Dallas-based Holt Lunsford Commercial to build warehouse project near Austin airport

A new-to-town commercial and industrial real estate player is champing at the bit to get in on the action in Austin, even as some observers anticipate a slowdown in the market.

Dallas-based Holt Lunsford Commercial Investments recently disclosed plans for its second development in Austin in barely more than a month. SouthPark 183, as the new 19-acre project is called, would have three shallow-bay, rear-load buildings totaling slightly more than 246,000 square feet.

It's anticipated to break ground in the first quarter of 2025, putting more commercial warehouses within short drives of Tesla Inc.'s gigafactory in northeast Travis County, Austin’s Central Business District and Austin-Bergstrom International Airport.

The site is about two miles south of ABIA and less than nine miles from downtown. The development will replace the vacant Longhorn Speedway, a race track at the intersection of U.S. 183 and Farm-to-Market 812 that's now the used by the 812 Outdoor Market, a regularly held flea market.

The location is outside Austin's city limits but within its extraterritorial jurisdiction, which takes in unincorporated land within five miles of the city's boundaries.

Holt Lunsford bought the site in late December 2023. Counting the company's other project in the Austin area — Burleson Tech, a four-building, 632,370-square-foot industrial site set to rise on a 55-acre L-shaped infill property at 7051 Burleson Road — it's pipeline in the region totals nearly 880,000 square feet. Burleson Tech is anticipated to complete the city's entitlement process this year.

The Austin area has been a playground for commercial and industrial developers in recent years, fueled by major companies such as Tesla, Apple Inc. and Applied Materials, all of which have invested heavily in the region. In a ground-shaking move, Samsung Electronics Co. Ltd. also announced April 15 that it's widening its investment in the area to $45 billion as it expands operations at both its Austin and Taylor sites.

Still, precisely how much demand for commercial and industrial real estate there is in the Austin metro is unclear.

Davis Bass, industrial project partner at HPI Real Estate Services & Investments, said he expects industrial development in the region to slow.

"Part of that is due to the fact that we are building and delivering more than we ever have, so it's hard to continue to beat that pace," said Bass, an Austin Business Journal Heavy Hitter for 2024 and a leader in the market for a decade. "There are also some restrictions on the capital side that will make certain projects hard to get out of the ground."

Representatives of Holt Lunsford said Austin's southeast submarket, where both of its projects are located, offers access to major transportation routes that are critical for prospective tenants to effectively serve customers for local, interstate, or international service.

In addition, the property resides within a designated Opportunity Zone that provides incentives for the reinvestment of capital gains in businesses, real estate and business assets.

"This project is perfectly positioned off Highway 183 to meet the growing demand of shallow-bay tenants looking for a prime infill location to continue the growth of Austin’s already-robust economy," stated Jon Lueders, Vice President of Development for HLCI.

With a deep focus on Texas since its founding in 1993, HLCI has acquired and developed more than 200 projects spanning more than 44 million square feet, according to the company. The firm has participated in the acquisition and development of more than $1.9 billion worth of commercial real estate projects, spanning more than 275 properties.