Far Eastern Submarket Drawing More Interest

Andrew Lockwood, a vice president in Houston for Santa Ana, CA-based Grubb & Ellis Co., says oil refinery expansions in Port Arthur and Beaumont are contributing to the increased interest in land. The cities are in line for an estimated $13 billion of construction on manufacturing plants and refineries, creating as many as 15,000 jobs for the region. "People will want to live in that part of the world that had been overlooked at one time," he says. In addition, he says Chambers County and neighboring Liberty County have been very pro-business and pro-development.

Denver-based Mountain West Industrial Properties has two developments in the area. Its 129,568-sf Cedar Crossing distribution center at 3710 Cedar Blvd. in Baytown is 100% leased. Meanwhile, the developer is ready to market its 723-acre AmeriPort in Baytown, a master-planned industrial development bound by FM 565 to the north, Grand Parkway to the east and FM 1405 and the Union Pacific Railroad to the west.

Mountain West's acquisitions and development officer T.J. Tarbell says land prices are very attractive in that neck of the woods. In addition, he agrees with Lockwood that Chambers County's staff is proactive.

Tarbell says it's all about location. "It's close to the port," he explains. "When you look at the overall transportation network, it's close to Interstate 10 and Grand Parkway. That proximity to the port, you can't duplicate that anywhere else in Houston."

Another plus, Lockwood says is Interstate 10 is going from four to six lanes from the Trinity River, beginning just east of Houston to Texas 69 through Beaumont, which is 10 miles to the east. "They should have that widening completed sometime in 2009," Lockwood says.

William J. Gold, senior vice president with CB Richard Ellis' Houston office, agrees the port is driving the interest in the area, but says so is interest in oil and energy. He emphasizes the dynamics of the far eastern submarket are changing.

"In the past, that area had been a heavy fabrication area for the oil patch," says Gold, who is leading the marketing team for AmeriPort. "Now we're seeing this as a distribution hub. We're seeing more strategic plays near the water and near rail. And, this area has plenty of both." He says interest will increase further once the Panama Canal opens and Bayport Terminal's expansion is done, adding to Port of Houston's inbound capacity.

Right now, Lockwood points out that land prices are reasonable, at least in comparison to other parts of Houston. "You can get good land out there in the $5,000 to $6,000 per acre range versus the $20,000, $30,000 or $40,000 you have to pay per acre in West Houston," he tells GlobeSt.com.