Latest Hillwood News

HILLWOOD ACQUIRES 602,500 SQUARE-FOOT INDUSTRIAL BUILDING AT KEY DISTRIBUTION CENTER IN PENNSYVLANIA

Tue, 22 Jun 2010 00:00:00 GMT

HILLWOOD ACQUIRES 602,500 SQUARE-FOOT INDUSTRIAL BUILDING AT KEY DISTRIBUTION CENTER IN PENNSYVLANIA

Real Estate Developer Eyes Growth in Pennsylvania through New Acquisition

CARLISLE, PA (June 22, 2010) — Hillwood Investment Properties announced today that it has acquired a 602,500 square-foot industrial building at Key Distribution Center in Carlisle, Pa. Hillwood currently owns a number of commercial properties throughout Pennsylvania. This acquisition will further solidify its presence in the market and contribute to the company’s growth in the area.

“With the challenges of the current economy, Hillwood is focused on identifying the right investment and growth opportunities,” said Gary Frederick, Senior Vice President with Hillwood Investment Properties. “We are pleased to acquire a state-of-the-art distribution facility that will expand our presence and commercial activities in central Pennsylvania. The building is available for immediate occupancy and we will be aggressively marketing it to prospective tenants.”

The Class A industrial property is located at 1700 Ritner Highway, also known as U.S. Highway 11, in Carlisle. Constructed in 2007, the facility resides on a 46.3-acre site conveniently located between the Pennsylvania Turnpike and I-81, which are major distribution routes through Pennsylvania serving a number of large population centers in the northeastern United States. Approximately 100 million consumers reside within an eight-hour drive of Key Distribution Center in Carlisle.

Hillwood acquired the property from a joint venture between Higgins Development Partners and Pritzker Realty Group, both based in Chicago, Ill. Michael Bartolacci, Gerald Bower, and Jerry Moore of The Garibaldi Group helped negotiate the transaction.

Despite tough economic conditions, Hillwood continues to seek strategic acquisition opportunities across the nation.

“This purchase reflects Hillwood’s commitment to making strategic decisions that not only make good business sense, but good sense for our local communities.” Frederick added. “Our latest investment in Pennsylvania represents the type of acquisitions and growth on which Hillwood will continue to focus.”

About Hillwood

Hillwood, a Perot company, is ranked as one of the top commercial real estate investors and developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 65 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and the Victory district near downtown Dallas. For additional information about the company, please visit www.hillwood.com.

Jacksonville City Council selects Hillwood as developer of Cecil Commerce Center

David Bauerlein — Wed, 09 Jun 2010 00:00:00 GMT

The task of bringing long-awaited jobs to Cecil Commerce Center officially fell on Dallas-based Hillwood when the Jacksonville City Council voted Tuesday to make Hillwood the center’s master developer.

The 16-0 vote capped a year of negotiations that started last summer when the city tapped Hillwood as the top-ranked applicant for the role of master developer.

Despite opposition that came mainly from businesses doing industrial development in Jacksonville, council members have said the commerce center needs a master developer and Hillwood has a track record of success.

“We’re looking forward to them getting busy out there,” Councilman Ronnie Fussell said Tuesday night.

The master developer contract will last up to 25 years and cover as many as 2,800 acres. As Hillwood attracts businesses, the company will purchase tracts of land from the city for construction of distribution centers and warehouses.

Hillwood will call its project Alliance Florida, the same “premier brand” the company affixed to its Alliance Texas and Alliance California mega-developments. Alliance California is at a former Air Force base in San Bernardino.

Opponents of the contract argued the negotiations between Hillwood and the Jacksonville Economic Development Commission resulted in the city agreeing to sell land on the cheap.

Though some council members said the price would probably be higher if the city were just selling land in a straight land deal, they said the price is part of a much larger agreement that requires Hillwood to develop the center or lose its right to the contract.

Mayor John Peyton has supported making Hillwood the master developer, saying the city cannot afford to maintain the “status quo” at the commerce center.

The city and the Jacksonville Aviation Authority took ownership of the commerce center in 1999 from the Navy after the federal government closed the military base. Hillwood will be the master developer of city-owned land at the center. The aviation authority’s land is not covered by the contract.

What's next for Cecil Commerce Center after Hillwood approval

David Bauerlein — Wed, 09 Jun 2010 00:00:00 GMT

After winning the hard-fought battle to be master developer of Cecil Commerce Center, Hillwood faces a tall order in translating that political success to where it counts on the ground — construction of industrial buildings.

Hillwood, a Dallas-based company that is among nation’s largest industrial developers, will be in charge of bringing businesses to land where the city attracted just two companies in the past 11 years.

“We’ve got to deliver on our promises now,” Preston Herold, vice president of Hillwood Investment Properties, said after City Council approved the master development agreement Tuesday night.

Herold said Hillwood has talked with a couple of businesses about locating at Cecil Commerce Center. He said Hillwood wanted to get the master development approved before moving ahead with those discussions.

“That will be job number one — getting back to those folks,” he said.

Herold will move to Jacksonville to lead Hillwood’s marketing of the commerce center. He said Hillwood will set up its office in a former Navy building at the commerce center. The city and the Jacksonville Aviation Authority obtained thousands of acres of land from the federal government in 1999 after the Navy base closed.

One change that will take effect immediately when Hillwood takes over as master developer is real estate brokers will be able to earn fees when their clients decide to locate at the commerce center. The city hasn’t paid broker fees, but brokers will have a financial incentive to have their clients consider Cecil when Hillwood is on board.

The master development agreement with Hillwood can run for up to 25 years, but it establishes a series of benchmarks for development that Hillwood must meet along the way or else it will lose the contract. Those requirements are based on the square footage of construction.

Within three years, Hillwood must construct a 400,000 square foot building, regardless of whether Hillwood has tenants for the building or not.

In 10 years, it must have built 2 million square feet, and by the end of 20 years, the total tally must be at least 7 million square feet.

Since 1999, the city has struck two deals at the commerce center by selling land for the 1 million square foot Bridgestone Americas Tire Operation center and the 235,000 square foot Saft high-tech battery manufacturing plant.

City Councilman Daniel Davis, whose Westside district includes the commerce center, said he isn’t expecting Hillwood to come roaring out of the gate.

“We all know what kind of economic environment we’re in,” he said.

But he said he’s confident that Hillwood’s connections with industrial businesses will result in tenants and jobs coming as they building are built.

“I’m measuring success as consistent takedown of lots and consistent new job creation at Cecil,” he said.

The City Council voted 16-0 Tuesday to make Hillwood the center’s master developer. The unanimous support capped a year of negotiations that started last summer when the city tapped Hillwood as the top-ranked applicant for the role of master developer.

“We’re looking forward to them getting busy out there,” Councilman Ronnie Fussell said Tuesday night.

The master developer contract will cover as many as 2,800 acres. As Hillwood attracts businesses, the company will purchase tracts of land from the city for construction of distribution centers and warehouses.

Opponents of the contract argued the negotiations between Hillwood and the Jacksonville Economic Development Commission resulted in the city agreeing to sell land on the cheap.

Mayor John Peyton has supported making Hillwood the master developer, saying the city cannot afford to maintain the “status quo” at the commerce center.

Hillwood will be the master developer of city-owned land at the center. The Jacksonville Aviation Authority’s land is not covered by the contract.

Jacksonville's largest industrial sale of 2009: West Point Trade Center

Christian Conte — Fri, 26 Mar 2010 00:00:00 GMT

When Dallas-based Hillwood Investment Properties first put its 600,000-square-foot industrial warehouse on the market in July 2009, it didn’t get many takers.

It wasn’t until after pulling the West Point Trade Center back off the market that the Dallas-based office and industrial development company found a suitable buyer in CB Richard Ellis Realty Trust, which bought the property Dec. 30 for $29 million.

“This property benefits from an excellent location in the most desirable and active submarket in the Jacksonville (area),” said Chuck Hessell, director of investments for Princeton, N.J.-based CBRE Realty Trust in a press release announcing the sale.

The property at 2300 Pickettville Road, which is 100 percent occupied by beverage maker Dr Pepper Snapple Group (NYSE: DPS), was actually one of three properties the trust bought at the same time for a total of about $70 million. The other two are fully leased office buildings totaling 222,600 square feet in Miramar.

Hillwood spent about $17.1 million developing the West Point Trade Center in 2008. Dr Pepper Snapple has leased out the space since it opened in 2009. The lease expires in 2019.

West Point Trade Center

Location: 2300 Pickettville Road

Value: $29 million

Size: 601,500 sq. ft

Date: December 2009

Buyer: RT West Point Jax LLC

Buyer’s agent: WND

Seller: Hillwood Investment Properties

Seller’s agent: Terry Quarterman, Jeff Nelson; CB Richard Ellis

Vacuum cleaner maker finds cheap lease in San Bernardino

Lou Hirsh — Fri, 19 Feb 2010 00:00:00 GMT

Vacuum cleaner maker Royal Appliance Manufacturing is relocating its Ontario distribution operations to a larger facility in San Bernardino.

Its new landlord says the move reflects a trend of growing companies seeking out more favorable business terms in a buyer's market for industrial space.

Royal will begin operations in early May in a newly constructed building purchased in December by Hillwood Investment Properties. According to statements from Hillwood and CB Richard Ellis, Royal has signed a five-year lease for a 415,000-square-foot space at Hillwood's Alliance California industrial development, built on land that once housed Norton Air Force Base.

Officials of Ohio-based Royal, whose brands include Hoover and Dirt Devil, could not immediately be reached for comment. Financial terms were not disclosed for the deal that will bring Royal to the space at 925 Ninth St.

John Magness, a Hillwood senior vice president, said by phone the new location will give Royal about 65,000 more square feet than it had in Ontario, and it will be paying less for rent, taxes and other overhead. The building is also located in a state-sponsored county enterprise zone that gives tax credits for future job creation.

Magness said the current economy has prompted many companies to shop around for space before renewing leases, and Hillwood has received more inquiries about its properties this quarter "than the past three quarters combined."

In December, Hillwood also purchased another building in the same vicinity, with more than 600,000 square feet of space. At the time, Magness said that because Hillwood got a favorable price for the buildings, it is able to offer lower rents to potential tenants.

Hillwood is a division of Dallas-based Perot Companies. It is the primary commercial developer of land on the outskirts of what is now known as San Bernardino International Airport.

Appliance Firm Expands in 416,000-SF Lease

Bob Howard — Fri, 19 Feb 2010 00:00:00 GMT

SAN BERNARDINO, CA-Royal Appliance Manufacturing Co. is expanding its operations by more than 65,000 square feet and relocating to an industrial building owned by Hillwood Investment Properties in a five-year lease for a 415,825-square-foot building at 925 E. Ninth St. The deal marks one of the largest new leases in the Inland Empire so far this year, according to brokers from CB Richard Ellis who represented Hillwood.

Royal Appliance plans to relocate to the new building upon completion of tenant improvements at the beginning of May. Hillwood acquired the building last year from Blackrock in a transaction brokered by the same CBRE team that represented Hillwood in the Royal Appliance lease: Frank Geraci, Walt Chenoweth, Juan Gutierrez and Patrick Wood of CBRE's Ontario office.

Chenoweth says the new lease produces positive cash flow for Hillwood soon after an acquisition in a slow market. Royal Appliance, which now occupies a 349,000-square-foot facility in the West Inland Empire, manufactures brands including Hoover and Dirt Devil vacuum cleaners.

Royal Appliance was represented by Jeff Smith and Jeff Huberman of Lee & Associates. The five-year lease is valued at more than $5 million.

In December, Hillwood Development also acquired a sister building at the same location. CBRE is also the leasing agent for that building, which is a 609,000-square-foot warehouse at 7776 E. Tippecanoe Ave.

Both buildings are located in the San Bernardino Enterprise Zone at Hillwood's AllianceCalifornia project at the former Norton Air Force Base. According to John Magness, president of Hillwood’s operations in California, the AllianceCalifornia redevelopment project now totals more than 8.6 million square feet.

Two Mill For Hill

Mon, 11 Jan 2010 00:00:00 GMT

Hillwood Investment Properties acquired almost 2M SF of vacant industrial buildings: two properties adjacent to Hillwood’s Alliance California development in San Bernardino and the third is the Frankford Trade Center in Carrollton. Specifics weren’t released, but Hillwood prez Tal Hicks says the properties were identified as opportunities. Frankford is a Class A commercial building built in 2000 with renovations expected to finish in 30 days. It's located at the northeast corner of the George Bush Tpke and Interstate 35. It has 660k SF, with 60k of that for office space.

Hillwood Development buys two San Bernardino buildings

Andrew Edwards — Fri, 08 Jan 2010 00:00:00 GMT

Hillwood Development, the master developer for the land around San Bernardino International Airport, has acquired two new industrial buildings near the project.

Hillwood, which is based in Dallas, did not disclose the purchase price. The company announced the deal Tuesday.

"It's such a price that allows us to make good market deals below what the market was a year ago," Hillwood senior vice president John Magness said. "Put it this way: It's below replacement."

The airport area properties have never been occupied. Hillwood purchased the buildings from a company called Black Rock.

Current economic conditions make it cheaper to buy buildings than to build new ones, Magness said. The buildings, which together have more than 1 million square feet of space, could be used for warehousing or manufacturing, Magness said.

Inland Empire economist John Husing said upon hearing of the deal that Hillwood's purchase is not likely to signal any major changes in the industrial market.

"They saw a good deal and they jumped on it," Husing said, interpreting the news.

Hillwood did not announce tenants for the industrial buildings, the first of which is in the 7700 block of Tippecanoe Avenue and the second in the 900 block of East Ninth Street.

The newly acquired buildings are in the San Bernardino Valley Enterprise Zone, and are adjacent to Hillwood's AllianceCalifornia project. That project includes Stater Bros.

Markets' corporate headquarters and large warehouses used by such companies as Mattel, Kohl's and Pep Boys.

AllianceCalifornia has about 8.6 million square feet of redeveloped land, including the newly acquired buildings.

Hillwood Nabs 1.6 Million SF

Wed, 06 Jan 2010 00:00:00 GMT

DALLAS – Hillwood Investment Properties has added more than 1.6 million sf of industrial space to its portfolio, scooping up the Frankford Trade Center in Carrollton and two recently completed warehouses in San Bernadino, Calif.

The 659,340-sf Frankford Trade Center at 1649 W. Frankford Rd. is a vacant, class A building that's undergoing renovation. It was built in 2000, with a 30-acre deal-making location at the corner of the George Bush Turnpike and Interstate 35 and Triple Freeport tax exemption. Its former occupant was locally based Home Interiors & Gifts Inc.

In California's Inland Empire, Hillwood bought Northgate Buildings 10 and 11. The class A buildings, totaling more than one million sf, are adjacent to Hillwood's AllianceCalifornia development, formerly the Norton Air Force Base. The Northgate Buildings are part of the San Bernardino Valley Enterprise Zone. The portfolio addition pushes AllianceCalifornia to more than 8.6 million sf.

"With the challenges of the current global economy, Hillwood is focused on identifying the right investment and growth opportunities across the country," said Ross Perot Jr., chairman of Dallas-based Hillwood.

Tal Hicks, president of Hillwood Investment Properties, added that the company is "committed to making strategic decisions that not only make good business sense, but good sense for our local communities."

Hillwood Investment Strikes, Acquires 2M SF

Amy Wolff Sorter — Wed, 06 Jan 2010 00:00:00 GMT

FORT WORTH, TX-Hillwood Investment Properties has bulked up its portfolio with the acquisition of assets in Southern California and North Texas. Through separate deals, local company bought the 659,340-square-foot Frankford Trade Center in Carrollton, TX from LNR Partners Inc. and in a separate deal, acquired the 415,825-square-foot Northgate Building 10 and 609,499-square-foot Northgate Building 11 in San Bernardino, CA from Blackrock Realty.

Tal Hicks, president of Hillwood Investment Properties, tells GlobesSt.com that the attraction with both deals was the "price per pound" at which the vacant assets were purchased in the all-cash transaction. Hicks declined to discuss a sales price, though did acknowledge the purchase price was a substantial discount to replacement costs.

Frankford Trade Center at 1649 W. Frankford Rd., was built in 1999 and once served as the headquarters for Home Interiors & Gifts Inc. The company inked a sale-leaseback deal in late 2006 with First Industrial Realty Trust Inc. and UBS Realty Investors, but filed for bankruptcy in 2008, The warehouse-office building, valued by the Denton Central Appraisal District at $17.7 million, was foreclosed on last summer.

"We'll spend approximately $1 million on the building," Hicks says. "It's a second-generation building that needs work done." The work in question, he continues, will include cosmetics, such as interior and exterior painting.

Hicks goes on to say that the California properties, Northgate Building 10 at 927 E. 9th St. and Northgate Building 11 at 7776 Tippecanoe Ave. were completed in June 2009, and won't require anything in the way of upgrades. The California buildings are adjacent to Hillwood's AllianceCalifornia development in San Bernardino, CA.

With these properties safely in its portfolio, Hillwood Investment is on the hunt for more, and Hicks says the company wants to make similar acquisition in Texas, California and other markets. The investor's sweet spot is vacant industrial buildings in excellent locations.

"They don't have to be brand new, they could be second generation, though we like first generation," Hicks adds. "But if we can get a substantial discount to replacement cost for a well-located, functional building, we'll be looking at it."

Hillwood buys local buildings

Lou Hirsh — Wed, 06 Jan 2010 00:00:00 GMT

Hillwood Investment Properties, a division of Dallas-based Perot Co., announced Tuesday it has purchased two buildings totaling 1 million square feet in San Bernardino. Hillwood senior vice president John Magness said the buildings were purchased from investment firm Blackwood, but the sales price is not being disclosed.

The recently completed and unoccupied commercial buildings are adjacent to Hillwood's Alliance California development near the former Norton Air Force Base.

Tenants have not yet been lined up for the acquired buildings, but the space can handle distribution or manufacturing. Magness said Hillwood was able to buy the buildings at a cost that allows it to lease them at lower rates than would have been feasible for the former owner.

Hillwood acquires Frankford Trade Center

Wed, 06 Jan 2010 00:00:00 GMT

Commercial real estate company Hillwood Investment Properties — a Perot Co. — has acquired 2 million square feet of vacant industrial buildings in Dallas and San Bernardino, Calif.

One of the purchases is the Frankford Trade Center in Dallas, a Class A commercial building that was constructed back in 2000. The property is currently under renovation and is located at the corner of the George Bush Turnpike and Interstate 35.

The other two building, which are located in the San Bernardino, Calif. area, also were acquired in a transaction that Hillwood says will stimulate the local economy.

“With the challenges of the current global economy, Hillwood is focused on identifying the right investment and growth opportunities across the country,” said Ross Perot, Jr., chairman of Hillwood.

“We are very proud of our work to redevelop the Norton Air Force Base into AllianceCalifornia and these new acquisitions are an important step in furthering that effort. I am also especially pleased that Hillwood has an opportunity to invest in the Dallas-Fort Worth area — a community of which Hillwood has long been a part.”

Hillwood's new location in Dallas offers the benefit of its Triple Freeport Tax Exemption since it’s part of the Foreign Trade Zone. The development includes 659,340 square feet of space.

Hillwood buys industrial buildings in Carrollton and California

Sandra Baker — Wed, 06 Jan 2010 00:00:00 GMT

Dallas-based Hillwood Investment Properties has bought three industrial buildings, one in Carrollton and two in California, totaling nearly 1.7 million square feet of space.

The local property is in the Frankford Trade Center at the northeast corner of the President George Bush Turnpike and Interstate 35E. The 659,340-square-foot warehouse/office was built in 2000 but is being renovated. It is in a foreign trade zone, which offers tenants certain tax benefits.

Hillwood also bought two newly built structures in San Bernardino. Calif. They are adjacent to Hillwood’s AllianceCalifornia, a redevelopment project of the 2,000-acre former Norton Air Force Base.

The buildings, totaling 1 million square feet, are in the Inland Empire industrial market, about 60 miles east of Los Angeles.

"With the challenges of the current global economy, Hillwood is focused on identifying the right investment and growth opportunities across the country," Chairman Ross Perot Jr. said in a statement.

Hillwood recently celebrated the 20th anniversary of AllianceTexas, a 17,000-acre development in far north Fort Worth, and it also owns the American Airlines Center and land in the Victory district near downtown Dallas.

Hillwood buys three more industrial buildings

Steve Brown — Wed, 06 Jan 2010 00:00:00 GMT

Hillwood Investment Properties said Tuesday that it has purchased three industrial buildings – two in California and one in the Dallas area.

The real estate company owned by Ross Perot Jr. and his family acquired the Frankford Trade Center in Carrollton near State Highway 190 and Stemmons Freeway. The 10-year-old project has 659,340 square feet of office and warehouse space and is located in a foreign trade zone.

Frankford Trade Center is being remodeled and will be finished in 30 days.

Hillwood also bought two new Northgate industrial buildings in San Bernardino, Calif. The properties have more than 1 million square feet and are next to Hillwood's AllianceCalifornia business park.

Terms of the acquisitions were not disclosed.

"They were all purchased substantially below replacement cost," said Tal Hicks, president of Hillwood Investment Properties. "We are excited about these purchases, despite the uncertainty about where the bottom is in the market."

Hicks said the Carrollton complex was bought from a mortgage servicer who had foreclosed on the property.

The California buildings were purchased from an investor who bought them after they were finished in 2009.

"With the challenges of the current global economy, Hillwood is focused on identifying the right investment and growth opportunities across the country," Perot said. "I am also especially pleased that Hillwood has an opportunity to invest in the Dallas-Fort Worth area – a community of which Hillwood has long been a part."

Hillwood is a major industrial building owner with properties in several states. The company owns the huge AllianceTexas business park in North Fort Worth and the undeveloped portions of the Victory Park project near downtown.

Retailers Forecast Strong Import Growth

Joseph Bonney — Tue, 22 Dec 2009 00:00:00 GMT

Containerized imports at 10 major U.S. ports are expected to rise in three consecutive months starting in February, breaking a 31-month streak of year-to-year declines, the National Retail Federation and IHS Global Insight said in their monthly Port Tracker report.

“We’ve been seeing hints of a turnaround in our past few reports but this is starting to look like a clear trend,” said Jonathan Gold, the NRF’s vice president for supply chain and customs policy. “If retailers are starting to import more merchandise, it’s because they expect to be able to sell more, and that’s a good sign for our industry and the overall economy.”

By predicting a 9 percent year-to-year increase in April, the new report extended the cautious optimism shown in last month’s Port Tracker, which a forecast year-to-year increases of 16 percent in February and 6 percent in March. Volume through the ports in January is forecast to be down 4 percent. Port Tracker forecasts cover only six months.

Ports surveyed handled 1.18 million TEUs in October, the most recent month for which actual numbers are available. That was up 4 percent from September but was down 14 percent from October 2008. November was estimated at 1.09 million TEUs, down 12 percent from last year, and December is forecast at 1.05 million TEUs, down 1 percent.

The report now expects 2009 to end with a total volume of 12.6 million TEUs at the 10 ports. That would be a drop of 17 percent from last year’s 15.2 million TEUs and the lowest since the 12.47 million TEUs reported in 2003.

“The second half of 2009 has seen an improvement, with ‘less bad’ year-over-year numbers compared with the first half,” said Paul Bingham, an IHS Global Insight economist. “While improving, import container traffic is projected to be weak through March due to the traditional slow season combined with the weak pace of economic recovery.”

The drop in cargo has produced one benefit: All 10 ports covered by Port Tracker – Los Angeles, Long Beach, Oakland, Seattle, Tacoma, New York-New Jersey, Hampton Roads, Charleston, Savannah and Houston – continue to be rated by the survey as “low” for congestion.

Beyond the Business Card - John Magness

Kari Hamanaka — Mon, 21 Dec 2009 00:00:00 GMT

John Magness

TITLE: Senior Vice President

COMPANY: Hillwood Investment Properties

CAREER EXPERIENCE: Magness was a member of the U.S. Army Special Operations Aviation Regiment's Nightstalkers. He worked overseas as an aviation consultant for the United Arab Emirates for two years before he was hired at Hillwood in 1998.

EDUCATION: B.S. in mechanical engineering from United States Military Academy at West Point and an M.S. in business from Boston University

ASSOCIATIONS: Legislative co-chair for NAIOP Inland Empire

In his book "Pilot Vision," John Magness bridges his experiences as a U.S. Army special operations pilot commander to his present experiences in real estate development where he runs Hillwood Investment Properties' West Coast operations. Based in the company's San Bernardino office, the location keeps him close to Hillwood's 2,000-acre master-planned AllianceCalifornia industrial project and the InterChange Business Center.

Following his time in the military, Magness worked as an independent contractor for the United Arab Emirates as an aviation consultant. He made so many business contacts he could not wait to come back to the United States to put those newfound relationships to work. After three years as vice president in Hillwood's Dallas office, Magness relocated to San Bernardino in 2001. Since that time, he has helped bring about significant change in San Bernardino's industrial landscape while also adding to Rancho Cucamonga's office market and partnering with Lewis Community Developers on the future Renaissance Rialto project.

How did you get into real estate development?

My Bachelor's was in mechanical engineering at West Point. I used that degree and the concentration in aerospace engineering to fly with the military for nine years after I graduated, but real estate came much later in my career.

After I left the military, I went to work overseas and came back to the U.S. to work for Ross Perot Jr. What attracted me to real estate was the ability to perfect large-scale change. Our projects tend to be associated with redevelopment and taking a previous land use that may have been from 30, 40 or 50 years ago and changing that into a job generator that's also aesthetically pleasing.

What was that transition to real estate development like?

Some aspects were relatively easy such as the travel and critical learning skills. It was a steep learning curve coming out of the military, out of flying, and learning the ins and outs of real estate. With real estate being local, I learned all the local players. But I feel like I've gotten the best experience that money can buy and provide.

What was the transformation process like in converting a brownfield to the InterChange Business Park?

It took several years of testing and going through regulatory agencies at the federal and state level. If you have the patience and the money, getting through those hurdles is not impossible. It's now a major job center.

What do you find to the most challenging aspect of your job?

I think it's in keeping up with the ever-changing regulatory environment in California as it relates to real estate and logistics. In California, especially, you have regulations that are three and four deep and agencies and commissions that have power over how you build a building and when you build it. That's very uncommon in the rest of the country. And trying to find that balance between building a project that creates jobs in a city and the desires of a city to control its land use and to have open space and to have clean air and clean water is challenging.

What do you like most about working with industrial and office product?

I like the job-creation aspect of it when you walk into the mayor's office and say, "We're going to create 500 jobs by building this building." Politicians get elected by changing their community for the better. Establishing that relationship with electeds is my favorite part and then also seeing the changing of the landscape - seeing the change to a piece of land that had a different use at one time.

Looking at industrial, are there any major, long-term trends or shifts you are noting right now in the marketplace?

Green building was a trend that started a couple years ago. Looking at the InterChange project, that was our first foray into the U.S. Green Building Council and the LEED certification process and learning that trend is here to stay. If anything, it's going to become more of a part of the industrial real estate industry. I think the next wave or next trend to build on that will be utilizing rooftops to create renewable energy. That's taking the next logical step in terms of energy efficiency for these buildings.

Is there anything from your experience as a special operations pilot that you apply to your current work?

I definitely think there are similarities between flying and leading a company in real estate when you're looking at a piece of property or looking at an existing building that you're going to rehab. You have to have a vision. Getting from the conceptual sketch or idea all the way to the realization takes a unique set of skills. Some are good at coming up with a vision. Some are good with execution. In leading real estate companies, you get to do a little bit of both.

Tell us about the book you wrote.

I pitched it to publishing companies back in 1998/1999 and Adams-Hall Publishing out of Los Angeles published it. I was living overseas at the time when I found them and they saw the direction the book was going and helped edit it.

It wasn't until I got into business that I saw the similarities between flying and business leadership and started doing research, reading and interviewing different CEOs like Ross Perot Jr. and seeing the similarities between flying and leading a company.

Where were you were working?

I was working for one of our great allies, the United Arab Emirates, specifically for Abu Dhabi.

What was that like?

It was great. It really opened my eyes to the international business side and to see how different cultures approach business. But I was very anxious to get back to the U.S. only because I made so many great business contacts oversees and was anxious to apply that here in the U.S.

What do you like doing in your spare time?

I'm an avid scuba diver. I spend a lot of time playing catch with my son. He's 12. I spend time coaching baseball, scuba diving, traveling and writing.

Can we expect to see another book from you?

I'm working on several book ideas right now. Once a writer, always a writer.

Where do you like traveling?

We love California - San Diego, Catalina Island. Since my wife is from the Gulf Coast, we try to get back to Alabama and Florida beaches every couple of years. And since we're halfway to Hawaii, we love going to Kaui.

If you weren't doing what you are doing now, what would you be doing?

For sure I'd be back in the military.

Would you be a pilot or something else?

A pilot. The last four years of my career I worked in special operations. That aspect of flying in the military was the most fun and the most rewarding thing that I'd done in the military. I keep in close contact with friends and have relationships with many of those in the military because a lot are still in.

Fort Worths Alliance foreign trade zone is nations largest for second year

Barry Shlachter — Sat, 19 Sep 2009 00:00:00 GMT

On Wednesday, Alliance Airport will try to coax Commerce Secretary Gary Locke aboard a helicopter — possibly piloted by developer Ross Perot Jr. — for an aerial tour of its landlocked foreign trade zone, the largest in the country for two years running.

Rail Traffic Strengthens Again

John D. Boyd — Thu, 06 Aug 2009 00:00:00 GMT

U.S. rail hauls of metal cargoes reach highest level yet in 2009.

A traffic recovery for large U.S. railroads picked up steam in the week ending Aug. 1, adding to signs that freight demand may be on a sustained climb from recession lows.

The Class I carriers and a few regionals that report to the Association of American Railroads said their U.S. operations carried 274,728 bulk carloads, up nearly 800 from a week earlier. Train hauls of intermodal boxes, containers and trailers combined, hit 193,332 units for a gain of about 350.

From the same week in 2008, carloads were down 18.3 percent and intermodal down 16.1 percent. But for the second straight week carloads were their strongest since March 21 while intermodal volume was the most since Jan. 24.

The year-to-date peak in metal shipments – to 7,727 carloads -- came amid a sustained recent pickup in scrap metal loadings, consistent with demand from metal furnaces to use cheap scrap inputs along with costlier ore when they are getting more metal product orders from other factories.

Other cargoes swelling rail traffic in the latest week included the strongest grain volume since Feb. 14 at 20,983 hopper carloads, chemicals with 27,846 tank cars at their highest since Feb. 28, and pulp or paper shipments the most since Jan. 17 at 5,989 units.

U.S. Manufacturing Almost at Growth Stage

Mon, 03 Aug 2009 00:00:00 GMT

The U.S. factory sector moved within striking distance of growth in July, a survey showed on August 3 in another encouraging sign for the recession-gripped economy.

The Institute of Supply Management said its index of the manufacturing sector, also known as the purchasing managers (PMI) index, rose to 48.9% from 44.8% in June.

That figure was better than the level of 46.5% expected on Wall Street and closer to the 50% level that separates expansion and contraction.

The ISM said that although the factory sector contracted for an 18th consecutive month, the decline was modest and suggested the slump is ending. "It would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue," said ISM survey chief Norbert Ore.

"The solid increase in July’s production reflects reopening of auto plants that were closed during GM's bankruptcy, which results in associated increases in auto parts production. The 'cash-for-clunkers' program appears to be more popular than most analysts projected, which indicates that the long, deep recession has created pent up demand for motor vehicles, " said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI.

"In addition, although the inventory liquidation is probably not over in the manufacturing sector, a reduced pace of inventory cutting does increase production," he added. "The July ISM reports adds to a growing number of indicators that signal that manufacturing and the general economy is bottoming out and a recovery is coming this summer. Although a welcome relief, we believe that the recovery will be below average and it will take many years to reach the pre-recession production level."

Additionally, the survey showed the new orders and production sub-indexes growing, and that the headline index was pulled down by weakness in inventories and lingering declines in employment.

The new orders index increased to 55.3% from 49.2%, showing growth in factory orders.

The production sub-index climbed to 57.9% from 52.5%, suggesting accelerating activity.

The employment index was at 45.7%, still contracting, but better than the level of 40.7% in June.

The ISM said six of the 18 manufacturing industries reported growth in July -- nonmetallic mineral products; paper products; printing and related activities; electrical equipment, appliances and components; transportation equipment; and chemical products.

A certified green building

By Sandra Baker — Mon, 27 Jul 2009 00:00:00 GMT

Five buildings totaling 1.2 million square feet of space in the Hillwood-developed Interchange Business Center in San Bernardino, Calif., have earned LEED Silver certification from the U.S. Green Building Council.

It is the largest speculative industrial project in the U.S., one of the largest industrial projects in the U.S., and one of the largest overall projects in California to receive LEED certification, said Hillwood, the Fort Worth-based developer of Alliance Airport and the surrounding residential and industrial developments.

The buildings were completed in 2008 but have since been sold to CB Richard Ellis Investors. The buildings received the Leadership in Energy and Environmental Design certification in June.

The Interchange Business Center was done in partnership with the city of San Bernardino’s Economic Development Agency. The 144-acre site once housed a pre-World War II silica gel manufacturer.

Watson, Hillwood Buildings Earn LEED

By Bob Howard — Fri, 24 Jul 2009 00:00:00 GMT

CHINO, CA-Developers Watson Land Co. of Carson, CA and Hillwood of Dallas have earned LEED certifications on industrial buildings totaling more than 1.5 milllion square feet that the two companies developed here and in San Bernardino, underscoring the momentum that the sustainability movement is gaining in new commercial real estate construction. Watson Land Co.'s new 297,107-square-foot industrial building in Chino has won a LEED Gold rating, while buildings totaling more than 1.2 million square feet that Hillwood developed in San Bernardino and later sold to CB Richard Ellis Investors have earned LEED Silver.

The Watson building is at 6810 Bickmore Ave. It is one of four new buildings in Watson Commerce Center Chino, a 1.2-million-square-foot project featuring industrial buildings that Watson markets under its Legacy Building brand, a series of energy-efficient class A buildings designed and constructed in accordance with LEED guidelines.

According to Lance Ryan, vice president of marketing and leasing for Watson Land, customer demand for energy-efficient green buildings "is stronger than ever.” The Chino building is occupied by Motivational Fulfillment & Logistics Services Inc., one of the largest full-service fulfillment and logistics services providers in the nation. Since moving to the new facility in May 2007, the company reported that its electricity bill has dropped 50% and its landscaping fees are nearly 40% less, Watson says. By the end of 2009, Watson will have completed construction on more than two million square feet of speculative industrial buildings designed for LEED certification.

The Hillwood LEED buildings are at Interchange Business Center in San Bernardino, which Hillwood describes as the largest LEED-certified speculative industrial project in the US. The five speculative buildings, which were completed in 2008, range from 94,108 square feet to 448,108 square feet. Hillwood developed the project, then later sold the five buildings to CBRE Investors.

The Interchange center was developed on a 144-acre former Brownfield site in the State College Redevelopment Project Area that dates back to before World War II, when it housed a facility to manufacture silica gel, later being converted for uses involving the testing of incendiary bombs for the military and the production of mineral-based composites used in water softening.

The redeveloped site is the result of a public-private partnership between the city of San Bernardino's Economic Development Agency (EDA) and Hillwood to redevelop a blighted property. The EDA, Hillwood and the San Bernardino Municipal Water District also worked together on a four-million-gallon water reservoir for fire suppression.

1.2M SF Project on Former Brownfield Site in California Earns LEED Certification

Tonie Auer — Wed, 22 Jul 2009 00:00:00 GMT

A 1.2-million-square-foot industrial park touted as the largest speculative industrial project in the U.S. became one of the largest overall projects in California to receive LEED certification. Developed by Dallas-based Hillwood, the project was sold to CB Richard Ellis Investors a year ago, but Hillwood staff recently completed the Silver LEED certification process on behalf of the new buyer.The five speculative buildings at Interchange Business Center in San Bernardino, Calif., were completed in 2008. They range in size from 94,100 to 448,100 square feet. The buildings were constructed over an 18-month period. The project is the second in San Bernardino to receive LEED certification.“We finished the project about a year ago, but the LEED certification process takes a long time,” John Magness, senior vice president for Hillwood, told CPN. “We've been working through the final throes of getting certification and earning all the points we're eligible for to earn the Silver certification.Magness said seeking the LEED certification on a speculative project is becoming a key component in searching for tenants and buyers, especially in the current era of sluggish tenant demand.“We are forecasting that [LEED certification] is becoming more and more important for people looking for properties,” he said. “The economy has slowed down, but the green initiative is the buzz word in industry. More companies are indicating that if they are going to sign a 10- to 15-year lease or buy a building, they would like to have a site with a reduced carbon footprint and be green. That is why we built the projects like this on Interchange Business Center.”Located in the State College Redevelopment Project Area, InterChange Business Center is the result of a public-private partnership between the city of San Bernardino's Economic Development Agency and Hillwood to redevelop the blighted property to a productive use.Prior to its extensive remediation, the 144-acre site was defined as a brownfield. The location dates back to before World War II, when it housed a facility to manufacture silica gel. During the war, the site was used for the storage, packing and testing of six-pound incendiary bombs for the military. Later it was used for zeolite production of mineral based composites used in water softening.“Interchange Business Park's LEED certification demonstrates tremendous green building leadership,” said Rick Fedrizzi, president, CEO & founding chairman of the U.S. Green Building Council, in a prepared statement. “The urgency of USGBC's mission has challenged the industry to move faster and reach further than ever before, and Interchange Business Park serves as a prime example with just how much we can accomplish.”

Buildings certified under energy program

Lou Hirsh — Wed, 22 Jul 2009 00:00:00 GMT

Five buildings totaling more than 1.2 million square feet, at Interchange Business Center in San Bernardino, have earned certification under the national Leadership in Energy and Environmental Design (LEED) program of the U.S. Green Building Council.

A statement from Dallas-based developer Hillwood said this is among the nation's largest industrial projects, the largest speculative one, and among the largest overall in California, to receive LEED certification.

The industrial project, off Cajon Boulevard near Interstate 215, also is the second in San Bernardino to receive LEED certification. The business park stems from a public-private partnership between the city of San Bernardino's Economic Development Agency and Hillwood, to redevelop a formerly blighted property for productive uses.

MORE THAN 1.2 MILLION SQUARE FEET AT INTERCHANGE BUSINESS CENTER IN SAN BERNARDINO, CALIF. RECEIVES LEED CERTIFICATION

contact: Dave Pelletier (817-224-6044, dave.pelletier@hillwood.com — Tue, 21 Jul 2009 00:00:00 GMT

SAN BERNARDINO, Calif. (July 21, 2009) – Five Hillwood-developed buildings totaling more than 1.2 million square feet at Interchange Business Center in San Bernardino, Calif. have earned LEED (Leadership in Energy and Environmental Design) Silver certification from the U.S. Green Building Council (USGBC). This is the largest speculative industrial project in the U.S., one of the largest industrial projects in the country, and one of the largest overall projects in California to receive LEED certification.

The project also is the second in San Bernardino to receive LEED certification. In 2008 a 1,400 square-foot CFNA retail outlet was certified by the USGBC.

“Interchange Business Park’s LEED certification demonstrates tremendous green building leadership,” said Rick Fedrizzi, President, CEO & Founding Chair, U.S. Green Building Council. “The urgency of USGBC’s mission has challenged the industry to move faster and reach further than ever before, and Interchange Business Park serves as a prime example with just how much we can accomplish.”

The five speculative buildings, which were completed in 2008, range in size from 94,108 square feet to 448,108 square feet. Hillwood developed the project then later sold the five buildings to CB Richard Ellis Investors.

Located in the State College Redevelopment Project Area, InterChange Business Center is the result of a public-private partnership between the city of San Bernardino’s Economic Development Agency (EDA) and Hillwood to redevelop the blighted property to a productive use.

LARGEST LEED CERTIFIED INDUSTRIAL PROJECTS IN U.S.

