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Baytown’s Port 10 Logistics Center adding 2 more warehouses, including rail-served building

April 11, 2023

The Port 10 Logistics Center, a 246-acre multimodal business park in Baytown, is gaining two more warehouses totaling more than 630,000 square feet, including one connected to rail.

The park’s developers, Houston-based McNair Interests and Pontikes Development, said construction started late last month on Building 3, a 450,873-square-foot rail-served warehouse. They expect to break ground on Building 5, a 179,255-square-foot cross-dock facility, in the next two to three weeks.

The partnership, which goes by Palmetto Pontikes, expects to complete Building 3 in the third quarter and Building 5 in the fourth quarter of this year.

Satterfield & Pontikes Construction Inc. is the general contractor, and Powers Brown Architecture designed the buildings.

Richard Quarles, Joseph Berwick, David Holland and Eliza Klein with the Houston office of Chicago-based JLL are handling leasing for the project south of Interstate 10 between Thompson and Wade roads.

“We are thrilled to incorporate a rail service component to the Port 10 Logistics Center, which will offer improved accessibility, versatility and streamlining to the Baytown region,” George Pontikes, principal of Pontikes Development, said in a statement. “The premier location, adjacent to Interstate 10, will provide easy access and connectivity, optimizing our customers' production and distribution economics.”

Building 3 will have rail connectivity to the Union Pacific main line and direct access to the railroad’s Coady Yard along Wade Road.

A second rail-served warehouse, the 452,266-square-foot Building 4, is proposed for the site next to Building 3.

Next to both buildings, the partnership is building a storage-in-transit — or SIT — yard, operated by Pittsburg, Kansas-based Watco. The first phase, which was just completed, provides capacity for 420 rail cars to store industrial products.

The second phase, which has no start date yet, will add space for another 1,200 rail cars or, alternatively, another 750,000-square-foot building.

Both rail-served buildings will offer on-site truck, trailer, container and rail-car storage capabilities. Potential tenants could include industries such as building supplies, petrochemicals, retail, food, and logistics and transportation, JLL said.

Building 5, the cross-dock warehouse, will offer direct access to the I-10 frontage road and accommodate users needing 90,000 square feet and up.

Port 10 Logistics Center broke ground in January 2018 and has since completed four buildings totaling 861,025 square feet, which are all fully leased. JLL declined to name the tenants, but the Houston Business Journal reported last year that FedEx Corp. (NYSE: FDX) would occupy a 337,000-square-foot distribution center, which is now Building 2 of Port 10. Other tenants in the park include ZXP Technologies and PSC Group, according to reports.

JLL previously told the HBJ that there’s no minimum or maximum amount of tenants that the park could accommodate.

The goal is to be able to have tenants “from packaging-type operations to e-commerce,” JLL’s John Talhelm said when the project was announced in 2017.

Houston’s industrial real estate market remains strong, though leasing activity declined and vacancy rose to 6% in the first quarter of this year, according to Cushman & Wakefield.

The vacancy increase can be partly attributed to the 7.4 million square feet of space added to the market.

“Tenant demand remains positive, but at totals much more indicative of sustainable growth,” Jim Foreman, vice chairman at Cushman & Wakefield, said in a statement. “Houston’s industrial market has been on fire during the past several years with demand far outpacing supply. As we settle into a more balanced market, one reminiscent of pre-pandemic times, Houston will continue to outperform other major metros in the U.S.”

Average net asking rental rates keep rising as well. Rents for warehouse/distribution centers are $6.77 per square foot in Greater Houston, a 1% increase over the previous quarter, according to Cushman & Wakefield.

By Florian Martin, Houston Business Journal