Constellation Real Estate Partners To Transform Fuel Terminal
Originally posted by Candace Carlisle, CoStar News
An industrial developer with deep roots in Texas is beginning work on its first speculative industrial park in the Dallas-Fort Worth region — in a move it hopes to replicate in the future.
Constellation Real Estate Partners, a real estate firm formed during the pandemic and co-founded by longtime executives with Prologis and JPMorgan Chase, has teamed up with insurer Northwestern Mutual to acquire a 33.7-acre fuel terminal operated by Magellan Midstream Partners LP.
The development team plans to clear the facility to make way for a four-building, 546,330-square-foot industrial park called Constellation Mustang Crossing at 2100 Mustang Court in Southlake, Texas, about 26 miles northwest of downtown Dallas.
“We did extensive environmental testing to outline our game plan,” Constellation Senior Vice President Scott Ellerman said, in an interview with CoStar News. “We are working with Magellan to decommission the fuel terminal right away. It takes a lot of coordination, but it’s a regimented process.”
Constellation Real Estate bought the property from the pipeline operator in what Ellerman called a “competitive process.” Terms of the land sale were undisclosed. According to the Tarrant Appraisal District, the property at the address listed was last valued at nearly $1.5 million.
“They had planned to close on this site before, but the deal had been dropped,” Ellerman said. “They felt most confident with us that we could close on the transaction given the volatility of the capital markets and the rising interest rate environment.”
Constellation Real Estate Partners has similar industrial projects underway in Houston and El Paso, betting on the future growth of U.S.-Mexico trade. This is the firm’s first project in Dallas-Fort Worth, but likely won’t be its last. Ellerman said his team is looking for additional infill sites in locations with “limited vacancy rates and high demand.”
The Constellation Mustang Crossing project is about 6 miles from Dallas-Fort Worth International Airport and sits in one of those highly desired submarkets for industrial space in the region with high barriers to entry. Last year, the airport shipped 901,502 U.S. tons of cargo from its runways.
The Dallas-Fort Worth region, the nation’s fourth largest metropolitan area with more than 7.8 million residents, is also home to the nation’s largest industrial pipeline with 46.3 million square feet of industrial space underway. Phoenix ranks No. 2 in the country with 44 million square feet of industrial space in its pipeline.
Construction on the new industrial park, with buildings ranging from 102,957 square feet to 188,132 square feet, is scheduled to begin in the first quarter of 2024, with completion slated by the end of the first quarter of 2025.
Constellation Real Estate Partners was created in 2021 by former Prologis executive Jeremy Giles and former JPMorgan Chase executive Hien Le. Le spent 14 years at the financial services firm overseeing commercial real estate opportunities throughout the southwestern U.S. Giles spent 19 years at Prologis in various leadership roles overseeing regions throughout the country.
The co-founders of the firm with dual headquarters in Dallas and Houston have much in common. Both executives are tied to deal sheets with more than $10 billion of transactions during their respective roles at Prologis and JPMorgan Chase. They also each have degrees from The University of Texas at Austin.
For the Record
Meinhardt & Associates designed Constellation Mustang Crossing. Joey Tyner and Tom Dosch of Dosch Marshall Real Estate represented Constellation Real Estate Partners in the land acquisition. JLL’s Kurt Griffin, Nathan Orbin, Dalton Knipe and Weston King have been hired to lease the industrial park.