Sq. Foot. Project Date Certified

2,000,000 BridgestoneFirestone Warren Green Bldg., Morrison, TN Oct. 1, 2008

1,500,000 GM Lansing Delta Township Assembly Plant, Lansing, MI June 30, 2006

1,441,705 Pryor Gatorade Facility, Pryor, OK April 28, 2008

*1,205,551 Interchange Business Park, San Bernardino, CA June 3, 2009

LARGEST LEED CERTIFIED PROJECTS IN CALIFORNIA

Sq. Foot. Project Proj. Type Date Certified

1,728,702 Capitol Area East Complex, Blk. 17, Sacramento Office Feb. 11, 2004

1,722,464 Getty Center, Los Angeles Assembly/High Ed Feb. 3, 2009

1,464,953 101 California, San Francisco Office April 14, 2009

1,205,551 Interchange Business Park, San Bernardino Industrial June, 3, 2009

* speculative project

Prior to its extensive remediation, the 144-acre site was defined as a Brownfield by local, state and federal agencies. One of the facets of the LEED rating system is to encourage re-developing challenging sites in order to reduce the need to develop pristine undeveloped land.

The location dates back to pre-World War II when it housed a facility to manufacture silica gel. During the war the site was used for the storage, packing and testing of six-pound incendiary bombs for the military. Later it was used for zeolite production of mineral based composites used in water softening.

Other measures that led to the LEED Silver certification for the five speculative buildings at Interchange Business Center include:

Preferred parking for low-emitting and fuel-efficient vehicles, carpools and vanpools Keeping a significant portion of the site undeveloped with native vegetation to maximize open space Stormwater management plan that limits discharge by increasing on-site infiltration with a bio-swale and detention basin Reduced light pollution by minimizing glare from lighting on buildings and site Developed a Design and Construction Guideline for future tenants to educate and assist with implementing sustainable design and construction elements for interior build-out Installation of water efficient irrigation system and drought tolerant landscaping to minimize water usage Commissioning of the building energy systems to ensure they are installed, calibrated and perform as required for optimal performance. Contracted for Green Power (renewable energy) Onsite recycling program during construction that diverted 75% - 90% of construction debris from landfills Utilized building materials with recycled content, as well as regional materials to reduce environmental impacts resulting from transportation Provided additional outdoor air ventilation by increasing air changes per hour, above code requirements Implemented an Indoor Air Quality (IAQ) plan during construction to properly protect equipment prior to and during installation to minimize contamination, as well as protect absorptive materials from moisture damage Utilized low-emitting materials, including adhesives/sealants and finish materials for the interior of the building Skylights and large windows for natural light

The EDA, Hillwood and the San Bernardino Municipal Water District also worked together on a 4 million gallon water reservoir that is vital for future fire suppression capacity in the area.

Interchange Business Center is expected to create approximately 1,400 jobs and provide funding for extensive improvements to the much-traveled and highly congested University Parkway/I-215 Freeway Interchange.

The City of San Bernardino Economic Development Agency is a focused, diverse organization whose mission is to enhance the quality of life for the citizens of San Bernardino by creating and retaining jobs, eliminating physical and social blight, supporting culture and the arts, developing a balanced mix of quality housing, along with attracting and assisting businesses both independently and through public-private partnerships.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since that time, 7.6 million square feet have been built and close to 3,000 new jobs have been created at what is now called AllianceCalifornia. In addition to Interchange Business Center and AllianceCalifornia, Hillwood’s projects in the Inland Empire include North San Bernardino Business Park, Hofer Ranch in Ontario, Renaissance in Rialto, Vintner’s Grove in Rancho Cucamonga, and West Valley Logistics Center in Fontana.

Dallas-based Hillwood, a Perot company, is one of the top commercial and residential real estate developers in the country. The company's developments currently house facilities for close to 90 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to its Inland Empire projects, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Ex-Norton base land leased to Florida firm

Lou Hirsh — Sat, 25 Apr 2009 00:00:00 GMT

Dallas-based developer Hillwood has leased 141,650 square feet at its AllianceCalifornia development in San Bernardino to Interline Brands Inc. Headquartered in Jacksonville, Fla., Interline distributes maintenance, repair and operations products used in several industries, including construction contracting.

A statement from Hillwood said Interline will occupy Westgate Building One, at 310 S. Tippecanoe Ave., which also houses distribution centers for Pep Boys and ODW Logistics.

Companies operating in the Hillwood development, on former Norton Air Force Base land, also include Stater Bros., Kohl's and Mattel.

Hillwood Development is frontrunner to develop Cecil Commerce Center

Thu, 23 Apr 2009 00:00:00 GMT

Hillwood Development Company has the edge in becoming the master developer of the recently privatized Cecil Commerce Center.

The city’s Professional Services Evaluation Committee is expected to vote Thursday on recommending that the Dallas company develop the 4,500 acres on the Westside. Hillwood, which leased 602,000-square-feet of space at West Point Trade Center in Jacksonville to Dr Pepper Snapple Group Inc. last year, beat out San Diego-based The Allen Group and Malvern, Penn.-based Liberty Property Trust, according to the committee’s agenda.

It isn’t known whether the world’s largest developer, ProLogis (NYSE:PLD), bid to develop the former U.S. Navy base.

Interline Brands Joins Hillwood’s AllianceCalifornia

Thu, 23 Apr 2009 00:00:00 GMT

SAN BERNADINO,CALIF.-Commercial real estate developer, Hillwood, has leased 141,650 square feet of its Westgate Building One in its AllianceCalifornia development to Interline Brands Inc., a distributor and direct marketer of maintenance, repair and operations products.

Interline Brands will use the facility for distribution of a number of products throughout southern California and other regions. Included are its Wilmar offerings for multi family housing and Barnett products for contractors. Interline Brands will alsodistribute parts for its U.S. Lock brand from the Westgate Building One. The company will provide a walkup counter for local customers.

AllianceCalifornia is at 99% occupancy in its existing buildings and has 2.6 million square feet of entitled and permit-ready product for build-to-suit developments. The project also features outstanding access to air, highway and rail; Foreign Trade Zone status; and tax incentives. The development is close to Interstates 10, 210 and 215, is within two miles of a large intermodal rail facility and is anchored by San Bernardino International Airport.

Lease Takes 8M-SF Center to Near Full Occupancy

John McCloud — Thu, 23 Apr 2009 00:00:00 GMT

SAN BERNARDINO, CA-A 141,650-square-foot lease to Interline Brands Inc. has taken Hillwood’s massive AllianceCalifornia development here to nearly 100% occupancy. According to Hillwood senior vice president John Magness, barely 100,000 square feet remain available of the 8.1 million square feet built so far at the 2,000-acre project.

The tenant, a distributor and direct marketer of maintenance, repair and operations products based in Jacksonville, FL, will take space in the 1.14-million-square-foot Westgate Building One at 300 S. Tippecanoe St. The building also houses distribution centers for Pep Boys and ODW Logistics. Interline will use the facility to distribute its Wilmar, Barnett and US Lock brand products to Southern California and other regions. The space will also have a walk-up counter for local customers.

AllianceCalifornia is a redevelopment of the former Norton Air Force Base by a joint public/private partnership. Since Fort Worth-based Hillwood was selected as master developer of the property in 2000, it has built or redeveloped more than 8.1 million square feet of logistics and light manufacturing space on both a speculative and build-to-suit basis. In addition to the companies mentioned above, tenants include TRW, GE Engines, Kohl’s, Mattel, Stater Bros., Pactiv, Medline, Kohler and Komar.

Magness attributes Hillwood's success at achieving and maintaining such a high occupancy level partly to the presence of San Bernardino International Airport within the development's boundaries, a location near the intersection of interstates 10 and 215 and proximity to a large intermodal rail facility. But equally important, he says, is a combination of the project's foreign trade zone status, various tax incentives available to the project as a publicly backed redevelopment effort and comparatively low rents made possible by public ownership of the land.

“We've been pleasantly surprised at the level of demand,” Magness tells GlobeSt.com. “These are obviously tough times, but we're constantly talking with tenants to find out what they need and, if necessary, work things out to make sure they can stay. Most tenants are aware of all the benefits of being here, so they generally aren't looking for alternatives.” New tenants, he adds, have tended to be companies seeking opportunities to consolidate operations at a single location.

In regard to the current deal, the Hillwood exec notes the company signed a lease with Interline at a Hillwood property in Texas in the final quarter of 2008. The same broker who represented the tenant in that transaction, John McDaniel of Mohr Partners in Dallas, handled the AllianceCalifornia negotiation as well. Peter B. McWilliams, Ruben V. Goodsell and Michael McCrary of Colliers International in Ontario, CA represented Hillwood.

Though several build-to-suit projects were completed at AllianceCalifornia last year, Magness reports there are no projects in construction or development at this time. About three million square feet of additional construction is included in the long-range plan. “We have graded two pads in anticipation of future construction,” he says. “Hopefully in the next year there will be a couple build-to-suits, but nothing is in the works.” In the meantime, he continues, several tenants have expressed interest in the remaining space, all of which is located in Westgate Building One. In addition to AllianceCalifornia, Hillwood has two other properties in San Bernardino, InterChange Business Park and North San Bernardino Industrial Park.

Hillwood gets top rank to be Cecil Commerce developer in Jacksonville

David Bauerlein — Thu, 23 Apr 2009 00:00:00 GMT

The Dallas-based company will have the inside track on negotiating contracts with City Hall.

Hillwood, a Dallas-based company overseeing redevelopment of a former Air Force base in California, is the frontrunner to become master developer of Cecil Commerce Center, the onetime Navy base on Jacksonville’s Westside.

The city of Jacksonville’s Professional Service Evaluation Committee is scheduled to vote today on recommending Hillwood as the top-rated firm. The next step would be negotiating fees and a contract with the city.

The master developer will oversee 4,500 acres of city-owned land set aside for manufacturing and distributions centers. The Jacksonville Aviation Authority separately owns a big piece of Cecil Commerce Center for aviation development.

The selection process brought a protest this week by another company, MBA Development Partners LLC.

Erick Collazo of MBA Development said the city should have given applicants a chance to appear in public question-and-answer sessions in front of Jacksonville Economic Development Commission officials who scored the applications.

He said Cecil Commerce Center’s importance to Jacksonville’s long-term growth warrants going beyond a review of the written proposals submitted by the firms. He said presentations would give applicants a chance to offer alternatives for the best way to bring in complementary businesses such as hotels and restaurants.

“Then let the best developer win,” Collazo said Wednesday. “But we have to have an open, transparent process.”

He said the city’s purchasing department rejected the firm’s protest on grounds it wasn’t specific enough. He said MBA Development, which has headquarters in Boca Raton with a Jacksonville office, will refile the protest with more details in an effort to defer a committee vote until after there are public presentations.

Purchasing department officials did not return a phone call Wednesday for comment.

Jacksonville Economic Development officials reviewed proposals from five firms and ranked Hillwood No. 1, followed by The Allen Group of Dallas and Liberty Property Trust of Malvern, Pa. The other applicants are MBA Development and Steinemann & Co. of Jacksonville.

Hillwood is a privately held company founded by Ross Perot Jr., whose father, Ross Perot, was a presidential candidate. Hillwood has developments in Texas, California, Hawaii, Wyoming, Mississippi, Pennsylvania, Georgia and Florida.

It has been the master developer of the former Norton Air Force Base in San Bernardino, Calif., since 2000. Now called AllianceCalifornia, the 2,000-acre trade and logistics center is home to centers for Kohl’s, Mattel, Pep Boys, Stater Bros., Pactiv and Medline, according to Hillwood.

Hillwood built Westpoint Trade Center in Jacksonville and leased the 601,500-square-foot building last year to Dr Pepper Snapple Group for a distribution center.

INTERLINE BRANDS TO OPEN REGIONAL DISTRIBUTION CENTER AT HILLWOOD’S ALLIANCECALIFORNIA DEVELOPMENT

Contact: David Pelletier, Hillwood (817/224-6044, dave.pelletier@hillwood.com) — Wed, 22 Apr 2009 00:00:00 GMT

SAN BERNARDINO, Calif. (April 22, 2009) – Hillwood has leased 141,650 square feet in the Westgate Building One in its AllianceCalifornia development in San Bernardino to Interline Brands, Inc., a leading distributor and direct marketer of maintenance, repair and operations products.

Interline Brands will distribute its products to Southern California and other regions from the new facility. In addition to distributing its Wilmar products for the multifamily housing industry and its Barnett products for contractors, the company also will distribute parts for its U.S. Lock brand from Westgate Building One. The facility also will have a walkup counter for the company’s local customers.

Interline Brands also leases 133,245 square feet in the GSW Gateway Building 1 that Hillwood developed and manages in Grand Prairie, Texas.

The 1,140,220 square-foot Westgate Building One, located at 310 South Tippecanoe Street, also houses distribution centers for Pep Boys and ODW Logistics. There are 102,060 square feet that remain available for lease in the building.

“For a company of the stature of Interline Brands to locate its new facility here is a credit to the pro-business climate that the city of San Bernardino has created, particularly at the AllianceCalifornia development,” said Patrick J. Morris, mayor of San Bernardino. “The strength of what’s been established in our city is evident in that we’ve been able to create jobs and attract business even during tough economic times.”

Since December 2000, when Hillwood was selected as the master developer of the development, AllianceCalifornia has attracted many global industry leaders. In addition to Interline Brands, the development now houses major facilities for Kohl’s, Mattel, Stater Bros., Pactiv, Medline, Kohler, Komar and Pep Boys. Over the past eight years, more than 8.1 million square feet have been built and close to 3,000 new jobs have been created at AllianceCalifornia.

AllianceCalifornia is at 99% occupancy in its existing buildings and has 2.6 million square feet of entitled and permit-ready product for build-to-suit developments. The project also features outstanding access to air, highway and rail; Foreign Trade Zone status; tax incentives; and is located in one of the top industrial markets in the nation. The development is close to Interstates 10, 210 and 215, is within two miles of a large intermodal rail facility and is anchored by San Bernardino International Airport.

Hillwood’s San Bernardino developments also include InterChange Business Park and North San Bernardino Industrial Park.

Interline Brands was represented by John McDaniel of Mohr Partners in Dallas, Texas. Hillwood was represented by Peter B. McWilliams, Ruben V. Goodsell and Michael McCrary of Colliers International in Ontario, Calif.

Interline Brands, Inc. (http://www.interlinebrands.com/) is a leading national distributor and direct marketer with headquarters in Jacksonville, Florida. Interline provides maintenance, repair and operations (MRO) products to a diversified customer base made up of professional contractors, facilities maintenance professionals, and specialty distributors across North America, the Caribbean and Central America.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country. The company's developments currently house facilities for close to 90 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Searching for Solutions in the Snow

Fri, 30 Jan 2009 00:00:00 GMT

Ross Perot Jr. from World Economic Forum in Davos. Click here for link

Beverage Group Pours Distribution

Mon, 11 Aug 2008 00:00:00 GMT

The Dr Pepper Snapple Group leased 601,500 square feet at Hillwood Properties' West Point Trade Center project in Jacksonville, Fla., to distribute the beverage maker's Snapple and Mott's brands in the southeastern United States.

The building is expected to be complete later this year. The operation will employ about 40 workers starting in early 2009.

"The timing was fortunate for both parties," said T. Preston Herold, vice president of Hillwood Investment Properties.

"For Dr Pepper Snapple, catching us in the early stages of the building design allowed us to design in specific improvements to maximize the logistical efficiency of the facility for them," he said. "For Hillwood, it means we can leverage off this success and immediately start on our next Jacksonville development, which we hope to announce shortly."

Hillwood's trade center, located on Jacksonville's west side, is two miles from the CSX intermodal rail facility and the Interstate 295-I-10 interchange. It is also close to Norfolk Southern's intermodal facility and the Jaxport port terminals.

Hillwood Inks Beverage Giant to 600,000SF Lease in New Jacksonville Distrib Center

Scott Baltic, Contributing Editor — Fri, 01 Aug 2008 00:00:00 GMT

In a move to consolidate its distribution operations in the Jacksonville, Fla., area, where it operates a manufacturing plant, Dr Pepper Snapple Group has leased West Point Trade Center, a 601,500-square-foot distribution facility, from Hillwood, which is scheduled to complete the speculative building by the end of the year. The new facility is expected to be fully operational in the first quarter of next year and will employ 40 workers. The building will be used primarily to distribute the beverage giant’s Snapple and Mott’s brands in the Southeast. Hillwood was represented by T. Preston Herold of Hillwood Investment Properties and Terry Quarterman and Jeff Nelson of CB Richard Ellis Inc. Dr Pepper Snapple Group was represented by Jim Brice and David Parker of Holt Lunsford Commercial, and Seth Kelly of CB Richard Ellis. In addition to the facility’s proximity to Dr Pepper Snapple Group’s Jacksonville plant, Dan Flowers, senior vice president of logistics and distribution for Dr Pepper Snapple Group, in a prepared statement, cited highway and rail access as advantages to the location. West Point Trade Center is close to two intermodal rail facilities (CSX and Norfolk Southern), less than two miles from the I-295/I-10 interchange, and near the JAXPORT port terminals. “It’s not every day that you have the opportunity to lease an entire 601,500-square-foot speculative building before the slab has even been poured, let alone lease to an industry-leading company like Dr Pepper Snapple,” Herold said in the statement. In 2007, Hillwood developed a 400,000-square-foot BTS distribution center on Presidents Court in Jacksonville for Laney & Duke Terminal Warehouse Co., a third-party logistics company. And in 2006, Hillwood bought a 361,000-square-foot facility on Faye Road in Jacksonville. Hillwood is a Perot company and has developed the 17,000-acre AllianceTexas project, 15 miles from Dallas/Fort Worth Airport; the $420 million American Airlines Center and Victory district near Downtown Dallas; and AllianceCalifornia, the 2,000-acre redevelopment of the former Norton Air Force Base in San Bernardino.

Dr Pepper Leases in Fla.

William Hoffman - Associate Editor — Fri, 01 Aug 2008 00:00:00 GMT

The building is expected to be complete later this year. The operation will employ about 40 workers starting in early 2009.

T. Preston Herold, vice president of Hillwood Investment Properties, said, "The timing was fortunate for both parties.

"For Dr Pepper Snapple, catching us in the early stages of the building design allowed us to design in specific improvements to maximize the logistical efficiency of the facility for them," Herold said. "For Hillwood, it means we can leverage off this success and immediately start on our next Jacksonville development, which we hope to announce shortly."

Hillwood's trade center, located on Jacksonville's west side, is two miles from the CSX Intermodal rail facility and the Interstate 295-I-10 interchange. It is also close to Norfolk Southern's intermodal facility and the Jaxport port terminals.

Hillwood has purchased or developed three buildings comprising 1.3 million square feet in the Jacksonville market over the past two years.

Jacksonville Makes Way for Dr Pepper Snapple

Fri, 01 Aug 2008 00:00:00 GMT

By first quarter 2009, Dr Pepper Snapple Group Inc. will have consolidated its operations in the southeastern region. The refreshment beverage giant signed a 601,500-square-foot lease with developer Hillwood to occupy the forthcoming West Point Trade Center in Jacksonville, FL, due for delivery by the end of the year. The 601,500-square-foot distribution center at 2300 Pickettville Road began construction in March. The facility will feature 135 loading docks and 32-foot clearance height. Dr Pepper Snapple recognized the distribution center's Westside location as a key factor in the decision. In addition to being near Dr. Pepper Snapple's Jacksonville manufacturing plant, West Point is also in close proximity to the CSX Intermodal rail facility, the I-295/10 interchange, the Norfolk Intermodal Facility and JAXPORT. The company expects to employ about 40 people at the new facility. T. Preston Herold represented Hillwood in-house, along with Terry Quarterman and Jeff Nelson of CB Richard Ellis. Jim Brice and David S. Parker of Holt Lunsford Commercial and Seth Kelly of CBRE represented Dr Pepper Snapple. "The timing was fortunate for both parties," said Herold. "For Dr Pepper Snapple, catching us in the early stages of the building design, allowed us to design in specific improvements to maximize the logistical efficiency of the facility for them." Herold also noted that with a tenant secured for West Point, Hillwood can begin preparations for its next Jacksonville project, to be announced soon.

Dr Pepper consolidates in Jacksonville

Christian Conte — Fri, 01 Aug 2008 00:00:00 GMT

WESTSIDE -- Dr Pepper Snapple Group Inc. is consolidating all its Southeast noncarbonated distribution facilities into one 601,500-square-foot space in Jacksonville.

The company will distribute its noncarbonated products such as Snapple, Hawaiian Punch and Mott's brands throughout the Southeast from space leased in the West Point Trade Center, which is being developed by Dallas-based Hillwood Investment Properties.

"This is an important step toward strengthening our distribution in the southeastern United States," said Dan Flowers, senior vice president of logistics and distribution for Dr Pepper Snapple Group.

"This facility will enable Dr Pepper Snapple to get our Snapple and Mott's brands to our customers and consumers more efficiently and will lay the foundation for future growth in the southeastern region."

The company is consolidating its noncarbonated facilities in the U.S. and Canada into fewer regional facilities that total as much, if not more space, Flowers said. Currently the Southeast distribution facilities are located in several buildings totaling about 500,000 square feet. Flowers would not disclose their locations.

The space on Pickettville Road that was originally speculative space is expected to be ready by the first quarter of 2009.

"The timing was fortunate for both parties," said Preston Herold, vice president of Hillwood Investment Properties. "For Dr Pepper Snapple, catching us in the early stages of the building design allowed us to design in specific improvements to maximize the logistical efficiency of the facility for them. For Hillwood, it means we can leverage off this success and immediately start on our next Jacksonville development, which we hope to announce shortly."

Herold said Dr Pepper Snapple surveyed several sites in the Jacksonville area before choosing the Hillwood property because of its proximity to its manufacturing facility that makes Snapple, Hawaiian Punch and carbonated beverages on Bowdendale Avenue on the Southside as well as its proximity to major interstates. Dr Pepper Snapple signed a 10-year lease for the property.

"It's not every day that you have the opportunity to lease an entire 601,500-square-foot speculative building before the slab is even poured," Herold said.

More than 50 beverages

Dr Pepper Snapple Group (NYSE: DPS), based in Plano, Texas, markets more than 50 beverage brands that include not only Dr Pepper and Snapple, but also 7UP, Mott's, A&W, Sunkist Soda, Hawaiian Punch, Canada Dry, Schweppes, Squirt, RC Cola, Diet Rite, Penafiel, Rose's, Yoo-hoo, Clamato and Mr & Mrs T Mixers. The company employs 20,000 people and operates 24 bottling and manufacturing facilities, including one in Jacksonville and one in Miami, and more than 200 distribution centers across the U.S., Canada, Mexico and the Caribbean.

Commercial real estate developer Hillwood has either developed or bought three buildings, totaling more than 1.3 million square feet, in the Jacksonville market in the past two years. In addition to West Point Trade Center, the company developed a 400,000-square-foot build-to-suit distribution center for Laney & Duke on Presidents Court in 2007 and bought a 361,000-square-foot facility on Faye Road in 2006.

Terry Quarterman and Jeff Nelson of CB Richard Ellis helped Herold represent Hillwood in the deal and Jim Brice and David S. Parker of Holt Lunsford Commercial and Seth Kelly of CB Richard Ellis represented the soft drink company.

The new facility, which is expected to open in the first quarter of 2009, will employ 40 workers.

Hillwood Leases 600,000-SF Spec Center

Crystal Proenza (Crystal Proenza is associate editor of Real Estate Florida.) — Fri, 01 Aug 2008 00:00:00 GMT

JACKSONVILLE, FL-Hillwood, a Dallas-based commercial real estate development firm, has leased its 601,500-sf West Point Trade Center to the Dallas-based Dr. Pepper Snapple Group. Foundations are about to be poured at the site of the future distribution center, which was built on spec, says T. Preston Herold, vice president of Hillwood.

“We were going to lease it to the market, but Dr. Pepper came along,” Herold tells GlobeSt.com. “It was beneficial in that we were able to design specific improvements to maximize the logistical efficiency of the facility for them.” The building is expected to be complete by the end of the year and fully operational by the first quarter of 2009.

The move is part of Dr. Pepper’s effort to improve operational efficiencies within its 13.5 million-sf portfolio, a job it hired CB Richard Ellis to manage, as reported by GlobeSt.com in June. Terry Quarterman and Jeff Nelson of CBRE represented Hillwood in the transaction, while Dr. Pepper was represented by Jim Brice and David S. Parker of Holt Lunsford Commercial and Seth Kelly of CB Richard Ellis.

The beverage company will be consolidating several operations that were scattered throughout Jacksonville into the facility at 2300 Pickettville Rd. The building will serve as the company’s southeast distribution hub, and is located within 15 miles of one of its 24 manufacturing and bottling plants.

“With great access to major highways and rail lines, as well as close proximity to our manufacturing plant in Jacksonville, this facility will enable Dr. Pepper Snapple to get our Snapple and Mott’s brands to our customers and consumers more efficiently and will lay the foundation for future growth in the southeastern region,” said Dan Flowers, senior vice president of logistics and distribution for Dr Pepper, in a release. The facility is located within two miles of the CSX Intermodal Rail Facility and the Interstate 295/10 interchange. Its close proximity to the Norfolk Southern Intermodal Facility and the Jacksonville Port Authority also made the location attractive, says Herold.

“This deal gives us great momentum in the Jacksonville market—a market we are very high on right now,” he says. “We intend to do more development here. As evidenced by this deal, it’s the perfect place to set up a regional distribution center for the southeast because of the demographic location of Jacksonville, the abundance of labor available and the transportation infrastructure.” Last year, the company developed Hillwood Westlake, a 400,000-sf, build-to-suit distribution center for Laney & Duke on Presidents Court.

DR PEPPER SNAPPLE GROUP LEASES HILLWOOD'S 601,500 SQUARE-FOOT WEST POINT TRADE CENTER BUILDING IN JACKSONVILLE, FLORIDA

Contact: David Pelletier, Hillwood (817-224-6044, dave.pelletier@hillwood.com) — Thu, 31 Jul 2008 00:00:00 GMT

JACKSONVILLE, Fla. (July 31, 2008) – Hillwood has leased its 601,500 square-foot West Point Trade Center building in Jacksonville, Fla. to the Dr Pepper Snapple Group, which will utilize the facility primarily to distribute its Snapple and Mott's brands to the southeastern United States. Dr Pepper Snapple Group is consolidating its operations from several buildings in the Jacksonville area into West Point Trade Center.

Dr Pepper Snapple Group will employ 40 workers in the new facility, which is expected to be fully operational in the first quarter of 2009.

"This is an important step toward strengthening our distribution in the southeastern United States," said Dan Flowers, senior vice president of logistics & distribution for Dr Pepper Snapple Group. "With great access to major highways and rail lines, as well as close proximity to our manufacturing plant in Jacksonville, this facility will enable Dr Pepper Snapple to get our Snapple and Mott’s brands to our customers and consumers more efficiently and will lay the foundation for future growth in the Southeastern region."

Located on the city’s Westside, West Point Trade Center is a prime logistics location. The building is located within two miles of the CSX Intermodal rail facility and the Interstate 295/10 interchange, close to the Norfolk Southern Intermodal Facility, and near the JAXPORT port terminals. Site clearing began in March. The building is expected to be completed by the end of the year.

“It’s not every day that you have the opportunity to lease an entire 601,500 square-foot speculative building before the slab has even been poured…let alone lease to an industry leading company like Dr Pepper Snapple," said T. Preston Herold, vice president of Hillwood Investment Properties. "The timing was fortunate for both parties. For Dr Pepper Snapple, catching us in the early stages of the building design, allowed us to design in specific improvements to maximize the logistical efficiency of the facility for them. For Hillwood, it means we can leverage off this success and immediately start on our next Jacksonville development, which we hope to announce shortly."

Representing Hillwood were T. Preston Herold of Hillwood and Terry Quarterman and Jeff Nelson of CB Richard Ellis. Dr Pepper Snapple Group was represented by Jim Brice and David S. Parker of Holt Lunsford Commercial and Seth Kelly of CB Richard Ellis.

In the past two years, Hillwood has either developed or purchased three buildings, totaling more than 1.3 million square feet, in the Jacksonville market. In addition to West Point Trade Center, the company developed a 400,000 square-foot build-to-suit distribution center for Laney & Duke on Presidents Court in 2007 and purchased a 360,998 square-foot facility on Faye Rd. in 2006.

About Dr Pepper Snapple

Dr Pepper Snapple Group, Inc. (NYSE: DPS) is an integrated refreshment beverage business marketing more than 50 beverage brands to consumers throughout North America. In addition to its flagship Dr Pepper and Snapple brands, the company's portfolio includes 7UP, Mott's, A&W, Sunkist Soda, Hawaiian Punch, Canada Dry, Schweppes, Squirt, RC Cola, Diet Rite, Penafiel, Rose's, Yoo-hoo, Clamato, Mr & Mrs T Mixers and other well-known consumer favorites. Based in Plano, Texas, Dr Pepper Snapple Group employs approximately 20,000 people and operates 24 bottling and manufacturing facilities and more than 200 distribution centers across the United States, Canada, Mexico and the Caribbean. For more information, please visit http://www.drpeppersnapplegroup.com/.

About Hillwood

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country. The company's developments currently house facilities for close to 90 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to its projects in Jacksonville, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre redevelopment of the former Norton Air Force Base in San Bernardino.

# # #

FedEx plans sorting facility

Jane Roberts (Contract) — Wed, 30 Jul 2008 00:00:00 GMT

FedEx SmartPost, a subsidiary of FedEx Ground, is opening a sorting facility in Southaven to serve a growing business-to-consumer base, a group of customers it owes almost entirely to the power of online shopping.

SmartPost signed a five-year lease on 150,527 square feet in the DeSoto Trade Center Building III at 4325 Executive Drive in Southaven.

By early October, it intends to have about 80 full- and part-time employees at the facility, gearing up for the peak holiday season.

"Business is consistently growing," said Ward Strang, SmartPost president and chief executive. "We're offering a tremendous product that fits well with the FedEx portfolio of services."

Milwaukee-based SmartPost averages about 618,000 low-weight, low-yield packages a day, getting most of its volume from the nation's giant e-tailers and catalogers.

It sorts and ships the packages via FedEx Ground to a maze of 21 SmartPost hubs nationwide, where they further sorted, then delivered to the U.S. Postal Service for final delivery.

SmartPost gets a reduced rate from the post office for processing and carrying the packages along most of the journey.

"By opening this facility, we not only improve our work-share discounts and subsequent pricing we can offer our customers, but we also provide a more consistent service, by bypassing integration in the postal hubs," Strang said.

FedEx bought SmartPost in 2004 to help improve yield on a growing volume of low-weight packages generally destined for residential delivery, where the last mile, particularly in rural areas, is costly for courier companies.

FedEx paid $120 million for the company. In four years, the subsidiary has added nine hubs, with the 10th scheduled to open this year in Los Angeles. Revenue and package volume is growing 3 to 4 percent a year.

"We are cautiously optimistic. We're seeing very large e-tailers expanding out of their core competency and putting more products online. That appeals to today's economic sector," Strang said.

Although FedEx does not break out revenue specifics, SmartPost represents about 18 percent of the volume at FedEx Ground.

The Southaven facility will deliver packages to 500 post offices in the tri-state area. It has capacity to sort 7,500 packages an hour and is large enough to meet SmartPost's growth projections over three to six years.

Dallas-based Hillwood Investment Properties owns the building.

"Hillwood is delighted to have done the deal," said Dan Wilkinson, chairman of Colliers, Wilkinson Snowden, who represented the landlord, with Colliers Management Services LLC president Brad Kornegay and Richie Burnette, owner of The Burnette Co.

Fred Placke, senior vice president of Fischer & Co., represented the tenant.

"SmartPost is proof of two things," Wilkinson said. "One, there is still viability in the Memphis market overall, and two, DeSoto County continues to be attractive to national companies seeking a location in Memphis."

FedEx Ground subsidiary SmartPost selects DeSoto County for 21st distribution center

Andy Ashby — Fri, 25 Jul 2008 00:00:00 GMT

FedEx SmartPost, a subsidiary of FedEx Ground, signed a 150,527-square-foot lease with Hillwood Investment Properties at DeSoto Trade Center Building Three in Southaven.

Originally founded in 1998 as Parcel Direct, FedEx Corp. purchased FedEx SmartPost in 2004 from Quad/Graphics, Inc., for $120 million.

The company consolidates and delivers high volumes of low-weight, less time-sensitive packages to residences, using the U.S. Postal Service for final delivery. SmartPost only accepts packages up to 70 pounds.

Colliers Wilkinson Snowden chairman Dan Wilkerson, Colliers Management Services LLC president Brad Kornegay and The Burnette Co. owner Richie Burnette represented the landlord, Hillwood. Fred Placke, senior vice president of Fischer & Co., was the tenant representative.

"In today's market, it's very exciting when you can make a 150,000-square-foot lease with a national company," Wilkinson says. "I guess it's an indication of the vitality of the North Mississippi market, that they, after looking at everything, made the choice to go into that particular building."

The 522,066-square-foot building at 4325 Executive Drive was built in 2006.

FedEx SmartPost has 20 distribution centers and averages more than 600,000 packages daily. Most of its business comes from online retailers and catalog companies.

"Obviously, having FedEx as a tenant in your park is great," says Jim Mercer, executive vice president at CB Richard Ellis Memphis. "Just the fact that they're still out there growing is a positive sign."

The DeSoto County submarket's 18.6 million square feet of industrial space has a vacancy rate of 24.8%, according to CB Richard Ellis Memphis' Industrial MarketView report for first quarter 2008. Bulk warehouse space comprises 17.7 million square feet of that total.

"Over the past few years, you've seen more speculative space being in built in DeSoto County than Shelby County," Mercer says. "I think what has happened is that over the past few years, you've had more product come online down there, so the vacancy has gone up accordingly."

The Southeast Memphis submarket's 65.5 million square feet of space has a vacancy rate of 14.6%.

DeSoto County has more available land, which has helped spur more speculative building over the past few years, according to Mercer.

Industrial Developments International's 800,308-square-foot Crossroads Distribution Center Building F in Olive Branch accounted for the only new construction in the overall Memphis industrial market, according to the first quarter report. It's the latest in a series of speculative industrial buildings in DeSoto County.

"That vacancy is higher because of that," Mercer says. "It's a combination of the market slowing at a time when some of this product was delivered on the market."

That said, the vacancy rate hasn't historically been that high and it probably won't continue, according to Mercer.

"I think it will continue to be whittled down by these type of leases and by developers slowing their construction until that vacancy drops a little bit," Mercer says.

Mercer doesn't see any new deliveries through the end of the year, although activity could pick up in 2009.

Several large spaces opening up has led to a temporary halt in construction.

Hewlett Packard Co. plans to pull out of 2.2 million square feet of space in the Southeast Memphis submarket by February. The company will remain in 708,532 square feet in Summit Distribution I.

In Southaven, Kuehne + Nagel, Inc., is looking to sublease 865,120 square feet in DeSoto Trade Center, Building Five.

The current market favors tenants looking for large blocks of space, Mercer says.

"I think there are more options to choose from," Mercer says. "That will continue to keep rates lower. You're just not able to raise rates when you have a handful of buildings that people can choose from."

The average asking lease rate for bulk warehouse space in DeSoto County is $2.33 per square foot in the first quarter 2008, down from $3.13 per square foot in the first quarter 2007.

The average asking lease rate for bulk warehouse space in the Southeast Memphis submarket is $2.57 per square foot in the first quarter 2008, which is relatively flat compared to $2.47 per square foot in the first quarter 2007.

However, the vacancy won't affect potential tenants looking for smaller space, Mercer says.

The average asking lease rate for standard warehouse space is $3.46 per square foot in DeSoto County, and $2.36 per square foot in Southeast Memphis.

"I don't think we're seeing the softening of rental rates in spaces 100,000 square feet and below that you're seeing in the 400,000-500,000 square feet and above," Mercer says.

FedEx SmartPost

Package delivery

HQ: New Berlin, Wis.

President and CEO: Ward B. Strang

Employees: 1,700

Phone: (262) 796-6800

Web site: http://www.fedex.com/us/smartpost/

Money approved for airport project

Lou Hirsh — Thu, 24 Jul 2008 00:00:00 GMT

The joint-powers Inland Valley Development Agency, which oversees funding for San Bernardino International Airport, on Wednesday approved the transfer of $19 million to complete the ongoing airport terminal renovation project.

Funds will be transferred from the agency's debt service fund to its capital projects fund, and will go toward improvements including parking and security additions.

The agency and the San Bernardino International Airport Authority also approved a resolution to seek a $14 million non-secured loan from CMB Infrastructure Investment Group for phase three of previously approved projects related to the terminal renovation, including road improvements and technical systems and equipment.

S.B. airport expects expansion to spark retail development nearby

Joseph Ascenzi — Tue, 08 Jul 2008 00:00:00 GMT

Property around the former Norton Air Force Base is expected to begin attracting retail and other commercial development projects within next three to five years as the San Bernardino International Airport grows, according to airport officials.

Open parcels along Third and Fifth streets, along with some select properties along Tippecanoe Avenue, should start attracting restaurants and convenience stores, said Bill Ingraham, the airport's aviation director.

Nearby retail areas, such as Hospitality Lane in San Bernardino and the unincorporated area in Redlands that includes Citrus Plaza, will probably attract more commercial development before the airport does, Ingraham said.

"There are so many factors involved, and you already have an area to the south, Hospitality Lane, which serves that area. But there's no question we're going to start to see more commercial development closer to the airport," Ingraham said.

"I don't expect to see large stores, but I think you'll see smaller convenience stores that people will be able to get in and out of quickly."

Officials with the San Bernardino International Airport Authority hope to be operating commercial flights out of the airport by the end of this year, said Michael Burrows, the authority's assistant director.

Originally, commercial flights out of the former military base were to have started this summer, but those plans were postponed when it became clear the airport's commercial terminal wouldn't be ready in time.

But the introduction of commercial flights won't lead to an immediate flurry of commercial and retail development, Burrows said.

"We aren't going to start with 50 flights a day, we're going to start with five flights a day and work up from there," Burrows said. "Once we get to 50 flights then there will be a serious impetus for hotels and restaurants and the things you usually see around an airport. But in the short term I think there are enough services in the area to meet the immediate needs."

Burrows agreed that Third and Fifth streets and parts of Tippecanoe Avenue are likely to attract the most commercial development, though he cautioned that the airport alone won't be the only factor driving development in that market.

The owner of the lone retail establishment at the airport says he would like to see more development enter the neighborhood, even if it means competition for his business.

"We're in kind of a hidden place, and I think if we had more restaurants and other business here it could help us," said Bruce C. Lee, owner of the Airport Express Café, 157 S. Del Rosa Drive. "A McDonald's, a KFC and an In-N-Out Burger, something like that, we could all help each other out."

Lee opened the 4,000-square-foot eatery at San Bernardino International Airport in October 2005.

It is the only retail establishment on the former military base, Ingraham said.

The closest thing the café has to competition is a gas station with a mini-mart about a half-mile away.

Mary Sexton, a manager at the café for the past two and a half years, said she would also welcome the extra customers that a commercial airline terminal would bring to the area.

"I would love to see it happen, but I'm a little worried about them putting up a fence for security, which might keep people away," Sexton said. "That's the kind of thing they do these days. But it would bring more people into the area, and maybe we would get a nice hotel out of it."

Hillwood completes half-dozen buildings

Fri, 16 May 2008 00:00:00 GMT

Six buildings totaling more than 2 million square feet, including an 801,581-square-foot facility for Michelin, have been completed at InterChange Business Center.

The center is located next to the west side of Interstate 215, roughly two miles north of the 210 Freeway in San Bernardino.

The buildings were completed by Dallas-based Hillwood, a Perot-owned company and commercial-residential real-estate developer.

Mike Daley, a longtime Colliers International broker who died in 2006, was honored as part of the grand opening of the 144-acre business park by having a street - Mike Daley Drive - named after him.

Located in the State College Redevelopment Project Area, InterChange Business Center is the result of a pubic-private partnership between the San Bernardino Economic Development Agency and Hillwood.

