4 Industrial Titans Talk 2016 Projects: Hillwood, Billingsley, Duke & Jackson Shaw
1. Duke Realty
Duke Realty built the first 1M SF spec industrial building in Dallas and now the REIT is turning toward almost exclusively industrial, Duke Realty EVP Jeff Turner told the crowd at Bisnow's Dallas industrial event yesterday. Now, the REIT focuses about 80% to 90% of its business on industrial, with medical making up the remainder. This year, Duke is focused on build-to-suit projects on existing parcels. No spec, Jeff says. He expects to see more infill projects coming. The more the metro sprawls, the more valuable it's become to nab an infill site.
2. Billingsley Co
Billingsley Co has a 204k SF spec building going up in Mercer Business Park and is building a new 300k SF corporate HQ build-to-suit for Interceramic at Austin Ranch, says Billingsley partner George Billingsley (right, with Ratcliff Constructors’ Robert Williams). He, too, thinks infill will become more popular, and we'll see some infill sites being demo'd and replaced with new construction. George says the industrial market has been both burdened and blessed with a good economy; that makes it hard to find good land and when you do, it’s expensive.
Hillwood Properties EVP Bill Burton (center, chatting after the event with attendees) says Hillwood has 12 buildings under construction totaling 3.9M SF across the market in a variety of products and sizes. He says a challenge for industrial is that all the good land has been picked over. While Alliance (Hillwood’s massive intermodal facility in Fort Worth) had a lot of land, the easiest parcels have already been developed. There’s also the challenge of more government regulations regarding water and drainage issues. While development is hot across all markets, finding construction crews and quality subs can be a big issue. Some crews have walked off jobs because they can get more money somewhere else. Hillwood benefits from having a consistent book of business and quality relationships with its subs. Real estate is only about 5% to 10% of a project's cost, Bill says. Where Hillwood wins deals is by helping its partners with issues like labor, transportation and logistics costs.
4. Jackson Shaw
Jackson Shaw will break ground this year on about 800k SF of projects, says Jackson Shaw VP Jason Nunley (far left with panelists, George, Jeff, moderator Partner Engineering and Science national client manager Katrine Hanson and Bill). Jason says he’s betting on 2017 to be a great year for industrial. He agrees that urban infill will be in demand, but says that’s a challenge to find. DFW has an abundance of land but it’s hard to go too far north or south because of government regulations and traffic.