News Article | 5/26/2010

LEGO Expands Distribution Center by 200,000 SF


ROANOKE, TX-LEGO Systems Inc. has expanded its North American distribution center by nearly 200,000 square feet, moving into 596,000 square feet at the Alliance Global Logistics Hub, which is part the 17,000-acre AllianceTexas development.


The Denmark-based company, which provides toys and teaching materials for children, currently occupies the 402,500 square-foot Alliance Gateway 62 building at 400 Patriot Pkwy. LEGO first opened its Alliance distribution center in 2006. The center is managed by Exel Inc., a third-party logistics company that occupies about 2.5 million square feet at Alliance.


“LEGO only has one distribution facility in North America, and their business had grown exponentially so they ran out of space,” says Tony Creme, who represented Hillwood internally on the deal. The tenant was represented by Dan Cook of Cushman & Wakefield of Texas.


Creme tells GlobeSt. that LEGO is a textbook example of Hillwood’s flexibility. “We have the ability to tear up a lease mid-term and move a tenant into another space,” he points out, adding that LEGO/Excel had two years left on the original lease.


LEGO’s new distribution space is in the 756,000-square-foot Alliance Gateway 60 building located at 300 Freedom Dr. The company, which will occupy 79% of the building, has the opportunity to expand into the remaining space as it grows.


The building, which had an asking rate of $3.25 per square foot, triple net, had been vacant for a year. It was previously occupied by Ryder Logistics and Phillips Electronics and represented Hillwood’s largest vacancy in the Alliance project.


LEGO’s existing space will be returned to Hillwood’s vacant inventory, but Creme says it’s a great building to have back since it offers rail service and all the “bells and whistles” including foreign trade zone designation.


Originally, Alliance Gateway 62 did not have foreign trade zone designation, and Hillwood worked with the city and state to obtain it for LEGO. “The new building had to have a foreign trade zone, and we were able to get a modification for it like we did for the previous building,” Creme explains. “This is a great public-private partnership that made this deal work. The city has a pro-business attitude and wanted to make sure that the expansion would happen.”


As part of the new lease, Hillwood made some improvements to the Alliance Gateway 60 building. “We repainted the exterior and refurbished the office area so their new home looks very similar to their old home,” Creme says.


LEGO joins a list of companies including General Mills, Motorola, ATC Logistics, SC Johnson & Sons, LG Electronics, and Bell Helicopter that have expanded at Alliance.