Hillwood Opens 2M-SF, 144-Acre Business Park

Bob Howard — Tue, 13 May 2008 00:00:00 GMT

SAN BERNARDINO, CA-Texas-based Hillwood Properties has opened its two-million-sf InterChange Business Center, a 144-acre project comprising six recently completed industrial buildings. The center, which includes an 801,581-sf build-to-suit for Michelin, includes a street named Mike Daley Drive that was dedicated in honor of the late Colliers International broker who represented InterChange Business Center and other Hillwood projects in the Inland Empire during his 28 years as a commercial real estate broker, primarily working in the San Bernardino area.

Five of the buildings at InterChange Business Center have been certified to meet LEEDS standards and are some of the first industrial buildings in the Inland Empire to earn such status. The five buildings total 1.25 million sf and range from 94,108 sf to 448,108 sf.

The site of the new project is along the west side of Interstate 215 approximately two miles north of the new interchange with Interstate 210. The site underwent extensive remediation to render it suitable for development because it formerly was a military site that was used for the storage, packing and testing of incendiary bombs and as a facility for manufacturing composites used in water softening.

The InterChange Business Center is the result of a pubic-private partnership between the city of San Bernardino’s Economic Development Agency and Hillwood to redevelop the property. The economic development agency, Hillwood and the San Bernardino Municipal Water District also worked together on a four-million-gallon water reservoir that is designated for fire suppression.

John Magness, a senior vice president with Hillwood, says that the new project is part of 12 industrial buildings totaling 5.7 million sf that Hillwood will have developed between 2007 and 2008. The other buildings are located in North San Bernardino Industrial Park and AllianceCalifornia in San Bernardino, and Hofer Ranch at Ontario Airport.

New offices may bring 2,000 jobs

Andrew Edwards, Staff Writer — Fri, 09 May 2008 00:00:00 GMT

SAN BERNARDINO - The planned construction of a new office for a health-care organization and a newly opened business complex could be worth more than 2,000 jobs here.

Thursday morning, a few dozen people attended a groundbreaking for Inland Regional Center's new administrative building, set to be built near Orange Show Road and Waterman Avenue.

Dallas-based developer Hillwood Investment Properties held a ribbon-cutting ceremony for its InterChange Business Center the same day. The 144-acre complex is about two miles north of where the 210 and 215 freeways meet.

Inland Regional Center is a nonprofit that works with the state Department of Development Services to help people who have been diagnosed with mental retardation, cerebral palsy, epilepsy and autism, director Mary Lynn Clark said.

The center, which has field offices in San Bernardino and Riverside, refers about 23,000 disabled people in San Bernardino and Riverside counties to vendors for health services, she said.

Clark said the 200,000-square-foot administrative building is expected to be ready in September 2009. About 750 people could work in the new offices.

"They'll eat a lot of food, which should make Hospitality (Lane) very happy," Clark said, referring to the restaurants on that south San Bernardino street.

The California Housing Foundation, a Redlands-based nonprofit that supports Inland Regional Center, has $76million in bond funding to finance Inland Regional Center's new building.

Steve von Rajcs, the foundation's executive director, said Inland Regional Center will pay rent to his organization. He expects to roll some of that money into housing programs for the center's patients.

"It could be that we help them in the first and last month's rent. It could be that we buy a house where four or five of them live," he said.

Mayor Pat Morris said at the groundbreaking that cows once roamed the land where the new office is set to be built.

He observed in a telephone interview Thursday afternoon that Hillwood's project is on the site of Camp Ono, a World War II ordnance depot that was once too contaminated for development.

InterChange Business Center - a logistics complex - has six buildings with more than 2million square feet of space.

The Michelin tire company has claimed one of the buildings, Hillwood Senior Vice President John Magness said.

The complex was designed to meet LEED standards for energy conservation, Magness and Morris said. LEED refers to the U.S. Green Building Council's program to encourage environmentally sound construction.

InterChange is expected to generate about 1,400 jobs when all six buildings are occupied.

"It opens up in that business center some very important new assets for our city," Morris said.

Business center makes its debut

Rodd Cayton — Fri, 09 May 2008 00:00:00 GMT

San Bernardino's InterChange Business Center was unveiled in a grand opening Thursday.

The industrial project, developed by Hillwood Development Co., consists of six buildings totaling more than 2 million square feet, including an 801,581 square-foot warehouse and distribution center built for Michelin.

InterChange Business Center is the result of a pubic-private partnership between San Bernardino's Economic Development Agency and Hillwood.

DEDICATION OF MIKE DALEY DRIVE TO BE PART OF GRAND OPENING OF INTERCHANGE BUSINESS CENTER IN SAN BERNARDINO’S UNIVERSITY DISTRICT

Contact: David Pelletier, Hillwood (817-224-6044, dave.pelletier@hillwood.com) — Thu, 08 May 2008 00:00:00 GMT

SAN BERNARDINO, Calif. – As part of the grand opening today of the 144-acre InterChange Business Center, Mike Daley Drive will be dedicated in honor of the former Colliers International broker who passed away in 2006. Six buildings totaling more than 2 million square feet, including an 801,581 square-foot build-to-suit for Michelin, have been completed at InterChange Business Center, which is located along the west side of Interstate 215 approximately 2 miles north of the new interchange with Interstate 210 in San Bernardino, Calif.

Daley, who is survived by his wife and three children, represented the development, as well as other Hillwood projects in the Inland Empire. He spent 28 years as a commercial real estate broker, primarily working in the San Bernardino area.

“Mike Daley was an integral part of Hillwood’s success in San Bernardino and success with the InterChange Business Center project,” said John Magness, senior vice president of Hillwood Investment Properties. “The naming of a road in his honor is an outward sign of our company’s appreciation and we hope a lasting tribute to his efforts in attracting businesses to San Bernardino. We hope that for decades people will enjoy coming to work on ‘Mike Daley Drive’.”

Located in the State College Redevelopment Project Area, InterChange Business Center is the result of a pubic-private partnership between the city of San Bernardino’s Economic Development Agency (EDA) and Hillwood to redevelop the property to a productive use.

“The Interchange Business Center is a significant development for our city,” said San Bernardino Mayor Patrick J. Morris. “This project is helping to create a diverse and sustainable local economy, with good paying jobs for our residents. Up to 1,400 jobs will be created at this center. That’s 1,400 more people that can work within the community in which they live. The city is committed to support and help cultivate our local economy through strategic investments, incentives and partnerships. This project demonstrates that commitment.”

“Through the team work of Hillwood and the Economic Development Agency, we have been able to transform the previously blighted Culligan site into a beautiful commercial development with more than 2 million square feet of new floor space,” said Emil Marzullo, EDA executive director. “This new development will stand as an example of what can be accomplished when both the private and public sector work in harmony to achieve a shared goal of blight elimination, job creation and attracting new businesses into our city.”

InterChange Business Center not only replaces a blighted area that is a main entrance to San Bernardino, but the five speculative buildings totaling 1.25 million square feet have been pre-certified to meet LEEDS standards for energy conservation by the United States Green Building Council. These facilities are some of the first industrial buildings in the Inland Empire to receive such status. The five buildings range in size from 94,108 square feet to 448,108 square feet.

“Developing these buildings to LEEDS standard is an important next step for Hillwood as we continue to explore new ways to make our developments and our buildings environmentally friendly,” added Magness. “Hillwood is grateful to the city of San Bernardino, especially the Development Services Department and the Economic Development Agency for their years of service in helping us accomplish the goal of bringing this once blighted land back into the community. “

The project is expected to create approximately 1,400 jobs and provide funding for extensive improvements to the much-traveled and highly congested University Parkway/I-215 Freeway Interchange. In addition the project improves the area’s public storm drain system and retention basin.

“Because the EDA helped monitor the project’s environmental site cleanup and assisted Hillwood with the additional property acquisition, InterChange Business Center will add continuing and valuable project tax increment for continued improvements to this vital and rapidly growing area in the sixth ward of our city,” said Councilman Rikke Van Johnson, Sixth Ward and redevelopment committee member.

The EDA, Hillwood and the San Bernardino Municipal Water District also worked together on a 4 million gallon water reservoir that is vital for future fire suppression capacity. “The reservoir was critical to safeguard the development and the community,” said Don Gee, EDA deputy director.

“The ground breaking of this project validates the University District as a growing destination and commerce corridor,” said San Bernardino Councilman Chas Kelley, Fifth Ward and strong proponent of quality development and quality of life. “Easy access to the Cal-State San Bernardino campus and retail components is critical to the safety and quality of life to the I-215 travelers, businesses and residents. The public works benefits of this project are tremendous!”

The InterChange Business Center site dates back to pre-World War II when Mr. Culligan developed a facility in San Bernardino for manufacturing silica gel, a critically needed de-hydrating material. After the war, zeolite production of mineral based composites used in water softening was shifted to the San Bernardino plant that later became Culligan, Inc. The site also was a military site used for the storage, packing and testing of six-pound incendiary bombs. Due to these uses, the site underwent extensive remediation in order to become a developable property.

InterChange Business Center is part of 12 industrial buildings totaling 5.7 million square feet that Hillwood will have developed between 2007 and 2008. The other buildings are located in North San Bernardino Industrial Park and AllianceCalifornia in San Bernardino, and Hofer Ranch at Ontario Airport.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since that time, 6.4 million square feet have either been built and close to 3,000 new jobs have been created at what is now called AllianceCalifornia. The development has attracted facilities for global industry leading companies, including Kohl’s, Mattel, Stater Bros., Pactiv, Medline and Pep Boys.

Dallas-based Hillwood, (www.hillwood.com) a Perot company, is one of the top commercial and residential real estate developers in the country. The company's developments currently house facilities for close to 90 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Hillwood Names Development, Marketing Director

Bob Howard — Mon, 05 May 2008 00:00:00 GMT

SAN BERNARDINO, CA-Texas-based Hillwood has hired Brian Wilson, who most recently manager of commercial development for LNR Property Corp., as marketing and development director for its projects in Southern California. John Magness, senior vice president of Hillwood Investment Properties, says that the firm has hired Wilson for his experience with large-scale industrial projects, as well as a variety of product types, as Hillwood continues its ambitious development program in the region.

Hillwood is in the midst of its most aggressive building program in the Inland Empire with plans to develop 12 industrial buildings totaling 5.7 million sf by the end of this year. The projects is is developing in the Inland Empire include AllianceCalifornia, Interchange Business Park and North San Bernardino Business Park in San Bernardino, West Valley Logistics Center in Fontana and Hofer Ranch in Ontario. The company also is involved in the development of Vintners Grove Office Park in Ontario and Renaissance Rialto, which are both joint ventures with the Upland, CA-based Lewis Group.

With LNR Property Corp., Wilson worked on the redevelopment of more than 1,000 acres at the former March Air Force Base in Riverside, CA. Before joining LNR, he served as a project manager for Opus West Construction Corp. His development and construction experience includes a wide variety of projects, including offices, a downtown shopping mall, a luxury hotel and a residential high-rise.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since that time, 6.4 million sf has been built or is under construction and close to 3,000 new jobs have been created at what is now called AllianceCalifornia. Hillwood, a Perot company, is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of the Dallas-Fort Worth Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

Hillwood Acquires 750,000-Square-Foot Industrial Portfolio

Wed, 30 Apr 2008 00:00:00 GMT

COLUMBUS, OHIO — Hillwood has acquired three industrial buildings totaling more than 750,000 square feet from ODW Logistics in a sale/leaseback transaction. The portfolio of properties is located on Williams Road in Columbus. ODW built each of the facilities and will continue to operate them as part of an 83-acre campus totaling more than 1.5 million square feet. Hillwood was represented in-house by Chad Cook; ODW was represented by Al and Trip Leon of Leon Brothers. The acquisition price was not disclosed.

ODW Sells 750,000 SF in Perot’s Midwest Entry

Robert Carr — Wed, 30 Apr 2008 00:00:00 GMT

COLUMBUS-Dallas-based Hillwood, a Ross Perot company, has moved into the Midwest with its purchase of three industrial buildings here, totaling more than 750,000 sf. The purchase was a sale-leaseback, as ODW Logistics, which had developed and occupied the buildings, sold the properties for $23.3 million and signed a 10-year lease with Hillwood. The properties are 1580 to 1600 Williams Rd., northeast of the Interstate 71-270 interchange, and near the Norfolk Southern and CSX rail lines.

The seller built the 83-acre campus here, which totals 1.5 million sf, and ODW will still own and occupy half the space. The company has more than 400 employees in the city, and also has properties in Chicago, Milwaukee and Los Angeles.

Hillwood, on the other hand, has focused mostly on all types of properties in the South and West, though it does own three industrial properties in Pennsylvania. Chad Cook, VP of the company’s investment division, says the SLB provides an entry into a region that the firm has targeted for some time. “We consider Columbus to be a good, long-term market,” he tells GlobeSt.com Tuesday. “It’s a distribution point into the Midwest, and greatly helps with the amount of time to get product across the country, through the heartland corridor.”

The firm had leased 339,980 sf to ODW in December in the AllianceCalifornia development in San Bernardino, CA, and that relationship led to this purchase, Cook says. “We thought this was a great entryway into the Midwest, and Columbus market. Just look at the great strides they’re making with the Rickenbacker Airport,” he says. The opening of Norfolk Southern's Rickenbacker Intermodal terminal has boosted the state’s position as a distribution center. “Although no other deals are imminent, Hillwood will continue to seek new opportunities in Columbus,” Cook says.

Al Leon and Trip Leon with Leon Bros. represented ODW in the transaction. Cook represented his firm.

HILLWOOD, ODW LOGISTICS COMPLETE SALE-LEASE BACK OF MORE THAN 750,000 SQUARE FEET IN COLUMBUS, OHIO

Tue, 29 Apr 2008 00:00:00 GMT

COLUMBUS, Ohio – Hillwood has purchased three buildings totaling more than 750,000 square feet in Columbus, Ohio from ODW Logistics, a leading provider of logistics and transportation services. ODW Logistics will lease the facilities from Hillwood.

The buildings are located on Williams Road, northeast of the Interstate 71/Interstate 270 interchange and near the Norfolk Southern and CSX rail lines.

“Hillwood is a recognized leader in the real estate industry,” said John Ness, president of ODW Logistics, Inc. “With real estate interest in multiple markets and significant resources, we feel this partnership will strategically benefit our customers and position us well for future growth.”

ODW built and continues to operate these facilities as part of an 83 acre campus totaling 1.5 million square feet. ODW employs more than 400 associates in Columbus and is positioned as a market leader for 3PL services in Columbus, as well as Chicago, Milwaukee and Los Angeles.

“This deal not only allows Hillwood to further develop its relationship with a highly valued customer in ODW Logistics, but it provides the company an entry into a region of the country that we have targeted for some time,” said Chad Cook, vice president of Hillwood Investment Properties. “Although no other deals are imminent, Hillwood will continue to seek new opportunities in Columbus.”

In December 2007 ODW Logistics leased 339,980 square feet in Hillwood’s AllianceCalifornia development in San Bernardino.

ODW Logistics was represented by Al Leon and Trip Leon of Leon Brothers. Hillwood was represented in-house by Chad Cook.

ODW Logistics, Inc. (www.odwlogistics.com) is a multi-regional third-party logistics provider with a primary campus in Columbus, Ohio and several distribution points located throughout the country in Indianapolis, Chicago, Milwaukee and Los Angeles. With more than 700 employees and over three million square feet of warehouse space, ODW provides unparalleled distribution, fulfillment, import logistics, yard management, and automotive support services. ODW is an asset-based provider offering highly responsive, personal service to a variety of customers ranging from international Fortune 500 companies to locally owned and managed companies. ODW serves the unique needs of diverse industries including retail, electronics, medical devices, food and apparel.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for more than 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and the 2,000-acre AllianceCalifornia development near Los Angeles.

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HILLWOOD NAMES DEVELOPMENT/MARKETING DIRECTOR FOR SOUTHERN CALIFORNIA PROJECTS

Contact: David Pelletier, Hillwood (817.224.6044, dave.pelletier@hillwood.com) — Wed, 16 Apr 2008 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has hired Brian Wilson, who most recently was Manager of Commercial Development for LNR Property Corp., as Marketing and Development Director for its projects in Southern California. Projects being developed by Hillwood in the Inland Empire include AllianceCalifornia, Interchange Business Park and North San Bernardino Business Park in San Bernardino, West Valley Logistics Center in Fontana, and Hofer Ranch in Ontario.

The company also is involved in the development of Vintners Grove Office Park in Ontario and Renaissance Rialto, which are both joint ventures with the Lewis Group.

Hillwood is in the midst of its most aggressive building program in the Inland Empire with plans to develop 12 industrial buildings totaling 5.7 million square feet by the end of this year.

“As Hillwood’s development activities in Southern California increase, it is imperative that we continue to add top talent, like Brian Wilson, to our team,” said John Magness, senior vice president of Hillwood Investment Properties. "Brian has experience with large-scale industrial projects, as well as a variety of product types, which will be a tremendous asset as Hillwood continues its unprecedented industrial development, while diversifying its development portfolio, in the Inland Empire.”

With LNR Property Corp., Wilson worked on the redevelopment of more than 1,000 acres at the former March Air Force Base in Riverside, California. Prior to joining LNR, Wilson served as a project manager for Opus West Construction Corp. His development and construction experience includes a wide variety of projects, including offices, a downtown shopping mall, a luxury hotel, and a residential high-rise.

Wilson earned his bachelor’s degree in Environmental Design from Texas A&M University.

Hillwood’s projects in Southern California have attracted facilities for global industry leading companies, including Kohl’s, Mattel, Stater Bros., Pactiv, Medline, FedEx, Michelin and Pep Boys.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for close to 90 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to its projects in the Inland Empire, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Port Builds Push Hillwood’s 610,000-SF Spec Plan

Natalie Keith — Mon, 10 Mar 2008 00:00:00 GMT

JACKSONVILLE, FL-Plano, TX-based Hillwood is planning to begin construction immediately on West Point Trade Center, a 610,000-sf speculative industrial building. The project is expected to be completed in early fourth quarter.

The building will be located on the city’s Westside, near the Port of Jacksonville and within two miles of the CSX Intermodal rail facility and the Interstate 295/Interstate 10 Interchange. The project cost was not released.

Hillwood Investment Properties vice president T. Preston Herold tells GlobeSt.com that the building can be divided to accommodate up to four tenants. Leasing efforts have started on the project, but no signed leases are yet in place. “There have been a large number of build-to-suit projects in Jacksonville because there has not been speculative space,” Herold says. “We think there is a demand for speculative space so we’re moving forward with the project.”

The project is being developed to accommodate an anticipated need for industrial space in the area, driven in part by two Asian shipping company’s plans to open new terminals at the port. The new terminals are expected to bring additional capacity for 1.8 million containers. Japan-based Mitsui O.S.K. Lines is expected to open a 157-acre, $220-million terminal later in 2008. Plans are also under way for Hanjin Shipping Co. to open a new 170-acre, $360-million terminal in 2011. The facility will be the company’s first dedicated operation on the US East Coast.

In addition to the new terminals, a proposed dredging project is being considered which will allow the port to handle the large ships that will travel through the Panama Canal in 2014, when the canal expansion project is scheduled to be complete.

West Point Trade Center will be the third industrial building Hillwood has either developed or purchased in Jacksonville in the past two years. The company developed a 400,000-sf build-to-suit distribution center for Laney & Duke on Presidents Court in 2007 and purchased a 360,998-sf facility on Faye Road in 2006.

Large warehouse planned on Westside

Tony Quesada — Fri, 07 Mar 2008 00:00:00 GMT

JACKSONVILLE -- A Dallas developer has bought 69 acres on the Westside to build a 601,500-square-foot speculative warehouse.

Hillwood hopes to tap into the expected growth in cargo moving through Jacksonville after a 158-acre container terminal opens at Dames Point.

West Point Trade Center will fill a need for speculative warehousing space, said T. Preston Herold, vice president for Hillwood Investment Properties, a Hillwood business unit.

"Companies that have wanted to locate in Jacksonville were forced to wait for a build-to-suit," said Herold, who would not disclose the price for the land or the estimated cost to build the warehouse.

Hillwood bought the property from Pickettville Partners Ltd. and Westside Investment Trust, with Allen Land Group representing the sellers and CB Richard Ellis representing Hillwood, a commercial and residential developer whose chairman is former presidential candidate Ross Perot.

"In the next six months to a year, the majority of ware-house space being delivered is being done on a build-to-suit basis," said Colliers Dickinson broker Jeff Evans, who was not involved with the West Point Trade Center.

He cited four projects of 800,000 square feet or more being built for specific users, with only one other sizable speculative project that he's aware of. "The market will have a huge appetite for larger structures built on spec."

Hillwood is targeting tenants seeking space for regional distribution. It expects to have from one tenant using the entire building to as many as three tenants sharing it, Herold said.

Hillwood will start immediately on the project. It is expected to be ready early in the fourth quarter, just before TraPac Inc., the terminal operating subsidiary of Tokyo-based ocean carrier Mitsui O.S.K. Lines Ltd., opens its terminal in January 2009.

The timing of Hillwood's project should help it, said Jerry Mallot, executive director of Cornerstone Regional Development Partnership. Many companies have been and will be interested in Jacksonville during the next couple of years, and opportunities can be missed for lack of space built on spec.

"To be able to move forward and get a project going creates more opportunity," Mallot said.

Located on Pickettville Road about a mile north of the intersection with Commonwealth Avenue, the West Point Trade Center is within two miles of the CSX Intermodal rail facility and the Interstate 295-Interstate 10 interchange.

The warehouse will be 1,200 feet wide and 500 feet deep with a 32-foot clear-height and cross-dock loading capability, including 135 dock-high doors. It will have 313 parking spaces for cars, 118 parking spots for trailers and plenty of space next to the building to maneuver trucks -- 180 feet on the west side and 140 feet on the east side.

Although Hillwood is building on spec, the company has been talking with a couple of prospects interested in leasing space, Herold said.

Lease rates rising

He declined, however, to comment on how much the building might lease for, either for the entire space or on a per-square-foot basis.

In general, warehousing landlords can get $4.25 to $4.50 per square foot in annual rent, Evans said, not including charges for property insurance, taxes and upkeep.

"We hit the low fours in industrial warehouse space about two years ago," Evans said. "As the cost of land rises, even as construction costs have leveled off a bit, that will drive lease rates up higher."

West Point Trade Center is in line with typical Hillwood warehousing projects. Although the company built a 1.2 million-square-foot building in Memphis, Tenn., it mostly builds 300,000 square feet to 800,000 square feet.

West Point Trade Center will be the third industrial building in Jacksonville that Hillwood has been involved with in the past two years. The company developed a 400,000-square-foot build-to-suit distribution center for Laney & Duke on Presidents Court in 2007, and it bought a 360,998-square-foot building on Faye Road in 2006.

Hillwood's role in those buildings enabled the company to see and understand Jacksonville's potential as a distribution hub for the Southeast, Herold said.

"We like the fundamentals of the market," he said, touting Jacksonville's geographic position in the Southeast, its highway and rail infrastructure and its expanding port.

"You're going to see us coming into Jacksonville in a big way.

"This is the start. We obviously hope there will be more."

At the same time, Herold said suitable land for warehousing is getting harder to find for attractive prices.

"Land costs have tripled since our deal with Laney-Duke," Herold said. Also, few, if any, sites are available that don't have issues related to wetlands. Many sites require "significant mitigation costs" associated with filling them in to achieve a workable footprint for distribution operations.

Mallot said Jacksonville has enough industrial land for warehousing to keep projects going for a few years, especially at Cecil Commerce Center, where "there is still a substantial amount available."

But it won't be long before "we'll see future projects have to go to neighboring counties" such as Clay and Baker, he said. "The good thing is that the region will share in the benefits of the expansion of the port."

tquesada@bizjournals.com | 265-2220

ODW Logistics leases space at former Norton base

Josh Brown — Thu, 28 Feb 2008 00:00:00 GMT

An Ohio warehousing and distribution company has leased part of a 1.1 million-square-foot building on the grounds of the former Norton Air Force Base, according to a news release.

ODW Logistics Inc. will occupy roughly half of the building, which is part of Hillwood Development Corp.'s warehousing redevelopment at the former base.

The building was originally constructed to accommodate an expansion by Pep Boys. The company occupies the other half of the building.

John Ness, ODW's president, said in a news release the location positions his company to have better access to the Inland region and companies on the western edge of the region that work heavily with the ports of Los Angeles and Long Beach.

Hillwood has built about 4.2 million square feet of warehouse space at the former base so far and about 2.7 million square feet is in planning or under construction, including about 120 acres of the former Palm Meadows golf course.

The company also is building two other warehouses in San Bernardino on Central Avenue near Tippecanoe Avenue.

The buildings will have a combined 1.4 million square feet, but no tenants have been announced.

Last year, Hillwood announced Michelin North America had signed a 10-year lease on an 801,000-square-foot building at the site of the former Culligan water treatment plant in northern San Bernardino near Cal State San Bernardino.

ODW LOGISTICS LEASES 339,980 SQUARE FEET IN HILLWOOD’S ALLIANCECALIFORNIA DEVELOPMENT

Tue, 26 Feb 2008 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has leased 339,980 square feet in Westgate Building One in its AllianceCalifornia development in San Bernardino to ODW Logistics, a Columbus, Ohio-based provider of logistics and transportation services.

“As well as being complimentary to our facility in Chino, California, this new location now positions ODW in the Inland Empire region of Southern California to service port-focused markets on the western edge of the Inland Empire,” said John Ness, president of ODW Logistics, Inc. “In addition, it also positions us to service Eastern Inland Empire markets seeking a closer proximity to eastern shipping points at lower real estate operating costs.”

The 1,140,200 square-foot Westgate Building One, located at 310 South Tippecanoe Street, was completed in two phases. ODW Logistics will occupy most of the 540,480 square-foot speculative expansion that was completed in 2006. The 600,240 square-foot first phase was completed in 2005 as a build-to-suit for Pep Boys.

“The selection of AllianceCalifornia by ODW Logistics, a leading logistics provider whose job is to find the most efficient means of distributing goods for its customers, is a great endorsement for the development,” said John Magness, senior vice president of Hillwood Investment Properties. “The strength of AllianceCalifornia and the surrounding area as a distribution hub is a major reason why Hillwood is underway on the most aggressive speculative building program in the Inland Empire.”

ODW Logistics was represented by Al Leon of Leon Brothers. Hillwood was represented by Peter B. McWilliams, Ruben V. Goodsell and Michael McCrary of Colliers International.

Since December 2000, when Hillwood was selected as the master developer of the development, AllianceCalifornia has attracted many global industry leaders. In addition to ODW Logistics, the development now houses major facilities for Kohl’s, Mattel, Stater Bros., Pactiv, Medline and Pep Boys. Over the past seven years, more than 7.8 million square feet have either been built or are under construction and close to 3,000 new jobs have been created at AllianceCalifornia.

ODW Logistics, Inc. (http://www.odwlogistics.com/) is a multi-regional third-party logistics provider with a primary campus in Columbus, Ohio and several distribution points located throughout the country in Indianapolis, Chicago, Milwaukee and Los Angeles. With more than 700 employees and over three million square feet of warehouse space, ODW provides unparalleled distribution, fulfillment, import logistics, yard management, and automotive support services. ODW is an asset-based provider offering highly responsive, personal service to a variety of customers ranging from international Fortune 500 companies to locally owned and managed companies. ODW serves the unique needs of diverse industries including retail, electronics, medical devices, food and apparel.

Including two buildings at AllianceCalifornia, Hillwood will complete 12 industrial buildings totaling 5.7 million square feet in four different developments in the Inland Empire by the end of 2008. Two of the buildings are build-to-suits for Michelin and FedEx. The others are speculative buildings. The developments include InterChange Business Park, North San Bernardino Industrial Park and AllianceCalifornia in San Bernardino, and Hofer Ranch at Ontario Airport.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 89 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Real Estate: Hillwood adds vice president

Staff Reports — Mon, 21 Jan 2008 00:00:00 GMT

His new job: Toby Rogers has joined Hillwood as a vice president for Hillwood Investment Properties. He will oversee marketing for the company’s projects in North Texas and in northern Mississippi in the Memphis market. In North Texas, Rogers will oversee the leasing of a portfolio of approximately 8.1 million square feet of primarily industrial projects outside of Hillwood’s AllianceTexas development. Projects on which Rogers will oversee marketing in North Texas include Lakeside Trade Center in Flower Mound, where Hillwood is developing two speculative buildings totaling more than 790,000 square feet, and Crossroads Trade Center in DeSoto, where the company is developing a 550,600-square-foot speculative building.

His background: He began his career at Trammell Crow Company in 2002 and has been engaged in the company’s leasing and development group since 2003. CB Richard Ellis acquired Trammell Crow in 2006. He was vice president with CB Richard Ellis. Rogers earned a bachelor’s degree in agricultural economics from Texas Tech, a master’s degree in agricultural economics from Texas A&M and a MBA from the University of Virginia.

Hillwood names new leasing executive

Andrea Jares — Fri, 11 Jan 2008 00:00:00 GMT

Hillwood named Toby Rogers, a former CB Richard Ellis vice president, to lead the leasing of its investment properties outside of the Alliance development in north Fort Worth.

Click here to read the full article.

HILLWOOD ADDS VICE PRESIDENT

Contact: David Pelletier, Hillwood (817-224-6044, dave.pelletier@hillwood.com) — Wed, 09 Jan 2008 00:00:00 GMT

DALLAS, Texas – Hillwood has hired Toby Rogers, formerly a vice president with CB Richard Ellis, as a vice president for Hillwood Investment Properties. Rogers will oversee marketing for the company’s projects in northern Mississippi in the Memphis market and several of the company’s projects in North Texas.

“Toby is a tremendous addition for Hillwood because of his background in leasing and development, as well as his experience as a financial analyst,” said Tal Hicks, president of Hillwood Investment Properties. “As Hillwood continues to grow and enter new markets, it’s imperative that we continue to add dynamic, talented people like Toby to our team.”

In North Texas Rogers will oversee the leasing of a portfolio of approximately 8.1 million square feet of primarily industrial projects outside of Hillwood’s AllianceTexas development. Projects on which Rogers will oversee marketing in North Texas include Lakeside Trade Center in Flower Mound, where Hillwood is developing two speculative buildings totaling more than 790,000 square feet, and Crossroads Trade Center in DeSoto, where the company is developing a 550,600 square-foot speculative building.

Hillwood currently owns approximately 3 million square feet in Southaven, Mississippi in the Memphis market. A majority of that square footage is in DeSoto Trade Center, where the company has completed speculative buildings of 552,106 square feet and 301,053 square feet in the past two years. The 668-acre DeSoto Trade Center has the capacity for 10 more buildings totaling approximately 7 million square feet.

“Hillwood has always had the reputation of being a top-notch developer, among the brokerage community, other commercial real estate owners and tenants,” said Rogers. “The company’s unique business model and this position will allow me to expand and diversify my market knowledge, continue to be engaged in lease transactions, and over time, become more involved in the development side of the business. I am proud to be associated with the Hillwood organization and hope to contribute to the future growth and success of the company.”

Rogers began his career at Trammell Crow Company in 2002 and has been engaged in the company’s leasing and development group since 2003. CB Richard Ellis acquired Trammell Crow in 2006. Rogers earned a Bachelor’s degree in agricualtural economics from Texas Tech, a Master’s degrees in agricultural economics from Texas A&M and an MBA from the University of Virginia.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for more than 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, AllianceCalifornia in San Bernardino, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Hillwood Puts New VP at Helm of 9M SF Plus

Connie Gore — Wed, 09 Jan 2008 00:00:00 GMT

DALLAS-Gaming out its plan for this year, Hillwood Investment Properties has hired a vice president to oversee an eight-million-sf portfolio in North Texas and 853,000-sf start to a seven-million-sf development in Southaven, MS.

Moving into the newly created position is Toby Rogers, who was groomed in the Trammell Crow Co. ranks and subsequently became a vice president at CB Richard Ellis, which historically doesn't comment on personnel departures. Rogers tells GlobeSt.com that the biggest challenge is "getting ramped up in the two markets and learning the way Hillwood does business."

Rogers, who's marking his fifth year in the business, is taking over duties previously shared by senior vice president Dan Tatsch and vice president T. Preston Herold. With the change, Tatsch will be concentrating on development and land acquisitions while Herold will focus on a new market that Hillwood has in its sights.

Rogers, who started one week ago, has hit the ground running on "several large deals" that are working in his territories. In North Texas, he is responsible for all industrial space outside the 17,000-acre AllianceTexas lines.

Rogers' territory includes Lakeside Trade Center 4 and 5, 333,372 sf and 557,000 sf, respectively in Flower Mound, and the 556,664-sf Crossroads Trade Center at 1221 Centre Park Blvd. in DeSoto, TX, which recently landed a 350,150-sf tenant. In Mississippi, Rogers is facing a 301,000-sf opening in a 552,000-sf warehouse and 165,000-sf vacancy in a 301,000-sf spec project in DeSoto Trade Center, where the developer has 675 acres to build 10 buildings.

Clemson alum makes Hillwood a major Lowcountry player

Dan McCue — Mon, 24 Dec 2007 00:00:00 GMT

The Clemson University ties of a senior executive of Hillwood Investment Properties were a crucial factor in the office and industrial property development company’s decision to roll the dice on creating a 750-acre business park near Interstate 26 in Berkeley County.

They also helped to ensure the project remained under the radar until all the agreements were sealed and construction at the development, called Charleston Trade Center, was about to begin.

“Those relationships mean more to me than anything,” said Gary Frederick, senior vice president of Hillwood Investment Properties.

“If I’d been a lowly (University of South Carolina) Gamecock, I don’t know that we would’ve gotten this done,” he laughed.

Frederick, born and raised in Deerfield Beach, Fla., graduated from Clemson in 1979 with a bachelor’s degree in economics. He returned to the state in 1997 to oversee development of Disney Direct Marketing’s worldwide distribution center in Union County.

At the time, Frederick was working for a joint venture called Panattoni Hillwood, and when the joint venture parted, he joined Hillwood proper, hoping for another chance to do a big project in his adopted state.

In 2002, he thought the opportunity had arrived, but it would be another five years before he’d set up shop in the Lowcountry.

“Our first look at this area, and in fact, at this exact site, which is located between exits 194 and 199 near the Piggly Wiggly Distribution Center, was when Mercedes was seriously considering the area for its manufacturing plant,” Frederick said.

“It looked pretty serious. The state had acquired all the options on the land, dubbing the effort Project Bluebell, and our plan was to build a commerce park adjacent to the site that would be home to Mercedes’ suppliers.”

After the Mercedes deal fell through, the state released its options on the land. But Frederick didn’t forget the site. When he learned it was still available in early 2005, he decided the time might be right to take a gamble on a speculative project.

“By then we had seen the emergence of the East Coast ports in the global supply chain and the S.C. State Ports Authority’s investments in expansion were becoming obvious,” Frederick said. “A giant bridge was standing over the harbor, and it appeared that the Navy base terminal was going forward.

“Basically, it seemed like the stage was set for the Port of Charleston to be an increasingly important port in the United States, and I knew we could benefit from the due diligence the state had already performed in regard to the site.”

That’s when Frederick began to work closely with Carlyle Blakeney, another Clemson alum who also happened to be a broker at Palmetto Commercial Real Estate. Soon he was engaged in serious discussions with two other alumni of the university, attorney Neil C. Robinson Jr., of Nexsen Pruett Jacobs and Pollard in Charleston and then-Berkeley County Supervisor Jim Rosier.

But Clemson’s ties to the development deal didn’t end there. As it happened, the largest landowner involved in the sale was Tom Salisbury, a member of Clemson’s 1948 Southern Conference Championship football team. Salisbury passed away after Hillwood contracted for the land.

While Frederick often jokes about the importance of his university ties, they were critically important in allowing a relative outsider “to get on the inside.”

Hillwood plans major South Carolina development

Tue, 04 Dec 2007 00:00:00 GMT

Hillwood Investment Properties plans to begin construction in the next 60 days on the first building in a new distribution and industrial park outside Charleston that may eventually encompass 13 buildings with 9 million square feet of space.

The Charleston Trade Center is located on a 760-acre tract along Interstate 26 near I-95, about 20 miles from Charleston's marine terminals. The property has foreign trade zone status.

Hillwood is the Perot family company that is probably best known for building a giant 17,000-acre mixed-use development around the Ft. Worth Alliance Airport that is used by a number of companies for distribution.

Hillwood also has major distribution developments in California, Pennsylvania, in Mississippi near Memphis, and Jacksonville, Fla.

Growth in trade from Asia is "certainly a big reason why we are here in Charleston," said Gary Frederick, a senior vice president for the company. "It's a trend that is very likely to be continued and sustained."

Frederick pointed to the growing number of container services from Asia to the U.S. East Coast, including those using post-Panamax ships through the Suez Canal.

He noted that Charleston, with its deep channels, is prepared to handle those ships, as well as the large ships that will be transiting Panama when expansion of the Panama Canal is completed. He also noted that Charleston is adding terminal capacity through redevelopment of the former Navy base in the city.

Many companies are adding distribution centers on the East and Gulf coasts to reduce the risk of having "all their eggs in one basket" on the West Coast because of capacity constraints as well as concern about labor disputes in the wake of the 2002 lockout of longshoremen on the West Coast which disrupted shipping, he said.

Hillwood hopes to complete its first 400,000-square-foot building at the Charleston Trade Center by the third quarter of 2008, Frederick said. The company is marketing the center to companies for warehousing and distribution and manufacturing, including tenants at its other facilities around the country. But he said there is enough flexibility in the zoning for the property that offices and retail stores may also be built at the site.

Hillwood Builds Up Charleston

Mon, 03 Dec 2007 00:00:00 GMT

Increased global trade through East Coast ports inspired commercial real estate developer Hillwood to start building the 750-acre Charleston Trade Center in South Carolina, along Interstate 26 between the Port of Charleston and the I-95 corridor.

Construction on the first of approximately 13 buildings will begin early next year, and Hillwood plans to have the first 400,000-square foot speculative property complete by the end of 2008. Hillwood plans about eight million square feet of industrial space, primarily for logistics and light industry, and a million square feet of office and retail space, at the trade center.

Gary Frederick, senior vice president of Hillwood Investment Properties, said, "Charleston Trade Center is a prime logistics location because of its proximity to I-95, the major north-south connector along the East Coast, and to the Port of Charleston, which has become a key East Coast entry point for goods imported from Asia and should continue to handle more containers due to increased use of the Suez Canal and the expansion of the Panama Canal."

The Port of Charleston handles almost two million TEUs of container traffic per year and can accommodate the new generation of super-post-Panamax ships. The South Carolina Port Authority is also building a new container terminal that will increase Charleston's capacity by almost half.

Total value of the trade center complex was not disclosed, though Hillwood said it will spend $9 million on highway access improvements at the I-26 interchange.

Hillwood expects the Charleston Trade Center will eventually create as many as 3,000 area jobs.

Hillwood Launching 9M SF Plan in SC

John McCloud — Wed, 21 Nov 2007 00:00:00 GMT

Charleston, SC—Hillwood Investment Properties unveiled plans for a major project that will be not only the largest industrial development in the history of this port city but also one of the largest announced this year for anywhere in the US. The Dallas-based company plans to break ground in Q1 ’08 on Charleston Trade Center, a 750-acre industrial project that could ultimately have up to eight million sf of logistics and light manufacturing space and one million sf of other uses.

According to Hillwood senior vice president Gary Frederick, the project seeks to take advantage of growth at the Port of Charleston. In the fiscal year ending this past June 30, port container volumes totaled 1.88 million 20-foot equivalent units. Though this figure was down 4.8% from last year's record-breaking total, the South Carolina State Ports Authority, which is headquartered in Charleston, projects significant growth over the next 10 years. The port currently ranks sixth in the US in terms of cargo value.

“The major shippers and suppliers are engaged in what we call the East Coast diversification strategy,” explains Frederick. “They're spreading volumes from the overcrowded West Coast ports to ports on the Gulf and East coasts.”

