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Joint venture develops cold-storage distribution center in massive Cedar Port Industrial Park

April 20, 2023

Another warehouse is being developed in the massive TGS Cedar Port Industrial Park in the Baytown area.

Philadelphia-based BG Capital and New Jersey-based FreezPak Logistics said they started construction on a 281,849-square-foot cold-storage warehouse last week.

The joint venture, named BGFP International LLC, purchased the 30.7 acres at 7818 Fisher Road — just off the Grand Parkway near Floor & Décor’s 1.5 million-square-foot distribution center — last June from TGS Cedar Port Partners LP for $9 million.

Houston-based Partners represented the seller in the transaction. Marc Isdaner from Colliers International represented BGFP.

Development of the first building, slated to be completed by mid-2024, will cost about $102 million and be leased by FreezPak, BGFP said.

An attached second warehouse measuring 262,000 square feet will be built after stabilization of the first, said Joseph Byrne, co-founder of BG Capital. The estimated cost for that building is $95 million.

Braintree, Massachusetts-based RKB Architects Inc. designed the project. Elizabeth, New Jersey-based Industrial Building Group is the general contractor.

The combined facilities will have 67-foot clear height with 408,213 square feet of freezer space and 110,142 square feet of temperature-controlled cooler dock. There will be 141 trailer parking stalls, 64 truck stalls, three rail bays and 131 car parking spots, and the property will be designed to install an automated storage and retrieval system in a portion of the building and include blast-freezing, cross-docking, transportation, repacking and overseas container plug-in.

“(It’s) an extremely tall building … from the freezer perspective,” Byrne said. “So we believe that we're really making a statement that we want to be in the Houston market by doing that and that we hope to have a facility that will service the customers of FreezPak appropriately in the market.”

Cold storage was one of the hottest subsectors of the industrial real estate market during the pandemic, with sales hitting a record $33 billion in 2020, a 22.9% increase, according to a 2021 Colliers International report that cited Real Capital Analytics Inc. data.

BGFP is also developing a 171,117-square-foot cold-storage facility in Philadelphia, slated to be completed in the fourth quarter of this year, and expects to break ground on a 272,400-square-foot warehouse in Jacksonville, Florida, in the third quarter.

The joint venture is also looking to develop facilities in Savannah, Georgia; Norfolk, Virginia; Chicago; and the mid-Atlantic area, Byrne said.

BGFP would like to build another warehouse in the Houston area in the future, he said.

“We're hoping that TGS will have some room for us for future expansion,” Byrne said. “We believe that Houston is a very integral part of our program.”

FreezPak focuses on frozen, cooler and dry storage as well as third-party logistics. BG Capital is a commercial real estate investment and development firm specializing in mixed-use multifamily, medical office and industrial.

The two companies previously had a landlord-tenant relationship and decided a partnership made sense to expand across the country, Byrne said.

The 15,000-acre TGS Cedar Port is the largest master-planned, rail- and barge-served industrial park in the United States and fifth largest industrial park in the world, according to its website.

It has access to the Grand Parkway, Interstate 10, state highways 225 and 146, and the Port of Houston’s Bayport and Barbours Cut container terminals.

Major warehouse tenants at the industrial park include Walmart, Home Depot, Target, Floor & Décor, Article, Niagara Bottling, Webstaurant, Plastic Express, Ikea, Ravago and Vinmar.

After the land sale to BGFP, Cedar Port still has 14 tracts totaling more than 990 acres available for sale, 1,980 acres of build-to-suit sites for lease and 219 acres of spec warehouse sites for lease, according to its current marketing brochure.

By Florian Martin, Houston Business Journal