ABJ: Goodwill Industries of Central Texas growing in a big way Read more: Goodwill Industries of Central Texas growing in a big
Sep 5, 2010
http://www.bizjournals.com/austin/stories/2010/09/06/story1.html
Goodwill Industries of Central Texas has signed a lease for a 124,200-square-foot building in Southeast Austin, marking the largest industrial lease transaction of the year and one of the biggest deals across all real estate sectors in 2010.
Besides being a big step for Goodwill, with its largest single footprint in Central Texas, the announcement represents a shot in the arm for the ailing industrial sector in Austin, with the Southeast submarket leading the charge for recovery.
Goodwill will consolidate two warehouses, offices and retail space spread throughout the region into Kelly Trade Center II, a single building at 6505 Burleson Road. Finish-out work will begin immediately, with Goodwill anticipating a move in early December. The site will be called the Goodwill Resource Center.
“This space will provide a more accessible location for all of our Southern community members as they seek out our assistance to find, obtain and retain jobs,” Goodwill President and CEO Gerald Davis said. “It will also help streamline our operations and create added efficiency so that we can generate additional revenue to help more people.”
Goodwill’s decision is expected to reduce vacancy rates for the third quarter in the Southeast industrial market, which has seen activity increase in the last six months.
“The Southeast submarket is leading the charge out of the doldrums,” said Ken Satterlee, president of St. Croix Capital Corp., which bought the Kelly Trade Center property in mid-2007. At the time, the building, built in 1998, was fully occupied with a tenant that eventually moved out, leaving a prime block of large space available until Goodwill came along.
Goodwill’s good times
Goodwill’s consolidation at the Kelly site marks a net expansion of 40,000 square feet for Goodwill. Additional office space will house a new job training classroom and a new conference room. The conference room will be open to the community to provide meeting space for Goodwill and other local nonprofits, Director of Property Roberta Planos said. The site will house a 5,400-square-foot job assistance center, 32,000 square feet of community meeting rooms, a 23,000-square-foot retail outlet and warehouse space for Goodwill.
Goodwill’s Central Texas operation, which functions independently of the national headquarters in Rockville, Md., is the sixth-largest nonprofit in Austin, and has been active locally since 1958. It focuses on job-related services for people with employment barriers, such as disabilities and homelessness. In 2009, Goodwill provided more than 43,000 job-related services to more than 13,000 individuals.
Serving 15 counties, it has 33 locations with 22 retail stores, eight bookstores with attended donation centers, and three attended donation drop-off sites. Goodwill reported $39 million in revenue in its latest available tax forms for 2008, up from $36.5 million in 2006 and 2007.
The nonprofit has fared well during the recession, officials said, opening new stores, including three this year with expansions in Round Rock and Oak Hill. Its entry into upscale Lakeway is planned for Sept. 18 — a month ahead of schedule.
“People have needed our services more than ever in this recession, and the retail side especially has allowed us to be in a place where we can turn around and take advantage of the lower prices in the real estate market to expand and enter new places in Central Texas,” Planos said.
Planos said Goodwill already is under contract with Endeavor Real Estate Group for a ground-up location at the growing Southpark Meadows retail development in South Austin. Construction is planned to start next January with a grand opening in August 2011. The nonprofit, which likes to open two to three retail stores a year, has aspirations for new stores in Marble Falls and Fredericksburg in 2011.
For the greater industrial good
As of mid-2010, the vacancy rate for industrial space in the Southeast Austin sector was 22 percent, according to CB Richard Ellis Inc. The citywide vacancy rate increased from 22 percent at the end of 2009 to 24 percent by mid-2010, a level not seen since the late 1980s, according to NAI REOC Austin.
Besides Goodwill, other significant industrial leases signed this year in Southeast Austin are among the top five throughout the city in 2010. Others include Ultra Electronics Advanced Tactical Systems Inc. and US Courier & Logistics, which both leased 76,800 square feet at Burleson Business Park. Western Paper leased 37,000 square feet, and Move Solutions leased 24,000 square feet in the same submarket.
New construction projects are also in the works for the Southeast, including the Veterans Administration’s new 185,000-square-foot clinic, Data Foundry’s 250,000-square-foot data center and Ben E. Keith’s 85,000-square-foot distribution center.
John Barksdale, a senior associate at CB Richard Ellis, represented St. Croix in the Goodwill transaction. Jay Lamy and Zane Cole with AQUILA Commercial represented Goodwill.
Todd Tebbe of AQUILA Commercial is serving as project manager. Carson Design Associates has been selected as the architect, while S. Kanetzky Engineering is the engineer. The project is accepting bids from general contractors.
“It’s exactly the type of activity that bolsters a true recovery,” Barksdale said.