A major component of the strategy entails expansion of the Panama Canal to handle larger ships, and Charleston has responded by building facilities capable of handling the super-sized post-Panamax ships that are already making their way to East Coast ports. The Ports Authority has budgeted $300 million for port expansion and improvements, including construction of a new terminal that will increase container-handling capacity by almost 50%.

The Q3 report from Grubb & Ellis pegs Charleston industrial vacancy at 10.6%. According to the report, while transaction volume is down compared with last year’s pace, many see the decline a return to normalcy after a torrid pace in '06 that was generally viewed as unsustainable. At the same time, the report shows market rents continuing to tick upwards, reaching an annual average of $4.52 per sf for warehouse/distribution product and $5.88 per sf for flex space.

Port growth is not the only impetus for the development, Frederick tells IPJ. “The project is surrounded by large-scale residential growth,” he says. ”Some 30,000 to 40,000 residential units are scheduled to be built nearby. We will also be able to provide a site for the employment and services the new residents will need.”

Frederick says Hillwood got a flexible planning overlay for the property that will enable it to include office, commercial, retail and even some high-density residential space in the development, depending on demand. But he emphasizes the primary focus will be industrial and notes the project will launch with construction of a 400,000-sf spec warehouse/distribution building that will be ready for move-in before the end of 2008. The building can be expanded to 652,340 sf.

Frederick, who expects build-out to take about 10 years, says the project is already being actively marketed to prospective tenants. Hillwood gave the marketing assignment to Michael Ferrer and Thomas Buist Jr. of Barkley Fraser, a Charleston-based affiliate of Grubb & Ellis.

While the Hillwood project will be the largest industrial development in Charleston, a subsidiary of Dubai-based Dubai International Capital LLC recently announced its intent to purchase 1,300 acres in Orangeburg, SC for development of an inland multimodal logistics center. This site is about equidistant between the ports of Savannah, GA and Charleston. It will also be close to the proposed future Jasper, SC port expansion site, which is to be far larger than either of the two existing ports and will be operated as a joint venture between the states of South Carolina and Georgia.

Charleston area to get warehouse complex

Jim Duplessis — Thu, 15 Nov 2007 00:00:00 GMT

A company owned by the son of Texas billionaire Ross Perot said Wednesday it has bought 750 acres in the Charleston area for a distribution center that is expected to create 3,000 jobs within 10 years, rivaling the plans of a Dubai company in Orangeburg County.

Hillwood Development, the Ross Perot Jr. company based in Dallas, plans 8 million square feet of warehouse space on the Berkeley County site near Jedburg. It’s part of the land German automaker Daimler bypassed in the last 14 years for plants that would have made Mercedes sport utility vehicles and Sprinter vans.

The complex, to be called the Charleston Trade Center, will increase the area’s limited warehouse space, now covering 26 million square feet, said Chris Fraser, president of Barkley Fraser, a Charleston commercial real estate company that will handle leasing for the warehouse.

Increasing Charleston’s warehouse space will allow the state to better handle the flood of goods that are expected to arrive after 2014, when expansions of the Port of Charleston and the Panama Canal are scheduled for completion, Fraser said.

The same expectations led a Dubai World subsidiary, Jafza International, to buy 1,324 acres in Orangeburg County in September for a massive warehouse complex. Construction of that project is expected to begin by 2009. Development on the site is expected to cost at least $600 million and draw distributors and light manufacturers employing about 5,500 people by 2015.

Hillwood plans a quicker start. It will begin construction early next year on a warehouse to cover 400,000 square feet. The building is scheduled to be completed by the end of 2008 and can be expanded by an additional 252,340 square feet, Fraser said.

Hillwood announced the purchase in a news release Wednesday that did not include the price of the land, the full development costs or how long it would take to complete. Hillwood officials were not immediately available for comment. Fraser would not comment on the price.

The site stretches along about a mile of Interstate 26 south of the Piggly Wiggly distribution center built after Mercedes bypassed the site in 1993, instead choosing a site near Vance, Ala., for a plant that makes sport utility vehicles. Daimler, Mercedes’ parent, also considered the site in 2002 for a Sprinter van site, which ultimately landed in another part of Charleston.

Hillwood has developed distribution hubs near Dallas, Memphis and Los Angeles.

Hillwood Pencils 750-Acre Charleston Trade Center

Natalie Keith — Wed, 14 Nov 2007 00:00:00 GMT

BERKELEY COUNTY, SC-Dallas-based Hillwood plans to break ground in the first half of 2008 on the first buildings of Charleston Trade Center. The 750-acre industrial park will include up to nine million sf.

About 13 buildings are planned for the project, which will include eight million sf of industrial space and one million of office/retail space. It is located between the Port of Charleston and Interstate 95 along the south side of Interstate 26 just east of the Jedburg Road exit. A 400,000-sf speculative building, which can be expanded to 652,340 sf, should be completed by the end of 2008. Thomas Buist Jr. and Michael Ferrer, of Grubb & Ellis/Barkley Fraser, will market the property for Hillwood.

Hillwood Investment Properties senior vice president Gary Frederick tells GlobeSt.com that leasing efforts for the project have started, but no signed leases are in place. The start date of subsequent phases of the project has not yet been determined, but the anticipated build-out of the project is 10 years.

He adds that, due to residential growth in the area subsequent phases may contain types of commercial space other than industrial. “The Interstate 26 corridor has received a lot of attention for both industrial and residential growth,” he says. “The zoning is flexible with this project so there could be office or retail space.”

With close to two million TEUs handled per year, the Port of Charleston is among the busiest ports on the East Coast and is expected to continue to grow, according to a Hillwood release. Super-post-panamax ships can be accommodated at the Port of Charleston due to channel depth/width and air draft of the new Ravenel Bridge. In addition the South Carolina State Ports Authority is building a new container terminal that will increase capacity by almost 50%, the release adds.

“Charleston Trade Center is a prime logistics location because of its proximity to Interstate 95 and to the Port of Charleston, which has become a key East Coast entry point for goods imported from Asia and should continue to handle more containers due to increased use of the Suez Canal and the expansion of the Panama Canal,” says Frederick.

Under an agreement with Berkeley County, Hillwood will spend approximately $9 million on traffic improvements in and around the Jedburg Interchange.

Hillwood Suits Daimler

Tue, 13 Nov 2007 00:00:00 GMT

FORT WORTH (Hillwood) – Daimler Financial Services Americas has leased a three-story, 204,000-square-foot build-to-suit in Hillwood’s 17,000-acre AllianceTexas development.The new building will house 650 financial services employees.

Daimler was represented by UGL Equis. Hillwood represented itself.

Week in Review: Park plan advances

Mon, 12 Nov 2007 00:00:00 GMT

Hillwood Development Co. LLC, a Dallas-based real estate developer led by Ross Perot Jr., has committed to the initial stage of a massive industrial park along Interstate 26 near Summerville. The first building at the Charleston Trade Center will measure about 400,000 square feet, the State Ports Authority announced. Hillwood has submitted plans showing more than a dozen buildings on the site with more than 8 million square feet of industrial space for warehouse operators and manufacturers.

Local company gets major marketing deal

John McDermott — Mon, 12 Nov 2007 00:00:00 GMT

The industrial real estate arm of Grubb & Ellis|Barkley Fraser should have plenty to say grace over.

The locally based company got the nod from Dallas developer Hillwood to market its proposed 9 million-square-foot Charleston Trade Center along Interstate 26 near Jedburg. The sought-after leasing and brokerage gig falls to Thomas Buist and Michael J. Ferrer.

"This is as big as it gets," said Chris Fraser, president and managing principal of Grubb & Ellis|Barkley Fraser.

Hillwood's plan calls for 8 million square feet of industrial real estate and up to 1 million square feet of office and retail space. The development is projected to create about 3,000 jobs and it ranks among the largest commercial real estate ventures ever in South Carolina.

The project also would boost the size of the local industrial real estate market —currently weighing in at about 26 million square feet — by about one-third to the local market if built out.

Hillwood said Friday that construction should begin by mid-2008 on the first of roughly 13 buildings planned for Charleston Trade Center. The 400,000-square-foot speculative structure, which can be expanded to about 650,000 feet, should be ready for occupancy by the end of next year.

The property has attracted much interest over the years but no takers until Hillwood came along.

Among the better-known tire kickers: Mercedes-Benz and the former DaimlerChrysler AG, both of which considered building automotive assembly plants out there.

Gary Frederick, senior vice president of Hillwood Investment Properties, said the 750-acre site is poised to become "a prime logistics location" because of its proximity to I-26, Interstate 95 and the Port of Charleston.

A new interchange near the Hillwood tract has been proposed but is not approved. In the meantime, vehicles will enter and exit the property via Exit 194 on I-26. Hillwood said it plans to invest $9 million in improvements in and around the Jedburg Road on- and off-ramps under an agreement with Berkeley County.

Headed by Ross Perot Jr., son of the 1992 presidential candidate, Hillwood has developed several major warehouse and distribution hubs, including AllianceTexas in Dallas-Fort Worth, DeSoto Trade Center near Memphis, AllianceCalifornia near Los Angeles and Lakeside Trade Center in North Texas.

HILLWOOD TO DEVELOP 750-ACRE CHARLESTON TRADE CENTER IN BERKELEY COUNTY, SOUTH CAROLINA

Contact: David Pelletier, Hillwood (817/224-6044, dave.pelletier.com) — Mon, 12 Nov 2007 00:00:00 GMT

BERKELEY COUNTY, S.C. – In large part due to the importance of global trade through the Port of Charleston, Hillwood is developing Charleston Trade Center, a 750-acre industrial project that includes up to 9 million square feet of primarily logistics and light manufacturing space in Berkeley County, South Carolina. Charleston Trade Center is strategically located between the Port of Charleston and Interstate 95, along the south side of Interstate 26 just east of the Jedburg Rd. exit.

Construction on the first of approximately 13 buildings planned for the development is slated to begin in the first half of 2008. A 400,000 square-foot speculative building should be completed by the end of next year. This building can be expanded to 652,340 square feet. Approximately 8 million square feet of industrial space and 1 million square feet of office/retail space are planned for Charleston Trade Center.

"Hillwood is making a significant investment in the Berkeley County/Jedburg area,” said Berkeley County Supervisor Dan Davis. “With this world class development project, Hillwood will bring significant job opportunities not only to Berkeley County but to an area that will benefit greatly from the increase in economic activity. We welcome and support their efforts and look forward to their support for our community."

The project will create approximately 3,000 new jobs and provide significant tax base growth for Berkeley County. Charleston Trade Center will be accessed by I-26 at exit 194 – Jedburg Road. Pursuant to a development agreement with Berkeley County, Hillwood will spend approximately $9 million on traffic improvements in and around the Jedburg Interchange. Combined with the large-scale residential growth in the immediate vicinity, the I-26 corridor through Berkeley County is slated to become a true live, work and shop community.

“Charleston Trade Center is a prime logistics location because of its proximity to I-95, the major north-south connector along the East Coast, and to the Port of Charleston, which has become a key East Coast entry point for goods imported from Asia and should continue to handle more containers due to increased use of the Suez Canal and the expansion of the Panama Canal,” said Gary Frederick, senior vice president of Hillwood Investment Properties.

With close to 2 million TEUs (20 foot equivalent containers) handled per year, the Port of Charleston is among the busiest ports on the East Coast and is well positioned for continued growth. Super-post-panamax ships can be accommodated at the Port of Charleston due to channel depth/width and air draft of the new Ravenel Bridge. In addition the South Carolina State Ports Authority is building a new container terminal that will increase capacity by almost 50%.

"The rapidly growing consumer population and changing demographics of our region will continue to create new international trading opportunities for us,” said Bernard S. Groseclose, president and CEO of the South Carolina State Ports Authority. “We are especially excited about this significant private investment by Hillwood and believe it is very timely given our own $128 million capital plan to prepare for growth in the coming year."

In addition to its transportation advantages, Charleston Trade Center also features no inventory tax, the lowest corporate income tax rate in the Southeastern U.S. with corporate income tax credits available for jobs and headquarters facilities, fee in lieu of tax incentives to allow for fixed real and personal property tax rates for 20 years, a special source revenue credit that provides 25% property tax abatement, and dual electricity providers for heavy users.

Thomas G. Buist Jr. and Michael J. Ferrer of Grubb & Ellis|Barkley Fraser, a local affiliate of the national commercial real estate firm, Grubb & Ellis, will market the property for Hillwood.

“Mike and I are extremely pleased to be a part of such a dynamic project” said Buist, senior vice president of industrial services and a principal in the firm. “This is exactly what the region needs to remain competitive in the ever changing global marketplace.”

Hillwood has developed several major distribution hubs across the country. These include AllianceTexas in Dallas-Fort Worth, DeSoto Trade Center in the Memphis market, AllianceCalifornia near Los Angeles, and Lakeside Trade Center in North Texas.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to its major distribution hubs, Hillwood is best known for its development of the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Perot Jr. to build on 750 acres

Dan McCue — Fri, 09 Nov 2007 00:00:00 GMT

An office and industrial property development company owned by H. Ross Perot Jr.—son of the Texas billionaire and onetime presidential candidate H. Ross Perot—is poised to begin construction of a 750-acre business park near Interstate 26 in Berkeley County.

The development, to be called the Charleston Trade Center, will be located on Interstate 25 between exits 194 and 199 near the Piggy Wiggly Distribution Center. The site, formerly known as the Mercedes tract, will have approximately 9 million square feet of Class A distribution and manufacturing facilities at full buildout.

Hillwood Investment Properties planned to announce the construction of its initial building, a 400,000-square-foot structure that can be expanded to 600,000 square feet, on Monday.

But the plan was revealed Thursday when S.C. State Ports Authority President and CEO Bernard S. Groseclose Jr. made reference to an advance copy of the company’s press release during a ports authority board meeting.

“This is a very significant development, and great news for the Port of Charleston and the region,” he said.

Groseclose commended Fred N. Stribling, vice president of marketing and sales, and other ports authority employees for helping make Hillwood’s presence in the Lowcountry a reality.

A Hillwood spokesman declined to comment on the development, but confirmed that a master plan, map and other details relating to the project were already on the company’s Web site under its earlier designation, the “Berkeley Trade Center.”

Al Kennedy, who was a project manager with the Berkeley County Economic Development department before assuming his current position as the county’s administrative services director, said Hillwood approached the county more than a year ago looking for a potential site for a commercial park in South Carolina.

“It goes back to the expansion of the port, the challenges associated with that, and the lack of port-related infrastructure,” Kennedy said. “Hillwood is involved in projects all over the world—all over the nation, certainly—and it saw the need for the kind of facility they do.

“They do their homework,” he said, “and they concluded that Berkeley County has tremendous potential in terms of this kind of development.”

According to Hillwood’s Web site, a new, full-movement interchange has been planned and funded at the southern boundary of the site, which is 20 miles from the Port of Charleston’s container terminals and 28 miles from the intersection of Interstate 26 and Interstate 95.

The site is served by both the CSX and Norfolk Southern railroads, and the Berkeley Electric Cooperative.

The younger Perot, a real estate developer, has aggressively expanded the family fortunes, primarily through real estate. He became independently prominent in the 1980s through his development and ownership of Fort Worth Alliance Airport and the surrounding area.

Texas-based Hillwood commits to project

John McDermott — Fri, 09 Nov 2007 00:00:00 GMT

Hillwood, the Texas real estate developer that is proposing to build a massive industrial park along Interstate 26 near Summerville, committed to the initial stage of the ambitious project Thursday.

The first building to come out of the ground at the Charleston Trade Center will measure about 400,000 square feet, the State Ports Authority announced at its monthly board meeting in Charleston.

Hillwood, which controls a large swath of land between exits 194 and 199, has submitted plans showing more than a dozen buildings on the site with more than 8 million square feet of industrial space for warehouse operators and manufacturers.

It was unclear Thursday whether Dallas-based Hillwood, which is led by Ross Perot Jr., has any tenants lined up for its first building.

Bernard S. Groseclose Jr., the SPA's chief executive officer, said he welcomed the investment, which is expected to make the Port of Charleston more competitive by providing more local storage and distribution options near for shippers of oceangoing cargo.

A Hillwood representative said Tuesday that the SPA's announcement was premature and that details about plans for its 750-acre property will be released soon.

The development is the biggest to date in what is now the undisputed hotbed of industrial real estate in the Charleston region. The burst of activity in what was once the piney hinterlands is being fueled by several factors, including soaring coastal property values, the growth in global trade and a waning supply of big industrial tracts near the Charleston port terminals.

Across I-26 from the Hillwood site, for example, an industrial park is planned for a 320-acre plot that formerly was home to Baucoms's Nursery. Nearby, New York-based Rockefeller Group is floating a proposal to build 2.6 million square feet of industrial space on 400 acres of timberland.

The big unknown is how a Dubai company's plans for 1,300 acres near Orangeburg will fit into the mix. Jafza International recently acquired the property at Interstate 95 and S.C. Highway 301, saying it wants to build a huge warehouse and transportation hub.

Whether the Jafza project poses a competitive threat to the Jedburg developments is up for debate.

Some industrial real estate brokers feel that many port users prefer to be as close to the local container terminals as they can, which is what investors like Hillwood are betting on. Others said the Jafza development could be complementary in that it will attract new business to the Port of Charleston.

San Bernardino International Airport

Matt Wrye, Staff Writer — Fri, 02 Nov 2007 00:00:00 GMT

Ontario or LAX - which is it?

San Bernardino County residents ask that same question when it comes to deciding which airport to use.

But the day isn't far off when families can say, "What about SBIA?"

San Bernardino International Airport - site of the former Norton Air Force Base - is turning out to be quite a transportation hub.

Airport officials are dreaming of a freight and passenger airline magnet that global businesses and local residents won't be able to pass up.

"It's all about jobs ... and it's also about perception," said Don Rogers, interim director of the San Bernardino International Airport Authority Commission. "And once the airline services come, it's about convenient and material changes. It's about the way the outside world evaluates and views San Bernardino."

When the former air force base shut down in 1993, about 10,000 jobs vanished - a devastating blow to San Bernardino's blue-collar employment base and local economy.

Nonetheless, almost a decade of groundwork, planning and marketing is resurrecting the airport's glory years.

With Los Angeles International Airport's capacity almost maxed out - and LA/Ontario International Airport expected to double in size within 20 years - SBIA is positioning itself to handle an overflow of passenger and freight airline services.

In December, the airport completed its new 10,000-by-200-foot runway, which can handle any passenger airline jet and most cargo aircraft, Rogers said.

Plans to build 40 small hangers and a few large ones on the runway's east side are also in the works.

The airport's first U.S. Customs office came online earlier this year, and its new air-traffic control tower will be completed in May.

Projects like these will help SBIA ready itself for Million Air Interlink, a private jet charter starting services in June.

"They see a market here," said Penny Chua, director of economic development, about Million Air. "But they have to build their brand."

Current expansion and refurbishing projects totaling $38 million for passenger terminals include three new gates, with plans to build three more by June 2009.

Of course, the upcoming passenger airline services represent only half of the story, and only a portion of the new jobs SBIA expects airline companies will bring to the region.

The Inland Valley Development Agency, the airport's development entity, has already worked with Hillwood development company in building millions of square feet of industrial space for several companies.

Rogers said Hillwood is almost finished acquiring 130 more acres of land at the airport's south end, where 5 million square feet of new industrial space - called Southgate - is planned.

"We'll end up replacing approximately 5,000 jobs," Rogers said.

But the ultimate goal is beyond 5,000, and that's why Chua is building relationships oversees. In September, she made her second trip to Hong Kong on behalf of SBIA, promoting the airport's logistics/freight capabilities at the Air Freight Asia 2007 exposition.

"We have ... to promote awareness of the airport, because everyone knows where LAX is," Chua said. "The market is still not aware of who we are."

Rialto's quest

Jason Pesick, Staff Writer — Fri, 02 Nov 2007 00:00:00 GMT

Rialto's quest to upgrade its image and its economy ran into a little trouble this year as the housing market slowed down.

But the region's growth and four new miles of freeway frontage along the 210 Freeway make it a crucial time for the city.

"I do think that we have a great potential for being just a great city to live in," Councilwoman Winnie Hanson said of the city's future.

Plans for Renaissance Rialto, a 1,500-acre master-planned development that would replace Rialto's airport along the 210 Freeway, changed to replace some of the housing with industrial.

By the end of September, the developer, a partnership between the Lewis Group and Ross Perot Jr.'s Hillwood, were floating a plan that included a shopping center anchored by Target, 2,000 homes, a school, parks and industrial facilities.

Another project that was supposed to be a mix of commercial and housing at Pepper Avenue and the 210 fell apart, partly because of the housing market, partly because the developers had trouble putting together a workable plan. Now the city will have to extend Pepper Avenue to the 210 itself.

The largest Rialto housing project, however, is planned for the Lytle Creek area. The market may have slowed it down and affected some specifics, but it's still moving forward, said Mike Story, Rialto's development services director.

The Lytle project should have 5,000 to 7,000 homes, schools and a small commercial center.

"We`re probably actually going to see some type of a land use plan by the end of the year," Story said.

Land on the city's south end that was supposed to be the site of more than 720 homes could become a 3-million-square foot distribution and manufacturing area, Story said.

The Oakmont Industrial Group bought the land from Young Homes even after Young had the City Council's approval for the project.

The Redevelopment Agency will continue to invest money in renovating blighted neighborhoods and expand the roughly 150-unit redevelopment project at Willow Avenue and Winchester Drive, which was one of the city's most dangerous neighborhoods.

The agency is also developing plans to bring new life to the city's downtown by bringing in more housing and business and by expanding the Metrolink parking lot.

The city also is in the early stages of developing plans to improve its own Route 66 corridor - Foothill Boulevard - by improving the street, adding landscaping, and deciding what mix of residential and commercial establishments would work well there, Story said.

In the next 20 years, Rialto will fill its open land and start moving toward denser, more urban projects, Story said. He also hopes the city can attract some of the corporate and office jobs moving to the region.

Hanson said Rialto will probably always be a bedroom community at heart.

"I don't see us becoming a great, big retail force in the area. I do see us becoming a lot more stable."

Rialto airport area project approved

Mary Bender — Wed, 17 Oct 2007 00:00:00 GMT

RIALTO - For 60 years, small aircraft have taken off and landed at Rialto Municipal Airport, but plans call for the aviation operation to move to San Bernardino International Airport and for the city to sell the property for creation of a vast residential, retail and industrial project.

The city Redevelopment Agency would sell 482 acres to the developers, who also have purchased other airport-adjacent land from private owners to create a 1,510-acre project called Renaissance Rialto.

On Tuesday night, the Rialto City Council -- Mayor Grace Vargas was absent -- approved the developer's revised master plan for building 2,118 homes and 14.7 million square feet of industrial space.

The site is bordered by Base Line, the newly opened section of Highway 210, Ayala Drive and Rialto's western edge, near Palmetto Avenue.

In earlier versions of the project developers Lewis-Hillwood Rialto LLC planned to build 3,887 homes and half as much industrial space -- 7.1 million square feet.

The developing partnership consists of Upland-based Lewis Retail Centers and Dallas-based Hillwood Development Corp. But in July, the team scaled back its conceptual master plan, approved by the Rialto Redevelopment Agency in December 2005.

City Council members generally praised the proposal, with some caveats and requests.

"I think this is going to be a great project. It's going to resuscitate and revive Rialto," Councilman Joe Baca Jr. told representatives of Lewis and Hillwood, the latter company headed by Ross Perot Jr. Hillwood also is master developer of San Bernardino's shuttered Norton Air Force Base.

But Baca also said that, as the environmental impact report is conducted and the developers create their specific plan for the project, he wanted it to include plenty of park land and open space. Rialto has much the same recreational uses as it did when he was growing up 25 years ago, he said.

Councilman Ed Scott said he wanted the city to have some say in what type of businesses would occupy the industrial portion of Renaissance Rialto.

"I'm strongly opposed to warehouses that pay $8 an hour, because those aren't good jobs for our residents. All they do is bring more trucks," he said.

The developers told city officials that they wanted to scale back the number of homes because of the ongoing slump in the housing market.

"The current and near-term condition of the residential economy made implementation of the original master plan infeasible," city Economic Development Director Robb Steel said in a written report.

The retail portions will be built close to Highway 210, and the residential neighborhoods will be constructed nearby so people can walk or bicycle to shopping, the developers said.

The developers will purchase the airport property once they complete the environmental review process and get all their approvals and development permits from the city, Steel said.

The airport property will be appraised at that time to determine its market value, which will in turn determine the selling price.

Renaissance Rialto project might get radical face-lift

Jason Pesick, Staff Writer — Thu, 20 Sep 2007 00:00:00 GMT

RIALTO - The project this city has pinned its hopes on for a better future will not only be delayed, but could also be in for a complete overhaul.

The weak housing market - August home sales in the region were 37 percent below average - has delayed the Renaissance Rialto project and could alter the character of Rialto's 210 Freeway corridor.

"We may be considering some more radical changes," said Robb Steel, the city's economic development director.

Recently, the project's developers, a partnership between the Lewis Group and Texas-based Hillwood, have considered replacing some or all of the housing in the 1,500-acre mixed-use development with industrial facilities. The commercial portion of the project would remain.

The Renaissance Rialto project, which will replace Rialto's airport and other available land along the 210 extension, is at the heart of the city's plans to improve its image and its economic base.

But the project's housing component would not be the only Rialto housing development to be scratched or altered because of the slow market. Only a few weeks ago, Young Homes sold property on Rialto's south end to an industrial developer instead of building more than 720 homes there.

The original Renaissance plans called for almost 4,000 homes. Now ideas ranging from no homes to 1,000 homes to the full 4,000 are floating around, Steel said.

A meeting Thursday night between members of the City Council's Economic Development Committee and the developers did not go well, said Councilman Ed Scott, a member of the committee.

"They presented a proposal, and I don`t like their proposal," he said, adding that he doesn't think the council would approve what he saw. "So we sent them back to the drawing board."

Lewis is still optimistic about the project, said Randall Lewis, the group's executive vice president.

"We're trying to finalize land-use recommendations, and we're trying to understand the impact of changes in the economy. We still think it's a very well-located development, and it will be an asset to the city," he said.

If the project takes on more of an industrial focus, that would almost certainly mean distribution warehouses and trucks to service them would pop up along the 210.

"I certainly don't want all industrial," said Councilwoman Winnie Hanson.

But she said she expects the number of homes in the project to be reduced and said that industrial development would make more money for the city.

"We're weighing the advantages to the city of the proposed changes," she said.

Councilman Joe Baca Jr., who was never thrilled with the old plans - he rated a May presentation about the retail zone a "C-" at best - said he doesn't want the city to be defined as strictly a bedroom community.

"But I think at the end of the day, we`re looking at what can we do to generate more revenue," he said, noting that residential development would require the city to pay more for city services, especially public safety.

He said he wants more retail in the project and said he has even been approached about the idea of locating a St. Bernardine Medical Center hospital facility in the project.

There are a number of different concepts going back and forth between Rialto and Lewis, Steel said.

"I think that they're probably going to do a lot more tweaking," Hanson said.

Hillwood Development begins construction on two new buildings in Lakeside Trade Center

Stephen Fashoro, Staff Writer — Tue, 04 Sep 2007 00:00:00 GMT

Flower Mound residents will soon notice two new buildings being built in the Lakeside Business District.Hillwood Development has begun construction on the second phase of projects which consists of creating 333,372 and 456,950 square-foot buildings. The two buildings, which will be located in the Lakeside Trade Center, are expected to be complete by December.The Lakeside Trade Center is a business park within the Lakeside Business District.Hillwood began developing in the Lakeside Trade Center in 2002.“To us, it speaks to the strength of the market. We look forward to the added economic development it will bring to the town. Hillwood has more than satisfied their incentive obligations on the first phase of this project and continues to be a tremendous development partner,” said Melissa Glasgow, director of economic development for Flower Mound. As part of its first phase, Hillwood developed three other buildings that totaled to be 1.4 million square feet. These buildings are occupied by Best Buy, Maytag and Stacy Furniture.“The previous buildings that we have built at Lakeside are being used by the occupants primarily for distribution, so it’s safe to assume that these new buildings will probably be used for distribution as well. The use of these buildings will be dependant on the customers who lease it,” said David Pelletier, director of communications for Hillwood. “Once the buildings are built, they will have a taxable value. This will bring in tax revenue to the town and it will take some of the tax burden off the residents.”Hillwood currently houses companies listed on the Fortune 500, Global 500 and Forbes List of Top Private firms.The town is currently negotiating with possible tenets, but no names could be released yet, said Glasgow.

Growth in city takes its toll

Matt Wrye, Staff Writer — Mon, 03 Sep 2007 00:00:00 GMT

SAN BERNARDINO - For a city striving to build its middle- class employment base, industrial development in northern San Bernardino is a give-and-take situation.

The sight of gigantic concrete walls being raised along the west side of the 215 Freeway is most likely just the beginning of development, bringing with it a fresh supply of jobs.

Huge distribution centers and truck fleets are popping up all over, while other land parcels are sporting "for sale" signs.

But the open space that once filled the Verdemont neighborhood of the city is slowly disappearing.

Instead of driving by a hodge-podge of properties with large front and backyards, local commuters will soon be dealing with an increase in road congestion, truck pollution, and eventual wear and tear on the streets they drive.

"We think it's an untapped resource of the city," said John Magness, senior vice president of Hillwood Investment Properties, about tracts of land north and south of University Parkway. "The benefit of that is that it's adjacent to the freeway and very close to the interchange of both the 210 and 215, and 215 and 15 (freeways)."

Cement trucks have made their towering presence known on streets adjacent to the 215 Freeway for the past few months, delivering cement to construction crews working on projects totalling more than 4.4 million square feet of new industrial space.

Within these projects, construction is well under way on two major business parks by Hillwood development company.

InterChange Business Center, just southwest of the University Parkway exits of the 215, will bring more than 2 million square feet of industrial space, with its flagship building already spoken for by Michelin tire company. The company will use its 801,581-square-foot building for distribution.

Hillwood's other project, North San Bernardino Industrial Park, is straddled by Glen Helen Parkway and Cajon Boulevard, near where the 15 and 215 freeways intersect. The park's first building is under construction - 184,641 square feet of warehouse and office space that FedEx will move into.

Another 1.4 million square feet of space is slated for construction in that industrial park next year.

San Bernardino's northern corridor is one of a few areas left in the San Bernardino Valley where land hasn't been developed or bought.

"There's just no vacant space out here right now," Magness said

Clark Neuhoff, vice president and CEO of Alere Property Group LLC, agreed.

His company is building a gargantuan 844,150-square-foot warehouse project, Industrial Parkway Distribution Center, between Cajon Boulevard and Industrial Parkway. No tenants have signed leases, but Neuhoff expects them to come on board soon after construction is finished.

"The market is extremely tight for this type of building," Neuhoff said.

He anticipates up to 500 jobs will come to the area because of that project.

McShane Corporation and other developers also have left their footprints in the northern corridor. McShane completed its 250,000-square-foot industrial and office space complex on Shenandoah Way in April.

The projects are examples of San Bernardino's effort to capture warehouse development over the past few years, which some community leaders say will help restore a city devastated by the departure of jobs from Norton Air Force Base, which closed in 1994.

Nonetheless, the area's open spaces are a boon for big-box companies.

"A company that moves in there that needs to get its goods to market, it's got several transportation options," Magness said. "These are big, brand-name companies that are going to be here for years to come."

However, the effects on infrastructure from these developments might also last for years to come.

Besides the initial clutter and damage to streets by construction debris, big rigs will eventually leave their marks on both old and resurfaced roads.

"You're going to have some real damage to road surfaces as the construction takes place," said Jim Mulvihill, professor of urban planning and economic geography at Cal State San Bernardino. "You've got dozens of trucks and heavy university traffic, and that's going to be a nightmare for transportation."

The final 210/215 freeway intersections will be finished in the next few years, and by that time, there will be possibly more industrial, retail and residential development.

"It's all a clear road to economic-development people," Mulvihill said. "But for citizens, it's more noise and congestion. You've got (more) jobs, but you've got the truck traffic."

More trucks on nearby roads isn't something residents of the Verdemont Neighborhood Association are looking forward to, said Mary Solis, president of the group.

"Most people up here are real concerned about what the increase in traffic will be," she said. "Just with Cal State San Bernardino, we already have a tremendous amount of traffic."

As far as Solis can remember, Verdemont residents have never fought industrial development.

"We just never touched it," she said. "I think it's going to happen no matter what we do."

Multifamily housing in Hillwood's plans

The Fort Worth Star-Telegram — Mon, 03 Sep 2007 00:00:00 GMT

Hillwood has built millions of square feet of warehouse and distribution space, developed acres of homes and brought such retailers as Cabela's to the Metroplex.

Now it is branching out again, into the apartment market.

Click here to read the full article.

Hillwood Develops Two Buildings Totaling 790,322 Square Feet

Wed, 29 Aug 2007 00:00:00 GMT

FLOWER MOUND, TEXAS — Hillwood is developing two speculative industrial buildings located in Lakeside Trade Center, a 137-acre development in Flower Mound. Lakeside Trade Center 4 building will consist of 333,372 square feet and Lakeside Trade Center 5 building will consist of 456,950 square feet. The properties will be located north of the intersection of Lakeside Parkway and Enterprise Drive and are scheduled for completion in 2007. Currently, three buildings totaling 1.4 million square feet are located onsite. The buildings are 100 percent occupied and tenants include Best Buy, Maytag, Stacy Furniture and Exel Logistics. Mark Miller and Adam Curran of Robert Lynn Co. will market the buildings for Hillwood.

Hillwood Adding 800,000 SF of Spec Industrial

John McCloud — Wed, 29 Aug 2007 00:00:00 GMT

FLOWER MOUND, TX-Hillwood has begun construction on the final two buildings at Lakeside Trade Center, a five-building warehouse-distribution complex on 137 acres in this rapidly growing city about 20 miles northwest of Dallas. The buildings, which are slated for completion in December, will total nearly 800,000 sf, bringing the project total to about 2.2 million sf.

“These are pure spec plays,” says David Pelletier, director of communications for the Dallas-based developer.

“The three buildings that have been built are 100% leased. The market here is very strong right now.”

The first three buildings, also developed on spec, were completed last October. Tenants include Maytag Corp., Best Buy Co. Inc. and Stacy's Furniture & Accessories, a retailer from Grapevine that maintains both a distribution center and outlet store at Lakeside. Pelletier tells GlobeSt.com that Hillwood has several prospective tenants for the upcoming space but none he can reveal.

Though Pelletier says company policy prohibits discussing building financials, according to Mark Miller, president of Dallas-based NAI/Robert Lynn Co., who is leasing the project along with Robert Lynn associate Adam Curran, the annual asking rate for the new buildings is $3.35 per sf, triple net. Of the new construction, Building 4 will have 333,372 sf, while Building 5 will have 456,950 sf.

Among the more attractive features for tenants, says Pelletier, are tax incentives the developer was able to negotiate with both the City of Flower Mound and surrounding Denton County. “They will be paying the lowest tax rate in north Texas,” he declares, adding that tenants will also benefit from what is known as “triple Freeport” tax exemption, which allows school districts, cities and counties to exempt business inventory from taxes if goods are shipped out of state within 175 days.

According to Pelletier, Hillwood now has more than five million sf of commercial space under construction in North Texas, the majority of it industrial. This includes close to two million sf at AllianceTexas, 1.3 million sf in Victory and a recently announced 550,600-sf speculative building in DeSoto. He says another one million sf is planned for completion in Q1 or Q2.

“Lakeside Trade Center has proven to be one of the top locations for distribution centers in North Texas," says Dan Tatsch, senior vice president of Hillwood Investment Properties, which is overseeing the development. "The credit goes to the town of Flower Mound, Denton County and Tarrant County for creating a tremendous business atmosphere in the development."

According to Melissa Glasgow, Flower Mound's director of economic development, Hillwood's decision to go forward with the project's final phase so quickly after completing the initial phase speaks to the strength of the local market. “We look forward to the added economic development it will bring to the town,” she says. “Hillwood has more than satisfied their incentive obligations on the first phase of this project and continues to be a tremendous development partner.”

Hillwood starts work on Flower Mound buildings

Tue, 28 Aug 2007 00:00:00 GMT

Hillwood said Tuesday it has begun construction on two buildings in Lakeside Trade Center in Flower Mound.

The 333,372-square-foot Lakeside Trade Center 4 building and the 456,950-square-foot Lakeside Trade Center 5 are expected to be completed in December.

The 137-acre Lakeside Trade Center, just north of the intersection of Lakeside Parkway and Enterprise Drive, already has three buildings totaling 1.4 million square feet. The buildings are 100-percent leased. Best Buy, Maytag, Stacy Furniture and Excel Logistics are among the nine companies housed in the development. Combined, those companies employ about 400 workers.

"Lakeside Trade Center has proven to be one of the top locations for distribution centers in North Texas," said Dan Tatsch, senior vice president of Hillwood Investment Properties, in a statement.

Hillwood starts work on 2 Flower Mound industrial buildings

Steve Brown — Tue, 28 Aug 2007 00:00:00 GMT

Developer Hillwood has begun construction on two industrial buildings in Flower Mound.

The speculative buildings contain more than 790,000 square feet and are located in the Lakeside Trade Center near Lakeside Parkway and Enterprise Drive.

Robert Lynn Co. is marketing the project, which is scheduled to open in December.

Hillwood is developing the warehouses because "Lakeside Trade Center has proven to be one of the top locations for distribution centers in North Texas," senior vice president Dan Tatsch said in a statement.

Lakeside Trade Center now has three industrial buildings with 1.4 million square feet that are fully leased to companies including Best Buy, Maytag, Stacy Furniture and Exel Logistics.

With the groundbreaking for the Flower Mound project, Hillwood said it has 5 million square feet of commercial space under construction in North Texas.

The developer is best known for its Victory project near downtown Dallas and the AllianceTexas development in North Fort Worth.

Hillwood Builds 790,000 SF of Flex Space in Dallas Suburb

Tonie Auer, Southwest Correspondent — Mon, 27 Aug 2007 00:00:00 GMT

Fueled by growth in one of the suburbs surrounding DFW International Airport, Hillwood Investment Properties has begun construction on two buildings totaling 790,000 square feet within the Lakeside Trade Center in the Dallas suburb of Flower Mound, Texas. Plans call new buildings to house flex-office and/or flex-warehouse facilities. Financials on the project were not disclosed.The 137-acre Lakeside Trade Center development currently includes three buildings totaling 1.4 million square feet that are 100 percent occupied. The development has attracted nine companies that employ approximately 400 workers. Tenants include Best Buy, Maytag, Stacy Furniture and Exel Logistics. Hillwood began developing Lakeside Trade Center in 2002.

The two new speculative buildings, which are located just north of the intersection of Lakeside Parkway and Enterprise Drive in Flower Mound, will be completed in December. Lakeside Trade Center is the first Class A industrial space for the town of Flower Mound. The town’s new industrial market is a natural progression of the robust markets of neighboring communities, Coppell and Grapevine. With the incentives provided by the town of Flower Mound and Denton County, the two new buildings at Lakeside Trade Center offer the lowest combined tax rate in North Texas, according to Hillwood information. The development also features the advantages of Triple Freeport, easy access to major highways and proximity to DFW Airport. “These buildings are a continuation of developments we’ve been working on in Flower Mound for several years now,” Dan Tatsch, senior vice president of Hillwood Investment Properties, told CPN. “When we planted our flag in Flower Mound, we did so because it is a great location just three miles north of DFW International Airport and centrally located in the Metroplex.”Tatsch said the town has viewed this project as a sensible diversification of its property tax base and offered Hillwood good incentive packages.“For Phase II of our development, you’ll see the same kinds of users that Phase I saw,” Tatsch said. “We have several proposals out, but nothing signed yet.”Lakeside Trade Center profited from 379,700 square feet of black ink as locally-based Stacy Furniture filled the recently-delivered Building 2 located at 709 Enterprise Drive, according to the second quarter Dallas/Fort Worth Industrial Market Trends newsletter published by Grubb & Ellis Co. Mark Miller and Adam Curran of Robert Lynn Company will market the buildings for Hillwood. Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes list of top private firms. In addition to Lakeside Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre logistics center near Los Angeles.

