Hillwood Secures 34-Acre Site, Boosts DFW Portfolio

Key Takeaway

• Hillwood acquires 34-acre Freeport Business Center in Las Colinas, with Boeing among key tenants expanding leases.
• The complex is 70% leased, featuring office and industrial space near Dallas-Fort Worth International Airport.
• Despite a challenging office sector with high vacancies, the acquisition signals confidence in strategic real estate investments in North Texas.

A Strategic Expansion in Irving's Industrial Landscape

Hillwood, a prominent Dallas real estate firm led by Ross Perot Jr., has made a significant acquisition in the Irving area, securing the Freeport Business Center, a three-building office/industrial complex. This move comes at a time when the Dallas-Fort Worth (DFW) area, particularly near the Dallas-Fort Worth International Airport, is seeing fluctuating demand for office and industrial spaces. The acquisition, involving a 34-acre site at 8300-8440 Esters Boulevard in Las Colinas, underscores Hillwood's strategic approach to expanding its portfolio in key infill locations across North Texas. Notably, the complex, which is 70 percent leased with tenants like Boeing and Northrop Grumman Corporation, recently underwent renovations and saw Boeing expanding its lease by 50,000 square feet.

The Dynamics of DFW's Real Estate Market

The Freeport Business Center acquisition by Hillwood highlights the broader dynamics at play within the DFW real estate market. Despite challenges such as high vacancy rates and the impact of persistent remote-work trends, which have left office vacancies at 26.2 percent in the first quarter, there are signs of recovery. The area witnessed 2.5 million square feet of leasing activity in the first quarter, as reported by JLL, suggesting a rebound in demand. This context is crucial for understanding the significance of Hillwood's investment, as it represents a bet on the future growth and resilience of the DFW market, particularly in strategic locations near major transportation hubs.

Navigating Market Challenges and Opportunities

The contrasting fortunes of properties within the Irving office market, such as the recent sale of a 164,000-square-foot building at 4200 Regent Boulevard for $9.1 million due to its low occupancy rate, highlight the challenges and opportunities facing investors. Hillwood's acquisition of the Freeport Business Center, with its strategic location and diversified tenant base, positions the company to capitalize on the gradual market recovery. This move reflects a broader trend of strategic acquisitions by seasoned investors looking to navigate the post-pandemic market landscape, focusing on well-located, quality real estate that can attract or retain high-profile tenants.

A Forward-Looking Investment Strategy

Hillwood's acquisition of the Freeport Business Center is emblematic of a forward-looking investment strategy that prioritizes location, tenant diversity, and the potential for value-add through strategic improvements and lease expansions. By focusing on properties with strong fundamentals in key logistical and industrial hubs, Hillwood is positioning itself to benefit from the evolving dynamics of the DFW real estate market. This approach not only demonstrates confidence in the market's long-term prospects but also highlights the importance of strategic location and tenant mix in driving real estate investment decisions in the current economic climate.

Management Quotes

• Steve Aldrich, Hillwood Vice President:

  "The acquisition a strategic move to obtain well-located, quality real estate in infill locations around North Texas."