Amazon signs lease in Round Rock industrial project

Continuing its rapid expansion in Central Texas, e-commerce giant Amazon has signed a lease for the entire 442,000 square feet of space in a new industrial project called Chisholm Trail Trade Center in Round Rock.

Otto Swingler, a vice president in Austin with Stream Realty Partners L.P., confirmed the lease Friday in an interview with the American-Statesman. The lease, signed in May, was first reported by the Austin Business Journal.

Transwestern Development Company developed Chisholm Trail Trade Center, which consists of three buildings and is off Interstate 35 and Old Settlers Boulevard.

Swingler said the transaction is one of the largest industrial leases signed in Central Texas in recent years. For a size comparison of the distribution facility, he said the 442,000 square feet of space is roughly equivalent to eight Walmart retail stores.

Swingler said Amazon actually needed only about 220,000 square feet of operating space, but ended up leasing all three buildings because they also needed more room for parking.

At Chisholm Trail, Amazon will operate its distribution center out of a building consisting of 180,700 square feet of space, Swingler said. The company will use the other two buildings -- one with more than 170,000 square feet and the other with over 90,000 square feet of space -- for its parking needs.

With that amount of parking for both employee vehicles and Amazon delivery vans, Swingler estimates Amazon could have 700 to 900 people working at the Chisholm Trail facility.

Amazon emailed a statement Friday saying the company “does not comment on rumors or speculation.”

Swingler said Amazon’s latest expansion in the region is driven by the acceleration of online shopping due to the coronavirus pandemic.

Consumers who previously were not inclined to shop online are doing so, he said, and he believes that “it has sped up the adoption of online shopping by at least a decade.”

Swingler said the Chisholm Trail buildings should be completed in the next 30 to 60 days, and he anticipates that the center will be “fully up and running sometime in August.”

In Buda, south of Austin, Amazon plans to open another distribution facility this year in 305,000 square feet of leased space, bringing hundreds more jobs, according to published reports. That facility will be in Exeter Property Group’s Park 35 building.

The Buda and Chisholm Trail projects amount to nearly 750,000 square feet of space that Amazon has leased within the past two or three months, Swingler said.

“That’s a whole lot of space, and for a city that is not a major distribution hub such as a Dallas, Houston or Chicago, it is a huge needle-mover in overall vacancy rates and the overall health of the industrial market citywide,” said Swingler.

And there’s more.

In nearby Pflugerville, and just east of Texas 130, Amazon is building a distribution center that will have 3.8 million square feet of space, Swingler said. That facility will be the biggest industrial distribution center to be built in the Central Texas region in two decades, he said, referencing the large TechRidge project that the Gottesman Company developed in the early 2000’s. Atlanta-based Seefried Industrial Properties has started initial site and utility work on the Pflugerville distribution center, Swingler said.

Swingler said he would estimate Amazon’s eventual headcount at the Pflugerville distribution center would be “between 1,000 and 2,000” employees.

Pflugerville officials have not confirmed the company is Amazon, instead referring to it only by its code name, Project Charm. But during a Jan. 14 council meeting, Amanda Swor, a representative with Drenner Group, inadvertently referred to the company as Amazon, the Statesman reported.

At that meeting, the Pflugerville City Council approved a rezoning request for the property, 94 acres along Pecan Street and south of Wilbarger Creek.

In an email Friday, Veronica Ramirez, marketing communications manager for the Plugerville Community Development Corporation, wrote: “Project Charm has not officially announced. There has been no further action taken on this project.”

The Pflugerville project would be more than four times the size of the 855,000-square-foot distribution facility Amazon operates in San Marcos.

Swingler said the cost of the Pflugerville distribution could be in excess of $300 million. He said it amounts to four large distribution centers stacked on top of each other, something seen more in land-constrained areas such as Tokyo or Seattle, and is “unheard of for our market with so much available land.”

Amazon has been growing its headcount in Central Texas for some time. The company announced in September that it would add more than 600 tech-focused jobs at its hub in North Austin. That followed an announcement in March that it would add 800 tech jobs at the Domain in North Austin.

Last June, an additional 300 part-time and full-time employees were hired at a new delivery station in Austin.