AUSTIN, TX-Goodwill Industries of Central Texas has signed alease for a 124,200-square-foot industrial building in SoutheastAustin, which signifies Austin’s largest industrial leasetransaction of the year, according to brokers involved in the deal.Goodwill will consolidate two warehouses, offices and retail spacespread throughout the region as it expands its services and overallfootprint into Kelly Trade Center II, located at 6505 BurlesonRd.

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Finish-out work will begin immediately, with Goodwillanticipating to move in early December. “The Southeast submarket isleading the charge out of the doldrums,” says Ken Satterlee,speaking of Austin’s industrial market. Satterlee is president ofSan Diego-based St. Croix Capital Corp., which purchased theproperty in mid-2007. At the time, the building was fully occupiedwith a tenant that eventually moved out, leaving a prime block oflarge space available.

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Kelly Trade Center II will house a job assistance center,community meeting rooms, retail outlet and warehouse space forGoodwill. “This space will provide a more accessible location forall of our Southern community members as they seek out ourassistance to help them find, obtain and retain jobs in our CentralTexas region,” says Goodwill’s president and CEO Jerry Davis. “Itwill also help streamline our operations and create addedefficiency so that we can generate additional revenue to help morepeople.”

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The consolidation also marks a net expansion of 40,000 squarefeet for Goodwill, which notes the new space will help theirorganization provide more resources to serve more people. Forexample, additional office space will house a new job trainingclassroom and a new conference room will provide meeting space forGoodwill and other local non-profits. In 2009, Goodwill providedmore than 43,000 job-related services to more than 13,000individuals, and has been active locally for more than 50years.

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“One of the reasons Goodwill selected the building was becauseit offered extensive existing mechanical infrastructure—making theconversion process faster and cheaper. We were able topresent Goodwill with their best option in the market combining theright size, space configuration and strong corporate image,” saysJohn Barksdale, senior associate at CB Richard Ellis Inc., whorepresented St. Croix.

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Jay Lamy and Zane Cole with Aquila Commercial representedGoodwill in the transaction. Lamy notes the site is ideal fromlogistical and accessibility perspectives, noting the property’svisibility along a major highway and location along a bus line.“Ultimately, this helps Goodwill expand its mission and put morepeople to work,” Lamy says.

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Todd Tebbe, also of Aquila Commercial, is serving as projectmanager. Carson Design Assoc. has been selected as the architect,while S Kanetzky Engineering is the engineer. The project is nowaccepting bids from general contractors.

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Barksdale notes other significant industrial leases done thisyear include UltraElectronics Advanced Tactical Systems Inc. and USCourier & Logistics—both of which leased 76,800 square feet atBurleson Business Park. Western Paper leased 37,000 square feet andMove Solutions leased 24,000 square feet in the same submarket. Asof mid-2010, the vacancy rate for industrial space in the Southeastsector was 22%, according to CBRE research. The city-wide vacancyrate increased from 22% at the end of 2009 to 24% by mid-2010, alevel not seen since the late 1980s, according to NAI REOC Austinresearch.

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Also of note is the amount of new construction projects plannedfor the Southeast, including: the Veterans Administration’s new,185,000-square-foot clinic; Data Foundry’s new 250,000-square-footdata center, and Ben E. Keith’s new 85,000-square-foot distributioncenter.

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“This one lease is significant, and this series of large dealsand new construction announcements is even more so. It’s exactlythe type of activity that bolsters a recovery,” Barksdale says.

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San Diego-based St. Croix entered the Austin market in late2005, and according to a prepared statement, quickly amassing adiverse portfolio of industrial, office and retail space as well asraw land in key growth corridors including along the I-35 and StateHighway 71.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.