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.