “SoDoCo,” grew by nearly 28% – a healthy growth rate among suburban areas nationwide. From a population of 108,385 people in 1990, the area has grown to over 148,919. That population growth is expected to increase as the wave of new development continues to gain
momentum.

Experts say that when the Dallas Logistics Hub is fully complete in the next 30 to 40 years, it is expected to employ about 30,000 workers in as much as 60 million square feet of distribution, manufacturing, office and retail facilities. About 65 percent of the land will be set aside for industrial and distribution space, with offices and other commercial development on the rest.

The hub is expected to create a property tax base of $2.5billion. Company officials predict that the direct economic impact of construction and employment at the facility through 2035 will be $68.8 billion.

Development and Construction

To support the global trade demands of new ports off of Mexico that will drive traffic through North Texas, there are a number of large industrial projects underway and that have just been completed. As mentioned above, The Allen Group has broken ground on the Dallas Logistics Hub which is a 6,000-acre development that is almost equally
located in Dallas, Lancaster, Wilmer and Hutchins.

Duke Realty Corp. has had some early success with their phase one project adjacent to the Union pacific Intermodal in Hutchins. Proctor & Gamble signed a short-term lease for the new 626,100 sq.ft. property. Also, underway form Duke is the 872,000 sq. ft. Unilever built-to-suit project which should be completed in lat 2007. First, Industrial, Courtland Development, and Industrial Works Investment Fund all have large projects under way, all of which are currently scheduled for completion in late 2007.

In the planning stages, there are currently 19 industrial projects totaling more than 8.7 million sq. ft. of space on the horizon.

And with industrial growth of this size, the retail and office markets are not lagging behind. Each of the Southern Dallas Counties are preparing for this growth by revitalizing or creating a more active downtown for their cities, which has historically been lacking. Plans are set to develop mixed-use areas in order to remain economically wealthy and to retain young professionals which some suburbs are dramatically losing.

One example is Desoto where they are currently developing a town square in hope to drive more growth within the city, improve its image, and increase involvement with residents in their town. Cedar Hill will bring to market the 800,000 square foot Uptown Village at Cedar Hill that will include two department stores and room for more than 80-
shops and restaurants, which is set to open March 2008. This is the biggest retail project in the southern sector has seen in about 30 years. On the residential front, the Southern Dallas County are has had over 1,000 annual closing of new homes.

With all roads leading to Southern Dallas County, only opportunities lie ahead for the area to be the home of the new “it” industry in North Texas –the “it” being global logistics. Many believe Southern Dallas County could become the largest economic engines in the region, generating billions of dollars in investment and tens of thousands of new jobs.

The Dallas Morning News

Economic Growth May be in Store for DeSoto

13 July 2007

Attracting new business to DeSoto has been a talking point in the city for years. Scott D. Livingston, director of the DeSoto Economic Development Corp., projects that DeSoto’s population could increase from the current 47,600 to 70,000 or 80,000 in the next few decades as the Dallas Logistics Hub takes shape.

Most recently, in the May City Council election, every candidate recognized the need for commercial and industrial growth to keep pace with residential growth in the bedroom community.

In years to come, however, that talking point could become moot as the Dallas Logistics Hub and the Union Pacific Corp.’s Dallas Intermodal Terminal take shape.

Both are expected to be a boon to the economy in southern Dallas County, specifically in Lancaster, Dallas, Wilmer and Hutchins. Outlying towns in southern Dallas County, such as Mesquite, Balch Springs and DeSoto, and Ferris and Red Oak in northern Ellis County expect the ripple effect.

Because of its proximity to Interstate 35E and Interstate 20, businesses are recognizing DeSoto as one of the region’s hot spots for growth.

The development hub – when completed in 30 to 40 years – is expected to employ about 30,000 workers in as much as 60 million square feet of distribution,
manufacturing, office and retail facilities.

“We fully recognize we’re not going to be an immediate or direct beneficiary of the inland port because it’s farther from us,” said DeSoto Economic Development Corp. director Scott D. Livingston. “But we anticipate, and we’ve already seen proof, that we probably will be indirect beneficiaries of the
spillover effect.”

He also said he didn’t expect the effect to happen as quickly as it has. Before April’s groundbreaking on the 6,000-acre logistics facility, Mr. Livingston was getting calls from developers wanting to be part of the development, but not in it.

“I think people realize this is a real deal and it’s moving pretty quickly,” Mr. Livingston said.

