Greater Houston getting $114M Volkswagen Distribution Center

Joint venture will build VW’s 120-acre Gulf Coast Vehicle Terminal in Freeport

PRP Real Estate Investment Management's Paul C. Dougherty and KDC's Steve Van Amburgh (PRP, KDC, Port Freeport, Getty)
PRP Real Estate Investment Management's Paul C. Dougherty and KDC's Steve Van Amburgh (PRP, KDC, Port Freeport, Getty)

Volkswagen Group of America is adding to Greater Houston’s already substantial industrial space with a new $114 million, 120-acre distribution hub in Freeport, about 61 miles south of the Bayou City.

Volkswagen’s new gulf coast vehicle terminal, which will be able to service nearly all of the German automaker’s 300 US retail dealers, will consolidate the company’s current port and distribution operations in Houston and Midlothian, TX. near Dallas.

Combined, Houston and Dallas account for more than 20 percent of the industrial square footage under construction across the country. The Houston industrial market continues to see huge spec deals.

The joint venture between the developers has entered into a long-term ground lease with Port Freeport, while Volkswagen will lease its new hub from the venture for 20 years.

Construction is expected to begin in October and be completed in early 2024.

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The facility will allow Volkswagen to import 140,000 cars per year from its factories in Mexico and Europe. The company will use ships powered by liquified natural gas which will help the automaker reduce its emissions and improve PRP’s ESG initiatives, according to a press release.

It helps that Houston-based Freeport LNG operates a major terminal there that will give Volkswagen’s ships easy access to liquified natural gas.

Freeport is located on the Intracoastal Waterway and can get ships to the Gulf of Mexico in about an hour. Port Freeport is also known in the region for handling large ships importing automobiles. The port manages roughly 30 large vehicle ships a month.

Global carriers offering automobile cargo services at the port include Hoegh Autoliners, Glovis, Liberty Global Logistics, Sallaum, and Grimaldi Lines. Companies like Amports, Ports America, and Red Hook Terminals already have vehicle logistics operation terminals at Port Freeport.

Commercial real estate giant JLL brokered the deal for Volkswagen and helped the company select the new site.

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