Borderlands: $1B warehouse and logistics port planned for Laredo

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: A $1 billion warehouse and logistics port is planned for Laredo; RCR Taylor Logistics Park opens in Texas; Volkswagen ends Golf production in Mexico; and Red Sun Farms expands in Pharr.

$1B warehouse and logistics port planned for Laredo

Spurred by strong U.S.-Mexico trade, a Los Angeles-area developer is planning to build a $1 billion distribution center, warehouse and manufacturing port in Laredo, Texas.

The project by Majestic Realty Co. is aimed at developing an 1,850-acre parcel of land in response to demand from companies that want more facilities near the border, Kyle Valley, Majestic Realty’s senior vice president, told FreightWaves.

“Laredo is an extremely important logistics market, not just to the region but to the country,” Valley said. 

The project is the next phase of Majestic Realty’s Port Grande Logistics Port, a development that began when the company completed the acquisition of the 2,000-acre site from a subsidiary of Mercedes-Benz in 2015. 

“About five years ago, we acquired the old Mercedes-Benz test track facility near the I-35 South mile marker 13, and we’ve now converted that into Port Grande Logistics Port,” Valley said. “We completed phase one earlier last year, which was a million square feet among four buildings, two of which were the largest speculative reconstructed buildings along the U.S.-Mexico border.”

The first-phase buildings at Port Grande include a 366,000-square-foot building and a 423,000-square-foot building, which are both 100% leased, Valley said.

“We have another 1,850 acres to go until we have fully developed Port Grande,” Valley said. “The land, when we look east from our existing Port Grande phase, we’re talking about 100% undeveloped Texas scrubland.”

The long term plan calls for six phases and 14 million-square-feet of spec industrial development, primarily distribution, warehouse and manufacturing space at the port.

Located just east of I-35, Port Grande is 10 miles from the Port of Laredo commercial border crossings, where approximately 60% of all trade between the U.S. and Mexico occurs, according to the Department of Transportation.

U.S. goods and services traded with Mexico totaled $489 billion for the first 11 months of 2020, according to the Office of the U.S. Trade Representative. In 2020, 2.3 million trucks and 239,017 rail containers crossed the border at the Laredo port of entry.

Gerardo Alanis Barrios, CEO of Laredo-based Cold Chain Solutions, said demand for warehouse and logistics space is still tight around the city.

Cold Chain Solutions is a refrigerated carrier and cross-dock operation servicing the consumer packaged goods, refrigerated and frozen food industries in Mexico, Canada and the U.S.

“It is rare to see a warehouse with a for sale or for lease sign,” Barrios said. “I have spoken to several real estate agents in the area and the reality is demand is still greater than supply.” 

Ermilo Richer III, executive director of Laredo-based customs broker Richer, said Laredo needs more warehouse space, but 14 million-square-feet could be a little on the high side.

“Warehouse space has been a problem here for the past two to three years,” Richer said.

Matt Silver, CEO of Forager, said from his experience much of the warehousing in Laredo is more short-term and pass-through space. 

“Much of what Forager does is transloading, where you have freight sitting somewhere for about no more than two hours, versus with storage or distribution, so I don’t see Laredo becoming a distribution point or a bigger one than it is,” Silver said. “Supply chain leaders, shippers send their cross-border stuff, their airfreight network goes to Dallas-Fort Worth [Airport] because stopping in Laredo causes too many issues with trying to…

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