EL PASO, TX—In response to rapidly increasing demand forindustrial space, VanTrust Real Estate LLC has launched a 59-acrespec logistics park. Phase I of the logistics park, which isVanTrust's first El Paso project, consists of four buildingstotaling more than 514,135 square feet. Two additional buildingstotaling 480,504 square feet will be constructed during Phase II ofthe project, bringing the total to nearly 1 million square feet.The park will be located between Mercantile Avenue and Paseo DelEste Boulevard, bordered on the east by the new Bill BurnettDrive.

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"We've seen tremendous demand for industrial property in El Pasoover the past few years, which creates a great opportunity forVanTrust to enter this dynamic marketplace with one of the region'slargest spec industrial projects," said Josh Meredith, director ofdevelopment at VanTrust. "We're confident that the city'sgeographic benefits and Texas' business-friendly environment willcontinue positioning El Paso as a destination of choice forindustrial customers."

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El Paso is traversed by Interstate 10, the fourth-longestinterstate in the nation that extends from the Pacific to Atlanticoceans. Additionally, the region is served by rail lines, twointernational airports and five international crossings between ElPaso and Mexico. And the logistics development is located withinfive miles of the Zaragoza Bridge, one of the busiest internationalpoints of commercial entry.

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"Its location across the border from Juarez is very beneficial,"Meredith tells GlobeSt.com. "A lot of manufacturing companies aremoving out of China, and this increasing exodus will benefitmanufacturing in Mexico, which in turn benefits El Paso withvacancy rates hovering around 3%."

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Due to this strategic geographic location, more than 300 Fortune500 corporations have a presence in the region. These companiesalso benefit from being located within Foreign Trade Zone number68, which encompasses more than 3,400 acres of El Paso and El PasoCounty. This designation provides tax and duty exemptions oneligible inventory.

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"There has never been a more dynamic time for the industrialmarket in El Paso," said Bill Caparis, senior vice president inCBRE's industrial and logistics practice in El Paso. "We're seeingindustrial occupancy rates at 96.5% as global brands realize thebenefits of having a location along the US-Mexico border. Much ofthis demand is driven by a desire for companies to protect theirsupply chains and reduce taxes by reshoring their operations fromChina to North America, particularly Mexico, along with growingconsumer reliance on e-commerce retailers. El Paso is ideallypositioned to serve as a strategic international distribution pointfor those companies."

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Indeed, as one of the world's largest border communities, ElPaso is experiencing record-breaking demand for industrial space,with more than 182,000 square feet of space absorbed during thefirst quarter of 2020. Approximately 100,600 square feet ofindustrial space was completed and 652,189 square feet ofindustrial space was under construction during the same timeframe,according to CBRE. The first quarter closed with 2.9 million squarefeet of industrial space available for lease at 66 industrialproperties. Most of these properties have less than 30,000 squarefeet of space available, with only nine properties offering anaverage lease size range of 40,000 square feet to 1 million squarefeet.

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Phase I of VanTrust's logistics park is slated for completion inearly 2021. Phase II will commence upon completion of the firstphase.

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"We are in the infancy stages so no tenants to date but COVID isacting as the great accelerator," Meredith tells GlobeSt.com."E-commerce was popular before but in the last few months, withpeople relying more on e-commerce, leasing has picked up duringthis time."

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.