The City Council approved an incentive agreement with EastGroup Properties to invest more than $7 million to build two new speculative industrial buildings in Round Rock. EastGroup is a self-administered equity real estate investment trust focuses on the development, acquisition, and operation of industrial properties in major sunbelt markets throughout the United States.
“With a vacancy rate below five percent in Round Rock for industrial speculative space, this project is a huge win for our community,” Mayor Craig Morgan said.
The Round Rock Chamber and the City worked closely with EastGroup to make this project a reality. The first phase of the project will add 160,000 square feet of space on 12 acres of land located at 900 E. Old Settlers Blvd. The initial two buildings are expected to be complete by third quarter 2018.
The five-year agreement calls for the City to make payments equal to 75 percent of the buildings’ property tax payments in the first two years after it opens, and payments equal to 50 percent in years 3-5. To receive the payments, EastGroup must invest a minimum of $7 million in the property by Dec. 31, 2018, and the facilities must remain operational through the duration of the agreement.
“The Settlers Crossing project is Class A space in a Class A municipality,” said David Y. Hicks, Jr., vice president of EastGroup Properties. “Our company has purchased 30 acres of land at this site and our future development goals include a master-planned, multi-phased project consisting of four business distribution buildings totaling 340,000 square feet.”
EastGroup’s strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup’s portfolio, including development projects in lease-up and under construction, currently includes 38.6 million square feet.
“Having truly speculative building space developed in Round Rock is a good signal that our economy is thriving,” said Ben White, vice president of economic development for the Round Rock Chamber. “These new buildings are a much-needed selling tool for our business attraction and business retention and expansion efforts.”