COPPELL, TX-Holt Lunsford Commercial is making plans to add a second spec building to Coppell Trade Center after securing a 114,038-sf win for a two-month-old, 196,852-sf warehouse. Eight miles to the northwest, Champion Partners is hard at work on 477,500 sf in four spec structures.
In both cases, the developers are playing off proximity to the DFW International Airport and a seemingly insatiable appetite by flex office and industrial tenants for space in the submarket. Holt Lunsford, steering a plan for Des Moines-based Principal Financial Group, has 40 acres to work in Coppell while Champion is now raising walls on four flex and office/warehouse buildings on 27 acres in Lakeside Business District in Flower Mound.
"It's a sign of that's where the demand is," says Steve Modory, a lead executive for the Dallas-based Champion. The Corporate Ridge plan, with a "north of $20 million" development cost, will deliver in the third quarter.
At the first quarter's close, the airport submarket had 1.5 million sf coming out of the ground, according to Grubb & Ellis Co. With so much rising, Holt's Kacy Jones and Champion's Modory say they've taken a slightly different tact so the newer product differs from what is on the ground.
"We just feel good about the type of product we're building," Modory says. "We have a lot of flex for different sizes and different types of tenants." NAI Robert Lynn's Rick Medinis, Tyson Erwin and Ruth Duncan are marketing the space at $3.75 per sf to $9.50 per sf.
Jones says the amount of space coming from competitors has caused Holt Lunsford's team to "switch directions" for its next project--a 117,000-sf, rear-load design with 30% to 70% office finish-out. He says they are just following the tenants' lead in the submarket and looking for a new twist since so many competitors have rolled out comparable product.
Coppell Trade Center started in May 2005. "We were pretty bullish when we broke ground. There wasn't anything like that out there," Jones tells GlobeSt.com about the first building's design. "Now, other developers have done the same thing."
Despite the stiff competition, Jones and teammate Jim Brice have pocketed a submarket win for a seven-year lease with the Compton, CA-based 4 Wheel Parts, which was courting the market with a large expansion for a regional distribution center. "That lease was the trigger to break ground on the next building for sure," Jones says. "We're very happy to be 75% leased within a couple months of completion." The 50,000-sf balance of 800 W. Sandy Lake Rd. is being marketed at $4.75 per sf, triple net.
The 45-year-old 4 Wheel Parts, which has six distribution centers in the US, will move in mid-July from a 36-year-old, 68,407-sf warehouse at 1530 Inspiration Dr. in Dallas. Gary Lindsey, senior vice president for Grubb & Ellis Co., says the search in earnest began about two months ago after nearly two years of mulling over whether to expand. The business park environment, new building and competitive rate were the dealmakers for the Coppell Trade Center, he says.
With 4 Wheel's deal bed down, Jones says plans are being made to break ground in 45 to 60 days on the park's second building. Merriman Associates of Dallas has just started the design work.
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