Duke Makes 39-Acre Slam Dunk; Preps 624,000-SF Build

HUTCHINS, TX-With all industrial developers' eyeing South Dallas land, Duke Realty Corp. has quietly scored a coup for 39 acres near Union Pacific Railroad's intermodal yard. Construction will begin ASAP on a 624,000-sf distribution building in a race to be the first out of the ground with spec space to add more traction for the inland port plan.

Duke Intermodal I, bearing an all-in development tab of $19 million, will have more than 150 dock doors, 32-foot clear heights and 520-foot by 1,200-foot floor plates with expanded trailer storage--pushing the design bar to levels comparable to product found in and around the California ports. "Basically, it's a distribution company's dream," says Jeffrey D. Turner, senior vice president for the Indianapolis-based Duke, who bought the land in an off-market deal with Michael Rader of Dallas.

Turner tells GlobeSt.com that the intermodal product in Dallas is just the beginning of Duke's plan to tap comparable sites in other top distribution regions with intermodal footprints. Duke's Dallas land fronts the hard corner of Interstate 45 and Wintergreen Road, right across the bridge from the north entrance to UP's intermodal yard, one of the largest in the US. "Our strategy is to nestle right up against a major intermodal facility like UP's," Turner says, citing plans for interior and coastal port projects. "We are a big believer in the expansion around these areas." Besides Dallas, Houston is on the radar screen as is Savannah, GA, where Duke just bought 5.1 million sf of bulk-industrial space near the port.

Turner says he and local broker Pax Glenn have been scouting South Dallas nearly three years for the right site. "The thing that put us over the edge was the quick work that UP did in getting that intermodal up and running," he stresses.

The Dallas building's size is critical to Duke's strategy, according to Turner. "We believe there's going to be very good interest in that area," he says, "and the users are going to be larger."

Turner says the site could support another 200,000 sf of distribution space, but that's not likely to rise until deals are in hand for the first structure. Duke Intermodal I will deliver in November. Duke's Curt Hefner and Jeff Thornton will be quoting $2.95 per sf to $3.15 per sf, triple net. GSR Andrade Architects of Dallas designed the warehouse.

"Spec always makes your heart beat a little faster," Turner says, "but we want to be the first one up with a building. We'd rather take the spec risk and be up with a building rather than be later [than the competition]."

Duke's land has Triple Freeport status, but local officials conceivably could one day pursue additional distribution perks like Foreign Trade Zone standing or even a port of pre-clearance designation. Regardless of what lies ahead, Turner says the strength of the interstate-fronting land, with close proximity to three other interstates, speaks for itself. "Even without the intermodal facility, it's a great distribution location," he says.