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By   –  Reporter, Houston Business Journal

As the U.S. Highway 290 corridor outside the Grand Parkway is seeing increased development, Houston-based Pagewood will be among the first companies to deliver a speculative distribution center in the area.

The real estate firm closed on a 63-acre tract along U.S. 290 in Waller in April for an undisclosed price and plans to start site work next week after securing construction financing from Prosperity Bank.

Evelyn Ward of Transwestern represented the seller and Robert Graf of Houston-based Dosch Marshall Real Estate was the broker for Pagewood.

The 500,840-square-foot cross-dock facility is slated to be ready for one or more tenants next March. Dallas-based CBRE will be in charge of leasing.

Houston architecture firm Powers Brown designed the Great 290 Distribution Center and Sugar Land-based E.E. Reed Construction is the general contractor.

The facility will have about 3,000 square feet of office space with the rest for warehouse space, said Pagewood founder and Managing Principal Paul Coonrod. It will have 36-foot clear height and outside parking for 130 trailers and 218 cars, with room to expand.

Potential tenants could come from various industries, Coonrod said, including logistics, distribution and material suppliers, and it could serve well as a company’s southeast Texas distribution hub.

“At this location, you can easily serve Houston,” he said. “But also, it’s incredibly easy access to central Texas, north Texas or even, going a little further out west, to San Antonio.”

This is the second project for the young company, which Coonrod founded in the first quarter of last year. The other one is a 40,000-square-foot repurposed coworking facility next to The Cannon near CityCentre in west Houston, called The Quad, which Pagewood is building in a joint venture with Houston-based Wile Interests.

Pagewood decided to build the spec distribution center in the U.S. 290 corridor based on the company’s machine learning predictive algorithm and supply and demand for industrial real estate in the area. Vacancy for warehouses above 350,000 square feet is less than 2% in the northwest Houston market, he said.

“In order to capitalize on that market inefficiency, you need to be able to essentially buy at least 40 acres in northwest Houston,” Coonrod said. “And the only location in northwest Houston where you can find 40 acres at a land price that justifies industrial development is along the Grand Parkway or outside of the Grand Parkway, and for us being along (U.S.) 290 was key and paramount if you’re going to be this far out.”

In January, The Avera Cos. announced it will build 290 Grand Logistics, a 1.3 million square-foot industrial facility on 68 acres at Highway 290 and Kermier Road, estimated to be delivered in the first quarter of next year.

Earlier this year, Houston-based real estate development firm Hines purchased 78 acres for build-to-suit industrial space in the Wolff Cos. master-planned Beacon Hill community in Waller.

At least five other developers have industrial sites under contract in the 290 corridor, Gray Gilbert, partner in NAI Partners’ Industrial Services group, told the Houston Business Journal in March. However, while the city of Waller provides utilities for Pagewood’s tract, some that are outside the city or municipal utility districts are having to figure out how to get utilities to their sites.

While Pagewood is not yet in talks with potential tenants for the Great 290 Distribution Center, Coonrod is confident there won’t be a shortage of interest.

“We know that there’s a tremendous amount of large, credit-worthy tenants looking for 500,000 square feet or more in northwest Houston,” he said. “There’s a lot of those out in the market right now, and we’ll start talking to them pretty darn soon.”

This story was updated to include The Avera Co.’s planned facility at U.S. 290.

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