HILLWOOD BEGINS CONSTRUCTION ON TWO SPECULATIVE BUILDINGS AT LAKESIDE TRADE CENTER IN FLOWER MOUND, TEXAS

Contact: David Pelletier, Hillwood (817/224-6044, dave.pelletier@hillwood.com) — Mon, 27 Aug 2007 00:00:00 GMT

FLOWER MOUND, Texas -- Hillwood has begun construction on the 333,372 square-foot Lakeside Trade Center 4 building and the 456,950 square-foot Lakeside Trade Center 5 building in its Lakeside Trade Center development in Flower Mound, Texas. The two new speculative buildings, which are located just north of the intersection of Lakeside Parkway and Enterprise Drive, will be completed in December 2007.

Hillwood now has more than 5 million square feet of commercial space under construction in North Texas. This includes close to 2 million square feet that are under construction at Alliance, 1.3 million square feet that are under construction at Victory and the recently announced 550,600 square-foot speculative building underway in DeSoto. Hillwood has developed close to 30 million square feet of commercial space in North Texas since 1999.

With the outstanding incentives provided by the town of Flower Mound and Denton County, the two new buildings at Lakeside Trade Center offer the lowest combined tax rate in North Texas. The development also features the advantages of Triple Freeport, easy access to major highways and proximity to DFW Airport.

"Lakeside Trade Center has proven to be one of the top locations for distribution centers in North Texas," said Dan Tatsch, senior vice president of Hillwood Investment Properties. "The credit goes to the town of Flower Mound, Denton County and Tarrant County for creating a tremendous business atmosphere in the development."

Mark Miller and Adam Curran of Robert Lynn Company will market the buildings for Hillwood.

“We’re very pleased that Hillwood has initiated the second phase of their Lakeside Trade Center project in Flower Mound," said Melissa Glasgow, director of economic development for the town of Flower Mound. "To us, it speaks to the strength of the market. We look forward to the added economic development it will bring to the town. Hillwood has more than satisfied their incentive obligations on the first phase of this project and continues to be a tremendous development partner.”

The 137-acre Lakeside Trade Center development currently houses three buildings totaling 1.4 million square feet that are 100% occupied. The development has attracted nine companies that employ approximately 400 workers. Customers in the development include Best Buy, Maytag, Stacy Furniture and Exel Logistics. Hillwood began developing Lakeside Trade Center in 2002.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private Firms. In addition to Lakeside Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre logistics center near Los Angeles.

# # #

Airport authority returns to airlines option

Josh Brown — Sun, 26 Aug 2007 00:00:00 GMT

When a Texas developer presented a proposal to redevelop the former Norton Air Force Base, local officials thought they had found the key to replacing the jobs that vanished when the military shuttered the base 15 years ago.

But seven years later, the plan by Hillwood Development Corp. -- which originally called for turning San Bernardino International Airport into a multiuse cargo hub complete with railroad and air components -- has brought about 1,500 jobs to the former base, far fewer than the 10,000 that existed there when the Air Force had the property.

The airport was unable to attract any major cargo operations and the more ambitious parts of Hillwood's plan were scrapped. Now airport officials have switched gears again and are focusing on turning the former base into a passenger airport in a bid to recoup the rest of the lost jobs.

Two of the airport's most ambitious projects ever are under way -- one a $38 million renovation of the terminal building. Just a few hundred feet away, the airport plans to erect a $7 million general-aviation complex to house a franchise of Million Air Interlink, a Houston-based private-aviation services company. The projects come just two years after the airport finished a $34 million runway refurbishment.

Viability

Some critics, however, question whether officials' efforts will succeed.

For the past eight months, members of the San Bernardino International Airport Authority's board and staff have said they are in serious negotiations with airlines and an announcement is imminent. But officials decline to disclose the names of potential carriers or to discuss details of the negotiations. They now say they could reach a deal as early at the beginning of 2008.

While the prospects of passenger traffic may seem far-fetched for an airport that spent nearly a decade used for not much more than intermittent general-aviationflights, Don Rogers, the airport's interim director, said he is confident the airport can attract an airline eventually, despite critics who point to stagnant traffic growth at LA/Ontario International Airport -- only about 20 miles away.

"The question now is whether it'll be one year or five years, but carrier service will happen," he said.

"I may be putting too much emphasis on the economics of it all, but I don't think so."

Passengers or Packages?

One early vision for the airport was as traffic relief for Los Angeles International. When plans dragged and Ontario moved ahead with its upgrades, those plotting Norton's future saw their niche in packages rather than passengers.

In 2000, Hillwood, owned by the son of Texas billionaire H. Ross Perot, approached the airport with a plan to turn the airport into a major distribution and cargo hub with 10 million square feet of warehouses, a rail yard and the potential to eventually take over operation of the airport.

It was the strongest redevelopment proposal advanced since the base closed, and Hillwood had the experience to make it happen. The company had built a similar project called AllianceTexas north of Fort Worth. Officials at the time expected the San Bernardino project, called AllianceCalifornia, to generate as many as 8,000 jobs.

The plan went forward in 2002. Ontario, long the distribution and logistics center of the region, was running out of land, and airport officials hoped to take advantage of the push to build warehousing space east along the Interstate 10 corridor.

The Inland Valley Development Agency, the airport authority's sister agency, sold former base land to Hillwood, which razed old military buildings and erected numerous large warehouses, which are now occupied by Mattel, Kohl's, Pep Boys, Pactiv Corp. and Medline Industries Inc.

But there have been some hiccups. Originally, the plan called for a rail yard to be built on top of the former Palm Meadows Golf Course, but local political opposition derailed that plan.

"We've always said to make a good industrial park, you needed both the rail and air component," said John Magness, senior vice president of Hillwood. "There were a lot of issues with building the rail yard. We'd probably still be scratching our heads today trying to figure out how to do it."

Hillwood instead decided to build another few million square feet of warehousing space there and to promote use of the BNSF rail yard, which is about three miles from the airport.

In 2004, the airport was dealt another setback when it lost its chance of getting a major cargo carrier at the base. German-owned DHL had been eyeing Southern California for a hub, and airports throughout the region courted the company, hoping to get its business and the 250 jobs that would come with an operation. March Air Reserve Base near Moreno Valley won the contract.

Hillwood has built about 4.2 million square feet of warehouse space so far and is planning 2.7 million square feet more. The company expects about 2,000 more jobs to be added once the projects are finished in the next few years.

Another boon to the locale will come when Stater Bros. Markets finishes its headquarters and regional distribution center. The facility will bring 2,100 jobs to the former base from elsewhere in the region.

Change of Direction

Officials did not totally abandon the idea of using the airport for cargo, Rogers said, but they decided once again to focus on attracting passenger service because airlines have the ability to transport cargo in their planes' bellies.

With DHL at March and UPS and FedEx at LA/Ontario International, Rogers said, it was unlikely that the San Bernardino airport could attract a major cargo carrier any time soon.

"That only leaves two areas for us to focus on: general aviation and commercial (passenger) aviation," he said.

Last year, the airport hired Irvine-based architectural firm GKK Works to begin plans to renovate the terminal building, which was used for years as Norton's terminal for troop deployment.

After restoring the runway in 2005, the airport spent much of the past two years focused on airport services, including the addition of a 150,000-gallon underground fuel-storage site and updates to the control tower.

When a scheduled carrier never materialized, the airport authority decided to go ahead with the terminal renovation anyway.

San Bernardino County Supervisor Dennis Hansberger, who sits on the authority's board, said the board is taking a risk by building the terminal with its future uncertain.

"We believe that we have all the elements of a commitment of probably two airlines that will be willing to do business there," he said. "But we have to demonstrate that we are not just talking about it."

Hansberger said current negotiations may result in a deal with carriers as soon as the beginning of 2008.

"We could have sat and twiddled our thumbs and waited for a carrier to come and knock on our door, or we could go ahead build the terminal and control our own destiny," added San Bernardino Mayor Pat Morris, who serves as the airport authority's president.

Name Recognition

But as the airport moves forward, some experts question how successful it will be, while others say they have a good chance at accomplishing scheduled passenger service.

Ron Kuhlmann, an airline analyst with Unisys R2A in the Bay Area, said one of the main problems at LA/Ontario International -- one that San Bernardino International will likely share -- is poor name recognition. He said travelers from outside the region tend to think of Los Angeles International Airport first.

"Ontario has spent a lot of time trying to tell people they aren't just an alternative to LAX but a much more convenient one," he said. "The chance that someone 20 miles away is going to challenge their position is zero to nil."

New York-based airline consultant Bob Mann said launching service at untested airports is risky for airlines because there is no data for them to use in planning.

"Airlines tend to go where they can look at passenger traffic statistics," he said. "In a market where airlines are risk-averse, it just makes it that much more difficult for new cities to establish service."

Airport officials contend that if San Bernardino International can offer less-expensive accommodations to airlines -- some of which struggle to stay profitable -- they may decide to move to San Bernardino.

Alan Bender, an airline industry expert and professor at Embry-Riddle Aeronautical University, agrees. He said throughout this country and in Europe, low-cost carriers and even some higher-cost carriers are starting service to outlying airports near major metropolitan areas.

"Most experts discounted Long Beach Airport," he said. "For decades, it was never a very successful facility. But JetBlue has made it into a successful hub."

Master Tenant

Similar to Hillwood's role seven years ago, now much of the airport's fate rests on the shoulders ofone company -- SBD Aircraft Services LLC, which, because of its success elsewhere at the airport, was chosen to renovate the terminal.

Since becoming the master tenant for the airport's hangar complex in 2005, SBD has brought more than 400 aircraft maintenance jobs to the hangars, representing the only substantial job growth the airport has seen in more than a decade. Last week, the company announced that one of its tenants, Baysys West, would be expanding its aircraft interior conversion business and adding 200 workers.

In May, SBD announced that it had bought a Million Air franchise and would hire the company to run a fixed-base operation at the airport, providing fuel and services to executive charter and general aviation customers. It will be the airport's second general-aviation company. The other is Blue's Aviation.

As part of that deal, SBD is subleasing approximately 5 acres in the northwest corner of the airport, including a 32,000-square-foot hangar next to the airport's terminal on which it will build a 50,000-square-foot complex to host the aviation service.

In the past few months, work crews have gutted the inside of the terminal to prepare for renovations, and outside the building, concrete has been pulled up where a concourse will be built.

SBD manager Scot Spencer said the operation could be up and running by the early part of next year.

"Five years from now, we'll all be absolutely stunned at the level of activity here," Spencer said.

San Bernardino's base redevelopment efforts take circuitous path

Josh Brown — Sat, 25 Aug 2007 00:00:00 GMT

Two decades ago, Norton Air Force Base in San Bernardino was the center of a vibrant military community, pumping millions of dollars into the region each year through more than 10,000 jobs.

But in 1988, the base -- named for a young pilot who perished in World War II -- was slated for closure, sending the city into an economic downward spiral from which it has yet to fully recover.

"When the base closed, there was a tremendous exodus of good, stable people," said San Bernardino Mayor Pat Morris. "In their place came a lot people from the margins."

The jobless rate in the region swelled to more than 12 percent during the years after the base closure. And as military personnel left the region, many of the city's core neighborhoods emptied.

Even today, San Bernardino households within one mile of Carousel Mall -- the focal point for downtown redevelopment efforts -- have a median income of $20,480, less than half that of the Inland region as a whole.

Officials have struggled for more than a decade to revive the city and former base property from a state of economic malaise. They have had some success. In the past five years, more than 2,000 jobs have come to the base through redevelopment projects spearheaded by Hillwood Development Corp.

Next month, Stater Bros. Markets will move its headquarters from Colton to its new 162-acre distribution center and corporate office at the former base. The complex eventually will employ 2,100 workers.

However, attempts to turn San Bernardino International Airport, a major feature of the former base property, into a regional aviation hub have not been as successful. Numerous aviation businesses over the years have failed after launching operations there, and the airport has long tried fruitlessly to attract passenger and cargo flights.

Still, officials remain optimistic that they can bring flights and jobs back to the airport. Within the past year, 400 highly skilled aircraft maintenance jobs have been added at the airport's hangar complex, and the officials say more are on the way.

Morris long has called the airport the key to San Bernardino's economic recovery and the center of its next job-creation engine. Other civic leaders share his view.

"Virtually all of my lifetime in public affairs, Norton Air Force Base has been the center of economic interest for the entire region," said Rep. Jerry Lewis, R-Redlands. "At this very moment, we are right on the edges of that secondary economic explosion."

Scientists and Engineers

But Lorna Kenney, who worked at the base for 24 years, said it will be difficult to revive the "magic" of the old base.

"I don't think you can replace the 10,000 people," said Kenny, who left the base when it closed in 1994. "These were all highly skilled, highly trained technicians. It was a much higher level of skill than the box workers in these warehouses."

Along with Air Force personnel, thousands of civilian scientists and engineers worked at the base. Those well-paid jobs had a tremendous economic and social impact on the community, she said.

Jim Sikra worked as a civilian director at the Ballistic Missile Organization on the base until Norton closed.

Sikra said his family spent a lot of time at the base, shopping at the commissary, going to the movies and dining at the restaurants.

"It certainly left a void for those of us who were there," he said.

When the base closed, the majority of the workers were transferred to other Air Force bases. Some retired, and others began new careers.

Warehouses

Today, new warehouses stand beside old buildings that the military had used. Other Air Force structures were razed to make way for the 4.2 million square feet of warehouse space. Fortune 500 companies including Kohl's and Mattel as well as Pep Boys, one of the nation's top 800 companies, operate there, employing approximately 1,500 workers.

Construction is about to begin on 2.7 million square feet of warehouse space at the former Palm Meadows Golf Course, where the military officers used to play. John Magness, senior vice president of Hillwood, estimates that the project will be finished by the middle of next year and could employ at least 2,000 more workers once it is completed.

With the combination of Hillwood's projects and Stater Bros.' new distribution center, jobs on the former base site could reach more than 5,000 in the next few years.

"There are not as many jobs right now as we would have liked to have," said Don Rogers, interim director of the San Bernardino International Airport Authority and the Inland Valley Development Agency, charged with redeveloping the former base land that surrounds the airport.

"My disappointment is that we didn't bring in any manufacturing jobs," he said. "Whether another redevelopment company would have pushed for manufacturing jobs and just waited it out, I don't know. We'll probably never be able to replace all of the 10,000 jobs that were lost."

Officials are still pinning their hopes on the airport to replace more of those lost base jobs.

"The large warehousing facilities don't employ workers in the way office buildings do," Morris said.

"So the need is to have a mix. That will come, in my view, with the inauguration of the airport."

Executive Watch: Promotions

Wed, 22 Aug 2007 00:00:00 GMT

HILLWOOD INVESTMENT PROPERTIES(SAN BERNARDINO, CA) Ned Sciortino rises to vice president of development from development director. He will oversee all aspects of the firm's Inland Empire projects.

Hillwood Names Sciortino VP of Development

Fri, 17 Aug 2007 00:00:00 GMT

Hillwood Investment Properties has promoted Ned Sciortino to vice president of development. In his new role, Sciortino will oversee entitlements, design, quality control and permitting for all of the company's projects in the Inland Empire in Southern California. In his previous capacity as development director for the company, Sciortino oversaw individual projects in the Inland Empire. Sciortino joined Hillwood in October 2003.

HILLWOOD NAMES VICE PRESIDENT OF DEVELOPMENT FOR SOUTHERN CALIFORNIA PROJECTS

Contact: David Pelletier/Hillwood (817.224.6044, dave.pelletier@hillwood.com) — Thu, 16 Aug 2007 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has promoted Ned Sciortino to Vice President of Development for Hillwood Investment Properties. In his new capacity, Sciortino will oversee entitlements, design, quality control and permitting for all of the company's projects in the Inland Empire in Southern California. In his previous capacity as Development Director for Hillwood Investment Properties, Sciortino oversaw individual projects in the Inland Empire.

Recently Hillwood announced its most aggressive building program in the Inland Empire with plans to develop 12 industrial buildings totaling 5.7 million square feet by the end of 2008. Currently 10 buildings of more than 4.3 million square feet are under construction.

"Ned has been responsible for much of Hillwood's success with AllianceCalifornia, InterChange Business Park and other projects in the Inland Empire," said John Magness, senior vice president of Hillwood Investment Properties. "He has earned a great reputation in the market with our customers and the cities in which we develop. Ned makes even the toughest projects seem easy."

Sciortino joined Hillwood in October 2003. Since that time the company has developed more than 3.6 million square feet, including build-to-suits of 1.2 million square feet for Mattel and 600,240 square feet for Pep Boys, at AllianceCalifornia. He has more than 30 years of development experience, including a stint with SARES-REGIS Group prior to joining Hillwood.

Currently under construction in the Inland Empire are an 801,581 square-foot build-to-suit for Michelin, as well as five speculative buildings totaling another 1.2 million square feet at Interchange Business Park in San Bernardino. A 184,641 square-foot build-to-suit for FedEx is under construction in the 125-acre North San Bernardino Business Park, where two speculative buildings totaling 1.4 million square feet will be completed by the end of 2008. Two speculative buildings totaling 1.5 million square feet are under construction at AllianceCalifornia in San Bernardino. A 644,856 square-foot speculative building also is under construction at Hofer Ranch at Ontario Airport.

In addition Hillwood's Inland Empire projects include Vintners Grove Office Park in Ontario and Renaissance Rialto, which are both joint ventures with the Lewis Group.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since that time, 6.4 million square feet have either been built or are under construction and close to 3,000 new jobs have been created at what is now called AllianceCalifornia. The development has attracted facilities for global industry leading companies, including Kohl’s, Mattel, Stater Bros., Pactiv, Medline and Pep Boys.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Hillwood Outlines Inland Expansion

Bob Howard — Mon, 06 Aug 2007 00:00:00 GMT

SAN BERNARDINO, CA-Texas-based Hillwood plans to complete 12 new industrial buildings totaling 5.7 million sf at four different developments in the Inland Empire by the end of 2008, including new construction at its Alliance California project. After several years of acquiring property throughout the Inland Empire to complement the Alliance California project, Hillwood is under way on "its most aggressive building program yet in the region," according to John Magness, senior vice president of Hillwood Investment Properties.

In addition to Alliance California, the developments include InterChange Business Park, North San Bernardino Industrial Park and and Hofer Ranch at Ontario Airport. Ten of the buildings totaling more than 4.3 million sf are under construction, including build-to-suits with long term leases recently signed with FedEx and Michelin.

Magness comments that, with the completion of the Interstate 210 extension and increased imports from Asia arriving at the Southern California ports, now is a good time to add space in the Inland Empire. Hillwood has close to 1,000 developable acres in Southern California and is aggressively seeking other land opportunities in the area, he adds.

The new buildings planned for Alliance California are called the Gateway South Building 1 and Building 2. Building 1 will be 969,456 sf and building 2 will be 480,340 sf. Both are under construction on the south side of Central Avenue, just west of Tippecanoe Avenue in San Bernardino.

The 801,581-sf build-to-suit for Michelin is part of six buildings totaling more than two million sf that are under construction at InterChange Business Park. The other five buildings range in size from 94,108 sf to 448,108 sf. The 144-acre InterChange project is located along the west side of Interstate 215 approximately two miles north of the new interchange with Interstate 210 in San Bernardino.

Three buildings are planned for the 125-acre North San Bernardino Business Park, which is located just south of the Interstate 15/215 interchange. The 184,641-sf build-to-suit for FedEx is currently under construction, with speculative buildings of 672,958 sf and 730,000 sf slated to be built in 2008.

The 137-acre Hofer Ranch is adjacent to the south side of Ontario International Airport between the UPS and FedEx air cargo hubs. The first building, a 644,856-sfdistribution center, is under construction.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since then, the total of space either built or under construction has reached 6.4 million sf.

Work begins on trade center building

Sandra Baker — Mon, 06 Aug 2007 00:00:00 GMT

Hillwood has begun speculative construction on a 550,600-square-foot building at the 113-acre Crossroads Trade Center in DeSoto.

The building is the first of three planned for the business park, which will have 1.9 million square feet.

Click here to read the entire article.

550,600-SF Spec Project Underway

Connie Gore — Thu, 02 Aug 2007 00:00:00 GMT

DESOTO, TX-Hillwood has broken ground on a 550,600-sf cross-dock spec warehouse, the first of three boxes for the 113-acre Crossroads Trade Center business park. Based on the going rate for construction, the project stacks up as a $22.2-million undertaking.

T. Preston Herold, vice president of Hillwood Investment Properties, says a 39-acre development site has been carved from the park, which has 1,300 feet of frontage on Interstate 35's feeder road at the Interstate 20 junction. Hillwood is just the latest of the region's industrial developers to open its play this year in Dallas County's southern sector for land parked near the Union Pacific Railway's intermodal yard and the Allen Group's 6,000-acre Dallas Logistics Park. At build-out, Crossroads Trade Center will total 1.9 million sf.

"We feel good about our timing as far as when we're hitting the market," Herold tells GlobeSt.com. "We've had several really good prospects. The buildings that are up are 100% leased or close to it." He says the prospect list includes a full-building tenant and at least one for half of the structure.

Herold says Crossroads Trade Center 1's advantage over the competition is an expandable trailer parking area. The 32-foot clear-height design has 57 dedicated trailer parking positions and enough room for another 130 in addition to truck courts on the north and south sides of the warehouse. Designed by RGA Architects of Roanoke, TX, Crossroads Trade Center I also will be outfitted with 80 dock-high doors, four drive-in ramps and 500-foot depth.

Hillwood has opened the play with a $3.25 per sf net quote for rent and $3 per sf tenant-improvement allowance. The Dallas-based NAI Robert Lynn team of corporate services president Thomas Lynn and executive vice president Craig Jones are marketing Hillwood's newest project. Hillwood Construction Services will deliver the spec warehouse in the fourth quarter.

Hillwood's site is included in an application to expand the Southport Foreign Trade Zone, which is awaiting approval from the Foreign Trade Zones Board in Washington, DC. In addition, the development dirt carries a Triple Freeport equivalency and 10-year tax abatement on real property from the City of DeSoto.

Hillwood breaks ground on DeSoto industrial project

Steve Brown — Wed, 01 Aug 2007 00:00:00 GMT

Developer Hillwood said Tuesday that it has broken ground on a 550,600 square-foot industrial project in DeSoto.

The speculative warehouse building is under construction in the 113-acre Crossroads Trade Center business park, located on the west side of Interstate 35E just south of Interstate 20.

The complex when completed is planned to contain three industrial buildings with 1.9 million square feet.

"Crossroads Trade Center is one of the best locations in south Dallas County," T. Preston Herold, vice president of Hillwood Investment Properties, said in a statement.

He cited the developments accessibility to major highways, the nearby Union Pacific rail yard and pending trade zone status as making the area good for distribution centers.

Construction on the first building in Crossroads Trade Center will be completed by the end of the year. Robert Lynn Co. is leasing the project.

Hillwood has developed almost 30 million square feet of commercial space in North Texas since 1999.

Hillwood Starts Crossroads Trade Center Spec Building in Texas

Tue, 31 Jul 2007 00:00:00 GMT

Hillwood is underway on the construction of a 550,600-square-foot speculative building at its 113-acre Crossroads Trade Center business park in DeSoto, Texas, according to a company release.The development will house three buildings totaling 1.9 million square feet. Infrastructure construction and preparation for all three pad sites were completed late last year. Crossroads Trade Center is included in the application to expand the Southport Foreign-Trade Zone site of FTZ #39 that is pending approval by the Foreign-Trade Zones Board in Washington, D.C.

Hillwood begins work on DeSoto Industrial building

Tue, 31 Jul 2007 00:00:00 GMT

Hillwood said Tuesday it has begun construction on a 550,600 square-foot industrial building in DeSoto.

The building is going up inside the developer's 113-acre Crossroads Trade Center business park at Interstate 20 and Interstate 35.

The building is expected to be completed by the end of this year.

Fort Worth-based Hillwood, a Perot company, is a commercial real estate developer. It has developed more than 30 million square feet of commercial space in North Texas since 1999, including its AllianceTexas and Victory projects.

HILLWOOD TO BUILD 5.7 MILLION SQUARE FEET OF INDUSTRIAL SPACE IN INLAND EMPIRE BY END OF 2008

Contact: David Pelletier, Hillwood (817/224-6044, dave.pelletier@hillwood.com) — Tue, 31 Jul 2007 00:00:00 GMT

SAN BERNARDINO, Calif. – After several years of acquiring property throughout the Inland Empire to complement its development efforts at its AllianceCalifornia project in San Bernardino, Hillwood is underway on its most aggressive building program yet in the region.

By the end of 2008, Hillwood plans to complete a total of 12 industrial buildings totaling 5.7 million square feet in four different developments in the Inland Empire. The developments include InterChange Business Park, North San Bernardino Industrial Park and AllianceCalifornia in San Bernardino, and Hofer Ranch at Ontario Airport.

Currently 10 of those buildings totaling more than 4.3 million square feet are under construction. These include build-to-suits with long term leases recently signed with FedEx and Michelin.

"With the completion of the Interstate 210 extension and increased imports from Asia arriving at the Southern California ports, this is a perfect time to add space in the Inland Empire," said John Magness, senior vice president of Hillwood Investment Properties. "Hillwood has close to 1,000 developable acres in Southern California and is aggressively seeking other land opportunities in the area. Our biggest challenge will be finding and recruiting the talent needed as we continue to grow in the area."

Two of the new buildings are planned for AllianceCalifornia. Gateway South Building 1 will be 969,456 square feet. Gateway South Building 2 will be 480,340 square feet. Both are under construction and located on the south side of Central Avenue just west of Tippecanoe Avenue in San Bernardino.

The 801,581 square-foot build-to-suit for Michelin is part of six buildings totaling more than 2 million square feet that are under construction at InterChange Business Park. The other five buildings range in size from 94,108 square feet to 448,108 square feet. The 144-acre InterChange Business Park is located along the west side of Interstate 215 approximately 2 miles north of the new interchange with Interstate 210 in San Bernardino.

Three buildings are planned for the 125-acre North San Bernardino Business Park, which is located just south of the Interstate 15/215 interchange. The 184,641 square-foot build-to-suit for FedEx is currently under construction. Speculative buildings of 672,958 and 730,000 square feet are slated to be built in 2008.

The 137-acre Hofer Ranch is adjacent to the south side of Ontario International Airport between the UPS and FedEx air cargo hubs. The first building, a 644,856 square-foot distribution center, is under construction.

Hillwood began developing in the Inland Empire in 2000, when it was named master developer of the former Norton Air Force Base. Since that time, 6.4 million square feet have either been built or are under construction and close to 3,000 new jobs have been created at what is now called AllianceCalifornia. The development has attracted facilities for global industry leading companies, including Kohl’s, Mattel, Stater Bros., Pactiv, Medline and Pep Boys.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, and the $420-million American Airlines Center and Victory district near downtown Dallas.

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HILLWOOD BEGINS CONSTRUCTION ON 550,600 SQUARE-FOOT SPECULATIVE BUILDING AT CROSSROADS TRADE CENTER IN DESOTO, TEXAS

Contact: David Pelletier, Hillwood (817/224-6044, dave.pelletier@hillwood.com) — Tue, 31 Jul 2007 00:00:00 GMT

DESOTO, Texas -- Hillwood is underway on the construction of a 550,600 square-foot speculative building at its 113-acre Crossroads Trade Center business park in DeSoto, Texas. Located on the west side of Interstate 35E just south of Interstate 20, the 113-acre development will house three buildings totaling 1.9 million square feet. Infrastructure construction and preparation for all three pad sites were completed late last year.

"Crossroads Trade Center is one of the best locations in south Dallas County," said T. Preston Herold, vice president of Hillwood Investment Properties. "Its accesibility to major highways, the nearby UP Intermodal yard and pending general purpose FTZ status are the biggest factors that make this a great location, particularly for a distribution center."

Crossroads Trade Center is included in the application to expand the Southport Foreign-Trade Zone site of FTZ #39 that is pending approval by the Foreign-Trade Zones Board in Washington, DC.

With its location at the “crossroads” of I-20 and I-35, Crossroads Trade Center has tremendous east-west, north-south freeway access. The property also features a 10-year real-property tax abatement from the city of DeSoto and Triple Freeport equivalency from the city of DeSoto, Dallas County and the Dallas Independent School District.

The Crossroads Trade Center I speculative building is scheduled to be completed by the end of 2007. Tom Lynn and Craig Jones of the Robert Lynn Company are representing Hillwood at the property.

Including AllianceTexas and Victory, Hillwood has developed close to 30 million square feet of commercial space in North Texas since 1999. That includes more than 8 million square feet that have been developed in Dallas County.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private Firms. In addition to Crossroads Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre logistics center near Los Angeles.

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Hillwood Buys 1,200 Acres in South Dallas for Mixed-Use Project

Tonie Auer, Southwest Correspondent — Fri, 27 Jul 2007 00:00:00 GMT

Dallas-based Hillwood has acquired 1,267 acres in Waxahachie, Texas, south of Dallas, for a new residential, retail and commercial project, with construction to start in the next few years. Hillwood purchased the land for the Saddlebrook Estates development from Centurion American for an undisclosed amount. Located approximately 25 miles south of the Dallas Central Business District, the community is east of Interstate 35E and along the north side of Highway 287. The property is zoned for single-family, multi-family, duplex, retail and commercial uses.

Plans for Saddlebrook Estates include 2,900 single-family lots ranging from 6,600 square feet to 12,500 square feet. Approximately 36 acres along the Highway 287 frontage are set aside for commercial/retail development. Another 18 acres are available for multifamily use.“Statistically, over the last four or five years, Waxahachie is one of the growing emerging markets,” Brian Carlock, vice president for Hillwood Residential, told CPN today. “It’s not doing the gross numbers today that Plano or Frisco are, but we’ve seen it as an obvious submarket for South Dallas.”“Three major corridors--I-45, I-35E and 67--are growing out of South Dallas and it is an obvious route for growth on 45, plus there are not a great deal of large tracts consolidated at a reasonable enough price to do a master planned concept, which is what we do best,” Carlock (pictured) added.New homes will be priced from $150,000 to $300,000. The population of Waxahachie is expected to increase by 15 percent by 2011. Waxahachie is the county seat and the largest city in Ellis County, which is the second fastest growing large county with more than 100,000 residents in North Texas, behind only Collin County. “I think there is a market south of Dallas/Fort Worth and there is not a lot of development in terms of multifaceted planned developed there,” Dr. Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas, told CPN. “It probably makes a lot of sense. Our population is supposed to double in the next 30 years and we’ll see more growth to the south and Waxahachie is a pretty good location with major highways.”Since 1988 Hillwood has developed more than 18,000 single-family lots in more than 30 cities throughout North Texas. Communities currently under development include the Creeks of Preston Hollow in Dallas, Heritage in Fort Worth, Heartland in Kaufman County, Chisholm Ridge in Fort Worth, Liberty in Melissa, Saratoga in Fort Worth, Creekwood in Saginaw, Twin Creeks in Allen, Harmony in Red Oak, Gateway Estates in Glenn Heights and Falcon’s Lair in Mesquite. In Jackson Hole, Wyo., Hillwood also is developing Bar BC Ranch.

Freeway expansion seen as catalyst for Rialto, San Bernardino development

Massiel Ladrón De Guevara — Sun, 15 Jul 2007 00:00:00 GMT

When Interstate 210 opened in Fontana six years ago, it became an economic artery feeding development and growth into the city.

Rialto and San Bernardino officials say they hope for similar results after this summer's opening of the final stretch of freeway that will run through both communities.

Planning for development around the freeway is well under way.

Rialto is pinning its hopes on the ambitious Renaissance Rialto project, a 1,500-acre master-planned community along I-210, west of Ayala Avenue where the Rialto Municipal Airport now stands.

San Bernardino officials are hoping for mixed-use development in the area that will breathe life into the city's struggling Westside.

Three offramps will lead into Rialto at Ayala Drive, Riverside Avenue and at Pepper Avenue once Rialto extends Pepper north to I-210, said Cheryl Donahue, spokeswoman for San Bernardino Associated Governments.

"With the opening of the freeway, there is going to be an explosion of development like in Fontana and revenue is going to be coming in," Rialto Mayor Grace Vargas said.

Revenue is especially important in Rialto because a special 8 percent utility users tax approved by voters in 2003 to help sustain the city will expire in 2008.

Officials say they hope development and the sales tax revenue generated by the freeway will replace the utility tax, which represents nearly one-fourth of the city's general fund.

Councilman Joe Baca Jr. has estimated the tax revenue generated by Renaissance Rialto will fall between $2 million and $3 million per year.

Tenants Relocated

Because the project is slated on the Rialto airport's land, the remaining 127 tenants must be relocated.

The process will begin six months after approval of the project's environmental impact review, specific plan and development agreement, which is expected to occur in November, records show.

Commercial areas will include a Target, and possibly a Ross, TJ Maxx, Best Buy, Office Depot, Big 5, JoAnn Fabrics and Gold's World Gym, said Greg Stoffel, of Stoffel & Associates, at a Rialto City Council meeting in May.

The project's benefit to the city will be tremendous, said Midge Zupanic, president of the Rialto Chamber of Commerce.

"It can't open too soon," she said.

"Stores and businesses will be more willing to come to our city because they will have freeway frontage, which translates to a tremendous financial plus for us."

Councilman Ed Scott said he suspects the selling price for homes near the freeway will be in the $400,000 price range.

Mayor Vargas said she is looking forward to the increase in jobs within Rialto so residents won't have to travel out of town to work.

San Bernardino officials are excited about having a connector between the city and Los Angeles, said D'Ann Lanning, assistant to San Bernardino Mayor Pat Morris.

More Visitors Expected

"We will have more visitors and shoppers coming through the city, perhaps even people who had never heard of it before," Lanning said.

"We are excited to see what happens with economic development because of what has happened in Rancho Cucamonga and Fontana."

There are plans to bring more mixed-use development to San Bernardino, like that seen in Fontana, she said.

Housing units and shopping centers in close proximity will help attract more people to San Bernardino and encourage more shopping, Lanning said.

The opening of the freeway through Fontana catapulted the city's economy and could do the same for Rialto, San Bernardino and surrounding areas, said Fontana Mayor Mark Nuaimi.

"I think we planned well in Fontana and leveraged the 210 to the hilt, and now Rialto and San Bernardino have the opportunity to do the same thing," he said.

The first wave of success came in housing projects moving forward and an immediate increase in the sale price of homes, Nuaimi said.

The same is possible in Rialto and San Bernardino, he said.

Housing Prices Jump

The average selling price for a Fontana home before the freeway opened was between $250,000 and $275,000. The average selling price jumped to between $500,000 and $700,000, Nuaimi said.

"What that translated into was people with higher incomes came to the area, and when the average median income improved, commercial development came," he said.

The assessed value of property in Fontana was $5.5 billion in 2001.

In 2006 it jumped to $11.85 billion and was projected to hit $14 billion by 2007, Nuaimi said. Sales tax revenue from fiscal 2000-01 was $11.6 million.

The revenue for 2008-09 is projected to be $29 million, Nuaimi said.

The freeway crosses the cities of La Verne, Claremont, Upland, Rancho Cucamonga and Fontana. When Rialto and San Bernardino are added, the total stretch of roadway will be 28.2 miles, records show.

Interstate 210 is projected to carry an average of 163,000 vehicles per day, once the final 7.25 miles through Rialto and San Bernardino are completed, SANBAG records show.

The new freeway will help relieve Interstate 10 and surface streets such as Foothill Boulevard and Base Line.

More than half of the freeway's $714 million construction cost has come from a voter-approved tax, Measure I, said SANBAG spokeswoman Donahue. Additional costs were covered by federal, state and city funds, she said.

Inland economist John Husing said that anytime a freeway corridor opens, there will be a positive impact on the economy because it can operate more efficiently.

"The whole stretch of the 10 freeway that goes through Fontana, Bloomington, Colton and Rialto is a parking lot," Husing said.

Interstate 210 will relieve some pressure there and make the movement of goods more efficient, Husing said.

"The economy of the east San Bernardino Valley, including Rialto will become more efficient because of the extra transportation corridor opening up," he said.

Rialto's big chance

Jason Pesick — Thu, 21 Jun 2007 00:00:00 GMT

RIALTO - For years, the city paid a price for being hard to get to, with only one exit and entrance off the 10 Freeway.

But once the 210 Freeway is completed later this year, four new miles of freeway will run through the city.

Along with the new freeway access will come a number of new development projects that could help reshape the city's image.

"This is our one time in our community's history to map this city's future correctly," Henry Garcia, the city administrator, has said. "We only get one good shot at it."

Work on plans for the relatively vacant land along the 210 route is moving ahead at a frenzied pace in Rialto. When it opens, there will be exits at Ayala Drive, Riverside Avenue and State Street, with an exit at Pepper Avenue in the works.

The three biggest projects will be a mixed-use development still in the planning stages at Pepper, a shopping area at Riverside Avenue and the boldest - and least discreetly named - of all: Renaissance Rialto on the city's northwest end.

So what can residents expect to see built around the 210?

It will take a while to attract upscale stores and restaurants to Rialto, Greg Stoffel, a consultant with Stoffel and Associates, said at a recent City Council meeting to discuss retail opportunities in the city.

"I think it's really important that we're realistic," he said.

The 210 will not be able to singlehandedly transform the city, Garcia said.

"I see it as one of many contributing factors to our economic development," he said.

But the direct connection to Pasadena will bring in better-educated, wealthier residents.

The new residents should have twice the household income of the city's current residents, and they will have smaller families.

A number of new distribution centers, including the massive Target distribution center, are already moving to the area around the freeway.

Renaissance Rialto, much of which is being developed by a partnership of the Lewis Group and the Texas developer Hillwood, will have about 3,900 homes with 10,500 residents and will create about 4,000 jobs. The portion of the development that Lewis and Hillwood control will generate about $1.5 million in sales tax revenue a year, said Robb Steel, the city's economic development director.

The commercial area, which will be along Ayala Drive, will include a Target and three to four other large stores such as Bed, Bath and Beyond and an office supply or sporting goods store, Steel said. There will also be a couple of restaurants and a coffee shop. This commercial piece could be done by 2009.

In order to provide the businesses there with patrons during the day, city leaders have toyed with the idea of moving the Civic Center to the project.

After Renaissance is built, the 6,000-home Lytle Creek development north of Renaissance will further boost the city.

"I think that (Renaissance Rialto) combined with Lytle will reshape the image of Rialto," Garcia said.

With the housing market cool, the Lytle project is on hold while developers wait to see how things go with Renaissance, said Mike Story, the city's development services director.

Though the details of the Pepper project are still being worked out, the project at Riverside Avenue and the 210, known as the Shoppes at Creekside, will have a bank, a Tesco market, a gas station and a drive-through, Story said.

There's already a Ralphs in the area, a Starbucks should be opening by the end of this month and a Denny's or Coco's, as well as a Del Taco, should be moving in, he said.

It is Renaissance, though, part of which will replace the city's airport, that has attracted the most attention.

The project will use up some of the city's last open land.

Former Councilman Joe Sampson has called it "our last, best opportunity to make that big leap."

400,000 SQUARE-FOOT BUILD-TO-SUIT FOR LANEY & DUKE COMPLETED IN JACKSONVILLE

Contact: David Pelletier, Hillwood (817.224.6044, dave.pelletier@hillwood.com) — Tue, 05 Jun 2007 00:00:00 GMT

JACKSONVILLE, Fla. – Hillwood recently completed construction on a 400,000 square-foot build-to-suit distribution center in Jacksonville, Fla. for Laney & Duke, one of the premier logistics companies in Florida. The building is located at 12400 Presidents Court in Norfolk Southern Railroad’s Westlake Industrial Park on the Westside.

"The record activity at JAXPORT, the start of construction on the TraPac terminal and the soon-to-be established Asian service have increased the demand for industrial space and logistics services in northeast Florida," said Brian Duke, president of Laney & Duke. "With this new facility, Laney & Duke now has close to 1.5 million square feet of space, which provides us tremendous flexibility to manage the logistics needs of our current customers, to better market to potential customers and to offer sub-lease opportunities to meet the growing demand for industrial space."

