Home Depot hammers out deal for new distribution center

The Home Depot Inc. will be undertaking some improvements of its own after signing a huge lease last month for a new distribution center in Northwest Houston.
The Atlanta-based retailer is leasing the entire 535,000-square-foot Fallbrook Distribution Center, according to sources close to the deal.
Fallbrook Distribution Center is currently being built by Malvern, Pa.-based developer Liberty Property Trust.
Home Depot already has a 750,000-square-foot distribution center in the Cedar Crossing Industrial Park near the Port of Houston, as well as other facilities in the Houston area.
Home Depot executives were not available for comment by press time.
Joe Trinkle, city manager in Houston for Liberty Property, discussed the deal but would not confirm the tenant's name.
But the large transaction is common knowledge in real estate circles, especially since a number of developers tried to land the deal.
"I think it will be one of the largest single-lease transactions this year," says Ron Roberson, head of commercial development at Caldwell Cos. "There just aren't that many half-a-million square foot deals."
Meanwhile, the facility, located at the southwest corner of Fairbanks-North Houston and Fallbrook Drive, is being billed as one of the first industrial buildings in Houston to seek LEED certification as a sustainable development. Liberty Property first announced plans to build two "green" industrial buildings late last year.
Liberty Property also switched gears in the middle of construction to make the facility -- originally planned as 615,000 square feet -- smaller to suit the long-term tenant. "We disassembled the east side of the building and relocated tiltwall concrete panels to create a larger employee parking area," Trinkle says. "We had to take apart the building to accommodate their need."
The west side of the building was also disassembled and reconstructed in order to add a third loading dock, he says.
Gary Mabray, an industrial broker with Colliers International, says it is unusual for a construction project to undergo as many changes as this one did.
"That building was basically finished," Mabray says. "They had to go back in and demolish slab and everything."
Liberty Trust, a real estate investment trust, offered the tenant a build-to-suit option at another site so the building would not have to be converted, but Trinkle says the timing was off.
The Fallbrook tenant wanted to move in by July instead of waiting until the first quarter 2009.
"The problem was timing," Trinkle says. "They needed to be in this summer." FRom HBJ 4/28/2008 For more information see: www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net