Huntsman, WP Carey Buy Site for $200M Consolidation Plan

Damon Palermo and Kevin Barr, partners in a real estate advisory firm, are steering a turnkey real estate plan for the chemical manufacturing giant, which signed a long-term net lease for the proposed Woodlands campus in sync with the property takedown just four days ago. Palermo tells GlobeSt.com that Huntsman and WP Carey bought a 70,000-sf, empty office building on 7.5 acres at 8302 New Trails Dr. and an abutting 6.6 acres from the Woodlands Operating Co. The vacant land will be built out with a 176,000-sf, three-building research and lab facility at a ballpark cost of more than $18 million. The project recently cornered Montgomery County abatements and nearly $2.8 million in a state award, says Palermo, whose job included working out incentives.

"This has been 2.5 years in the making," Palermo says. "We've certainly worked really hard to get to this point. Now, all we have to do is build it." He says decision to pull the trigger on the consolidation plan was made 11 months ago, setting off a fast-paced run toward a summer 2005 completion. Huntsman began a quiet period Sept. 13 for an IPO launch.

Palermo and Barr will oversee corporate relocation as well as development. Palermo says a minimum of four US locations will be closed, delivering 670 jobs to the Woodlands, some in relocations and some new hires. Right now, the "to go" list includes locations in Austin, Los Angeles, West Deptford, NJ and Brewster, NY, a mere fraction of the chemical manufacturing firm's 15,000-employee network in 30 countries. But, says Palermo, more closings could be possible.

The corporation's first sign of change came in June when it vacated 95,000 sf at 3040 Post Oak Blvd. in the Galleria and put the headquarters team for two business units into 132,000 sf on five floors of the class A Waterway Plaza I at 10003 Woodloch Forest Dr. The Palermo-Barr team is now tasked with finding a sublease tenant, with $17 per sf as the starting point for talks.

The campus will rise under the watch of a full team from Houston. Fretz Construction Co. is general contractor; Kirksey Architects, overall designer; and LCS Constructors Inc., the lab plans. The project includes retooling the 70,000-sf office structure, built in 1997 for Telxon Corp. of Akron, which vacated about two years ago when the company was sold.