Hillwood and Laney & Duke selected the site in Westlake Industrial Park because the development is strategically located as evidenced by the major facilities already located there for UPS, BJ's Wholesale Club and Southeast Toyota. The 400,000 square-foot build-to-suit also is a key addition for Laney & Duke, because it is the company's first cross-dock facility and features dock levelers to better accommodate intermodal containers.

The new build-to-suit features outstanding access to the Interstate 295 loop; to I-95, the major north-south connector on the East Coast; and to Interstate 10, the major east-west route through the southern United States. With the convergence of interstate highways, major railroads and JAXPORT, Jacksonville has become a key distribution point for Florida, the fourth most populous state in the country.

As part of the original deal, Hillwood purchased an existing 360,998 square-foot building, located at 2855 Faye Rd. in Jacksonville, from Laney & Duke, which now leases that facility.

In March at JAXPORT, construction began on a major new terminal, which is expected to open in late 2008. The terminal, which will double the port's current capacity, will be operated by TraPac, a division of Mitsui O.S.K. Lines (MOL). One of the world's leading shipping companies, MOL also has announced that it will establish the first direct from Asia to Jacksonville all-water container service.

The Army Corps of Engineers also has been given initial approval to dredge the federal channel serving JAXPORT, thus allowing it to be the first U.S. port of call for the world's largest container ships passing through the Panama Canal beginning in 2014, when the improvements to the canal are expected to be completed. Last October voters of Panama approved a $5.25 billion expansion project that, when complete, will allow the world's largest ships to traverse the waterway. Currently only ships with capacity for 4,500 TEUs (twenty-foot equivalent containers) can fit through the canal. The expansion will accommodate ships with loads of up to 12,000 TEUs.

For over 75 years Laney & Duke has been fulfilling the logistics, warehousing, and transportation needs of some of the most successful companies in the United States. As one of the premier logistics management companies in Florida, the company has worked with many Fortune 500 companies, such as Sara Lee, Proctor and Gamble, Colgate-Palmolive Company, Georgia-Pacific, Walgreen's, TJ Lipton, and Nestle Foods, as well as Tire Kingdom and all of the well known Tobacco Companies.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. Hillwood is best known for its development of the 17,000-acre AllianceTexas, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre redevelopment of the former Norton Air Force Base in San Bernardino.

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Area to get more than traffic

Jason Pesick — Mon, 14 May 2007 00:00:00 GMT

RIALTO - Within the next few months, instead of coming to an abrupt end, the Interstate 210 extension will funnel motorists into areas ripe for upscale homes and businesses.

The freeway, which was extended from Los Angeles County through Rancho Cucamonga and Fontana, has carried not only cars but economic energy through the area.

As the extension is set to be connected to Highway 30 by the end of the year, Rialto is salivating about the goodies in store. Among them are a new Target, restaurants and upscale homes.

Most of the buzz about I-210 in Rialto has focused on Renaissance Rialto, a massive retail and housing project that will replace the city's airport.

"I think that that project combined with Lytle will reshape the image of Rialto," City Administrator Henry Garcia said, referring to the Lytle Creek project, which will have even more housing than the 3,900 units planned for Renaissance.

On Tuesday night, the City Council held a workshop to discuss retail opportunities in the city, specifically in the Renaissance area.

Formal plans for the project should come to the council for a vote by the end of this year, and the commercial piece could be done in 2009, said Robb Steel, the city's economic development director.

That commercial area, which will be along Ayala Drive, will include the Target; three to four large stores like Bed, Bath and Beyond; an office supply or sporting goods store; one to two fast-food restaurants; a coffee shop; a restaurant; and a food court, he said.

The council will try to get on the same page about exactly what it wants for the retail area before going to market the city at the International Council of Shopping Centers Convention later this month in Las Vegas, Steel said.

In June, there will be a workshop to discuss plans for another large development where I-210 will meet Pepper Avenue once the city extends Pepper to the freeway by 2009, he said.

A strip mall called the Shoppes at Creekside will also be built at Riverside Avenue and I-210.

In addition to the housing and retail projects, the city already has a number of new distribution centers near I-210, including the massive Target distribution center.

The portion of the Renaissance area that the Lewis Group and Texas-based Hillwood are developing should bring in about $1.5 million in sales tax revenue a year, Steel said.

The new development should also attract residents with twice the household income and smaller families than the city's current residents, Steel said.

Rialto needs the economic shot in the arm, or the "bonanza" as Steel put it, that the I-210 corridor will provide to improve city services and help remake its image.

It has historically viewed itself as a bedroom community, but with the passage of Proposition 13 in 1978, it became more important to bring in retail, Steel said.

The city has less than a mile of frontage along Interstate 10, and the land it does have is taken up by trains and habitat for the Delhi Sands flower-loving fly - not the most lucrative uses - Steel said.

All these factors and the completion of I-210 make the next few months a critical time for Rialto.

"This is our one time in our community's history to map this city's future correctly," Garcia said. "We only get one good shot at it."

In Fontana, the freeway has brought in new residents and new businesses, including an auto mall, a Costco, restaurants, a Home Depot, a Lowe's and hotels that are on the way.

"It yielded for us a Miracle Mile," said Fontana Mayor Mark Nuaimi, talking about the stretch of the freeway from Citrus Avenue to Sierra Avenue.

"Certainly the demographics are different in the north end," said Ken Galasso, the chairman of the Fontana Chamber of Commerce and a planning commissioner.

The freeway was finished while the housing market was in great shape, which only increased the impact for the city, he said.

"Looking back, I can't separate them."

Although the housing market has slowed, temporarily halting the Lytle Creek project in Rialto, the commercial market still needs to catch up with all the new residents in the area, Steel said.

Despite the experience to the west, the I-210 extension might not have the same impact on Rialto.

Cities such as Rancho Cucamonga are newer with more open land than older places such as Rialto and San Bernardino, said regional economist John Husing.

I-210 is also not the busy thoroughfare I-10 is, Steel said.

The impact will not be "grandiose," Garcia said.

"I see it as one of many contributing factors to our economic development," he said.

The extension will also affect the communities to the east of Rialto, Husing said. Because State Street will have an off-ramp, Muscoy is in line for some major changes, he said.

Cities east of San Bernardino will see an even greater impact than San Bernardino and Rialto, he said, because there is more open space in those communities.

Rialto officials have hopes for master-planned community

Massiel Ladrón De Guevara — Wed, 09 May 2007 00:00:00 GMT

More housing developments coupled with higher education and income levels are the key elements to making an ambitious 1,500-acre master-planned community along Interstate 210 in Rialto a success, officials said.

Although the city is lacking those elements right now, new development such as the Renaissance Rialto project will help change that, Greg Stoffel, of Stoffel & Associates, said Tuesday during a Rialto City Council meeting geared to identify retail opportunities for the Renaissance Rialto project and other areas in the city.

The Renaissance Rialto project is expected to be built on Rialto Municipal Airport property along I-210, west of Ayala Avenue. The land would be divided among residential, industrial, commercial and public uses.

"We have a challenge ahead of us in terms of talking big retailers to come here because of the income and education level that they are going to look for," Stoffel said.

"That is why we need to keep talking about the amount of growth that is going to take place here over time."

Rialto has a population of 205,618. The number of residents with a bachelor's degree or higher is 8,320, Stoffel said.

Once new homes are built, people with higher incomes and education levels will be drawn to Rialto, which in turn will help draw large retail stores and higher-end restaurants, Stoffel said.

New housing projects such as the 8,000-home Lytle Creek project in the city's extreme northern edge also will help attract retail, Stoffel said.

Rialto may have to start off with courting lower-end restaurants and wait for the Renaissance Rialto project to really take off, he said.

The developer of Renaissance Rialto, Lewis-Hillwood LLC, is looking to make Target the anchor tenant for the project.

Jeff Moore with Lewis-Hillwood LLC said Target is a good tenant because it can draw customers from low- and high-income levels.

Because Target is able to attract people with high incomes, it is very possible for high-end stores to follow.

The Irvine Spectrum Center in Irvine, where there is a Nordstrom and Target is a good example, he said.

Other possibilities for the Renaissance Rialto Marketplace include Ross, TJ Maxx, Best Buy, Office Depot, Big 5 JoAnn Fabrics and Gold's World Gym, Stoffel said.

Once the freeway is opened, other opportunities may include Sam's Club, Marshall's Cost Plus World Market and Bed, Bath & Beyond, he said. Restaurants may include Applebee's, Red Robin and Coco's.

Mayor Grace Vargas said she is excited with all the possibilities for Rialto.

"Just hearing all these restaurants that may be here is great news for our residents," Vargas said. "I'm looking forward to the projects that are before us."

Rialto getting ready for its renaissance

Fri, 06 Apr 2007 00:00:00 GMT

Everyone looks to benefit from a deal to pave the way for major economic development in Rialto - from the city to the developer, to even another municipality.

All appear to be ready to cash in on Rialto's closing its airport, allowing the city to take advantage of the economic renaissance expected from using the site for a far more profitable, massive multiuse project, a la Renaissance Rialto.

Tens of millions of dollars are at stake, and we only hope the arrangement wasn't hammered out so quickly that someone ends up getting cheated of their rightful share of the pie.

Federal legislation allowing Rialto to close its underused airport requires the city to pay 45 percent of its value to San Bernardino International Airport. But determining the value of its airport has led to perhaps the biggest bone of contention for Rialto.

Rialto officials initially thought Rialto Municipal Airport was worth $66 million. But after negotiations with San Bernardino airport officials, all agreed it was worth $120 million, minus $10 million for development costs.

The new figure leaves Rialto paying SBIA $49.5 million, or nearly double what it would have paid using its original numbers. The discrepancy in values bears some explanation to a doubting public.

In the meantime, Rialto will be able to split the difference with the developer, Lewis-Hillwood Rialto LLC, in an uncommon sharing of the costs. Lewis-Hillwood is a partnership between the Lewis Group of Cos. and Texas-based Hillwood.

To top it off, Rialto has been guaranteed it will walk away with at least $26 million for its sale of the airport to Lewis-Hillwood.

It looks to be a win-win situation for all concerned.

Judging from how fast this all went down, however, we can only hope it doesn't turn out to be too good to be true. And that corners weren't cut in the rush to seal the deal, leaving some to rue the details later.

Rialto council approves payment to San Bernardino airport

Massiel Ladrón De Guevara — Wed, 04 Apr 2007 00:00:00 GMT

To clear the way for an ambitious new development and satisfy federal government regulations, the Rialto City Council on Tuesday approved an agreement to pay $49.5 million to San Bernardino International Airport.

The payment was required so the federal government would allow closure of Rialto Municipal Airport, where city officials plan to build Renaissance Rialto, a 1,500-acre development along Interstate 210 divided among residential, industrial, commercial and public uses. The development will bring millions of dollars in revenue to the city, said Robb Steel, the city's economic development director.

The payment to San Bernardino International Airport will come from the $120 million the city expects to receive through the sale of Rialto Municipal Airport.

"Before we embarked on this path, the airport was operating with $200,000 in the red, which cost the city's general fund a significant amount to keep it going," Steel said. "With what the airport can be replaced with will generate substantial revenue for the city."

Legislation authorizing the closure of the Rialto Municipal Airport was approved by the federal government in August 2005. The city, Federal Aviation Administration and San Bernardino International Airport Authority have been negotiating the terms of the closure.

The legislation requires 45 percent of the fair market value of the Rialto airport property be paid to the San Bernardino International Airport, records show.

But $10 million of the net payment given to San Bernardino International Airport will be used to fund specific hangers and improvements related to displaced long-term aviation leaseholders from the Rialto Municipal Airport, Steel said. Of that amount, up to $400,000 may be used to subsidize lease rates for hanger tenants for a period of two years after relocation, the agreement reads.

Rents at Rialto Municipal Airport are below market value in most cases because of a rent freeze that was approved during discussions to close the airport, Steel said. Under the agreement, tenants that relocate to San Bernardino will be able to continue paying low rents for two years.

Forty hangers will be developed to accommodate displaced Rialto aircraft owners, according to the agreement.

For tenants who want to relocate to the airport in San Bernardino, there are about 18 to 20 acres available for facilities to be built, Mike Burrows, assistant director of the San Bernardino International Airport Authority has said. The goal is to have the facilities ready for tenants in about a year, he has said.

Burrows could not be reached for comment Tuesday.

The next step is for the San Bernardino International Airport board to ratify the agreement, Steel said.

Councilman Joe Baca Jr. said the real value of the Rialto Municipal Airport property is going to come from future revenue that the Renaissance Rialto project will bring.

"We are projecting anywhere from $2 million to $3 million per year in revenue once the project is completely built out," Baca said.

The time frame on when Renaissance Rialto is built out depends on progress, negotiations and construction schedules, he said.

"We are talking perhaps 10 years, but who knows, it may be sooner, it may be later," he said.

Rialto OKs payment to airport

Jason Pesick — Wed, 04 Apr 2007 00:00:00 GMT

RIALTO - The City Council on Tuesday night approved an agreement that will provide San Bernardino International Airport with $49.5 million.

The agreement is necessary to allow Rialto to close its airport and replace it with a massive mixed-use development along the Interstate 210 extension.

"It'll be put to a much better use," Robb Steel, the city's economic-development director, said after the council had voted.

On Monday, Steel said that although the item would remain on the council's agenda, City Administrator Henry Garcia wanted to delay the council vote because at least one council member asked for more information.

However, after meeting in closed session Tuesday afternoon, Steel said the council's concerns were addressed.

Federal legislation allowing Rialto to close the airport required the city to pay 45 percent of the value of its airport to SBIA.

Rialto officials agreed after negotiations with SBIA officials that the airport was worth $120 million. To determine the $49.5 million payment, $10 million of the value was deducted to account for development costs.

The city initially thought the airport was worth $66 million. The difference between that and the value agreed upon means that Rialto will have to pay SBIA about twice as much as it originally intended. That difference will be split by Rialto and the developer of the project, Lewis-Hillwood Rialto LLC, Steel said. Lewis-Hillwood is a partnership between the Lewis Group of Companies and Texas-based developer Hillwood.

After Rialto closes its airport, many of the airport tenants will move to SBIA. The city is guaranteed to gain $26 million from the sale to the developer, even after paying SBIA and helping Lewis-Hillwood prepare the Rialto airport property for development.

Even though Rialto is guaranteed $26 million from Lewis-Hillwood, Steel stressed the developer could end up spending $120 million after helping to pay SBIA, preparing the Rialto property for development and after paying Rialto for the property itself.

Stylecraft Taps 251,053 SF in Hillwood Park

Amy Wolff Sorter — Wed, 28 Mar 2007 00:00:00 GMT

SOUTHAVEN, MS-Stylecraft Home Collection is expanding its presence by leasing 251,053 sf in DeSoto Trade Center building 3, one of two spec structures that delivered last year. The tenant will move in on or around May 1 from a headquarters location in Hernando.

According to T. Preston Herold, vice president for Fort Worth-based Hillwood Investment Properties, Stylecraft wanted to relocate to a state-of-the-art, clear-height building, which prompted the long-term lease for the 552,106-sf spec at 4325 Executive Dr. He says other tenants are looking at the remaining space, but no letters of intent or contracts have been signed.

Preston tells GlobeSt.com that the asking rate is $2.95 per sf, triple net, with $3 per sf in tenant-improvement allowance. "They had a few more in TIs than the normal tenant would," he says about the Stylecraft deal.

The 675-acre DeSoto Trade Center is located along Interstate 55 between Church and Star Landing roads. Herold says the office and industrial development at full build-out could have as much as 11 million sf. To date, more than three million sf of spec and build-to-suit space have come out, with 400 acres still left to develop. In addition to the balance of building 3, there is 260,000 sf open in the 301,053-sf building 4, also built last year along with a 865,120-sf build-to-suit for Switzerland-based logistics firm, Kuehne + Nagel.

Herold says dirt work has started on two sites for more spec space. "One will be large enough for 1.3 million sf and the other will be for a 330,000-sf building," he adds. "Once we get closer to leasing up buildings 3 and 4, we'll go vertical on those."

Herold worked with Dan Wilkinson of Colliers Wilkinson Snowden in Memphis and Richard Burnette of the Burnette Co. in Hernando. The tenant had CFO Dan Shear bargaining its terms.

Southaven to get decor maker

Amos Maki — Wed, 28 Mar 2007 00:00:00 GMT

Stylecraft Home Collection, a leading provider of lamps and other home accessories, will locate its headquarters at Hillwood's DeSoto Trade Center in Southaven.

The company has leased 251,053 square feet in DeSoto Trade Center Building 3, the new 552,106-square-foot building from Hillwood.

Hernando-based Stylecraft, founded in 1968, will employ 200 workers in the new facility, which also will serve as the company's distribution center.

"Stylecraft is preparing for expansion," said Stylecraft president Charlie McCaffrey.

Stylecraft imports home decor items and then assembles them in Mississippi, which made DeSoto Trade Center's status as a Foreign Trade Zone appealing.

Certain types of merchandise can be imported into an FTZ without going through formal U.S. Customs procedures or paying import duties.

Customs duties and excise taxes are due only at the time of transfer from the FTZ for U.S. consumption. If the merchandise never enters the U.S. market, then no duties or taxes are paid on those items.

"The foreign trade zone was critical to them," said Dan Wilkinson, chairman of Colliers, Wilkinson & Snowden, who represented Hillwood.

Richard Burnette of The Burnette Co. and T. Preston Herold, vice president of Hillwood Investment Properties, also represented Hillwood in the deal.

The Stylecraft facility is one of three buildings recently completed by Hillwood in DeSoto Trade Center, located on the west side of Interstate 55 between Church Road and Star Landing Road.

Stylecraft's announcement is the latest sign of DeSoto County's growing strength as a distribution market.

Almost 2 million square feet of a key product -- bulk Class A space -- was absorbed last year in DeSoto County, compared with 500,000 square feet in Southeast Memphis, the third time in four years that DeSoto outpaced the Southeast submarket for bulk Class A space, according to Memphis-based Commercial Advisors LLC.

About 2.4 million square feet of industrial space is under construction in DeSoto County, while Southeast Memphis is expected to see only 500,000 square feet completed this year.

Stylecraft is the second major announced industrial lease signing of the year.

Earlier this month, Ohio-based Terminal Warehouse, a third-party provider of storage and distribution services, signed a lease for 316,000 square feet at Shelby Air Park at Malone and Shelby Drive in Southeast Memphis.

"There is a lot of activity and interest," said Wilkinson. "It's just been hard to get people to make decisions."

-- Amos Maki: 529-2351

Stylecraft Home Collection

What: A leading provider of lamps, wall decor and home accessories

Where: The company will locate its headquarters at Hillwood's DeSoto Trade Center in Southaven

President: Charlie McCaffrey

Stylecraft inks distribution lease in DeSoto Trade Center

Tue, 27 Mar 2007 00:00:00 GMT

Stylecraft Home Collection has leased 251,052 square feet for its new headquarters in Building 3 of Hillwood's DeSoto Trade Center development in Southaven.

Stylecraft, a provider of lamps, wall decor, accent furniture and home accessories, will employ 200 workers in the new distribution center.

The lease occupies almost half of the new 552,106-square-foot Hillwood Building 3.

Hillwood completed the speculative 301,053-square-foot Building 4 and the 865,120-square-foot build-to-suit for Kuehne and Nagel in 2006.

Dan Wilkinson of Colliers Wilkinson & Snowden, Richard Burnette of the Burnette Company and T. Preston Herold of Hillwood represented Hillwood on the deal.

Stylecraft was represented in-house by its chief financial officer Dan Shear.

"Stylecraft is preparing for expansion," said Charlie McCaffrey, president of Stylecraft Home Collection, in a statement. "The new DeSoto Trade Center location provides us with the space to grow, as well as easy access to our major transportation modes and a low-cost operating environment."

In total, Dallas-based Hillwood has developed six buildings and more than 4.1 million square feet at DeSoto Trade Center over four years.

450 acres of the industrial park remain available for additional development.

"A locally based industry leading company, Stylecraft Home Collection is a great addition to the development," said T. Preston Herold, vice president of Hillwood, in a statement. "Of the 1.7 million square feet that were completed at DeSoto Trade Center last year, more than 500,000 square feet of cross-dock or front-dock space is available for immediate occupancy."

DeSoto Trade Center, located in Foreign Trade Zone #262, is on the west side of Interstate 55 between Church Road and Star Landing Road.

STYLECRAFT HOME COLLECTION TO OPEN HEADQUARTERS AT HILLWOOD'S DESOTO TRADE CENTER DEVELOPMENT

Contact: David Pelletier, Hillwood (817.224.6044 / dave.pelletier@hillwood.com) — Tue, 27 Mar 2007 00:00:00 GMT

SOUTHAVEN, Miss. – Stylecraft Home Collection, a leading provider of lamps, wall décor, accent furniture and home accessories, will locate its headquarters at Hillwood's DeSoto Trade Center development in Southaven, Mississippi. The company has leased 251,053 square feet in DeSoto Trade Center, Building 3, the new 552,106 square-foot building, from Hillwood.

Stylecraft will employ 200 workers in the new facility, which also will serve as the company's distribution center.

"Stylecraft is preparing for expansion," said Charlie McCaffrey, president of Stylecraft Home Collection. "The new DeSoto Trade Center location provides us with the space to grow, as well as easy access to our major transportation modes and a low-cost operating environment.

Located at 4325 Executive Drive, DeSoto Trade Center, Building 3 is one of three buildings that have recently been completed by Hillwood in the development. The 301,053 square-foot DeSoto Trade Center, Building 4, a speculative building, and the 865,120 square-foot build-to-suit for Kuehne + Nagel also were built in 2006.

"A locally based industry leading company, Stylecraft Home Collection is a great addition to the development," said T. Preston Herold, vice president of Hillwood Investment Properties. "Of the 1.7 million square feet that were completed at DeSoto Trade Center last year, more than 500,000 square feet of cross-dock or front-load space is available for immediate occupancy."

Representing Hillwood were Dan Wilkinson of Colliers Wilkinson Snowden, Richard Burnette of The Burnette Company and T. Preston Herold of Hillwood. Stylecraft Home Collection was represented in-house by Dan Shear, Chief Financial Officer.

In four years Hillwood has developed six buildings totaling more than 4.1 million square feet at DeSoto Trade Center. Including those with Stylecraft Home Collection, approximately 900 jobs have been created in the development. There are approximately 450 acres remaining and available for additional industrial development. The 668-acre DeSoto Trade Center has the capacity for 16 buildings totaling more than 11 million square feet.

Located on the west side of Interstate 55 between Church Road and Star Landing Road, DeSoto Trade Center provides outstanding access to Interstates 55 and 40; is within 10 miles of the FedEx hub and the UPS center at Memphis International Airport; and is close to the Memphis rail yards. As the largest suburban area of Memphis, DeSoto County also offers a large labor base. The development also presents low operating costs due to its location in Foreign Trade Zone #262, the low cost of real estate in the area, as well as aggressive incentives and streamlined approval processes offered by the city of Southaven, DeSoto County and the State of Mississippi.

Founded in 1968, Stylecraft Home Collection designs, manufactures and markets high-quality, fashionable home décor. The company has the broadest product offering in the mid-priced portable lamp segment and differentiates itself with its unique ability to deliver attractive fashions at modest price points. Stylecraft Home Collection products are distributed to all major retail channels, including independent retail stores, specialty home décor retailers, mass merchants, home centers and department stores.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 85 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to DeSoto Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of Dallas/Fort Worth Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre logistics center near Los Angeles.

# # #

Desert BNSF yard would mean more jobs

Leonor Vivanco and Andrew Silva — Wed, 21 Mar 2007 00:00:00 GMT

Location, location, location.

Major freeways coupled with close proximity to airports has solidified the Inland Empire's position of being a jobs hub mainly for the logistics sector.

And the outlook to continue that trend is good given the recent news that an intermodal facility may be on its way to the former George Air Force Base in Victorville and ongoing development of the former Norton Air Force Base in San Bernardino.

"Our geography is our destiny. It's through here major railroads flow. It's through here major highways connect to the markets of the East," said Bill Carney, president and CEO of the Inland Empire Economic Partnership. "We'll just see more of it moving farther out into the High Desert, Victorville and Barstow."

Land available at a less expensive price along with a work force pushed inland from coastal areas due to rising home prices make the Inland Empire attractive for companies.

The logistics industry - which deals with the shipping of goods - provides a replacement for the blue-collar jobs lost in recent decades with the closure of air bases and the virtual disappearance of manufacturing.

Not only is the industrial market growing but office space and commercial real estate is strong in the region, said Karin Weddig Durant, vice president of economic development for the Inland Empire Economic Partnership.

Businesses are following the rooftops and their clients, she said. The region boasts the second-lowest vacancy rate in the nation in office space and is the national leader in construction activity in the industrial market, she said.

International trade in the Inland Empire was a $17.5billion industry in 2005, she said.

The economy remains strong and the potential tremendous because of the expected continued growth of international trade through the twin ports of Long Beach and Los Angeles, Carney said.

New jobs for Victorville

The proposed rail yard could make the High Desert a major draw for the warehousing, trucking and shipping businesses that have mainly been sprouting in places such as San Bernardino, Rialto, Fontana and Mira Loma.

Victorville agreed with BNSF Railway in January to explore building an intermodal facility on about 300 acres on the eastern side of Southern California Logistics Airport, formerly George Air Force Base.

An intermodal yard is where big shipping containers are moved from trains to trucks.

Despite success so far in luring businesses to the former fighter base, lack of an intermodal yard has caused the airport to lose some businesses that had considered moving there, said Jon Roberts, Victorville city manager.

Once a formal deal is drafted with BNSF, the yard could be open by 2009 or 2010, officials said.

Full development of the logistics airport could eventually generate 20,000 well-paying jobs, officials estimate.

Stirling Enterprises is the private developer working with Victorville to develop the 3,500-acre airport area.

The proposed yard itself won't provide that many jobs, but that's not as important as what it will mean in the bigger picture.

"It will make it possible for logistics companies to start moving up there in significant numbers," said John Husing, a Redlands-based economist who specializes in the Inland Empire. "There was a reluctance for logistics firms to go up the Cajon Pass."

A hub for shipping

The explosion in international trade is driving the growth of shipping, known as logistics, and the Inland Empire is literally at the crossroads of goods moving to the rest of the country.

BNSF officials said they envision the proposed Victorville yard as handling mostly domestic trade, but expansion is needed throughout the entire shipping industry.

The railroad's intermodal yard in San Bernardino is at or near capacity after a nearly 40percent increase since 2001.

In 2001 the yard did 410,000 "lifts," which is moving one container from a train to a truck or vice versa. In 2006, the yard did 569,000 lifts.

And the ports of Long Beach and Los Angeles, which already handle 40percent of the nation's imports, have seen container traffic grow by 50percent in the same five-year period.

"Looking at 10 to 20 years down the line, you look at inland intermodal facilities as an important link," said John Pope, spokesman for the Port of Long Beach.

This comes as San Bernardino International Airport, formerly Norton Air Force Base, continues its redevelopment, focusing on big distribution centers, and March Air Reserve Base near Riverside moves toward becoming an inland port.

"This is a great time to be in San Bernardino. The economy has never been better," said John Magness, senior vice president of Hillwood Investment Properties.

Hillwood is developing AllianceCalifornia, a 2,000-acre trade and logistics center, in and around the former Norton Air Force Base in San Bernardino.

Although the housing market has slowed, homes are still being sold, just not as rapidly. Retail sales are up, the consumer price index is steady, and there's a low unemployment rate of 4.5 percent, Magness said.

Since conversion of the air base started in 2002, Kohl's, Mattel, Pep Boys, Medline and Pactiv have created 1,500 new jobs plus 500 more in construction jobs. With the addition of Stater Bros. Markets and roughly 300 acres left to develop, that only means one thing: more jobs to come.

"In San Bernardino, we're in the largest peacetime construction effort the city has ever seen," Magness said.

"You have an aggressive city that wants new jobs. You have San Bernardino at the crossroads of the logistics industry with freeway and rail and air crossing through this area and a very robust labor force here."

Local projects

The following are projects that local officials hope will boost economic development in the region:

"Looks can be a little bit deceiving."

That's what San Bernardino Associated Governments spokeswoman Cheryl Donahue said when asked about the progress on the Interstate 210 extension.

It may look almost ready, but there's still a lot to be done, including electrical work, lighting, signage and painting, she said, adding that Caltrans might spend a couple months giving its approval to open the freeway.

Next week, paving will begin between Pepper Avenue and State Street, Donahue said.

There's still no opening date set, but it will be done by the end of the year, she said.

The new east-west route will not only help relieve congestion on Interstate 10 and on local surface streets, but it will feed economic growth in Rialto and San Bernardino, Donahue said.

Commercial growth continues to transform the "doughnut hole," the increasingly developed pocket of county land in northwest Redlands.

There's no more space for newcomers at the largest shopping center, Citrus Plaza. City of Industry-based developer Majestic Realty Co. announced in January that the last parcel of land at the 530,000-square-foot shopping center had been leased and is set to become the site of a new gas station and car wash.

But Majestic Realty's not done with the doughnut hole. The firm is advertising space at the Mountain Grove at Citrus Plaza shopping center, which the company plans to build north of the Citrus Plaza center.

Redlands-based House Land Development Co. also has a hand in developing the doughnut hole. That company is behind the Palm Grove shopping center, which is under construction just west of Citrus Plaza, on the other side of Alabama Street.

Developer Charles House said the 252,000-square-foot Palm Grove center will be completed by the end of the year. One highlight, he said, is a 65,000-square-foot building that will combine Toys `R' Us, Babies `R' Us and Kids `R' Us stores under one roof.

House said that the groundbreaking for that component of the shopping center is scheduled to happen today.

San Bernardino International Airport: The former Norton Air Force Base now is home to manufacturing companies Video King Gaming Systems Inc. and Magneto-Inductive Systems Limited (USA), employing over 100 people.

Hillwood Investment Properties is developing AllianceCalifornia, a 2,000-acre trade and logistics center in and around the former base. There are 4.5 million square feet of new buildings there that house Kohl's, Mattel, Pep Boys, Medline and Pactiv, creating 1,500 new jobs plus an additional 500 construction jobs.

More jobs will be created once Stater Bros. opens its headquarters and 300 remaining acres are developed.

Michelin to be first tenant in San Bernardino's InterChange project

Josh Brown — Sun, 11 Mar 2007 00:00:00 GMT

Michelin North America said it will open in about a year its third Inland region distribution center, bringing an estimated 200 jobs to San Bernardino.

The Greenville, S.C.-based tire company in January signed a 10-year lease for an 801,000-square-foot building owned by Hillwood, the Ross Perot-owned company that's also charged with redeveloping the former Norton Air Force Base.

The warehouse is part of a 144-acre redevelopment project at the site of the former Culligan water treatment plant in northern San Bernardino near Cal State San Bernardino.

Hillwood bought the land, once used as a military munitions site, in 2004 for $5.8 million. The company has spent the past two years dismantling the former Culligan buildings and making sure there were no live munitions still buried there, said John Magness, Hillwood's senior vice president.

Michelin is the first tenant at the site, named the InterChange Business Center, which is bounded by Interstate 215, University Parkway and Cajon Boulevard. Hillwood is constructing 11 buildings at the site that will have approximately 2 million square feet of warehouse space and employ an estimated 1,000 workers.

Michelin North America, the U.S. subsidiary of the French tire manufacturer, employs 22,300 and operates 19 factories in 17 locations throughout the continent. The company, which has 10 tire distribution centers in the United States, also has warehouses in Redlands and Ontario, said Lynn Mann, a Michelin spokeswoman.

Mann said the new San Bernardino warehouse will distribute the company's popular vehicle tires. She said the warehouse would open in about a year but said she wasn't sure how many it would employ. Hillwood estimated the warehouse would employ more than 200.

"The project certainly opens up that area for more development," said Emil Marzullo, economic development adviser for the city of San Bernardino. "It's basically been underutilized property for 60 years."

The Hillwood business center is adjacent to rail line. To help alleviate any congestion, the city is building an overpass to allow traffic to move freely above the railroad.

"If you're a logistics company, you don't want to just sit there for 20 minutes while a train passes," Marzullo said.

Jim Morris, chief of staff for San Bernardino Mayor Pat Morris, said the InterChange center will bring important jobs to the city.

"While warehousing doesn't add the best aesthetics for the community, with the right landscaping it could be a nice entrance corridor to the city," he said.

Hillwood is building two other large warehouses in San Bernardino on Central Avenue near Tippecanoe Avenue. The buildings will have a combined 1.4 million square feet. No tenants have been announced for that location.

Stacy Furniture to open new distribution center

Andrea Jares — Fri, 09 Mar 2007 00:00:00 GMT

Stacy Furniture is opening a 379,700-square-foot distribution center in Flower Mound that will include an outlet store.

Click here to read the full article.

Stacy Furniture Boxes 379,700-SF Expansion

Connie Gore — Thu, 08 Mar 2007 00:00:00 GMT

FLOWER MOUND, TX-After a yearlong search, a leading regional retailer has packaged a long-term lease with an option to buy the 379,700-sf Lakeside Trade Center 2. The deal is the firing pin for the furniture icon's expansion and Hillwood to add more spec space to the park.

If all goes according to plan, Rick Stacy, founder of Stacy Furniture, says he will be holding the deed to the 21-acre asset before the year ends. For now, the plan is to start moving in early May to 709 Enterprise Dr., shifting inventory from four local warehouses while continuing to ship orders to customers. Stacy says the move will take about three months to complete. At the end of the day, he'll have a 30,000-sf retail outlet and all distribution space under one roof with room to grow in the building's balance.

"We've grown so much that we couldn't grow any more till we had more warehouse space," Stacy tells GlobeSt.com. And, he's definitely on the hunt for more store locations in the metroplex. Stacy Furniture's main store, headquarters and three warehouses are situated in nearby Grapevine. The retailer also has a store in Allen and an affiliate, Dorian's Interior Designs, in Fort Worth, which is the only leased site.

Stacy says his original warehouse, about 85,000 sf at 280 Commerce St. in Southlake, is under contract. He's still weighing what to hold and what to fold from his existing stack of warehouse deeds, totaling roughly 140,000 sf. Stacy started in the business in the 1970s as a wholesaler and entered the retail arena in 1989, first in Southlake.

Stacy says the search for a new distribution center was triggered by an upcoming five-year road project in front of his Grapevine complex. "I thought it would be smart to get all my trucks out of Grapevine," he says, citing daily deliveries of 500 to 600 pieces of furniture as the cause for concern.

Owning the real estate was a primary consideration as was a location within the coverage area for his familiar prime-time TV ads--the main driver in his hunt for more store sites. With the extra warehouse room coming on line, he's already looking in Southwest Fort Worth, South Arlington, Rockwall, Granbury, Weatherford, Denton and the Colony.

Stacy says Lakeside Trade Center 2's central location in his sales territory helped to narrow the options. Its front-row seat along FM 2499 at the front door of the Hillwood park added leverage. But, it was Hillwood's decision to sell the building that was the dealmaker.

Stacy's broker, Steve Shrum with Glacier Commercial Realty in Dallas, inquired about the building in October 2006, shortly before it delivered. "We spent the most amount of time trying to figure out if we would sell the building or not," says Dan Tatsch, senior vice president of Hillwood Investment Properties. "The people at Stacy's made it clear they wanted to own or at least have the option to own." Once that was settled, it only took a few months to get the deal done. Hillwood's team included NAI Robert Lynn president and principal Mark Miller and associate Adam Curran in Dallas.

"I don't think having separate ownership of that building hurts the other buildings," Tatsch says. Besides, there are covenants in place in the event of a future sale.

With 1.4 million sf in three Lakeside buildings now filled, Tatsch says it's time for Hillwood to build more. Dirt work began yesterday; it will take two months to complete.

For the next month, the team will be weighing whether to add one spec warehouse or two to build out the park's 62-acre balance. The drawing board is holding a front-load 333,372-sf Lakeside Trade Center 4 and cross-dock 456,950-sf Lakeside Trade Center 5. Tatsch says the goal is to have more spec on the ground in October or November, with preliminary quotes of $3.15 per sf to $3.25 per sf triple net right in line with the market. And if he would be making a bet, he says he'd bet the decision will be to go for the build-out.

STACY FURNITURE TO OPEN OUTLET STORE, DISTRIBUTION CENTER AT LAKESIDE TRADE CENTER

Contact: David Pelletier, Hillwood (817/224-6044) — Thu, 08 Mar 2007 00:00:00 GMT

FLOWER MOUND, Texas -- Hillwood has leased the 379,700 square-foot Lakeside Trade Center 2 building in Flower Mound, Texas to Stacy Furniture, the Grapevine, Texas-based home furnishings retailer. In addition to utilizing the new space as a distribution center, Stacy Furniture will open a 30,000 square-foot retail outlet store in the building.

This will be Stacy Furniture's fourth location in North Texas. The company currently operates a three-story headquarters and retail showplace in Grapevine, Texas and a showroom in Allen, Texas for Stacy Furniture. The company also owns Dorian's Interior Designs in Fort Worth, Texas.

"We feel very strongly that Lakeside Trade Center best addresses the needs of a rapidly growing company like ours," said company president Dorian Stacy Sims. "We wanted our distribution center to be convenient to our main store in Grapevine, all the while addressing the entire Metroplex and surrounding counties. Hillwood's facility seemed to us to best fill that need."

Located on the northeast corner of F.M. 2499 and Enterprise Dr., Lakeside Trade Center 2 was completed as a speculative building in October 2006. The facility is the last of the three-building Phase I of the development, which is now 100% occupied. Two additional buildings are planned for Phase II.

“Stacy Furniture has a tremendous regional presence and great brand recognition in this area. We are proud that they have chosen Flower Mound as home to their distribution center and new retail outlet,” said Flower Mound Mayor Jody Smith. “Centrally located in North Texas, Flower Mound will provide Stacy Furniture with a convenient site to distribute their products to key business locations, and Stacy Furniture will provide our residents with a great place to shop for home furnishings.”

"Stacy Furniture is an icon in North Texas," said Dan Tatsch, senior vice president of Hillwood Investment Properties. "Their presence in Lakeside Trade Center will bring tremendous visibility to the development and to business activity in the town of Flower Mound. Now that the development is fully leased, Hillwood will move forward with Phase II of Lakeside Trade Center."

In addition to the Lakeside Trade Center 2 building, the 137-acre Lakeside Trade Center development houses the 600,200 square-foot Lakeside Trade Center 3 building, which was completed in 2002, and the 426,200 square-foot Lakeside Trade Center 1 building that was completed in 2005. Customers in the development include Best Buy, Maytag, Anderson Merchandisers, Sabry Lee, Exel, Sullivans and Universal Display & Fixtures.

Phase II of the project includes Lakeside Trade Center 4 (333,372 square feet) and Lakeside Trade Center 5 (456,950 s.f.).

In addition to the outstanding incentives provided by the Town of Flower Mound and Denton and Tarrant Counties, Lakeside Trade Center also offers the advantages of Triple Freeport, easy access to major highways and proximity to DFW Airport.

Hillwood was represented by Mark Miller and Adam Curran of NAI Robert Lynn Company and Dan Tatsch of Hillwood. Stacy Furniture was represented by Steve Shrum of Glacier Commercial Realty.

Stacy Furniture (http://www.stacyfurniture.com) is a family-owned, family-operated home furnishings retailer that is undergoing an unprecedented period of growth. Originally a furniture wholesaler, Stacy opened his Southlake warehouse to the public in 1988, opened the Grapevine store and headquarters in 2000 and the showroom in Allen three years later. 2006 saw the addition of Dorian's Interior Designs on Hulen Street in Fort Worth.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 86 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to Lakeside Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, AllianceCalifornia in San Bernardino and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Stater Bros. gives itself room to grow

Josh Brown — Mon, 12 Feb 2007 00:00:00 GMT

Twenty-one years ago, Jack H. Brown was in the fight of his career.