Developer Hillwood broke ground in March 2006 on a 113-acre site near I-35E and Danieldale Road and plans to build a 1.8 million-square-foot distribution
center. The company recently released plans for a 550,000-square-foot building to be constructed at the site.

Six hotels are also scheduled to open or start construction within six months to a year, Mr. Livingston said.

DeSoto’s population stands at about 47,600. With the general growth in southern Dallas County, and DeSoto attracting the development’s workers, Mr. Livingston projects the city’s population could reach as high as 70,000 to 80,000 in the next couple of decades.

Former DEDC president and current council member Sandy Respess said DeSoto’s growth is in need of change. In the last few years, residential growth has hovered around 10 percent, with retail and commercial at a 2 percent and 3 percent clip, respectively, he said.

“We’re becoming a city of residences without a proper balance of tax base and job base,” Mr. Respess said.

An April 2006 study by the University of North Texas Center for Economic Development and Research shows that DeSoto has a large pool of employees who regularly commute more than 30 minutes to work. New businesses will help keep that money in DeSoto and create jobs closer to home, said Dr. Terry Clower, associate director at the center and co-author of the study.

“Of course the advantage DeSoto has is they already have workers who are looking to find jobs closer to home. In that sense it’s a good, positive gain for
them,” he said. “Working three miles down the road as opposed to 23 makes a lot of sense.”

Commercial Property News

Construction Starts on River Plaza Corporate Center in Sacramento

July 10, 2007

Construction on the first six buildings of the12-building Class A River Plaza Corporate Center in Sacramento’s South Natomas market has begun, according to The Allen Group and the California Farm Bureau Federation, co-developers of the project.

The two-story buildings in the 175,000-square-foot office park will be sold rather than leased. Ranging in size from 11,000 square feet to 17,000 square feet, each building can be sold individually or divided up.

Office sizes as small as 4,500 square feet will be available for sale, according to a release from San Diego-based Allen Group. Each building will have garage and surface-level parking, private elevator access and 24-foot vaulted ceilings on the second floor.

The first six buildings should be available by early 2008. The 11-acre site is located at 2500 River Plaza Drive, adjacent to the California Farm Bureau Federation’s headquarters. The property has access to Interstates 5 and 80 and is close to downtown Sacramento and the airport.

A construction timetable for the remaining six buildings was not available by press time today.

The Allen Group, a developer of industrial and office properties across the western United States, announced the joint venture with the California Farm Bureau Federation nearly two years ago. The architect is Smith Consulting Inc. and the general contractor is Brown Construction. CB Richard Ellis Inc. of Sacramento, led by senior vice president Greg Levi, is marketing the buildings. Bank of America is proving the construction funding.

Meridian Plaza, a 12-story Class A office building near the California State Capitol in Sacramento was also developed by The Allen Group. The firm sold it to Angelo Tsakopoulos’ AKT Development in 2004, according to a report by Jon Ortiz in today’s Sacramento Bee. The Allen Group has also developed Diamante Del Mar, a Class A office building in San Diego and Kelly Corporate Center IV, an office complex in Carlsbad, Calif.

CPN reported April 19 that The Allen Group and BNSF Railway Co. reached a deal to build an intermodal facility at the Dallas Logistics Hub, a 6,000-acre master-planned logistics park in southern Dallas County in Texas. Under the terms of the agreement, BNSF would buy between 387 and 530 acres at the hub, which would serve as an inland port for distributing goods to the Central and Eastern U.S. The Allen Group announced in April that it was going to build two speculative industrial buildings, one totaling 640,000 square feet and the other about 210,000 square feet, in the logistics hub.

The Sacramento Bee

Natomas Office Park Afoot

July 10, 2007

The San Diego-based development firm that built Meridian Plaza in downtown Sacramento has started construction on a 175,000-square-foot office park in South Natomas.

The Allen Group is selling space in its 12-building River Plaza Corporate Center instead of leasing it. The plan calls for the two-story office buildings to range from 11,000 square feet to 17,000 square feet at the 2500 River Plaza Drive site. CB Richard Ellis, the developer’s broker, is offering units for sale down to 4,500 square feet.

The Allen Group plans to finish River Plaza’s first six buildings on the 11-acre site in early 2008. The company built the 4-year-old Meridian Plaza on L Street before selling it to Angelo Tsakopoulos’ AKT Development in 2004.