J. Holmes Davis IV, senior vice president for Philadelphia-basedBinswanger Corp., tells GlobeSt.com that an 82,574-sf lease byPackaging Corp. of America gets some, but not all, of the creditfor investor interest in the distribution center at 1600 E. PlanoPkwy. The empty box, sitting on 26 acres along the President GeorgeBush Toll Road, has been on the market for $19.5 million. Aneighboring 10-acre tract is up for grabs too--at an extracost.

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The distribution center abuts the Lake Forest, IL-basedPackaging Corp. of America's manufacturing plant. Stuart Smith,senior vice president in Dallas for Chicago-based UGL Equis Corp.,says the leased space will be used as overflow storage for thecorrugated box maker. He says the search began about six months agofor warehouse space closer to its factory at 1800 E. Plano Pkwy.than the 76,000 sf that it now leases at 808 Stewart Ave. The sweetspot is the new space, leased for five years, is right next door,he adds.

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"There is hardly any warehouse space in Plano. Most of what'savailable is higher finish-type space," Smith says, faulting azoning regulation with creating the submarket void. "True warehousespace is a relatively rare commodity because of the zoningissue."

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The distribution center boasts a 32-foot clear height, 13,200 sfof office space, 156 dock doors and dual-feed power lines. The boxwas built in 1983 and expanded in 1986.

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Davis says Chicago-based Klaff Realty LP wanted to sell or leasethe building, but didn't plan on it swinging to multi-tenant use,particularly for one under 200,000 sf. "The charge was to sell it,not lease it," he says.

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It was under contract by an investor when the tenant surfaced--atalking point that only heightened interest in the property. Thesales contract fell out in January, but a different investor istrying to work out a deal, Davis confides.

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The lease's drawing power has carried some weight. "They likethe fact that there's going to be a tenant in there," Davis says."But, what's driving the investor interest more than anything isthis building represents the only one I know of over 300,000 sfthat's fully air conditioned." He estimates to add air conditioningto a comparably-sized structure would cost at least $6 per sf."That's why investors and developers are coming at us," he says,adding rising construction costs are fueling interest as well.

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With one tenant in hand, Davis says the door is open to a fewmore. Since there is no signed purchase contract, he says "if wecan get more, our price of $19.5 million goes up."

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Staying true to his profession, Davis doesn't want to jinx thenew round of purchase talks so he's not saying how far along theyare. "All I can tell you is we've got a buyer at the table that'snegotiating," he says.

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