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Hillwood plans $50M buildout at Target distribution hub
Perot firm is turning 1.2M sq ft space into a warehouse
A photo illustration of Hillwood Investment Properties’ Chairman Ross Perot Jr. along with Beltway 66 Logistics Park (Getty, Hillwood Investment Properties)
Hillwood is planning major improvements for a massive Target distribution center.
The Dallas-based development firm chaired by Ross Perot Jr. is set to spend $50 million on interior improvements for the 1.2 million distribution facility at 5805 South Sam Houston Parkway East, according to state filing records. The project will convert the distribution space into a “new function” to operate as a warehouse, the records state. Construction is set to begin in June with a completion date of February 2025. The facility sits within Hillwood’s four-building, 66-acre Beltway 66 Logistics Park, which was completed last year.
Target signed a lease in 2022 confirming its plan to use the location as a distribution center. The lease was estimated to cost over $65 million, according to the Houston Chronicle. The facility, designed by Powers Brown Architecture, was one of the Bayou City’s largest industrial projects completed last year. Target did not immediately respond to requests for comment.
Construction activity in Houston’s industrial market surged in 2023, with 41 percent more projects completed compared to the previous year, according to Avison Young’s Q4 industrial market report. This wave added a record 32.4 million square feet of space to the market, slightly edging past the previous record set in 2020.
Leasing activity moderated somewhat, but it remained robust. The influx of new industrial space contributed to a 1.7 percent increase in the total vacancy rate, reaching 7.3 percent in Greater Houston. Net absorption for 2023 stood at 19.5 million square feet, marking a 39 percent decline from the peak seen in 2021 but more in line with pre-pandemic levels.
Hillwood is developing two of Greater Houston’s largest industrial projects, totaling over 3 million square feet. Last year, it delivered the first phase of the 1.8-million-square-foot, seven-building Pinnacle Logistics Park at Tanyard Creek Drive near Westbank. The firm also completed the 1.3 million-square-foot Grand Port Logistics Park on a 108-acre tract in Baytown near Port Houston at Kilgore Parkway Frontage. Hillwood did not respond to request for comment.
Hillwood is currently developing a 98,000-square-foot retail-anchored development, called Harvest Town Center, in the Fort Worth suburb of Argyle, as part of its master-planned community, Harvest by Hillwood. Construction is set to begin in June on the new retail project.