Gillett Commercial’s Shell-Building Strategy Pays Off in Allen
Share News:
A bold bet on an infill project in Allen has paid off for developer Gillett Commercial, which recently sold three shell structures to buyers who took it upon themselves to design the interiors to fit their distinct operational needs.
Citadel Partners finalized the sale of all three builds, which total nearly 72,000 square feet at the northeast corner of Exchange Parkway and U.S. Highway 75 in Allen. The buildings were sold in shell condition, meaning the structures were delivered without interior finishings, leaving the buyer or tenant to customize the interior space.
“Gillett Commercial is truly visionary,” said Citadel Partners senior advisor Katherine Pool. “[Managing partners] Bucky Gillett and Kirstin Temesvary saw a need for businesses who have an industrial component — mostly light distribution, some product storage — but still need office space. There really isn’t much existing on the market that can accommodate both of those uses under one roof.”
The multi-service compounding pharmacy Texas Star Pharmacy bought the biggest of the three properties for its relocation from Plano. Spanning 50,864 square feet on 3.6 acres, 260 W. Exchange Pkwy includes about 44,000 square feet of flex space and 6,800 square feet of mezzanine office and showroom.
A compounding pharmacy isn’t what you’d find in the back of your local Walgreens. Compounding pharmacies specialize in customizing medications by changing their form (say turning a pill into a liquid), combining multiple drugs into single doses, or removing ingredients to prevent allergic reactions for patients who have unique medical requirements. All that calls for specially designed space that many builds on the market might not be able to accommodate.
The sales at Allen Exchange seem to serve as proof of concept for Gillett Commercial’s development strategy of building customizable real estate for niche businesses needing diverse functionality.
“If you go build a spec and build out the interior, and a guy comes in and is like ‘Man, I love everything about this building, but for operations I need this on the other side of the building because I need A, B, and C over here,’ then you potentially lose or hinder that deal,” said Mac Morse, a partner at Citadel Partners. “We’re saying, for a very highly specialized user, here’s the shell of the building — you build it out how you need.”
Well Go USA Entertainment also needed a lot of flexibility with how its interior would function. The action film distributor, which is also moving from Plano to Allen, purchased 220 W. Exchange Pkwy (10,600 square feet) to house its marketing and sales teams, as well as its artwork and post-production operations. The company also needed space for warehousing and a theater.
Morse praised Gillett Commercial for taking the risk on the shell delivery model for Allen Exchange.
“It takes a lot of guts to do it that way, but it paid off,” he said. “The concept hit the nail right on the head.”
Morse and Pool gave a lot of credit to the Allen Economic Development Corporation and its executive director and CEO Dan Bowman for facilitating the development and sale of Allen Exchange, touting the city’s pro-business bona fides.
“I think the location of it honestly was instrumental as well. It’s a prime corner,” said Morse. “And then also obviously the product the developer built. The look and feel of it — it doesn’t look like an industrial building.”
Pool added that Gillett Commercial was very intentional in leveraging the visibility of the development and “making sure it’s reflective of what Allen wants to be and is in terms of high finish and quality users and businesses.”
The third property at Allen Exchange was sold to an undisclosed buyer. The 10,500-square-foot space at 240 W. Exchange Pkwy is partially leased to Clearstone Dental. Citadel Partners is working on leasing the remaining square footage for the building’s new owner.
