Earlier this month, First Industrial said it was on a short list for a user for the building, but didn't go into detail about the pending deal. One insider says Hillwood's identity was kept under wraps during negotiations.
It's perhaps the only time that Hillwood has bought a shell building and one of the few times that it's acquired an existing structure on behalf of a client, Tal Hicks, president of Hillwood Investment Properties, tells GlobeSt.com. In this case, it was two good customers--Shippers Warehouse and Kraft Foods--that pushed the deal to fruition. In the past two years, Hillwood has leased more than 1.1 million sf to Shippers Warehouse.
Garland was considered a must-have location since it's been home to a Kraft Foods' production facility since 1949. It also leases two warehouses, totaling about 200,000 sf in the submarket. The warehouses will be vacated in 40 days when the keys are turned over to Shippers Warehouse, Hicks says. Finish-out is under way.
Hicks says the Hillwood team searched the submarket for several months before looking into buying First Industrial's first phase, which delivered in the spring. Hillwood has not optioned First Industrial's remaining 20 acres, earmarked for another 472,200-sf building. The offer was made, but the two sides couldn't agree on the price, Hicks confides.
Hillwood, though, is always on the prowl for land, particularly in markets such as Garland where it doesn't have any acreage. The nearest Hillwood development is Skyline Business Park in neighboring Mesquite, where Shippers Warehouse occupies 530,000 sf.
"Hillwood has been a terrific partner," Darby Strickland, Shippers Warehouse CEO, said in a prepared statement. "This deal particularly represents how the two companies can work together to meet the goals of our end users." The Dallas-based Shippers Warehouse also leases 148,050 sf at Hillwood's Pinnacle 1 building in Pinnacle Park off Interstate 30 in Dallas.
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