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Giant Logistics Project Thriving

Although the tough leasing environment has many industrial owners operating in survival mode, the sprawling $4.3 billion AllianceTexas Airport project in Fort Worth is not only surviving, it's thriving. Alliance is owned and operated by Hillwood Development Corp., which is controlled by H. Ross Perot Jr., son of the former presidential candidate. Alliance leased a record 2.8 million sq. ft of Class-A industrial distribution and storage space in 2002 — nearly 13% of the development's 21.8 million sq. ft.

Alliance sets the benchmark for the industry, with its extensive landscaping, deep truck bays, state-of-the-art building sprinkler systems and wide streets that makes its easier for drivers to manipulate large track trailers, according to Gary Lindsey, senior vice president in the Dallas office of New York-based Grubb & Ellis. “It's the best money can build,” he says.

About 9,600 of Alliance's 15,000 acres are devoted to transportation and logistics operations. The centerpiece of the distribution hub is the nation's largest privately developed, financed and operated all-cargo airport, which features two ultra-long runways that can accommodate the largest freighter aircraft. “There is not one typical deal,” says David Pelletier, a Hillwood spokesman.

In fact, the developer has built much of Alliance on spec. In 2000, Hillwood built the original 400,000 sq. ft. distribution facility on spec, then secured the tenant, Ryder Systems Inc. The gamble paid off even more when Hillwood last year expanded the facility by 356,000 sq. ft. Ryder now operates the expanded building — the largest on the Alliance complex — as well as a distribution center for Philips Electronics and a warehouse for Hewlett Packard.

Now major corporate tenants are signing on. General Mills recently moved its 367,815 sq. ft. distribution center from nearby Haslet into a 670,000 sq. ft. space at Alliance. General Motors moved into a similar 670,000 sq. ft. facility last fall.

Alliance is ideal for big-box distributors looking to increase operating efficiencies, says Chuck Lounsbury, senior vice president of sales and marketing for the supply chain division of Ryder. “We, as well as our customers, like Alliance because of the benefits attached to concentrating operations there,” he explains.

Ryder, a logistics management and e-commerce development service provider, operates its North American Command Center, a 42,000 sq. ft. facility for dispatching and tracking the firm's operations in the U.S. and Canada, as well as a 176,000 sq. ft. e-channels solutions distribution center, out of Alliance.

In addition, Alliance “captures more than its fair share in the (Dallas-Fort Worth) metroplex” because of its relatively inexpensive rental rates, says Don Cook, senior director of Cushman & Wakefield's industrial/technical leasing division in Dallas.

Triple-net rental rates range from the high $2s per sq. ft. to mid $3s per sq. ft., equivalent to the market rate, according to Bill Burton, Hillwood senior vice president. “Alliance is a cheap place to operate,” he says.

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