Abasto Properties LLC, a sister company of Abasto Corp., which has built and operates five wholesale markets in Mexico and South Texas, broke ground Dec. 31, 2013, on the San Antonio Wholesale Produce Market, and expects phase one to open in the spring of 2015.

Fernando Narvaez, director of business development and sales for the company, told The Produce News on Aug. 27 that construction is on schedule and barring any unforeseen circumstances, the new market will be open for business sometime in the next nine months. Phase one construction consists of the two front buildings of 30 warehouse units each. Eventually the market will include nine buildings and 200 warehouses and be built in at least three phases.

In 2012, Abasto acquired the 80-acre lot near the corner of Loop 410 and I-37, in South San Antonio. “What drew us to this site was its extensive front to Loop 410, easy access around San Antonio and to all key highways that connect south to major ports of entry to the U.S. and north east to markets like Houston, Austin and Dallas,” said Narvaez. “San Antonio is the ideal location for this regional wholesale market due to its geographic location that facilitates the consolidation and trading of products coming from or going to Mexico.”

Abasto Properties is an American company with Mexican ownership and Narvaez said the new market is clearly designed to be a conduit for produce trade between the two border countries.

“We have already pre-sold more than half of the warehouse units available in this first phase,” he said.

Narvaez said purchasers of those units include producers, merchants and investors looking to lease to third parties. “We expect such a great demand for leasing units that we have already started collecting security deposits from merchants who wish to secure a spot and be first in line when units become available spring of 2015.”

He added that the initial units are being leased for $6,000 per month including condo fees, building insurance and property taxes. Phase two construction will begin at least one year after phase one is completed in 2015.

The Abasto executive said the company has had great success, especially in recent years, with its McAllen produce terminal and the adjacent warehouses built in the past decade. The McAllen terminal in South Texas is about 20 years old and Narvaez admits that in the early years it was a tougher sell. He said trade between the United States and Mexico was not at the level it is today and there was a level of discomfort between Mexican-based companies operating in the United States and U.S. buyers. That has dissipated over the years and he said occupancy in the McAllen property has consistently been at the 95-98 percent level.

Narvaez and other executives at Abasto believe trade between the two countries — especially in the perishable food sector — is only going to increase in coming years, and Texas is perfectly situated to take advantage of that increase. He added that the super highway connecting the Pacific Ocean near Mazatlan to the Gulf of Mexico in South Texas is a huge advantage for Texas-based importers and exporters. That highway has been under construction for many years with much of it already opened and the completion expected in the not-so-distant future.

“We think that is a huge factor and it is one of the reasons we are looking at similar projects in Dallas and Houston in the coming years,” Narvaez said.

He said the San Antonio Wholesale Produce Market “will incorporate the best of our experience in functionality and modern design. Additional to vast general parking for visitors and trucks, and extra-wide streets for easy truck maneuvering, each warehouse will have plenty of vehicle parking in front. The project will operate as a gated condominium with common area maintenance, 24-hour security and video surveillance.”

Each warehouse unit is 3,100 square feet with an additional 900-square-foot mezzanine for an office. All units will be refrigeration-ready, including insulated panels and roof, as well as a brand new refrigeration equipment. Each cold room can hold up to 156 pallets or about seven truckloads. Temperature in the loading areas will also be controlled to ensure cold chain continuity, according to information given to The Produce News by Narvaez.

Each unit has both a front end and back end to facilitate both truckload and smaller customers. Narvaez said the market will operate as a true produce market selling product in small lots to purveyors and distributors serving local stores and restaurants, as well as large distributors sending product throughout Texas and around the country.

While the geographic location of San Antonio is perfect as a transfer point for trade to and from Mexico, Narvaez said the needs of the city’s restaurants and foodservice operations were also a major factor in picking this metropolitan area. He said the Hispanic population in San Antonio is significant and growing quickly. In fact, one of the early tenants of the new market is a food supplier from Mexico who plans to offer many Mexican-centric products to that population.

While most of the tenants are expected to be fresh produce wholesalers, producers, distributors and merchants, Narvaez said other perishable food suppliers will be welcome.

He added that ideal candidates are those “looking to serve the markets of San Antonio, Houston, Austin and Dallas, or those that need a strategic location like this for consolidation and distribution of northbound and southbound cargo.”

San Antonio does have a produce market area where a number of firms operate. Though those operators were not involved in the development of this new market, Narvaez said they are welcome tenants or owners. He said the current market location has difficult freeway access because of urban development surrounding it over the years.

Narvaez is confident that the San Antonio market is well thought out and will be a big success. “Abasto Properties and its affiliates have successfully built a total of more than two million square feet of warehouse space and sold over 800 warehouses and industrial lots in Mexico and the U.S.”

Those interested can visit the market’s website at www.sawpm.com. Narvaez said that when the Texas International Produce Association holds its inaugural Viva Fresh convention and expo in Austin in March, the new San Antonio Wholesale Produce Market plans to be an exhibitor and be very close to opening for business.