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SAN ANTONIO-An active demand for industrial product and a long-term client that needed a larger space has spurred ProLogis to add two buildings to its City Park East Distribution Center. Ground has broken on a 52,000-sf structure that will be bought by Gulf Coast Paper Co. and a 101,200-sf spec building for lease.

The buildings will sit at 8555 and 8569 NE Loop 410. Both are slated to deliver in late 2008. A development cost isn’t available, but similar structures have come out of the ground for $60 per sf to $80 per sf.

ProLogis acquired the 252,900-sf City Park East for $7.5 million in 2003. Charles Hargis, vice president for Denver-based company, says it always planned to build more industrial space on the extra eight acres that it got with the four-building buy. When Gulf Coast Paper Co., which is currently leasing space from ProLogis, needed to expand its 31,000-sf distribution center at 4030 Binz-Engleman Rd., a deal was struck between for a design-build project that would be purchased by Gulf Coast Paper upon completion. The build-to-suit is about three miles southeast of its other location.

Hargis says the reason for the spec building is due to incredibly high demand for industrial product. “Our entire existing portfolio is running north of 96% leased and statistically we’re 100% full,” he explains. “In looking at the ebb and flow of our tenants, we realized we needed more product.”

Hargis tells GlobeSt.com that ProLogis wants to add at least 350,000 this year to its 7.4-million-sf regional portfolio that it manages and has developed in the past four years. The plans include a 55-acre tract in Tri-County Industrial Park in Schertz, TX, north of San Antonio. Meanwhile, ProLogis is looking for other industrial land sites. “Manufacturing continues strong in Mexico, which feeds our San Antonio operations,” he adds.

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