Walmart is planning a huge new distribution center in Houston as e-commerce competition intensifies

Walmart is investing in a new distribution center in the southeast Houston area as e-commerce continues to light up the city’s industrial real estate market.

Walmart is developing 1 million square feet of warehouse space in Baytown at 4633 Borusan Road at Cedar Port Trade Center, an distribution facility developed by Dallas-based Hunt Southwest, according to data from the commercial real estate information firm CoStar and two commercial real estate professionals familiar with the transaction.

Contractors in February are expected to start building out the interior of the existing warehouse space with construction expected to wrap up in early 2023, according state permitting documents. The build out is estimated to cost $22 million, according to estimates in the permitting documents.

Walmart and the building’s developer, Hunt Southwest, declined to comment.

The retailer has rapidly expanded its warehousing nationally as it vies with e-commerce rival Amazon to gain market share in growing population centers. Surging e-commerce demand during the pandemic has fueled a boom in industrial real estate as companies invest millions into warehouses to fulfill online orders in the age of same-day and next-day shippping.

In December, Walmart announced plans for a more than 1 million square-foot fulfilment center in Salt Lake City and a 925,000 square-foot high-tech facility in Lebanon, Tenn. The Salt Lake City warehouse — a similar size to the planned Houston warehouse — is expected to support 450 jobs while the Tennessee warehouse is expected to create 300 jobs.

In Houston, the retailer is planning the 1 million square-foot warehouse in a business park where it already has a 4.2 million square-foot distribution hub in buildings that it owns.

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