VOL. 129 | NO. 223 | Friday, November 14, 2014
Hillwood to Launch Two Spec Buildings in DeSoto County
By Amos Maki
A Texas-based development firm will start turning dirt soon on a massive new business park in DeSoto County.
Hillwood Investment Properties is expected to begin site work in around 30 days on Legacy Park, a 266-acre distribution and business park on the south side of Goodman Road, just east of Hacks Cross Road near Polk Lane.
Hillwood Investment Properties’ Legacy Park is a 266-acre distribution and business park on the south side of Goodman Road, just east of Hacks Cross Road near Polk Lane.
Hillwood recently closed on the purchase of 133 acres for the business park for an undisclosed amount and has an option on the remaining 133 acres.
The $165 million park, which will have around 4.3 million square feet of industrial space and includes a 50-acre site for an office campus, could generate an estimated 850 to 3,000 new jobs.
After initial site work begins, Hillwood will launch two buildings, a 294,000-square-foot building suitable for one to four tenants and a 798,000-square-foot building suitable for one to two tenants, which allows Hillwood to capture a broad range of tenants.
“The buildings cover several different sizes of tenants, and we feel those are good sizes for this market,” said Kurt Nelson, senior vice president of Hillwood. “By doing the two different building types we can accommodate a wide variety of users.”
The site has caught the eye of several large employers, according to local officials. International Paper considered the site for its expansion, which ultimately took place in Memphis, and Under Armour shortlisted it for a 2 million-square-foot distribution facility that will create 1,000 jobs, a project that appears destined for the Nashville area.
In August, the DeSoto County Board of Supervisors voted to approve Legacy Park after Hillwood made several adjustments to the plan, including appointing residents to a design review committee and adding a landscaped buffer zone to shield homes from the park.
Nelson said the main entry to Legacy Park will include a median-divided boulevard more typical of an upscale office park and the park will feature extensive landscaping and water features.
“Our goal is to create a park that sets a new bar for development in this area,” said Nelson.
Hillwood is ramping up its presence in the Memphis market, where it controls around 5 million square feet of industrial space, the company's second-largest industrial portfolio outside its home base of Dallas.
“The Memphis market is a big part of our portfolio, so we're very focused on it and dedicated to it,” said Nelson.
Nelson, who assumed his role at Hillwood in October after overseeing Industrial Development International's Memphis office for years, said that in addition to developing its own buildings Hillwood will be looking to acquire existing properties.
“We are in the business of finding opportunities to buy buildings, and we have the capital to do that,” he said.
Hillwood is launching Legacy Park as the industrial market continues the upswing that started occurring in 2012.
Net absorption for the third quarter of 2014 was 904,499 square feet – the fifth consecutive quarter for positive net absorption – and the vacancy rate dipped to 10.1 percent, according to CB Richard Ellis Memphis.
With around 2.7 million square feet of absorption through the third quarter, the Memphis market will likely top last year’s level of around 3.2 million square feet of absorption.
The vacancy rate in the DeSoto County industrial submarket is hovering around 4.2 percent. At the same time, demand in the Memphis market, including DeSoto County, is gaining momentum. According to Cushman & Wakefield/Commercial Advisors, prospects are looking for around 9 million square feet in the market.
Andy Cates, principal at Colliers International Memphis, represented Hillwood in the land purchase and is in charge of marketing and leasing the Legacy Park buildings.
In other news, a prominent labor and employment law firm is moving to one of the city's premier office buildings.
Ford & Harrison LLP has inked a lease for around 8,000 square feet at the Renaissance Center at 1715 Aaron Brenner Drive in East Memphis, helping to backfill around 12,000 square feet vacated by FedEx. Ford & Harrison will be relocating from the office building at 795 Ridge Lake Blvd., where it has operated for most of the last decade.
Louis Britt, regional managing partner for Ford & Harrison, said the law firm wanted a completely new design for its Memphis office, one that emphasized collaborative space and meeting areas over individual attorney offices, a growing trend.
“Our workplace needs are really changing with the business and this gives us an opportunity to redesign our space to meet our needs and serve our clients better,” said Britt. “When we meet with clients we usually don’t go to an attorney's office, we go to meeting rooms.”
“We’re saving a lot of space with the individual attorney offices,” he said. “I think it's going to be a very good work environment. We’ll have synergy with everyone in the new space, which will really help the collaborative work environment.”
David Kilborn with Newmark Grubb Knight Frank in Atlanta, in conjunction with Greg deWitt of Newmark Grubb Memphis represented Ford & Harrison. Ron Kastner of CBRE Memphis represented the landlord.
It's been a busy year at Renaissance Center. The Ford & Harrison lease is the fifth deal this year at the office building, filling a total of 40,313 square feet. Occupancy at Renaissance Center is now 97.5 percent.