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HOUSTON-Access to water, rail, road and air has put the city at the top of the list as companies push to globalize operations via inter-modal logistics and distribution.

John Talhelm, senior director in the city for Cushman & Wakefield of Texas Inc., tells that the scenery is changing as logistics and distribution firms look for multi-faceted transportation centers instead of traditional trucking hubs such as Dallas, Atlanta, Chicago and Los Angeles. He says the multi-modal capability was key to the decision by Panalpina Inc. to consolidate its air freight group and ocean-packing operations into a 410,000-sf build-to-suit, which is now rising in the Houston Intercontinental Trade Center.

Two years ago, Home Depot Inc. built a 750,000-sf distribution center in the Cedar Crossing Industrial Park in Baytown. The deal was won by the proximity to the Port of Houston’s Barbours Cut Terminal, with ready access to road and rail as well as water.

Where a “foreign component” is involved at any level of the operation, the city has a definite advantage over other cities, says Bill Rudolf, first vice president with CB Richard Ellis Inc.’s local office, part of the team marketing the 2,000-acre Worldport Logistics Center. The city might, in fact, be forced to add to its 15 Foreign Trade Zone-designated areas if more logistics and distribution users start landing in town. “Houston doesn’t currently have a proliferation of Foreign Trade Zones,” he says.

Talhelm says Panalpina, headquartered in Switzerland, needed to be located within 15 minutes of the George Bush Intercontinental Airport. The end result was the purchase of a 40-acre tract at 19409 Kenswick Rd. from the trade center’s developer, Revista, by Chicago-based International Airport Centers, which will develop and own the building. Panalpina penned a 10-year lease for a structure ticketed to deliver in June 2004. The building will have 60,000 sf of class A office space for a 400-employee workforce and more than 350,000 sf of warehouse space, with a carpentry shop for building customized crates. The firm owns a 132,000-sf facility, now up for sale, along Lee Road and leases 250,000 sf, also to be vacated, near the Houston Ship Channel.

Talhelm says the Panalpina building is one of the largest, single-tenant facilities to be built here since the Home Depot project. But the city’s inter-modal capabilities could attract others with similar needs and easily make buildings of 450,000 sf to 750,000 sf become the order of the day, he says.

“Panalpina’s commitment to expand operations in the Houston area is a testimony to the success of the airport expansion, combined with the multi-modal capabilities available to third-party logistics companies in the Houston metroplex,” Talhelm says in a press release. In addition to Talhelm, Panalpina C&W team included Kevin A. Erck, associate director in the city, and Paul Isenbergh, formerly in the Miami office and the client’s national real estate representative.

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