Georgetown manufacturers ink big leases in industrial parks amid growth plans

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Published on

Apr 30th, 2024

Austin suburb has become a magnet for industrial development

By Justin Sayers – Senior Staff Writer, Austin Business Journal

Apr 26, 2024

A pair of Georgetown manufacturers have taken up nearly 580,000 square feet for warehousing and distribution in sprawling industrial parks built by Albuquerque-based Titan Development Ltd.

Ohio-based Kreate, which recently acquired the longtime operations of Tasus Corp., has leased two buildings in the Gateway35 industrial park totaling roughly 400,000 square feet. Cangshan Cutlery Co. — which previously intended to move its headquarters to Leander but has opted to invest in its Georgetown site instead — has subleased about 158,000 square feet from logistics company Aeronet Inc. in Northpark35, officials said.

The moves are part of a continuing wave of manufacturers flocking to and investing in Georgetown, which for the last two years has been the fastest-growing city of its size in the country. The city is about 30 miles north of downtown Austin and had a population of 86,507 in 2022, according to the U.S. Census Bureau.

Industrial developers have been attempting to capitalize on the trend. Data from Houston-based Partners Real Estate shows that the Round Rock-Georgetown submarket, which includes most of Williamson County, has 4.7 million square feet of industrial space under construction and a 21% vacancy rate as of the first quarter. Roughly 1.5 million square feet of industrial space was delivered last year. The average asking rent per square foot was $1.09, below the region’s average of $1.24. The Austin market as a whole had a vacancy rate of 9.1%.

Titan, which is constructing the 146-acre Northpark35 and the 114-acre Gateway35 parks, is perhaps the most active developer in the city. The company has built and sold several buildings in the park. Other tenants include CelLink Corp.ZT Systems, Texas Speed & Performance Ltd., The Greater Austin Merchants Cooperative Association, and Valex Corp.

Kreate aims to build on its ‘phenomenal’ start in Georgetown

Back in February, when Kreate announced it acquired a 120,000-square-foot facility at 211 Tasus Way that housed Tasus — a longtime Toyota Motor Corp. supplier — founder and owner Nickolas Reinhart said the company was planning to have a total footprint of 500,000 square feet in the Georgetown area with off-site distribution space.

The company also acquired Tasus’ operations, which it plans to move away from the automotive sector. It marked Kreate’s first foray outside of its headquarters in Findlay, Ohio. Kreate was founded in 2015 and is a vertically integrated engineering firm. It does product design, development, 3D-printing, manufacturing and distribution, as well as content creation after its products are launched online or in stores. The company focuses on proprietary products for major retailers, such as patio furniture, raised garden beds, wheelbarrows and utility sinks.

Reinhart said the company found additional space a short distance away after taking Buildings 2 and 3 at 500 and 600 State Highway 130 in Gateway35. The two buildings total about 421,000 square feet and will be used for fulfillment of internet orders and other distribution. The buildings, which have more than 90 dock doors, will allow the company to fill 5,000 trucks a year and ship about 10 million units, he said.

Kreate will also add 24 seasonal jobs with the new space, Reinhart said. That’s in addition to the facility’s existing 160 permanent jobs, and the company plans to make an investment of $10 million in new capital at the manufacturing site in 2025.

“We look forward to expanding even more in 2025,” Reinhart said, calling the first few weeks in Georgetown “phenomenal” due to a “great culture (and) great community.”

Kreate announced on Feb. 13 the acquisition of the facility that houses Tasus, which is a division of Japan-based Tsuchiya Co. Ltd. and had been in the city since 2003, as well as its 30 injection molding machines and roughly 160 employees. The company said at the time that the facility and its employees would help it grow revenue by roughly $150 million annually.

Cangshan looks to start construction on HQ soon

About a year ago, Cangshan Cutlery announced it was abandoning plans to build a new headquarters in Leander and would instead purchase the 151,000-square-foot space in Georgetown at 111 Halmar Cove that it has been operating in as it looks to move manufacturing capabilities here. Those plans are now in motion after Cangshan sub-leased the 158,000-square-foot building in NorthPark35 at 201 Velocity Drive.

Chief Operating Officer Rick Loofs said the company plans to move its warehouse and logistics operations to the NorthPark site next month, while it begins renovating its current site for manufacturing. The initial phase of the renovation will take six months and will make the half of the facility ready for manufacturing. The plan is to do the second phase in about two years.

The company currently has about 45 employees, and the goal is to have 175 employees when fully operational in the building at Halmar Cove. That’s a revision of previous a forecast for it to have 300 local employees longterm, although Loofs said the company still might hit that target for its U.S. workforce overall.

Loofs also said the company will decide later whether to continue to lease or purchase a warehouse and distribution space — but its goal is to stay in Georgetown.

“The city has been great as far as working with us to move forward with the renovation plans,” Loofs said. “I have never worked with a municipality that has been this responsive. … If the city will continue to work with us throughout the upcoming seven to 10 years, we have no desire to go anywhere else.”

Cangshan originally planned to move to Leander and received incentives from the city to build a 400,000-square-foot facility on a greenfield site at 204 Heritage Grove Road. But Loofs said last year that the company changed plans due to rising lease costs at its original headquarters in California, which prompted it to move earlier than expected to the site in Georgetown. The company eventually decided to purchase the location and is in the process of selling the Leander site.

The Georgetown site will handle manufacturing from Cangshan and New Star Foodservice Inc., a sister company that manufactures food service equipment and supplies.

Loofs said this month that while “the whole economy obviously is not doing extremely well,” business has good for his Cangshan — albeit, not great. But the company has seen strong feedback from events like trade shows, where they sell their products.

“The sectors that we operate with food service and kitchen cutlery, the whole market is down. But we’re actually doing well. We’re capturing some market share,” Loofs said. “We’re definitely seeing growth, which is great, because it could be much worse.”

Meanwhile, Aeronet has abandoned its plans to expand in the Austin market. The California-based company back in March 2023 announced the move up I-35 to help fuel expansion in Austin, where the company since 2021 handled domestic and international cargo shipping. It now has opted to consolidate operations in Dallas and Houston.

“We loved being in Austin,” said Kevin Mautino, Aeronet’s executive vice president of marketing and brand development, in an email. “But per our business plan, it makes more sense for a company in the freight forwarding industry to focus on the state’s largest airport (DFW) and busiest port (Houston). We know that Cangshan Cutlery will make good use of that warehousing space, and will represent the Austin/Georgetown market well.”

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