HOUSTON-Buoyed by the continuing strength of the Houston economy, Houston-based Weingarten Realty Inc. has begun construction of the third phase of its Beltway Southwest Business Center, an industrial park in the city’s southern section.

Located south of US 59 on Beltway 8 and West Airport Boulevard the office/service center project has been developed in back-to-back phases in 1998, 1999 and now this one. Each of the three phases contains a single building containing approximately 52,500 sf. When the third phase is completed later this year, the business center will contain a total of 157,500 sf.

“Houston’s strong economy is much more diverse than it was 10 years ago, and Houston is a big distribution market,” says Drew Alexander, president of WRI, a REIT. “Houston has a huge port, one of the largest in terms of tonnage in the country. And Houston continues to receive the benefits from NAFTA. Trade with Mexico continues to increase and probably will do so in the future.”

Because of the city’s strong economic base, WRI has begun additional industrial construction to serve tenants in areas where there is a lack of space. “We believe the Houston industrial market will be good for the rest of this year and probably next year too, if the economy remains stable,” says Alexander. “The first two buildings in our Beltway Southwest Business Center are already leased and we are having discussions with potential tenants for the third building.”

The buildings are designed to serve as office/showroom facilities with distribution accommodations. The three buildings feature glass fronts for the offices/showrooms while the rear of the structures provide 24-foot clear height for storage and distribution.

Overall, Alexander says, Houston’s industrial market remains in good balance, although in the northwestern section of the city there are some 25 to 30 industrial projects currently underway or planned. “I’m concerned that Houston might be heading toward an overbuilding situation in Northwest Houston,” he continues. “Some may say it’s the conservative nature of our company to be cautious, but we’re always sensitive to overbuilding.”

Alexander notes that industrial real estate continues to be strong. Much has changed in the Houston industrial market in 20 years. “One of things about Houston in 2000 vs. 1980 is that today it is very diversified,” says Alexander. “Energy and petrochemicals, for instance, are more automated and leaner and now are much more profitable at lower prices. The industry can really enjoy the higher prices, but it has also learned the lessons of the past.”

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