Multinational real estate developer Hillwood is working to position AllianceTexas as a “catcher’s mitt” for goods traveling north as reshoring has caused manufacturing growth south of the border as well as across the United States, according to a top Hillwood executive.
Dallas-based Hillwood, the company behind the sprawling 27,000-acre AllianceTexas master-planned development, has historically focused on goods flowing in from Asia and reaching the center of the U.S. Now, as momentum builds around reshoring efforts in Mexico, AllianceTexas is positioned to benefit on the receiving end of goods flowing northward, Mike Berry, president of Hillwood, said in an exclusive interview with the Dallas Business Journal.
Efforts to bring manufacturing stateside, including advanced manufacturing, have created other positives for AllianceTexas. Last year, Las Vegas-based MP Materials Corp. (NYSE: MP) broke ground on its first rare earth metal, alloy and magnet manufacturing facility, located within AllianceTexas.
The plant represents a large component of a $700 million investment MP Materials will make to fully restore the U.S. rare earth magnetics supply chain over the next two years.
Hillwood has had a strong focus on transportation technology since the beginning of AllianceTexas. The creation of the airport in Alliance, now called Perot Field Fort Worth Alliance Airport, helped Hillwood develop what has become an inland port.
Over the years, the company began hosting firms focused on the cutting edge of transportation within AllianceTexas. It turns out, technologies like autonomous trucking and eVTOLs, or electric vertical takeoff and landing aircraft, were exactly the sort of things some of the development’s major corporate users were interested in, Berry said.
Some of those corporate partners include Fort Worth-based BNSF Railway Company and Memphis-headquartered FedEx Corporation (NYSE: FDX).
“We decided to really take advantage of this 27,000-acre platform that we have in Alliance, with all this infrastructure and all this movement of freight on a daily and hourly basis, to see if we could bring the industry together here and really act as a convener,” Berry said.
AllianceTexas has roughly 8,000 acres left for development. In future industrial projects, Berry said Hillwood will work to incorporate emerging technologies as they become more prevalent within the industry.
Berry spoke with the Dallas Business Journal about the future of transportation, reshoring and the impact of both those on industrial real estate at the recent UP.Summit event.
How will changing technologies, such as autonomous trucks, impact the future of commercial real estate?
You’ve got to put in technology and communications systems in your facility that allows these autonomous vehicles to talk to the building and the real estate. On the long haul side, you’re finding now, these long haul autonomous trucking companies will carry a load from, say, Houston to Dallas, but when they get to the destination, say an Amazon facility, they need a place to drop that trailer.
Then, another autonomous vehicle from the yard will come out, pick it up and place it at the right location…
So yard management systems and transportation management systems now have to talk to each other, which requires a very complex set of infrastructure, as well as communications systems. Those are ways that it’ll affect real estate. We’re now looking at designing these drop lots outside our buildings, adjacent to the gates, so that this transfer can happen.
What about drones involved in last-mile delivery?
On the air side, we had one client that we built a building for and they’re working with one of these drone carriers on package delivery. They requested, in the lease, the ability to build a drone landing facility adjacent to the building.
They can literally deliver packages via drone directly from the warehouse to the end user without having to have a step in the middle. From a design standpoint, those are the kinds of things we as a developer and designer have to start incorporating into our thinking.
How will reshoring and the growth of domestic advanced manufacturing impact AllianceTexas as well as the region?
MP Materials is a great example, because they are trying to bring back into North America what currently resides in China – our control of the manufacturing ecosystem around battery production. That’s a great example of how reshoring is really happening here in our backyard.
That’s another thing we’re really focused on right now, how we tap into this movement of manufacturing back to North America. You’re seeing it now with the CHIPS Act and what’s happening with semiconductor expansion in this country.
Intel is doing a huge project in Ohio. Samsung is doing a huge project in Central Texas. Texas Instruments is doing a huge project in Sherman.
There’s one thing that’s happening, while not directly U.S., but certainly something that benefits our position here at Alliance. There’s a huge amount of manufacturing expansion and reshoring happening in Mexico.
Tell me a little more about that.
It’s not just the automotive sector. It’s a number of high-tech industry players. Although we’ve been focused on supply chain movement from Asia to the U.S., and then here to the center of the U.S. and Alliance, we’re now seeing a shift and a growing activity south to north from Mexico. I think that’s only going to continue.
We’re kind of excited about it as well, because it gives us an opportunity to create a story and become a giant catcher’s mitt for a lot of product that’s being manufactured in Mexico that needs to move up into the U.S. market. It can come right here, and then we become a central place for final assembly, for additional manufacturing, for distribution.