The Situation
AQUILA was engaged in early 2019 to lead EDC Moving Systems in its search for new space. The requirement was a challenging one.
EDC was approaching its lease expiration for its existing warehouse space in North Austin.
Rather than renew, the company knew that they wanted to relocate to a new facility for several reasons.
First, they had outgrown their existing building and needed room to expand. They also were interested in relocating to one of Austin’s surrounding suburbs to capitalize on potential incentive opportunities.
The Challenge
EDC was looking for a 90,000-to-100,000-square-foot block, which there was a scarcity of at the time. This limited the options to primarily new construction, which created an additional challenge – time. EDC’s lease expired in November 2019, but most new projects wouldn’t deliver until early 2020 at the earliest.
Finally, EDC did not want a significant increase in rental rate, which further limited the options in the market, especially when looking at new construction.
The Approach
In order to assuage the timing concerns, AQUILA helped EDC extend its current lease for three months. This made the lease expiration fit more closely with the proposed timing of new construction delivery in the market.
AQUILA was able to identify a few select options that met EDC’s requirements. With EDC, the list was narrowed to two locations, with one option eliminated due to timing concerns.
This ultimately led them to Innovation Business Park III, a planned development from Titan Development in Hutto, Texas.
The project had a seven-month construction schedule, and AQUILA thoroughly vetted the project to ensure that EDC could feel comfortable that the project would deliver on schedule. After careful conversations with the construction team and reviewing recent projects that followed a similar schedule, AQUILA and EDC determined that Innovation Business Park III would be delivered in time for EDC to vacate its previous space prior to the lease expiration.
This was crucial. Not only did EDC want to avoid holdover fees if they had to stay in their existing space past their expiration, but EDC’s landlord had a buyer lined up to redevelop the existing property and had made it clear that there would be little leniency should EDC need to hold over.
The Results
With a reasonable assurance of on-time delivery, EDC executed a lease for 93,313 sf at Innovation Business Park III, and Titan kicked off the project construction.
In addition to finding a space that met their timing and size needs, EDC received both property and sales tax incentives from the City of Hutto for their relocation. And, AQUILA was able to negotiate a favorable rental rate that met EDC’s budget.
The building delivered in shell condition at the end of 2020, and EDC was able to build out its space and occupy it prior to its lease expiration.
EDC’s relocation from Austin to Hutto was pivotal for the City of Hutto. The relocation brings both businesses and new residents to the growing city.
As a part of the relocation and expansion, EDC relocated 38 employees and planned to employ 12 contract workers and hire an additional 12 new positions over a five-year period.
EDC’s leadership told the Austin Business Journal, “We are happy to relocate to an area that is more convenient and economical for our staff and their families. We are eager to build in this flourishing city.” An indication that many of the employees would plan to live in the Hutto community as well.
Titan Development told the Austin Business Journal, “Hutto’s commitment to bringing this project online really demonstrates their level of commitment to job growth and positive economic impact for the city. We continue to see impressive industrial growth in Hutto.”
Additionally, this was the first of two leases at Innovation Business Park III, which brought the building to 100% leased. Shortly after finalizing the EDC lease, Titan Development sold the property to Dogwood Industrial Properties, the industrial investment arm of TPG, a global private investment firm.
Ready to talk about finding your next space?
An AQUILA industrial tenant representation expert is ready to talk to you. Schedule your consultation today.
