New Duke Buy Includes $140M Build Project

David Hudson, SVP with Duke, tells GlobeSt.com that the company can't release the purchase price. However, he says the cost will be revealed in the end of the month information release to shareholders. Hudson says the acquisition was designed to build the company's stable of port-related properties, which already includes 5.2 million sf in Savannah, GA and a new development near the Port of Baltimore called the Chesapeake Commerce Center.

He says the Texas land, spread out in the cities of Pasadena and LaPorte, will be developed into a park called FairPort. The land is six miles from Barbours Cut and the recently constructed Bayport container terminal, which are part of the Port of Houston system. The company also bought a nearby 12-acre container/chassis storage yard and a 172,000-sf, fully-leased industrial building on Greenwood Street in Cedar Crossing Business Park in Baytown, TX.

Duke has wanted to build near the Texas port for three years, ever since it opened the Houston office, Hudson says. "This just hit all the things we were looking for," he says. "The port has serious container growth, with 200 million tons of cargo moved in 2006. Barbours and Bayport, which opened a year ago, combined are expected to handle about 3.5 million 20-foot equivalent units (TEUs) a year."

FairPort will hold both distribution and manufacturing buildings, Hudson says. "We're looking at build-to-suits now, and we'll definitely consider land sales to get up to 2.9 million sf. It's a bit early to look at building speculative space for lease, though, as we're not going to get the first property up and ready for at least 18 months." The first phase will consist of about 400,000 sf to 500,000 sf, he says, and should start by the fourth quarter or first quarter 2009.

The two Virginia properties acquired are a 166,000-sf building at 1400 Sewell Pt. Rd. in Norfolk and the 300,000-sf Northgate Buildings A and B in Hampton. "These are well positioned near a growing port, with great rail connections into Columbus, where we have a nice concentration of industrial properties," Hudson says.

Duke has recently opened offices in Inland Empire, CA and Seattle to explore prospective developments in these coastal port markets. This recent portfolio purchase included the 120,000-sf building at 13501 38th St. East in Sumner, WA. "The building is leased to a big trucking company, Schneider Trucking. It's in a port city and integral to a supply chain, where they receive containers and put them onto trucks," Hudson says.