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DALLAS-Industrial build-to-suits are an “up tick” in the Dallas-Ft. Worth market, once a hub for speculative building. Blame it on the changing economy or accept that companies really want to handcraft needs and save dollars in the long run.

Two DFW executives say build-to-suit popularity boils down to dollars and “sense.” The space most often can be had at a cheaper rate by executing a long-term lease. Companies get what they want without the compromise of retrofitting an existing building. And, project financing is practically a walk in the park if a tenant is in hand.

“More often than not, the big component is economics,” William G. Guthrey, vice president of marketing for Newport Beach, CA-based Koll Development Co.’s southwest team, tells GlobeSt.com. Roughly 35% of Koll’s eight million-sf CentrePort came out of the ground as build-to-suits. Most are attached to big name tenants in the business world that boast deep enough pockets to sign long-term leases plus reap an estimated 10% savings over the cost to retrofit existing space.

As the nation’s economy changed so did the DFW marketplace. The financial industry’s belt-tightening lending practices shrunk spec space in many leading submarkets and drove more build-to-suit projects where location was a high priority. That’s at least the way it was. In recent months, companies have been slow to sign as they await signs of certainty from today’s uncertain times. “Now add this world scale of events, it’s further going to slow down these long-term real estate plays,” Guthrey says.

Bob Alter, vice president of marketing for Ft. Worth-based Hillwood Properties, tells GlobeSt.com that the AllianceTexas strategy is to have a couple of spec buildings “on the shelf for whoever comes in and needs to be in yesterday.” Those who have the luxury and time to plan ahead can save in the long run with a build-to-suit instead of trying to tailor existing space. But, savings is in the mindset. Some build-to-suits end up a high ticket because the client wants a Cadillac version of an office-warehouse combo. Higher-end finish-outs definitely are becoming more commonplace.

It’s just not necessarily an undertaking for everyone. Smaller companies, the execs concur, are more willing to make the compromise to make the shoe fit when it comes to grabbing and retrofitting existing space.

Just recently, an automotive-related distributor, with a 600,000-sf immediate need, came looking at AllianceTexas. The distributor, whose identity is being kept under wraps right now, was shown a vacant 400,000-sf spec building that is expandable to 600,000 sf. The distributor turned its back as its planners peered into their crystal balls. Not even a cheaper per sf rate and immediate occupancy swayed the would-be, build-to-suit client. Hillwood’s control of the land will shave 30 to 90 days off the waiting period for build-to-suit construction and this client, says Alter, is willing to wait and pay the price to get what it wants.

A 375,000-sf build-to-suit tenant, Volkswagen, is just now moving into its AllianceTexas location. The project will serve as a distribution point for vehicle parts to dealers in seven states. As with Volkswagen, Alter says it almost always boils down to logistics. First, there’s the DFW’s centralized location in the US, a heavy-weight champion in the decision making process. Then comes the heavy-duty infrastructure of interstates, world-class air cargo hubs and rail lines. “We’re seeing a significant increase in the users wanting rail service,” he says. And if that’s the desire, it means a build-to-suit in an industrial park because the building inventory of rail-served structures usually is too antiquated or outlying land isn’t laced with today’s high-tech business must-haves.

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