He had just been ousted as president of Stater Bros. Markets and was entangled in a bitter battle with a New York investor for control of the grocery chain. Brown won by rallying company employees behind him to help expel the outsider.

Now the company's chairman and chief executive is in another fight and drawing on his experience to fend off two of the world's largest grocers in the highly competitive Southern California grocery market.

"The spirit of that time remains with us," Brown said.

The Colton-based grocery chain, which long has proved it can compete against traditional supermarkets, is about to face competition on new fronts. Wal-Mart is eyeing the Inland region for more of its supercenters that combine a discount store with a supermarket. Meanwhile, British grocery giant Tesco plans to open small-scale markets here that focus on produce and ready-made meals.

To help entrench itself in the market, Stater Bros. has launched the largest capital expansion in its 69-year history: a 2.1 million-square-foot distribution center and headquarters on 160 acres in San Bernardino. The project, being built at the former Norton Air Force base, will cost more than $300 million.

In an industry with razor-thin profit margins, Stater Bros. says the center will allow the grocery chain to save millions of dollars by consolidating its current 13 distribution buildings in seven locations into one.

Brown said those savings will keep prices low and allow the company to stay competitive against other supermarkets.

Storage space has been strained for the 162-store grocery chain since 1999, when it grew nearly 50 percent in one year by acquiring 33 Albertsons stores and 10 Lucky stores. The company has leased extra space and even resorted to storing some of its nonperishable products in semi-trailers.

The distribution center's larger capacity also will position the company, the Inland region's largest private employer, for growth. Brown said once construction is completed in summer 2008, the company plans to open 10 stores per year.

The corporate office was scheduled to open this month, with the distribution center opening in the summer. But that timetable had to be revised because of complications in dealing with three federal agencies on the project, Brown said.

Competing With Wal-Mart

Analysts and grocery experts agree the other half of Stater Bros. strategy is simple: continue to preach its core marketing message of low prices and customer service while expanding its product selection.

"I think people have always worried about Wal-Mart, but it's never been as bad as they thought," said Carla Casella, an analyst for J.P. Morgan in New York.

She said grocery stores learned to compete with Wal-Mart by offering different kinds of products and ramping up customer service.

Brown long has touted Stater Bros.' friendly, clean-cut workers. "My people have always been the head of my spear," he said.

Meanwhile, the company has gradually expanded its produce selection and launched more heavily into organic foods.

"They can't match Wal-Mart on price, but they can make it up somewhere else, and often that's in their people, customer service," said supermarket consultant David J. Livingston, who is based in Pewaukee, Wis. "Where's Wal-Mart the weakest? It's their perishables, fruits and vegetables. Stater can beat them there, too."

Livingston said some grocers can even use Wal-Mart to their advantage to edge out other competitors. He compared Stater Bros.' position to that of Publix, a large grocery chain in the southeastern United States.

"When Wal-Mart came into Florida, Winn-Dixie had to close more than 300 stores, and Albertsons closed some as well," he said. "But Publix did really well. Any revenue they lost from Wal-Mart, they regained from the other stores closing."

Casella said when a Wal-Mart comes to a town, many people try it but go back to shopping at regular grocery stores.

"They realize that they aren't getting that much of a deal, and they are willing to pay more for the convenience of a traditional supermarket," Casella said.

Stater Bros.' strategy of keeping prices within 10 percent of Wal-Mart's will prevent the company from losing as many customers as the other traditional supermarkets, said Bryan Hunt, a senior high-yield securities analyst for Wachovia Securities in Charlotte, N.C.

"Stater also has the reputation and brand position in that market to outmaneuver Ralphs, Vons and Albertsons against Wal-Mart," Hunt said.

'Know Your Territory'

Tesco, however, may be more of a challenge. Last summer, the British company announced plans to bring to Southern California more than 100 14,000-square-foot grocery stores, which are about one-third the size of the typical Stater Bros. The stores will focus on ready-made foods to appeal to busy families.

"It could hurt Stater," Casella said. "Because it will mean people will eat more at home, but not stuff they're making themselves."

Brown insists he knows his new British competitor better than any of the other chains in Southern California. Stater Bros. was in a consortium of grocers with Tesco before the British company decided to open in the United States.

"You've got to know your territory, and no one knows this area better than us," Brown said.

One former competitor also was optimistic about Stater Bros.' chances against Wal-Mart and Tesco.

"Stater Bros. has a very great program going for them," said Al Marasca, the former president and chief operating officer of Ralphs Grocery Co.

"They're very people-oriented, very community-oriented," said Marasca, who worked for Ralphs for 40 years. "They have quality stores. And Jack Brown is a very quality leader. He believes in taking care of his people."

Face of Stater Bros.

In some ways, the future success of Stater Bros. is tied to its chairman, chief executive and sole shareholder. For more than 20 years, Brown's name has been synonymous with the grocery chain.

He is also fiercely protective of his company's family image and his own as its benevolent patriarch. Brown, 67, serves as the company's chief spokesman, usually fielding all media inquiries himself. For photographs and public appearances, he typically dons a Stater Bros. trucker jacket instead of one of his outfits made by San Bernardino tailor Ariel Tello, whose custom suits start at $1,000.

Wachovia's Hunt likened Brown's spokesman role to that of the late Dave Thomas, the Wendy's restaurants founder who died in 2002.

In the 26 years with Brown at its helm, the company has grown from 61 stores and $475 million in sales to 162 stores with $3.5 billion in sales last year.

But getting there wasn't always easy.

Brown took part ownership of Stater Bros. in 1983 when its parent company at the time, Petrolane, sold 51 percent of the company to a New York investment group led by businessman Bernard Garrett and the remaining shares to a partnership controlled by Brown. In 1985, the company sold shares to the public. The Garrett group maintained ownership of 38 percent of the stock, Brown's group kept 37 percent, and 25 percent was sold to the public.

The next year, Brown and Garrett began a proxy fight for control of the company. Garrett, the company's then chairman, suspended Brown for 4 ½ months, alleging that Brown had manipulated the company's profits to drive down the stock price for a buyout. Brown was later cleared of the accusation.

Brown won the fight with help from Craig Corp., the Los Angeles-based investment firm that underwrote Brown's group when it bought Garrett's stake in the company for $18.47 million.

"We learned a lot in the mid-'80s," he said. "The challenge made us a stronger company than we could have been otherwise."

During the proxy battle in 1986, Brown enlisted the support of the company's employees and even local union members, who preferred to have a local businessman running the company. The employees bought shares of Stater Bros. stock in a bid to help Brown win control of the company. The suspended president even stood on picket lines alongside union members, who held signs that read "Bring Back Jack."

"I told the union organizer at the time I felt sort of funny picketing beside him," Brown recalled. "And he told me, 'Just think how I feel.' "

Again during the months of late 2003 and early 2004, grocery union workers went on strike, but Stater Bros. avoided a lockout while other major grocery chains were crippled for a time. The extra business sent Stater's sales in 2004 up nearly 40 percent and placed the company briefly in the Fortune 500.

Moving Forward

The company could break into that list again in the next decade. With a new distribution center able to serve nearly 400 stores, Brown is planning an ambitious growth trend of 10 stores per year. By 2015, it would put the company's store count around 235.

Hunt, the Wachovia analyst, said it may be easier to buy other stores than to build them. The most logical next step for the company will be to move more aggressively into the Los Angeles market, he said.

Brown has continued to eye about 10 Albertsons stores in hopes of buying them to add to his chain.

To help prepare Stater Bros. for that growth, Brown brought in Jim Lee, a 25-year veteran of Ralphs, Southern California's largest grocery chain, in 2002. Lee was Stater Bros.' retail vice president, and last year, Brown named him president and chief operating officer to replace retiring Don Baker.

Lee, 55, was a clear departure from Stater's tradition of promoting within the company, but his experience could help the company as it goes from a chain primarily based in the Inland Empire to one vying for a position as the Southern California market leader.

Despite that growth, Brown said building the new distribution center and headquarters in his hometown of San Bernardino will assure that the company that began in the "California heartland" will be anchored here for years to come.

Or, as he said, "This company isn't going anywhere I don't want it to go."

15 YEARS of growth

From 1992 to 2007, Stater Bros. Markets saw its greatest growth.

1992

Stores: 107

Employees: Nearly 10,000

Sales: $1.7 billion

2007

Stores: 162

Employees: 17,000

Sales: $3.5 billion

SOURCE: SEC FILINGS

Lease-Up Puts 950,000-SF Plan Into Action

Connie Gore — Sat, 20 Jan 2007 00:00:00 GMT

COPPELL, TX-With the last block filled in a 600,000-sf distribution center, Hillwood is pulling a 950,000-sf plan off the drafting table for Tradepoint Business Park. The industrial space will rise in stages, but it will start to go up this year.

Hillwood's options are to add 350,000 sf to the 600,000-sf Building 1 at 980 Bethel Rd. or roll out another flex design just like the first one. "We have not decided which one we will do first," T. Preston Herold, vice president of Hillwood Investment Properties, tells GlobeSt.com.

The development talk was triggered by a 62,500-sf lease of shell space that's been available for several years. "It was surprising it was vacant for so long," Herold says. "All of a sudden, we had a fight for it. Two deals hit at once." He says it boiled down to whoever signed the lease first. That was Houston-based T&L Distributing Co. Inc., which will pick up 20,000 sf of extra room, including a showroom, when it moves from a nearby location.

"We did put an aggressive deal out there as a market play to gain interest in the site," Herold admits. The quoted rate was $3.25 per sf and $3 per sf for the tenant-improvement allowance. T&L's long-term lease kicks in April 1. Its brokers were Tyson Erwin and Rick Medinis with Dallas-based NAI Robert Lynn. Herold teamed with Kacy Jones and Jim Brice from Holt Lunsford Commercial, also in Dallas, to work out Hillwood's terms.

The Calhoun, GA-based Mohawk Industries Inc. occupies 537,500 sf of the warehouse. Hillwood bought the building and 70-acre balance of the Tradepoint land in January 2003.

With occupancy now at 100%, Herold says Hillwood has jumped into amending the site plan, which is mapped out for 1.3 million sf in three buildings. If Herold's call is on target, Hillwood will "easily" be breaking ground on spec space before the year ends.

Construction starts on Flower Mound building

Holli L. Estridge — Fri, 15 Sep 2006 00:00:00 GMT

Fort Worth-based Hillwood has started construction on a 379,700-square-foot speculative building in its Lakeside Trade Center development in Flower Mound.

The new Lakeside Trade Center 2 building, to be completed in October, will be located on the northeast corner of F.M. 2499 and Enterprise Drive.

The project will be the third industrial building Hillwood has built in the 137-acre Lakeside Trade Center development, which will eventually house a total of five buildings.

The 600,200-square-foot Lakeside Trade Center 3 building, completed in 2002, is occupied by Best Buy and Maytag. Building 1, completed in early 2005, houses Sabry Lee, Exel, Sullivans, D&K Healthcare and Universal Display & Fixtures within its 426,200-square-foot footprint.

Future plans include buildings 4 (334,900 square feet) and 5 (456,950 square feet).

Mark Miller and Adam Curran of Robert Lynn Co. will market the new building for Hillwood.

Dan Tatsch, senior vice president of Hillwood Investment Properties, said Hillwood purchased the steel for Lakeside Trade Center 2 in 2004, when the company expanded building 1 by 196,100 square feet.

"In 2004, we knew we'd be adding another building within two years," Tatsch said. "By combining the steel purchase for two buildings, we were able to realize significant savings."

Tenants in the new building will have access to town of Flower Mound incentives, a 70% real and personal property rebate. Phase two, buildings 4 and 5 have already garnered a 50% real and property tax abatement from the town of Flower Mound.

Hillwood spokesman David Pelletier said the developer is not sure when it will begin the second phase.

Hillwood has also received a real and personal property tax rebate from Tarrant County for the buildings, comparable to the 55% rebate the developer had originally negotiated with Denton County. The buildings were within Denton County's jurisdiction, until Tarrant and Denton counties' boundaries recently changed following a lengthy legal dispute.

Melissa Glasgow, economic development director for the town of Flower Mound, said more than 800,000 square feet of industrial space is scheduled to come on line in the next 90 days. Within the first quarter of 2007, developers will add another 1.8 million square feet.

"This means we're finally able to increase substantially our commercial tax base and provide new opportunities for companies to move into Flower Mound," Glasgow said. "It also start putting Flower Mound on the map as an ideal location for new businesses."

Bill Guthrey, marketing manager for CentrePort, a Fort Worth office park located in the Dallas-Fort Worth International Airport submarket, said absorption rates will soon drive more speculative development.

"D/FW Airport is the biggest economic driver in North Texas," said Guthrey of Koll Development Co. "From CentrePort's perspective, a central location and access to labor is what it's all about."

Lakeside Trade Center Expanding

Fri, 15 Sep 2006 00:00:00 GMT

FLOWER MOUND (hillwood.com) – The Perot family’s Hillwood development company has begun construction on a 379,700-square-foot speculative building in its Flower Mound Lakeside Trade Center. The new Lakeside Trade Center 2 building on the northeast corner of FM 2499 and Enterprise Dr. will be completed in October 2006.

Anticipating rising construction costs, Hillwood purchased the steel for Lakeside Trade Center 2 in 2004, when the company was expanding the Lakeside Trade Center 1 building.

“By combining the steel purchase for two buildings, we were able to realize significant savings that will be passed on to our customers," said Dan Tatsch, senior vice president of Hillwood Investment Properties.

The 196,100-square-foot expansion of Lakeside Trade Center 1 was completed in early 2005. The now 426,200-square-foot facility is currently occupied by Sabry Lee, Exel, Sullivans, D&K Healthcare and Universal Display & Fixtures. The 137-acre Lakeside Trade Center development will eventually include five buildings. The 600,200-square-foot Lakeside Trade Center 3 building, which was completed in 2002, is occupied by Best Buy and Maytag. Future plans include the 334,900-square-foot Lakeside Trade Center 4 and Lakeside Trade Center 5 at 456,950 square feet.

Robert Lynn Company will market the building for Hillwood.

Hillwood to add to Lakeside center

Andrea Jares — Fri, 15 Sep 2006 00:00:00 GMT

Hillwood is adding a 379,700-square-foot building at the Lakeside Trade Center to its Flower Mound development, according to the company. The speculative Lakeside Trade Center 2 is at Farm Road 2499 and Enterprise Drive.

For rest of story click here.

Hillwood Breaks Ground on 379,000-SF Building at Lakeside Center Development in Texas

Fri, 15 Sep 2006 00:00:00 GMT

Hillwood said today that it has begun construction on a 379,700-square-foot Lakeside Trade Center 2 building in its Lakeside Trade Center development in Flower Mound, Texas. The building is set for completion in October and will sit at the northeast corner of F.M. 2499 and Enterprise Drive. The 196,000-square-foot Lakeside Trade Center 1 was completed early last year. Upon completion, the 137-acre development will include five buildings.

HILLWOOD TO DEVELOP 379,700 SQUARE-FOOT SPECULATIVE BUILDING AT LAKESIDE TRADE CENTER

Thu, 14 Sep 2006 00:00:00 GMT

FLOWER MOUND, Texas -- Hillwood has begun construction on a 379,700 square-foot speculative building in its Lakeside Trade Center development in Flower Mound, Texas. The new Lakeside Trade Center 2 building, which will be completed in October 2006, will be located on the northeast corner of F.M. 2499 and Enterprise Dr.

Due to the prospect of rising construction costs, Hillwood purchased the steel for Lakeside Trade Center 2 in 2004, when the company was expanding the Lakeside Trade Center 1 building.

"Primarily due to the commitment to the area by the town of Flower Mound, Lakeside Trade Center has been a tremendous development location for Hillwood," said Dan Tatsch, senior vice president of Hillwood Investment Properties. "In 2004 we knew we'd be adding another building within two years. By combining the steel purchase for two buildings, we were able to realize significant savings that will be passed on to our customers."

The 196,100 square-foot expansion of Lakeside Trade Center 1 was completed in early 2005. The now 426,200 square-foot facility is currently occupied by Sabry Lee, Exel, Sullivans, D&K Healthcare and Universal Display & Fixtures.

In addition to the outstanding incentives provided by the town of Flower Mound, Lakeside Trade Center also offers the advantages of Triple Freeport, easy access to major highways and proximity to DFW Airport.

The 137-acre Lakeside Trade Center development will eventually house a total of five buildings. The 600,200 square-foot Lakeside Trade Center 3 building, which was completed in 2002, is occupied by Best Buy and Maytag. Future plans include Lakeside Trade Center 4 (334,900 square feet) and Lakeside Trade Center 5 (456,950 SF).

Mark Miller and Adam Curran of Robert Lynn Company will market the building for Hillwood.

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 83 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to Lakeside Trade Center, Hillwood is best known for its development of the 17,000-acre AllianceTexas project, located 15 miles northwest of DFW Airport, AllianceCalifornia in San Bernardino and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Aviall expanding into new building near D/FW

Tue, 18 Jul 2006 00:00:00 GMT

Aviall Inc. said Monday that it will expand its operations near Dallas/Fort Worth International Airport in Irving.

Developer Hillwood will build a 75,000 square-foot building adjacent to its facility at 2750 Regent Blvd. near Interstate 635.

The aviation and aerospace company also will add about 250,000 square feet to its warehouse and distribution building.

Aviall to expand its headquarters

By ANDREA AHLES — Tue, 18 Jul 2006 00:00:00 GMT

Aviall, a seller of aftermarket aerospace parts, announced that it will expand its headquarters and warehouse at Dallas/Fort Worth Airport after six consecutive years of record sales.

For rest of story click here.

Aviall Services to double size at D/FW Airport

Mon, 17 Jul 2006 00:00:00 GMT

Aviall Services Inc. in July will begin construction on two additions to its central warehouse facility and headquarters at Dallas/Fort Worth International Airport.

The construction will double the size of its 325,000-square-foot complex. As part of the expansion, Aviall will build a new 75,000-square-foot building north of its current airport location and add about 250,000 square feet of space to its existing warehouse and distribution facilities.

Aviall Services, a Dallas-based provider of new aviation parts, aftermarket sales, supply chain management and related services for the aerospace industry, expects the projects to be completed by January 2007.

Aviall opened its current headquarters in 2001 near the intersection of Interstate 635 and North Royal Lane on D/FW Airport property.

Dan Komnenovich, president and COO for Aviall Services, said six consecutive years of record sales prompted the need for more space. Aviall's 2005 sales reached $1.295 billion, up $131 million, or 11 percent, from 2004.

Aviall has recruited Dallas-based Hillwood to develop and construct the new facilities.

Aviall is being acquired by Chicago-based The Boeing Co. (NYSE: BA) in a $1.7 billion deal. The transaction is expected to close by the end of this year's third quarter.

Web sites: www.aviall.com and www.hillwood.com

Aviall to double headquarters size

Mon, 17 Jul 2006 00:00:00 GMT

Aviall Services Inc. in will this month begin construction on two additions to its central warehouse facility and headquarters at Dallas/Fort Worth International Airport.

Aviall is the holding company of Memphis-based Inventory Locator Service, whose electronic marketplace enables subscribers in the aviation, marine and defense industries to buy and sell parts, equipment and services.

Aviall opened its current Dallas headquarters in 2001 near the intersection of Interstate 635 and North Royal Lane on D/FW Airport property.

Aviall has recruited Dallas-based Hillwood to develop and construct the new facilities.

Aviall is being acquired by Chicago-based The Boeing Co. (NYSE: BA) in a $1.7 billion deal. The transaction is expected to close by the end of this year's third quarter.

Aviall Pushes Ahead on 325,000-SF Expansion

By Connie Gore — Mon, 17 Jul 2006 00:00:00 GMT

DALLAS-With a merger looming overhead, Aviall, Inc. has cleared all decks to double its 325,000-sf headquarters and central warehouse at Dallas/Fort Worth International Airport. Work will begin before the month ends.

Aviall's third quarter activity will include the closing of a $1.7-billion buyout by Chicago-based Boeing Co. Hillwood, with deep local ties to Boeing, won the construction nod to add 250,000 sf of warehouse and distribution space onto the HQ building at 2750 Regent Blvd. plus build a 75,000-sf structure at the northern end of the tract. The plan calls for a January 2007 delivery.

In early April, Aviall started to lay groundwork for the expansion on airport-leased land near the intersection of Interstate 635 and North Royal lane. The existing lease runs until 2020, with extensions embedded into it.

According to this morning's press release, the company's six consecutive years of record sales sparked the expansion plan. Last year's sales were $1.29 billion, representing an 11% increase in one year.

The addition and new building are climate-controlled designs with energy-efficient lighting and remote sensors. The overall project includes room for training, sales, technology and extra parking. The project will top $13 million without all the extra bells and whistles, based on today's average construction cost in the region.

In May, Aviall and Boeing announced a definitive merger agreement, expected to close in Q3. The terms, at the time, were $48 per share and the assumption of $350 million in debt. After the merger, Aviall will report to Boeing Commercial Aviation Services and operate as a wholly owned subsidiary.

AVIALL TO DOUBLE SIZE OF ITS AVIALL SERVICES’ UNIT CENTRAL WAREHOUSE IN DALLAS

Hillwood contact: Dave Pelletier (817-224-6044,dave.pelletier@hillwood.com) — Mon, 17 Jul 2006 00:00:00 GMT

DALLAS, TX – Aviall, Inc. announced today that it will begin construction in July on two additions to the Company’s Aviall Services unit Central Warehouse Facility and Headquarters staff building. The expansion is expected to double the footprint of the 325,000 square foot Dallas complex located at 2750 Regent Boulevard.

Aviall will construct a new 75,000 square foot building north of its current location at 2750 Regent Blvd. and also add about 250,000 square feet of space to its existing warehouse and distribution facilities.

The projects are scheduled to be completed by January 2007. In 2001, Aviall opened its

current corporate headquarters and central warehouse facility, located near the intersection of I-635 and North Royal Lane on DFW Airport property.

Aviall is a major solutions provider of aftermarket sales, supply-chain management and

related value-added services for the commercial, general aviation, and military segments of the aerospace industry. At present, Aviall Services, the world’s largest independent provider of new aviation parts, markets and distributes about 650,000 unique aircraft and related parts from 220 manufacturers through 37 customer service centers in North America, Europe and Asia-Pacific.

Dan Komnenovich, president and COO for Aviall Services, said six consecutive years of

record sales have created the need for this expansion. Aviall’s sales in 2005 reached $1.295 billion, up $131 million, or 11% from 2004.

“Aviall is moving ahead aggressively as our industry’s leading provider of aerospace and

defense aftermarket parts and related support services,” Komnenovich added. “We are pleased to announce that our vigorous growth has produced the need for this expansion of our corporate headquarters. These new facilities will enhance our ability to achieve our objectives by delivering world-class customer service and technology to every customer, every supplier, every time.”

Dallas-based Hillwood, which is best known for its development of the 17,000-acre

AllianceTexas project in north Fort Worth and American Airlines Center and Victory near downtown Dallas, has been selected by Aviall to develop and construct its new facilities.

The two additions will be fully climate-controlled with energy-efficient lighting and remote sensors. There will also be expanded facilities for training and meetings, increased parking, and additional space for technology, sales, forecasting and procurement. A long-term lease for the property by Aviall extends to June 2020.

ABOUT HILLWOOD

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country by Commercial Property News and National Real Estate Investor magazines. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms.

ABOUT AVIALL

Aviall, Inc. is a leading provider of aftermarket supply-chain management services for the aviation and defense industries. Aviall is comprised of two operating units: Aviall Services, Inc. and Inventory Locator Service (ILS). As the world's largest independent provider of new aviation parts and related aftermarket operations, the Aviall Services business unit markets and distributes products for more than 220 manufacturers and offers approximately 650,000 catalog items from 37 customer service centers located in North America, Europe, and Asia-Pacific. Aviall Services provides maintenance for aviation batteries, wheels and brakes as well as hose assembly, kitting and paint-mixing. The company also offers a complete set of supply chain and logistics services, including order processing, stocking and fulfillment, automated inventory management and reverse

logistics to OEMs and customers. The Inventory Locator Service (ILS) business unit, headquartered in Memphis, Tennessee, provides information and facilitates global eCommerce via its electronic marketplace that enables subscribers to buy and sell commercial parts, equipment and services, as well as provides eBusiness Services to the aviation, marine and defense industries.

# # #

Hillwood Expands Project by 540,000 SF

By Bob Howard — Tue, 11 Jul 2006 00:00:00 GMT

SAN BERNARDINO, CA-The Texas-based development firm has kicked off construction of a 540,480-sf speculative expansion of the Westgate I building in the company's AllianceCalifornia project. The new space will increase the size of Westgate I to 1.14 million sf, making it one of the largest buildings in the AllianceCalifornia project.

The expansion of the Westgate building will ensure that Hillwood has enough distribution space available to meet the continuing and increasing demand for such space in the Inland Empire, according to John Magness, SVP of Hillwood Investment Properties. Many companies have shortened their site selection decision-making from years to months, Magness points out, so the development firm wants to be ready to provide space as quickly as possible.

Hillwood expects to complete the expansion, which is located at 310 S. Tippecanoe St., in October. The 600,240-sf first phase of Westgate I was completed in May 2005 and is occupied by Pep Boys.

Including the Westgate I expansion, Hillwood is under construction on more than 1.8 million sf at Alliance California. The 913,726-sf Gateway North I building and a 404,560-sf distribution center for the Medline medical supplies distribution firm are scheduled to be completed in September.

The Westgate I building is being marketed by Peter McWilliams, Michael Daley and Ruben Goodsell of Colliers Seeley. Since December 2000, when Hillwood was selected as the project's master developer, the total of space built or under construction at the AllianceCalifornia project has climbed to 6.4 million sf.

HILLWOOD BEGINS EXPANSION PROJECT AT AIRPORT

Staff Reports — Wed, 28 Jun 2006 00:00:00 GMT

Hillwood, the master developer for much of San Bernardino International Airport, has begun construction on a 540,480-square-foot expansion of the Westgate 1 building in the company's AllianceCalifornia development.

Completion of the expansion, located at 310 S. Tippecanoe St., is expected in October.

The 600,240-square-foot first phase of Westgate 1 was completed in May 2005. It is occupied by Pep Boys, may take up a portion of the new building. The building expansion is being marketed by Peter B. McWilliams, Michael J. Daley and Ruben V. Goodsell of Colliers Seeley.

Including the Westgate 1 expansion, Hillwood has more than 1.8 million square feet under construction at the airport. The 913,726-square-foot Gateway North 1 building and the 404,560-square-foot distribution center for Medline will be completed in September.

HILLWOOD TO EXPAND WESTGATE 1 BUILDING AT ALLIANCECALIFORNIA

Tue, 27 Jun 2006 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has begun construction on a 540,480 square-foot expansion of the Westgate 1 building in the company's AllianceCalifornia development in San Bernardino. Westgate 1 will now be one of the largest buildings in the development with 1,140,720 square feet.

The 600,240 square-foot first-phase of Westgate 1 was completed in May 2005. It is occupied by Pep Boys, the nation’s leading automotive aftermarket retail and service chain.

The expansion of Westgate 1, which is located at 310 South Tippecanoe St., will be completed in October 2006.

Including the Westgate 1 expansion, Hillwood is under construction on more than 1.8 million square feet at AllianceCalifornia. The 913,726 square-foot Gateway North 1 building and the 404,560 square-foot distribution center for Medline will be completed in September 2006.

“As interest in the Inland Empire market continues to grow, Hillwood wants to position itself to have enough available product at AllianceCalifornia to be ready to meet that increasing demand," said John Magness, senior vice president of Hillwood Investment Properties. “Many companies have shortened their site selection decision making from years to months. We want to be ready to provide space to our customers.”

Currently more than 9.9 million square feet of commercial space, including 2.7 million square feet of speculative space, are under development in Hillwood projects across the country.

The Westgate 1 building is being marketed by Peter B. McWilliams, Michael J. Daley and Ruben V. Goodsell of Colliers Seeley. For more information contact their Ontario office at 909-605-9400.

Since December 2000, when Hillwood was selected as the project’s master developer, 6.4 million square feet have either been built or are under construction at AllianceCalifornia. During that time more than 2,900 new jobs have been created in the development.

AllianceCalifornia has attracted facilities for some of the world’s best corporations. Each of the five companies at AllianceCalifornia are ranked either among the top public companies by Fortune magazine or on the Forbes List of Top Private Firms. Kohl’s (166), Mattel (416), Stater Bros. Grocers (558) and Pep Boys (752) are listed among Fortune’s top 800 companies. Medline is 163rd on Forbes List of Top Private Companies.

AllianceCalifornia features outstanding access to air, highway and rail; Foreign Trade Zone status; tax incentives; and is located in one of the top industrial markets in the nation. The project is close to Interstates 10, 210 and 215, is within two miles of a large intermodal rail facility and is anchored by San Bernardino International Airport. The development also is close to commercial passenger air service at Ontario International Airport, one of the country’s fastest-growing facilities.

Hillwood, (www.hillwood.com) a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Hillwood Trades for Laney

Mon, 15 May 2006 00:00:00 GMT

In a logistical reinterpretation of musical chairs, Texas developer Hillwood will build a 400,000-square-foot distribution center for Laney & Duke Terminal Warehouse in Jacksonville, Fla., while Laney & Duke sells Hillwood a 360,998-square-foot building nearby.

"The timing of this deal is key and very opportunistic, as there is increased awareness of Jacksonville due to the recent (Mitsui O.S.K. Lines) commitment at Jaxport," said Laney President Brian T. Duke.

Tokyo-based Mitsui last year signed a 30-year lease to bring the first cargo container service to Asia to the Port of Jacksonville. The company will be the port's largest tenant in size, revenue and containers handled when its first East Coast terminal, a $200 million, 158-acre facility, opens in late 2007 or early 2008.

The build-to-suit development, to be located at Norfolk Southern Railroad's Westlake Industrial Park, features access to Jacksonville's I-295 loop, the north-south I-95 corridor and the east-west I-10 route into the southern United States.

"The Jacksonville market is one of the top distribution nodes in the country," said Gary Frederick, vice president of Hillwood Investment Properties.

The facility will be part of about 9.6 million square feet of commercial property under construction at Hillwood projects around the country, including AllianceTexas, near Fort Worth; AllianceCalifornia, in San Bernardino; Victory, in Dallas; and DeSoto Trade Center, in Southhaven, Miss.

Hillwood will lease the former Laney & Duke property to its warehouse customers.

Hillwood Plans 400,000-SF BTS Center

By Alex Finkelstein — Mon, 01 May 2006 00:00:00 GMT

JACKSONVILLE, FL-Locally based Laney & Duke Terminal Warehouse Co. Inc., a 77-year-old logistics firm which has outgrown its quarters, has contracted with Plano, TX-based Hillwood to develop a 400,000-sf build-to-suit distribution center in Norfolk Southern Railroad’s Westlake Industrial Park. The park is off Pritchard Road on Jacksonville’s west side.

Hillwood officials couldn’t be reached by GlobeSt.com’s publication deadline to learn the development cost of the project. However, area construction sources familiar with comparable ventures tell GlobeSt.com the center will probably be built at an estimated hard construction cost of $50 per sf or a total $20 million.

Brian T. Duke, president of Laney & Duke, and Gary Frederick, vice president of Hillwood Investment Properties, did not specify in a prepared statement when the project would break ground and when it might be completed. However, Duke says “the timing of this deal is key and very opportunistic, as there is increased awareness of Jacksonville, due to the recent MOL commitment at Jaxport.”

Last year, Tokyo-based Mitsui O.S.K. Lines Ltd. (MOL) signed a 30-year lease with the Jacksonville Port Authority to establish, for the first time, cargo container service between the port and Asia, as GlobeSt.com previously reported.

Duke says the build-to-suit “will have ample space that will allow Laney & Duke to capitalize on the increased activity and market to potential customers, while meeting the additional space needs of our existing customers.”

Under terms of the build-to-suit agreement, Laney & Duke and Hillwood also completed a sale-leaseback transaction on Laney & Duke’s 360,998-sf building at 2855 Faye Rd. Officials of both companies couldn’t be reached to learn the estimated value of that transaction. However, area industrial brokers familiar with the city’s west side submarket tell GlobeSt.com the Faye Road building could have gone down for about $40 per sf or a total $14.43 million.

The new Jacksonville project is part of about 9.6 million sf of commercial space under construction at Hillwood projects across the country, according to Frederick. Hillwood is owned by the Ross Perot family of Texas.

Developer plans Westside warehouse

By Tony Quesada, Staff Writer — Fri, 28 Apr 2006 00:00:00 GMT

JACKSONVILLE -- A local third-party logistics company is partnering with a Dallas-based developer to build a 400,000-square-foot distribution center that will increase the company's warehouse space by about 40 percent.

As part of a joint venture, Hillwood Development Co. will develop a build-to-suit distribution center for Laney & Duke Terminal Warehouse Co., which operates about 1 million square feet of warehouse space in Jacksonville and Tampa.

The project is the latest distribution center announced that is to some degree prompted by plans for a container-handling terminal at Dames Point that will serve ships with routes to Asian ports.

In August 2005, ocean carrier Mitsui O.S.K. Lines Ltd., known as MOL, signed a 30-year lease with the Jacksonville Port Authority to make Dames Point its base of East Coast operations. Tokyo-based MOL will build a $200 million, 158-acre container terminal to be operated by a subsidiary stevedoring company. The terminal is expected to open in late 2007 or early 2008.

Laney & Duke President Brian Duke said the port business created by MOL is encouraging to logistics and warehousing companies like his.

"We hope to gain more offshore business through the port of Jacksonville," Duke said. "And if we do, we'll need more space."

National retailer Michaels Stores Inc. (NYSE: MIK) recently said it's relocating its Southeast seasonal distribution center from Savannah, Ga., to Jacksonville in large part because of its strong business relationship with MOL at other ports.

Laney & Duke operates seven warehouses, six in Jacksonville and one in Tampa. The joint venture has bought one of those warehouses, a 360,998-square-foot building on Faye Road near Dames Point, which will be leased to Laney & Duke.

The future distribution center will be built in Westlake Industrial Park on the Westside. The site was attractive to Hillwood and Laney & Duke because it has easy access to Interstate 295 via Pritchard Road, which in turn links it quickly to Interstate 95 and Interstate 10.

Hillwood introduced itself to Laney & Duke through a fellow third-party logistics company in Dallas, Duke said. That company had grown its operation from about 700,000 square feet to more than 2 million square feet through a similar arrangement with Hillwood.

Working with Hillwood provides a path for expansion that Laney & Duke wouldn't be able to follow on its own, Duke said. "We intend to partner with Hillwood as we grow our business."

For Hillwood, partnering with an established Jacksonville third-party logistics company provides an entry to a market poised for growth in the logistics industry, said Gary Frederick, vice president of Hillwood Investment Properties.

"We think Jacksonville is the key distribution point for Florida," Frederick said. "With the MOL terminal, there's going to be the availability of bringing containers from Asia that hasn't been there."

Hillwood, a Perot company with about 9.6 million square feet of commercial space under construction across the country, focuses on projects related to supply chain management, Frederick said. Jacksonville fits well into the company's objectives, particularly given the availability of CSX Transportation Inc., Norfolk Southern Railway Co. and Florida East Coast Railway LLC lines, as well as a well-positioned airport.

"Add all those things together and you have a lot of transportation infrastructure centered in Jacksonville," he said. "It's a strong indicator to us that there will be demand for distribution space in Jacksonville."

Hillwood to Develop 400,000SF Jacksonville Build-to-Suit

By Hortense Leon, Southeast Correspondent — Fri, 28 Apr 2006 00:00:00 GMT

Taking advantage of the city’s heavy and increasing traffic of international shipping, Hilllwood is about to break ground on a 400,000-square-foot build-to-suit distribution center in Jacksonville, Fla., for Laney & Duke Terminal Warehouse Co. Inc., a Florida-based logistics company. Also part of the deal, which closed late last month, Dallas-based Hillwood purchased a 360,998-square foot building, also in Jacksonville, from Laney & Duke in a sale-lease-back agreement. Financial terms were not disclosed.“The Jacksonville market is one of the top distribution nodes in the country,” noted Gary Frederick, vice president of Hillwood Investment Properties.The new build-to-suit, scheduled for completion in the first quarter of 2007, will be located in Norfolk Southern Railroad’s Westlake Industrial Park, which is easily accessible to major interstates, such as I-295. It is also just 20 minutes away from the Port of Jacksonville, which has one of the largest commercial cargo ports in the southeast, according to a Port Authority spokesperson. “The Hillwood-Laney & Duke deal comes at a time when there is increased awareness of Jacksonville due to the recent commitment (of Tokyo-based Mitsui O.S.K. Lines Ltd.) at Jaxport,” said Brian T. Duke, president of Laney & Duke. He is referring to the 30-year lease agreement between Mitsui and the Jacksonville Port Authority signed last summer. Mitsui is planning to build a $200 million, 158-acre facility at the Port of Jacksonville, which is scheduled to open late 2007 or early 2008. The new facility will make possible cargo container service between the port and Asia for the first time. The Port Authority spokesperson said that Mitsui will become the agency’s largest tenant based on size, revenue and containers handled with the development of its first East Coast terminal at Jacksonville.

Line lures second center

By TIMOTHY J. GIBBONS, The Times-Union — Fri, 28 Apr 2006 00:00:00 GMT

The impending arrival of a shipping line connecting Jacksonville to Asia has lured another distribution center to the First Coast.

Hillwood, a Dallas-based real estate developer, will build a 400,000-square-foot distribution center on Jacksonville's Westside for Laney & Duke Terminal Warehousing Inc.

The new facility, to be located in Norfolk Southern Corp.'s Westlake Industrial Park, is situated to take advantage of the confluence of Interstates 95 and 10, the company said.

Hillwood is also buying a 361,000-square-foot warehouse on Faye Road from Laney & Duke, which will lease the facility back from the developer.

Jacksonville-based Laney & Duke has been in business since 1929, providing a range of warehousing, distribution and logistics services throughout Florida and Southern Georgia. Among the company's clients are Fortune 500 companies like The Proctor & Gamble Co., Nestle SA and Colgate-Palmolive Co.

"The timing of this deal is key and very opportunistic, as there is increased awareness of Jacksonville due to the recent MOL commitment at Jaxport," said Brian T. Duke, president of Laney & Duke. "The new build-to-suit will have ample space that will allow Laney & Duke to capitalize on the increased activity and market to potential customers, while meeting the additional space needs of our existing customers."

"It's a city that's been on our radar screen for a while," said Gary Frederick, vice president of Hillwood Investment Properties. The deal signed last year with Japanese steamship line Mitsui O.S.K. Lines has made the market more attractive.

"We want to be in a position to take advantage of that," he said.

Hillwood and Laney & Duke's project comes on the heels of Michaels Stores Inc.'s announcement last week that it was relocating its seasonal goods distribution center from Savannah to Jacksonville.

HILLWOOD TO DEVELOP 400,000 SQUARE-FOOT BUILD-TO-SUIT FOR LANEY & DUKE IN JACKSONVILLE, FLORIDA

contact: Dave Pelletier (817-224-6044, dave.pelletier@hillwood.com) — Thu, 27 Apr 2006 00:00:00 GMT

JACKSONVILLE, Fla. – Hillwood has reached an agreement to develop a 400,000-square-foot build-to-suit distribution center in Jacksonville, Fla. for Laney & Duke Terminal Warehouse Co. Inc., one of the premier logistics companies in Florida. As part of the deal, Hillwood also purchased a 360,998-square-foot building, located at 2855 Faye Rd. in Jacksonville, from Laney & Duke, which will now lease that facility.

The site for the build-to-suit is in Norfolk Southern Railroad’s Westlake Industrial Park off of Pritchard Road on Jacksonville's Westside. The site features outstanding access to the Interstate 295 loop; to I-95, the major north-south connector on the East Coast; and to Interstate 10, the major east-west route through the southern United States. With the convergence of interstate highways, major railroads and Jaxport, Jacksonville has become a key distribution point for Florida, the fourth most populous state in the country.

