500 KSF Industrial Lease Signed Near Houston Port

TGS Cedar Port Partners has signed a tenant for a nearly 500,000-square-foot rail-served distribution center on 27 acres in the TGS Cedar Port Industrial Park in Baytown, Texas. It is the largest rail-served industrial deal of the year in the Houston market.

The tenant is Constellation Beverage, an international producer and marketer of beer, wine and spirits, according to CommercialEdge data. Terms of the lease were not disclosed.

Located on 27 acres at 4407 East Grand Parkway South, DC 2 was completed in the first quarter of 2023. The 496,421-square-foot facility offers dual rail service from Union Pacific and BNSF. Building features include a 36-foot clear height, 8-inch minimum slab, LED warehouse lighting, ESFR sprinkler system, oversized truck court and ample car and trailer parking. The property has direct access to Port Houston container terminals and major highways.

Cedar Port, which spans approximately 15,000 acres, is the largest master-planned, rail-and-barge-served industrial park in the United States. The park currently has 10,500 acres available for sale, lease and build-to-suit developments. Sites can range from 5 to more than 1,500 acres. Cedar Port has more than 25 million square feet of industrial and manufacturing warehouses already developed or under construction.

More properties for lease

TGS Cedar Port Partners owns 3.8 million square feet of warehouse space in the park, including two distribution centers available for lease and immediate occupancy. DC 3 is a 150,000-square-foot dual-rail-served facility that can be expanded up to 600,000 square feet. DC 4 is a 1.2 million-square-foot warehouse that can be expanded to more than 2 million square feet. It has an 8,236-square-foot spec office, 40-foot clear height, 8-inch minimum slab, 5000-amp power, ESFR sprinkler system and more than 1,000 car and trailer spaces.

The firm is preparing to break ground on DC 5, a 609,000-square-foot distribution center that can be expanded to more than 900,000 square feet. The asset will have the flexibility to be configured as a dual-rail-served or cross-dock facility.

Last year, Capital Development Partners completed Cedar Port Logistics Center Building II, an 800,405-square-foot facility located within the industrial park. It is part of a 90-acre campus that includes an 800,500-square-foot warehouse that came online in 2022. That building was sold to Stockbridge Capital Group the same year.

Houston market highlights

New industrial supply outpaced demand during the first quarter of the year in the Houston market, with 3.6 million square feet of space completed compared to 1 million square feet of net absorption, according to a Colliers report. There will be additional supply coming because, Colliers notes, 16.7 million square feet of space is under construction, up 11.6 percent from the fourth quarter of 2024 and up 24.3 percent year-over-year. First-quarter leasing activity was at 8.8 million square feet.

Colliers described it as healthy activity but stated it was down 6.8 percent from the first quarter of 2024. Overall vacancy was 6.8 percent, up from 6.5 percent in Q4 2024, but lower than 7.1 percent in Q1 2024. The Port of Houston continues to be a key economic market for the industrial market with March container volumes up 7 percent year-over-year.