Introduction
The Choyce Peterson National Accounts Team accomplished a noteworthy industrial lease transaction in Hidalgo, TX, where they concluded the renegotiation of an ongoing multi-year lease obligation into a deal that took advantage of a softening real estate market and vacant adjacent warehouse space. The result gave the client a 72% increase in both the warehouse square footage and the commensurate exterior parking while agreeing to only a 24% increase in the annual cost. In addition while solving operational and cost challenges the deal allowed the client to do so and keep the existing location that was well positioned to support product distribution throughout the region. This project again demonstrated the team’s expertise in complex logistics and negotiation while delivering a long-term solution.
Lease Details
- Tenant Broker: Alan Peterson, Choyce Peterson, Inc.
- Asset Class: Warehouse
- Square Footage Leased: 100,440 SF
- Occupancy Status: Fully Leased
Property Summary
- Address: 1601 N International Blvd, Hidalgo TX
- Building Type: Warehouse
This facility stands out for its large, contiguous space and its ability to flexibly accommodate both expansion and ongoing operations, making it highly functional for regional and national distribution requirements.
Leasing Strategy and Execution
The leasing strategy focused on:
- Quantifying current market conditions with regard to supply and demand of available warehouse space across the Hidalgo/McAllen, Texas region;
- Identifying all aspects of the client’s current and anticipated warehouse/outside storage needs and existing costs in the region;
- Creating preliminary drawings to demonstrate to local and regional members of the client team how the existing location can be enlarged and modified to overcome all existing shortcoming of the then existing operation; and
- Working with the current landlord to price the alteration work and incorporate such modifications into a new agreement which blended the warehouse expansion and modifications with an extended lease term.
By securing the expansion and alterations in a long-term lease with renewal options, the Choyce Peterson team provided the client with a long term solution to a number of operational constraints all at a lower cost per square foot.
Conclusion
This successful project underscores the capabilities of the Choyce Peterson National Accounts Team in executing complex, value-driven industrial transactions. By delivering a larger, modified existing warehouse, the team not only met but exceeded our client’s operational and financial objectives but again cemented best-in-class distribution capabilities across the south Texas market.
Frequently Asked Questions (FAQs)
What are the key features of this industrial space?
The renegotiated facility lease offers long term control; room to expand; vastly improved inbound and outbound delivery truck maneuverability, and state-of-the-art warehouse elements regarding ceiling height, lighting, aisle width, truck parking, dock equipment, and site work all of which are better suited for high volume distribution activity.
What type of tenant leased the space?
A national distribution client, requiring long-term occupancy, operational efficiency and great delivery access to the region.
Why was this location attractive to the tenant?
The location remains the best address to geographically provide the access throughout the client’s service area resulting in average unit cost reduction without sacrificing client service.
Were any buildouts or custom improvements part of the deal?
Yes, a 4-to-1 land to building ratio and good regional highway access was a factor that significantly limited available facility options.
