High-tech demands are driving plans to convert a 600,000-sf former grocery warehouse into Houston’s largest carrier hotel, the first transaction by an alliance charged with focusing on the southwest’s technological market. The project carries an end cost of $70 million, CEO Dean Macfarlan told GlobeSt.com.

An upfront $21 million is being spent by Dallas-based Macfarlan Real Estate Services and MetroNexus, a subsidiary of New York City-based Morgan Stanley Dean Witter, to acquire the former Fleming Foods grocery distribution warehouse at 2525 Minimax, situated near the intersection of Loop 610 and Texas 290. The balance of the project cost will be applied to an estimated 280,000-sf expansion and outfitting the structure with extra power, advanced fiber capabilities and increased air conditioning and cooling capacities.

Macfarlan says the first 200,000 sf will deliver in about 120 days. He presently is negotiating with several unidentified prospects for the space. The project, which is starting immediately, will be completed in six to nine months, according to Macfarlan.

The high-tech finishing out is critical for attracting the types of tenants being pursued for the round-the-clock, every-day-of-the-week demands of the e-commerce industry. “We want to be able to provide the kind of infrastructure and facility to carry tenants well beyond the needs of today,” says Macfarlan.

A carrier hotel is a specialized commercial property boasting high-tech interiors with vital multiple fiber optic lines specifically geared to telecommunications, Internet and data management companies.

The Houston site serves as the Texas inroad for the alliance, MSDW Southwest, to focus on marketing high-tech facilities in the region. MetroNexus is charged with acquiring, developing, leasing and managing carrier hotels. The alliance currently has carrier hotels in Seattle, New York and Montreal.

A 1 million-sf project is in the talking stages for North Dallas, Macfarlan told GlobeSt.com and a smaller one, about 200,000 sf in the works for San Antonio. He says the high-tech hotels generally will range between 200,000 sf and 1 million sf.

For the Houston project, Macfarlan Real Estates Services and MetroNexus represented the buyer and Cushman & Wakefield Inc.’s Houston office acted on behalf of the seller, Fleming Foods. Cushman & Wakefield will assist Macfarlan in marketing the Houston site.

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