Last year Tokyo-based Mitsui O.S.K. Lines Ltd. (MOL) signed a 30-year lease agreement with the Jacksonville Port Authority to establish, for the first time, cargo container service between the port and Asia. MOL will become the port authority's largest tenant in size, revenue and containers handled with its first East Coast terminal, a $200 million, 158-acre facility that is scheduled to open in late 2007 or early 2008.

“The Jacksonville market is one of the top distribution nodes in the country," said Gary Frederick, vice president of Hillwood Investment Properties. "Hillwood is excited to be able to work with Laney & Duke, a long-established industry leader in the market, and looks forward to exploring future development opportunities in Jacksonville."

For over 75 years Laney & Duke has been fulfilling the logistics, warehousing, and transportation needs of some of the most successful companies in the United States. As one of the premier logistics management companies in Florida, the company has worked with many Fortune 500 companies like Sara Lee, Proctor and Gamble, Colgate-Palmolive Company, Lever Brothers Company, TJ Lipton, Nestle Foods, and all of the well known Tobacco Companies.

The new facility in Jacksonville, Fla. is part of approximately 9.6 million square feet of commercial space currently under construction at Hillwood projects across the country, primarily at AllianceTexas in Fort Worth, AllianceCalifornia in San Bernardino, Victory in Dallas, and DeSoto Trade Center in Southaven, Mississippi.

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. Hillwood is best known for its development of the 17,000-acre AllianceTexas, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre redevelopment of the former Norton Air Force Base in San Bernardino.

# # #

Making way for change

Jim Steinberg, Business Editor — Sun, 23 Apr 2006 00:00:00 GMT

A tidal wave is coming.

It's part of what developer Randall Lewis likes to call a "a virtuous cycle." It means that when something good happens, good follows.

In this case, the cycle is growth, driven by powerful economic tides flowing east. The hope is that with it will come a more affluent and educated population ready to invest in the community.

"Historically, San Bernardino has been the last place in Southern California to feel these real-estate forces," said John Husing, a Redlands-based economist who studies the San Bernardino-Riverside county region.

But in the coming months and years, a variety of projects are poised to push San Bernardino and the surrounding area into a badly needed boom time with home prices driving property values to record highs and new business and industry bringing jobs and filling community coffers.

And it couldn't come at a better time as public officials and elected leaders vow a renewed war on crime and violence in the county seat.

"If you don't fix housing and the economy, you are never going to solve the crime problem," Husing said. "Downtown housing will start to change the nature of who lives there. It is the loss of single-family owners that really led to San Bernardino's crime problem."

One of the most crippling blows to San Bernardino's economy came with the closure of Norton Air Force Base in 1994.

Now, Colton-based Stater Bros. Markets is building a $200 million headquarters and warehouse complex at San Bernardino International Airport, the old Norton site. The 160-acre project and its 2,000 employees will go a long way toward easing Norton's painful legacy.

Demolition has also begun on 208 heavily vandalized houses that were homes for Norton's noncommissioned officers and their families. Once cleared, the 25 acres will become a part of a San Manuel Band of Mission Indians project that is still undefined and in its planning stages.

The last stretch of the Interstate 210 freeway extension, furthermore, is slated to open next year. It will change traffic patterns and spur development in Fontana, Rialto, San Bernardino and Highland.

Indeed, the boom has begun.

At the western edge of Cal State San Bernardino, Seal Beach developer Watson & Associates' The Promenade at University Park, with retail and live-work town homes, is a 16-acre, $70 million-plus development that will alter the university's northwestern edge.

In February, Miami Beach real-estate developer LNR Properties Inc.

became one of the partners redeveloping Carousel Mall. It plans to scatter up to 900 town-home and condominium units across the 44-acre downtown San Bernardino site.

Nearby, Watson & Associates plans to build up to 200 more town houses and condominiums.

Meanwhile, developers plan more than 200 homes in the San Bernardino's long-neglected Westside.

Change begins

Some might say San Bernardino's virtuous cycle really began in 2001, when the city cut a deal with the Hopkins Real Estate-Arthur Pearlman groups to develop the HUB project at Tippecanoe Avenue and Interstate 10, which extended The economic prosperity of Hospitality Lane east to Tippecanoe.

In the process, Harriman Place was realigned, and 63 substandard homes and one business were demolished. Replacing them are a new Sam's Club, an Elephant Bar, two hotels now under construction and a variety of other shops and restaurants.

Fred Stemmler, who was a partner with Hopkins, said he became attracted to Carousel Mall's potential because of The HUB.

Stemmler, now a partner in Irvine-based Street-Manchester LLC, said he brought The HUB prospect to the attention of the much larger LNR Properties. Now, the two firms are proceeding with development plans on the Carousel Mall project.

"This is a quilt, although not everyone can see it right now. But this quilt, if we let it, is going to come together, and it will be beautiful and understandable in another 10 years," Stemmler said.

Like Husing, Stemmler said it is important to have a "critical mass" of housing development to replace renters with homeowners people who have a stake in the community.

Stemmler and other developers are looking at the possibility of housing north of the Tri-City Corporate Center on Hospitality Lane and The HUB.

"A lot of preconceived ideas have to be tossed out. You have to look at the area with a new mind-set. And that is what we are doing," Stemmler said.

A second leg in San Bernardino's virtuous cycle would be the arrival of Texas-based Hillwood, a real-estate development concern headed by Ross Perot Jr., son of the legendary entrepreneur and former presidential candidate.

In 2002, the Inland Valley Development Agency board approved a master development agreement with Hillwood for much of San Bernardino International Airport.

Where other development efforts foundered, Hillwood brought results.

Even before the development agreement was finalized, Hillwood brought in the 575,000-square-foot Kohl's warehouse.

Mattel, Pep Boys and Medline followed.

Separate from the Hillwood agreement, Stater Bros. decided to bring its 1.2 million square-foot warehouse to the former air base.

"San Bernardino is on its way back," said Thomas Thornburgh,

president of American Development Group Inc., developer of the Arrowhead Springs project in San Bernardino's foothills.

"The whole area is changing fast. It has taken us 15 to 20 years to get us where we are. We are not going to get well overnight," Thornburgh said.

American Development Group is the master developer for the $1 billion redevelopment of the nearly 2,000-acre Arrowhead Springs Hotel property.

Construction is expected to start this year as it renovates the hotel as a conference center with 135 rooms, builds a 115-room addition, a spa with 50 rooms and an 18-hole golf course.

George Schnarre, a longtime San Bernardino real-estate broker and former San Bernardino Area Chamber of Commerce chairman said the Arrowhead Springs project is important because it will establish San Bernardino as a destination point.

Thornburgh sees San Bernardino's transition from a high percentage of renters to homeownership as a key to its recovery.

Mayor Pat Morris said he wants to push "strong and hard" on LNR's plans to bring housing to Carousel Mall.

"We want to put that project on the fast track so that it becomes reality sooner rather than later. It will bring in a critical number of new families and economic power," he said.

Morris said he wants to upgrade "the entire corridor between Highland Avenue and downtown, (Interstate 215) and Waterman."

How that can be accomplished will be studied extensively.

Next door in Rialto, impending extension of I-210 gave city leaders a solution to a long-standing problem: What to do with all that land in the north end, around Rialto Municipal Airport.

The freeway extension will reposition an undeveloped portion of the city, making it desirable for retail, residential and industrial growth.

The Renaissance Rialto Project, covering 1,200 acres, proposes development of 2,500 homes, 2.5 million square feet of retail space, 1.5 million square feet of office space and 7.5 million square feet of industrial space.

The city invited the Upland-based Lewis Group of Companies to help plan and develop the project. Lewis brought in Texas-based Hillwood, master developer of the San Bernardino airport.

Renaissance Rialto will be a joint Lewis-Hillwood effort. An outside consulting group is developing the master plan for the City Council's approval.

Boom or bust

San Bernardino's economic rebirth is linked to a powerful regional real-estate boom.

Many economists see high interest rates tempering that strength in the long term. Some predict that trend will be evident this year.

Chapman University economist Esmael Adibi is among the more extreme of the forecasters. He predicts the San Bernardino-Riverside county area will lose 1,200 construction jobs this year and 2,700 in financial services.

That's a sharp contrast to 2005, when the two-county area gained 10,400 jobs while financial services increased by 3,000 jobs.

"We believe these two major growth engines of the past few years will not be as strong as they have been," he said.

However, a forecast by the Los Angeles County Economic Development Corp. predicts commercial construction in the two-county area will pick up the slack in residential construction and the sector will grow by 7,500 jobs.

Even if Adibi's figures prove correct, that would not mean a collapse in San Bernardino's turnaround, but it might slow the pace.

What could happen that would change San Bernardino's course?

Stemmler worries about another 9/11. Not in the San Bernardino area. But somewhere in the country.

"There is a quilt in America and it connects us all." he said. "Countless transactions went sideways following 9/11."

A national recession could stall San Bernardino's momentum, he said.

James R. Watson, the Seal Beach developer who is active in San Bernardino, said if there is a downturn, "I would rather be positioned in San Bernardino than in Orange County."

Because of the increased job base in the region, Watson said the area is better positioned to weather a financial downturn than it was in the early 1990s.

"A lot of good stuff is happening," Stemmler said. "But it is not a foregone conclusion about what is going to happen here. More good things have to happen to keep this rolling."

BASE REUSE

Mon, 17 Apr 2006 00:00:00 GMT

The redevelopment of the former Norton Air Force Base in San Bernardino took another step forward this month as developer Hillwood began construction of a 913,726-square-foot distribution center.

The building, scheduled for completion this fall, will house a distribution center for Pactiv Corp. , an Illinois-based manufacturer of containers ranging from Hefty trash bags and disposable plates to meat packaging and egg cartons.

Michael Daley, senior vice president in the Ontario office of real estate firm Colliers Seeley International Inc., said Pactiv will move into a 586,820-square-foot space of the new building.

The firm is seeking potential users for the remaining space in the new building, he said.

Hillwood starts work on center

PAUL HERRERA — Fri, 14 Apr 2006 00:00:00 GMT

The redevelopment of the former Norton Air Force Base in San Bernardino took another step forward this month as developer Hillwood began construction of a 913,726-square-foot distribution center.

Michael Daley, senior vice president in the Ontario office of real estate firm Colliers Seeley International Inc., said Pactiv will move into a 586,820-square-foot space of the new building.

Daley said the firm is talking with potential users for the remaining space in the new building as well as a 540,000-square-foot extension of a Pep Boys distribution center built in 2005.

Daley said Pep Boys has an option on 200,000 square feet of the extension, which it has not exercised yet. The remaining space is available.

Since taking over redevelopment of the base under the name AllianceCalifornia, Texas-based Hillwood, a company chaired by billionaire Ross Perot Jr., has overseen construction of 5.8million square feet of new buildings, almost exclusively warehouses.

Besides Pep Boys and the upcoming Pactiv warehouses, the project includes distribution centers for the Kohl's department store chain, toymaker Mattel and the new Stater Bros. corporate headquarters, which is under construction.

Most recently, Medline Industries Inc., an Illinois-based medical supply company, announced plans to open a 404,560-square-foot warehouse at the base.

The redevelopment has helped create nearly 3,000 new jobs in and around the base, according to Hillwood.

Hillwood building lands first tenant

Jim Steinberg, Business Editor — Fri, 14 Apr 2006 00:00:00 GMT

Hillwood, the master developer for much of San Bernardino International Airport, will complete its first speculative building in the company's AllianceCalifornia Project this fall.

Although construction on the building, known as the Gateway North Building One, began with no tenants, Illinois-based Pactiv Corp. will take about 600,000 square feet of the 913,726-square-foot building, sources knowledgeable about the deal say.

Pactiv officials could not be reached for comment Thursday.

Pactiv is a leading producer of specialty packaging products for the consumer and food service/food packaging markets.

Among the company's products are Hefty waste bags, Serve 'n Store plates and Easy Grip party cups.

With $2.8 billion in sales, Pactiv derives more than 80 percent of its sales from market sectors, in which it holds the No. 1 or No. 2 market-share position, Pactiv documents say.

Gateway North Building One still has more than 300,000 square feet available.

Although the building does not fall within the boundary of San Bernardino International Airport, it is within Hillwood's AllianceCalifornia Project.

In addition to Pactiv, Hillwood has brought Kohl's, Mattel, Pep Boys and Medline to the project.

Hillwood, a Perot company, is ranked as one of the top commercial real-estate developers in the country and the top residential developer in Dallas-Fort Worth.

Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of the Dallas-Fort Worth International Airport.

Gateway North Building One is being marketed by Peter B. McWilliams, Michael J. Daley, and Ruben V. Goodsell of the Ontario office of Colliers Seeley.

Hillwood Develops First Spec Building at Alliance Project

By Bob Howard — Fri, 14 Apr 2006 00:00:00 GMT

SAN BERNARDINO, CA-Hillwood Investment Properties, the Texas-based company that is the master developer of the AllianceCalifornia project at the former Norton Air Force Base, has kicked off construction on the first speculative industrial building at the development. The building will total nearly 914,000 sf, according to Hillwood, and will be part of nearly 5.8 million sf that has been developed at the site since December 2000.

The new facility is called the Gateway North 1 building and is at 786 E. Central Ave. Hillwood expects to complete it in September. Hillwood is "confident that the speculative space in the Gateway North 1 building will be absorbed by the end of the year," says John Magness, SVP of Hillwood Investment Properties.

One prospective tenant has already committed for a majority of the building, where about 300,000 sf remains available, according to Magness. Hillwood did not disclose who the major tenant will be.

Listing agents for the new building are Peter McWilliams, Michael Daley and Ruben Goodsell of Colliers International's Ontario office. The new building will be the latest in a series of warehouse and distribution facilities at AllianceCalifornia that house companies including Kohl's Department Stores, the Mattel toy company, Stater Bros. supermarkets, the Pep Boys auto supply chain and Medline, a medical supply company that is building a 405,000-sf distribution facility on 20 acres.

The Kohl's warehouse is a 600,000-sf facility, Mattel's is 1.2 million sf and the Stater Bros. distribution facility totals 1.8 million sf. The AllianceCalifornia project totals 2,000 acres of the former Norton Air Force Base land, where Hillwood's plans call for the development of approximately 14 million sf of industrial space and logistics buildings.

HILLWOOD UNDER CONSTRUCTION ON FIRST SPECULATIVE BUILDING AT ALLIANCECALIFORNIA

contact: Dave Pelletier (817-224-6044, dave.pelletier@hillwood.com) — Thu, 13 Apr 2006 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has begun construction on the first speculative building in the AllianceCalifornia development in San Bernardino. The 913,726 square-foot Gateway North 1 building, which is located at 786 E. Central Ave., is scheduled to be completed in September 2006.

“Due to the many advantages of AllianceCalifornia and the tremendous amount of activity in the market, Hillwood is confident that the speculative space in the Gateway North 1 building will be absorbed by the end of the year,” said John Magness, senior vice president of Hillwood Investment Properties. “We’ve had great interest in the building and already have a customer committed for a majority of the facility. We still have more than 300,000 square feet available for perspective customers.

“An aggressive speculative building program has been an important growth strategy for Hillwood for many years. This philosophy led to a surge of growth at AllianceTexas that began in the mid-1990s and still continues today.”

Including the Gateway North 1 building, Hillwood has more than 2.1 million square feet of speculative space under construction across the country.

The Gateway North 1 building is being marketed by Peter B. McWilliams, Michael J. Daley and Ruben V. Goodsell of Colliers Seeley. For more information contact their Ontario office at 909-605-9400.

Since December 2000, when Hillwood was selected as the project’s master developer, 5.8 million square feet have either been built or are under construction at AllianceCalifornia. During that time 2,865 new jobs also have been created in the development.

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport and the $420-million American Airlines Center and Victory district near downtown Dallas.

# # #

Hillwood Set to Begin Building $55M Industrial Park as South Dallas Development Grows

By Tonie Auer, Southwest Correspondent — Thu, 30 Mar 2006 00:00:00 GMT

As land becomes increasingly hard to find, business growth in South Dallas and South Dallas County ticks slowly upward, evidenced by the construction of two new industrial parks and a new state university.Trammell Crow Co. has a 1.6 million-square-foot facility already under construction, and Hillwood Investment Properties will break ground before the end of April on an anticipated $50 to $55 million 1.85 square million business park. Hillwood Investment Properties' 113-acre Crossroads Trade Center is located on the west side of Interstate 35 East, just south of Interstate 20 in DeSoto in South Dallas County. The company plans to have pad sites ready for three buildings by the end of the third quarter, when the decision will be made whether to proceed with speculative construction. "Long term, building in the southern part of Dallas makes sense because there is a lot of relatively inexpensive land and that is important for industrial," said Dan Tatsch (pictured), senior vice president of Hillwood Investment Properties. "The I-20 corridor provides good surface transportation in terms of highways and there are existing rail lines."Tatsch said he believes the intermodal facility, in conjunction with the growing number of business parks, will increase the attractiveness of the southern sector to more logistics professionals when they are planning their distribution systems."We're seeing more industrial development moving southward today than just five years ago," he added, noting that Trammell Crow Co. used to be the only major developer in the southern sector. "Now you've got Trammell Crow, Hillwood, ProLogis, Duke, Argent and those are the people who are on the ground with announced development plans. The Southern sector has not gotten its fair share of developments for a long time, but I think that is going to change."Additionally, more jobs and economic opportunities should be coming to South Dallas as the University of North Texas nears the 2007 completion for its campus at Camp Wisdom and Houston School Road.

UPDATE: Site Work Ready to Begin for $50M-Plus Industrial Park

By Connie Gore — Wed, 29 Mar 2006 00:00:00 GMT

DeSOTO, TX-Eyeing the progressive change in the South Dallas market, Hillwood will begin dirt work on the 113-acre Crossroads Trade Center. The master development plan, as it now stands, calls for 1.85 million sf in three buildings.

There are no plans right now to raise spec space on land that Hillwood and local partner, United Commercial Development, acquired in 1992 from the Resolution Trust Corp. In February 2004, the developer took full control of the site near the split of interstates 35E and 20, picked up an additional 20 acres and closed out five years of negotiations for a 10-year abatement on real property taxes for up to 100% relief. "What we really are doing is eliminating a long lead time for the development process," says Dan Tatsch, senior vice president of the Fort Worth-based Hillwood Investment Properties. "We feel comfortable enough to start the dirt work."

Tatsch tells GlobeSt.com that Hillwood is awaiting permits, but expects to start prepping the land in a couple weeks. It will take about six months to finish. When the dust settles and the buildings are up, Crossroads Trade Center will have an all-in value of more than $50 million. The site is mapped for buildings ranging from 525,000 sf to 725,000 sf, but that, like whether or not to do spec, could change. "It's premature in the process to make that decision," Tatsch says. "The first building will depend on the market." In announcing the go-ahead, Hillwood says it will decide in the third quarter if it's going to roll out spec.

Hillwood's acreage is seven miles due west of Union Pacific Railroad's intermodal yard, but part of an interstate pocket that's on the radar screen of every large industrial developer in the market. "The $64,000 question is will the demand materialize to meet the supply," Tatsch says. "The number of name developers staking claims down there may make the difference."

Hillwood will build DeSoto industrial park

By STEVE BROWN / The Dallas Morning News — Wed, 29 Mar 2006 00:00:00 GMT

Developer Hillwood is starting work on a 113-acre industrial park on Interstate 35E in DeSoto.

The warehouse project is one of several new industrial developments kicking off south of Dallas.

"I think it's due time, and it makes sense on a number of different levels and has for some years," said Dan Tatsch, senior vice president of Hillwood Investment Properties, who sees demand increasing for industrial space in southern Dallas County.

"The question has always been how much do you build and how fast," Mr. Tatsch said. "We are all going to find that out."

Hillwood's Crossroads Trade Center will be near the southwest corner of I-35E and Danieldale Road.

The developer would like to build three buildings with 1.85 million square feet. And after putting in the streets and utilities, Hillwood will decide later this year how much of that to build.

"We will assess the market and decide if it makes sense to carry on immediately with a speculative building," Mr. Tatsch said. "I think you can make a sound argument for building in that area."

Other developers think so, too.

Duke Realty Corp. recently announced plans for a 624,000-square-foot distribution center to be constructed in Hutchins. The building will be near Interstate 20 and Interstate 45, adjacent to Union Pacific Railroad's new intermodal facility.

"The opening of the intermodal facility in late 2005 has generated a great deal of interest by tenants and companies wanting to locate near the UP facility," Duke senior vice president Jeff Turner said in a statement.

Along with the big railyard, freeway access and availability of development sites in the I-20 corridor are pluses, developers say.

In the last decade, the bulk of industrial development in North Texas has occurred northwest of Dallas.

Hillwood Buys Distribution Center from Helen of Troy

By Dees Stribling, Special Correspondent — Wed, 22 Feb 2006 00:00:00 GMT

Dallas-based Hillwood Investment Properties has acquired a 619,000-square-foot distribution center near Memphis from Bermuda-based Helen of Troy Ltd. The transaction was part of a build-to-suit deal inked last year between Hillwood and Helen of Troy, maker of a wide variety of personal care products, including Revlon, Vidal Sassoon and Dr. Scholl's.Helen of Troy will continue using the facility, the Airways Distribution Center in Southaven, Miss., until this spring, when it will move into a 1.2 million-square-foot facility built specifically for it by Hillwood in the DeSoto Trade Center, which is also in Southaven. Hillwood is currently building two separate spec industrial buildings at the DeSoto Trade Center, which covers 680 acres and is a foreign trade zone. Terms of the Airways sale weren't disclosed, but according to an SEC filing by Helen of Troy, it had a put option to require the developer to purchase the existing facility for $16 million. Helen of Troy paid about $33.6 million for the new facility, according to the filing. "The south Memphis industrial market is one of the strongest in the country, so we don't anticipate trouble in leasing the space in the Airways Distribution Center," a Hillwood spokesman told CPN this afternoon. He added that Hillwood plans to market the building to users ranging from 200,000 square feet to the entire building. Along with the buildings available at DeSoto Trade Center, Hillwood now has about 1.4 million square feet of distribution space available in the south Memphis submarket.

Hillwood increases portfolio with purchase of Helen of Troy building

Wed, 22 Feb 2006 00:00:00 GMT

Hillwood has acquired Helen of Troy's 619,000-square-foot facility in Southaven and will offer the building for lease beginning May 1.

The company cut a deal with Helen of Troy (NASDAQ: HELE) last year to construct a new 1.2 million square-foot distribution center at DeSoto Trade Center. Helen of Troy purchased its current 619,000-square-foot facility in Airways Distribution Center from Industrial Developments International in January 2003. It will continue doing business in that building until April, when it will move to the new, much larger facility.

Hillwood will lease the building to users ranging from 200,000-619,000 square feet. With two speculative buildings available at DeSoto Trade Center, Hillwood will have more than 1.4 million square feet of available distribution space in DeSoto County.

The company can now accommodate deals in the 50,000-619,000-square-foot range with its wide variety of industrial product, said Preston Herold, Hillwood Investment Properties vice president.

"After making 2.4 million square feet of build-to-suit and spec lease deals last year at DeSoto Trade Center, Hillwood continues to be bullish on the Memphis market, which has been one of the most active in the country," Herold said.

Some of Hillwood's success at DeSoto Trade Center can be attributed to its foreign trade zone status, which was approved in 2004. The 680-acre park is the largest of its kind in DeSoto County.

Dan Wilkinson with Colliers Wilkinson Snowden and Richard Burnette with The Burnette Co. will handle leasing at Airways Distribution Center.

Hillwood, which is based in Dallas, is a Perot company and is one of the top commercial real estate developers in the U.S. It is best known for its AllianceTexas development, a 17,000-acre project in the Dallas-Fort Worth area.

Distribution facility in Southaven sold

By Amos Maki — Wed, 22 Feb 2006 00:00:00 GMT

Dallas-based Hillwood Investment Properties is buying the 619,000-square-foot Helen of Troy distribution facility in Southaven.

The deal, the price of which was not disclosed, gives Hillwood a portfolio of 1.4 million square feet to lease. Hillwood also has two speculative buildings it is developing at DeSoto Trade Center.

Hillwood began construction last October on a 552,000-square-foot building and a 301,000-square-foot building at DeSoto Trade Center in Olive Branch.

"After making 2.4 million square feet of build-to-suit and spec lease deals last year at DeSoto Trade Center, (we) continue to be bullish on the Memphis market, which has been one of the most active in the country," said T. Preston Herold, Hillwood vice president.

Helen of Troy, which bought the Southaven facility in Airways Distribution Center from Industrial Developments International in 2003, is moving to a 1.2 million-square-foot distribution center at DeSoto Trade Center.

Foreign Trade Zone status was recently approved for the 450 acres that were added to DeSoto Trade Center in 2004.

The FTZ now includes the entire 680-acre business park.

FTZs are designated, secured areas within the United States that are considered outside the customs territory of the United States.

Locating within an FTZ reduces duties and taxes and eliminates disruption in the supply chain.

"Given the number of recently constructed big box developments, any advantage a developer can offer over a competitor will help attract more tenants to their building," said Tony Argiro, marketing specialist for CB Richard Ellis.

Southaven is closer to Memphis than Olive Branch and the building is within three miles of Memphis International Airport.

"It will provide Hillwood with a viable alternative to DeSoto Trade Center that is closer to Memphis International," Argiro said. "For some companies, the shorter transportation time to the airport is a key factor in selecting a site."

Dan Wilkinson of Collier Wilkinson Snowden and Richard Burnette of The Burnette Company will handle the leasing at the building and at DeSoto Trade Center, which has the capacity for 16 buildings totaling more than 11 million square feet.

Lured by a simple incentives process and business-friendly political environment, developers and their customers are increasingly looking south of the state line.

A recent report on Memphis and Shelby County incentives programs showed DeSoto County had lower annual costs for space, labor and property taxes than Memphis.

The report also said DeSoto County's "incentives are more generous, simpler, and require less time and legal costs to secure ... as compared to Memphis."

And it is working.

The North Mississippi submarket accounted for almost 3 million square feet of the Memphis market's 7 million square feet of absorption, according to Colliers Wilkinson Snowden. While North Mississippi makes up only 12 percent of the area's market size, it accounted for 42 percent of the market's absorption.

HILLWOOD PURCHASES 619,000 SQUARE-FOOT INDUSTRIAL BUILDING IN SOUTHAVEN, MS

contact: Dave Pelletier (817-224-6044, dave.pelletier@hillwood.com) — Tue, 21 Feb 2006 00:00:00 GMT

SOUTHAVEN, Miss. – Hillwood has acquired the 619,000-square-foot Airways Distribution Center, Building 1 facility in Southaven, Mississippi from Helen of Troy, which will continue to occupy the distribution center through April of this year. Beginning May 1, 2006, the space will be available for lease to users between 200,000 and 619,000 square feet.

This transaction, along with the two speculative buildings that the company is developing at DeSoto Trade Center, allows Hillwood to offer more than 1.4 million square feet of prime distribution space for lease in the Memphis market in the second quarter of this year. Hillwood began construction last October on the 552,000-square-foot DeSoto Trade Center 3 building and the 301,000-square-foot DeSoto Trade Center 4 building.

“After making 2.4 million square feet of build-to-suit and spec lease deals last year at DeSoto Trade Center, Hillwood continues to be bullish on the Memphis market, which has been one of the most active in the country,” said T. Preston Herold, vice president for Hillwood Investment Properties. “With the Class A distribution space the company has coming online in the next few months, Hillwood will be able to accommodate deals ranging from 50,000 to 619,000 square feet in state-of-the art buildings that feature tremendous cost-saving incentives.”

Recently Foreign Trade Zone status was approved for the 450 acres that were added to DeSoto Trade Center in 2004. Foreign Trade Zone #262 now includes the entire 680-acre business park, which also features outstanding access to Interstates 55 and 40; is within 10 miles of the FedEx hub and the UPS center at Memphis International Airport; and is close to the Memphis rail yard.

Located at 101 Industrial Drive, Airways Distribution Center, Building 1 is within three miles of Memphis International Airport, provides immediate access to Interstate 55 and features 10-year real and personal property tax exemptions available from the city and the county.

As the largest suburban area of Memphis, DeSoto County offers a large labor base. The area also benefits from aggressive incentives and streamlined approval processes offered by the city of Southaven, DeSoto County, and the State of Mississippi.

Dan Wilkinson of Collier Wilkinson Snowden and Richard Burnette of The Burnette Company will handle the leasing at Airways Distribution Center, Building 1 in addition to their responsibilities at DeSoto Trade Center.

Desoto Trade Center currently consists of three completed buildings totaling just over 2.4 million square feet, an 865,000 square-foot distribution center, which Hillwood is developing for Kuehne + Nagel, and 415 acres for additional industrial development. The 680-acre DeSoto Trade Center has the capacity for 16 buildings totaling more than 11 million square feet.

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport; the $420-million American Airlines Center and Victory district near downtown Dallas; and AllianceCalifornia, the 2,000-acre logistics center near Los Angeles.

Norton Air Force Base Transforms into Logistics Hub

Wed, 15 Feb 2006 00:00:00 GMT

Medical supply firm Medline Industries contracted with Hillwood (Dallas) to build a 400,000-sq.-ft. distribution center on 20 acres at Hillwood's AllianceCalifornia development in San Bernardino,

Calif.

The 2,000-acre business park is on the site of the former Norton Air Force Base. Construction already is under way on the building and should be complete by September.

The new Medline facility will reportedly aid the company in its expansion plans, said Bill Abington, president of Medline operations in a local news report. He said that it will help the company to deliver medical supplies with same or next day service.

Based in Mundelein, Ill., the Medline operates 29 distribution and service centers and exceeded $2 billion in sales last year. The company manufactures and distributes more than 100,000 products to hospitals, extended care facilities, surgery centers, home care dealers and agencies and other markets. One of the country's largest privately held providers of medical supplies, the company has doubled its sales volume in the past five years, averaging between 10-15% growth per year.

Medical supplier picks airport for warehouse site

By Joseph Ascenzi — Mon, 23 Jan 2006 00:00:00 GMT

An Illinois-based medical supply company will open a warehouse-distribution center at the San Bernardino International Airport, where it eventually plans to double its local work force.

Medline Industries Inc., which manufactures and distributes more than 100,000 products to hospitals, extended-care facilities and surgical centers, will occupy a 404,560-square-foot building at the former Norton Air Force Base, according to company officials.

The facility, which will service Southern California and Las Vegas, will be built on 20 acres at 1199 E. Mill St. The structure is expected to be ready for occupancy in September, said Bill Abington, president of operations and chief financial officer for Medline Industries in Mundelein, Ill., a Chicago suburb.

That property is part of the AllianceCalifornia project being developed by Hillwood, the Dallas-based company that is converting the former air base to civilian use as a cargo airport and business park. Mattel, Pep Boys and Kohl's Corp. have opened major warehouse/distribution operations at the former Air Force base since December 2000.

Stater Bros. Markets will move its corporate headquarters and its warehouse/distribution operation in Colton to the former Air Force base during the first quarter of 2007.

The Medline deal was announced Jan. 18.

Hillwood will buy the 20 acres from the Inland Valley Development Agency, the regional joint powers group that oversees development at the former base. Hillwood will construct the building and sell it to Medline, Hillwood president John Magness said.

Financial terms were not disclosed.

Medline Industries operates 29 warehouse/distribution operations in the United States and Puerto Rico.

Nine of those facilities serve specific hospitals or health care facilities; the rest supply territories.

The company employs about 100,000 people and it can provide next-day service to about 95 percent of the U.S. population, according to a release.

Medline currently operates a 200,000 square-foot warehouse-distribution operation at 14650 Meyer Canyon Drive in Fontana.

That facility, which Medline plans to sell, opened in 2001 and employs about 65 people, said Bob Waller, senior vice president of operations.

Over time, Medline plans to increase the work force at its San Bernardino operation to about 130 people.

"We're experiencing so much growth in that area that we're going to need more room," Abington said. "We outgrew Fontana. We liked the air base site because the city was so cooperative and Hillwood did such a good job of cutting through the red tape. They were both fantastic."

Abington declined to discuss sales figures for Riverside and San Bernardino counties, but the company reached $2 billion in sales during 2005, a 12 percent increase compared with 2004, he said.

Medline first approached Hillwood about locating at the former air base before it located in Fontana. But Hillwood was still assembling its master development agreement with the development authority and was unable to come to terms with Medline, Magness said.

Medical Supply Firm Plans 405,000-SF Warehouse at Hillwood Project

By Bob Howard — Fri, 20 Jan 2006 00:00:00 GMT

SAN BERNARDINO, CA-Medical supply firm Medline Industries has contracted with Texas-based Hillwood for a 404,560-sf distribution center on 20 acres at Hillwood's AllianceCalifornia development. Construction already is under way on the building, which will be located at 1199 E. Mill St. in the Gateway section of AllianceCalifornia and is scheduled to be completed in September.

The new Medline facility will aid the company in its expansion plans, according to Bill Abington, president of Medline Operations. He says that it will help to enable the company to deliver medical supplies with same or next day service, a capability that he says “can be critical” in the medical supply business.

Mundelein, IL-based already operates 29 distribution and service centers and is one of the country's largest privately held providers of medical supplies, with service to more than 95% of the US population. The company manufactures and distributes more than 100,000 products to hospitals, extended care facilities, surgery centers, home care dealers and agencies and other markets.

Medline is the fourth company from either the Fortune 500 or the Forbes List of Top Private Firms to open a new facility at AllianceCalifornia since December 2000, when Dallas-based Hillwood became the project’s master developer. The others at the project include a 600,000-sf Kohl’s distribution building, a 1.2-million-sf Mattel facility and a Stater Bros. distribution facility totaling 1.8 million sf.

AllianceCalifornia is Hillwood’s 2,000-acre business park on land that formerly was the Norton Air Force Base. Plans for AllianceCalifornia call for the development of approximately 14 million sf of industrial space and logistics buildings.

Medline facility to be in San Bernardino

By JACK KATZANEK / The Press-Enterprise — Thu, 19 Jan 2006 00:00:00 GMT

Medline Industries Inc., which sells a line of professional-care treatments for wounds, is the latest company to join the AllianceCalifornia development in San Bernardino.

Medline will occupy a 404,560-square-foot distribution center on a 20-acre site at the former Norton Air Force Base, master developer Hillwood said in a statement. Work has already started and should be completed by September.

The company will move from a smaller warehouse in Fontana, where about 65 people work, said Bill Abington, president of operations. The employees will be given a chance to move to San Bernardino, Abington said.

The company could add employees but it would depend on the demand for its products.

"But we know there is significant growth in that area," Abington said by phone.

The facility will be one of 27 distribution centers Medline operates nationwide, Abington said. Medline, based in Mundelein, Ill., announced last year it will bring its entire California sales staff under one roof in Ontario.

The distribution center is at 1199 E. Mill St. in the Gateway section of AllianceCalifornia.

Medline ranks No. 163 on Forbes list of the top privately held companies.

Several companies that have committed to AllianceCalifornia in San Bernardino since Dallas-based Hillwood became developer in 2000 are on the Fortune 500 list, including Colton-based Stater Bros. Markets, which ranks No. 493.

MEDLINE TO OPEN DISTRIBUTION CENTER AT HILLWOOD’S ALLIANCECALIFORNIA DEVELOPMENT

contact: Dave Pelletier (817-224-6044, dave.pelletier@hillwood.com) — Wed, 18 Jan 2006 00:00:00 GMT

SAN BERNARDINO, Calif. – Hillwood has contracted to build a 404,560 square-foot distribution center on 20 acres at its AllianceCalifornia development in San Bernardino for Medline Industries Inc., the nation's largest privately held manufacturer and distributor of healthcare supplies.

Medline is the fourth company from either the Fortune 500 or the Forbes List of Top Private Firms to open a new facility at AllianceCalifornia since December 2000, when Dallas-based Hillwood was selected as the project’s master developer. Medline is 163rd on Forbes List of Top Private Companies. Kohl’s (184), Mattel (383) and Stater Bros. Grocers (493) are ranked among the Fortune 500. Pep Boys, the fifth company attracted to the development since December 2000, is listed just outside the Fortune 500 at 689.

“In the healthcare marketplace, being able to deliver medical supplies with same or next day service can be critical,” said Bill Abington, president, Medline Operations. “With 29 distribution and service centers, Medline offers next day service to more than 95% of the U.S. Population. We are privileged to be the supplier of choice to so many quality hospitals, nursing homes, surgery centers and other healthcare facilities in Southern California and this new state-of-the-art distribution center will position us for even more growth and expanded service within this market.”

Construction already is underway on the building, which will be located at 1199 E. Mill Street in the Gateway section of AllianceCalifornia. The facility is scheduled to be completed in September 2006.

Medline, headquartered in Mundelein, IL, manufactures and distributes more than 100,000 products to hospitals, extended care facilities, surgery centers, home care dealers and agencies and other markets. Medline has more than 700 dedicated sales representatives nationwide to support its broad product line and cost management services.

Hillwood, a Perot company, is ranked as one of the top commercial real estate developers in the country and the top residential developer in Dallas-Fort Worth. The company's developments currently house facilities for 81 companies listed on either the Fortune 500, Global 500 or Forbes List of Top Private firms. In addition to AllianceCalifornia, Hillwood is best known for its development of the 17,000-acre AllianceTexas development, located 15 miles northwest of DFW Airport and the $420-million American Airlines Center and Victory district near downtown Dallas.

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Stater Bros. secures SB site

Jim Steinberg, Business Editor — Sat, 07 Jan 2006 00:00:00 GMT

Colton-based Stater Bros. Markets on Friday officially took possession of approximately 160 acres at San Bernardino International Airport for its new distribution and warehouse center.

``All the conditions have been met,'' said Jack Brown, chairman and chief executive officer.

As part of its site preparation for the $200 million construction project, Stater Bros. relocated 30 businesses that were on land needed for its project.

``We spent a pile of money,'' Brown said, declining to be more specific.

``This deal is real,'' said Don Rogers, interim executive director of the Inland Valley Development Agency.

``They put up the money. The land has been transferred. The project will be built,'' Rogers said.

Stater Bros. paid the IVDA approximately $4.6 million for the land. That money will be reinvested in various infrastructure improvements, including the widening of Leland Norton Way.

Brown said that construction on the project will begin well before the end of this month.

Rogers said that demolition of some buildings still has to be completed.

Brown said Stater Bros. will move its administration building to the new site in February 2007 and warehousing operations will begin there in summer 2007.

The move will consolidate 10 facilities located in four cities.

Brown said the relocation of the 30 businesses occurred ``without one lawsuit being filed.''

``Our philosophy is do the right thing for the right reason. And the right thing was to be fair with the people who were here (on the land Stater Bros. wanted to buy),'' he said.

Upon completion, 2,000 jobs will move to SBIA. About 500 construction jobs will be created as the project is being built, he said.

Stater Bros. completes deal for ex-Norton site

Jack Katzanek, — Fri, 06 Jan 2006 00:00:00 GMT

Stater Bros. Markets took a big step toward its new corporate headquarters and distribution center Friday, when the chain became the owner of a 160-acre site on the former Norton Air Force Base.

The Colton-based chain has had a deal with the Inland Valley Development Agency, the developer of the portions of the former base not being used for aviation, for more than a year.

All the conditions of the deal were completed Friday, said Jack Brown, Stater Bros.' chairman of the board and chief executive officer.

A few more permits are needed but construction will start soon, Brown said.

"We're ready to come out of the ground," Brown said by phone. "Now it's just going to be a matter of bricks and mortar."

Stater Bros. held a ceremonial groundbreaking in February, but some existing tenants at the site had to be relocated and old warehouses -- some dating to the World War II era -- torn down, Brown said. Also, IVDA had to ensure the site was environmentally safe.

Construction will be completed in phases and take 18 months to complete, Brown said.

Stater Bros. headquarters and its main distribution center on Barton Road have been in Colton for more than 45 years.

But the chain has distribution facilities and offices in several other Inland cities, and bringing them together under one roof has long been a goal.

The project, which has a price estimated at $200 million, will eventually house more than 1,600 employees and generate a payroll estimated at $3 billion over the next 20 years.