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People who think Houston is all about urban sprawl haven’t been to Houston lately. Houston’s 610 Loop has been a hotbed for infill development. A stretch of land just south of Buffalo Bayou — roughly 1.5 miles long and 0.5 miles deep — is attracting infill development at a rapid pace. The latest projects, a 600-unit mid-rise with 50K SF of retail from GID and a separate $500M mixed-use development from DC Partners, are a sure sign the city’s real estate perception is changing.

“It has been amazing to see the transformation of Houston in the decades since GID first acquired this property, and we feel patience has truly been a virtue in determining how best to knit this site into the area’s ongoing evolution,” GID Development Group President James Linsley said.  The area is expected to add 1,700 new units on West Dallas between Dunlavy and Shepherd, according to ApartmentData.com. Most will be in mid-rise or high-rise projects.  GID Development Group broke ground on the second phase of Regent Square, an 8-acre tract at West Dallas and Dunlavy Street, just south of Houston’s prominent Buffalo Bayou Park. Announced in spring 2019 and designed by acclaimed Boston-based architectural placemaking firm CBT, Phase 2 aims to be game-changing urban infill development, bringing an Old World-style town square into the thriving heart of Houston’s most rapidly densifying neighborhood.

Tomorrow DC Partners will break ground on its $500M project known as The Allen, set to be anchored by a 34-story hotel and condo tower. DC Partners’ The Allen will rise on a 6-acre tract, featuring 250K SF of Class-A office, a 170-room Thompson Hotel, and 95 condos. Once completed, five towers will occupy the site.  Blocks away, Weingarten Realty is planning The Driscoll, a 30-story luxury high-rise with 300 residential units. The Montrose at Buffalo Bayou, under construction, will add another 224 units in an eight-story mid-rise. Hanover is planning Hanover Buffalo Bayou, which looks to be the company’s biggest project in Houston yet, with early documents showing plans for a 23-story residential tower and 21-story office building.  All of this new density coming to Houston is happening in roughly one square mile.  “It’s very clear one could see four or five additional towers there over a long period of time,” Weingarten Realty Investors CEO Drew Alexander said during a third-quarter conference call with analysts. Weingarten hasn’t announced formal plans for additional towers at the site near the historic River Oaks Theater, but with the rapid densification, it may be in the future.  “I think it will become denser over the next 10, 20 years certainly,” Weingarten Senior Vice President Gerald Crump told the Houston Chronicle when the project was announced more than two years ago. “It is possible you could end up with the office, hotel or further residential units.”

Master-planned communities and suburban sprawl are still common in the outlying Houston areas. With few land constraints, historically Houston has had few reasons to pursue density. As renter demographics shift and the city grapples with increasingly frequent flooding issues, density and height have become favorites in Houston’s urban core. While the city has a long way to go, areas like Downtown, Uptown, Greenway Plaza and now the Buffalo Bayou southern bank show promise for Houston’s dense, walkable future.

 

PlazAmericas, the former Sharpstown shopping center that has struggled to find its footing as regional malls have fallen out of shoppers’ favor, has a new owner that wants to turn around the property while maintaining the diverse culture, particularly Latino, that exists there today.

Baker Katz, a Houston commercial real estate firm, has purchased the property from a Philadelphia financial company that acquired mall out of bankruptcy about a decade ago. The developers said they intend to make improvements, but will first spend time studying what the property needs most.

Baker Katz, a Houston commercial real estate firm, has purchased the property from a Philadelphia financial company that acquired mall out of bankruptcy about a decade ago. The developers said they intend to make improvements, but will first spend time studying what the property needs most.

“It’s not our goal to come in and be the big bad developer,” said Baker Katz Principal Jason Baker. “Our goal is to build on and improve on what’s there already.”

Located at the busy intersection of U.S. 59 and Bellaire, the former Sharpstown Center opened in 1961. Frank Sharp, who developed the Sharpstown neighborhood, naming it after himself, also built the mall.

In later decades, the shopping center struggled as newer malls opened. The ownership became fractured. Baker Katz is buying the mall’s largest section, but its purchase does not include any of the attached anchor stores or the 10-story building that rises from the property.

The former Montgomery Ward, JC Penny, and Macy’s buildings all have different owners. The high-rise, too, has a separate owner and so-called out parcels closer to the road are under different ownership.

“Those agreements essentially prevent major changes from happening at the property in the near future,” said Justin Segal, president of Boxer Property Management Corp., which managed the mall several years ago and was involved in repositioning it from an outdated, struggling mall to PlazAmericas, which largely caters to area’s diverse population.

“There’s definitely a viable strategy of maintaining its current form and having an eye on the future for when it’s subject to fewer restrictions,” Segal said. “Baker Katz is a great company. They’re local, they’re well respected and they have a long history in retail.”

Retail developer Ed Wulfe, said the mall has a prime location but echoed the concern over the ownership issues.

“It’s fraught with problems that hopefully they can work out,” Wulfe said. “As far as I’m concerned, for first time it’s in hands of an experienced shopping center developer.”

Commercial realty firm CBRE put the property on the market earlier this year. There was not a public asking price. The Harris County Appraisal District values the property at $12.2 million.

The mall can be slow on weekdays, but it is busy during weekends when it becomes a gathering spot for families who come not only for shopping but also live music and entertainment for children. Still, the surrounding area has struggled from a reputation standpoint, following bouts of crime in previous years.

As Houstonians who specialize in retail properties, the Baker Katz principals said they have for years studied the mall, which they say has several advantages, including a location at a busy intersection in one of the most densely populated areas in Houston. Baker emphasized the positive aspects of the property, including diversity and community involvement.

“We want to build on what’s there and hopefully turn this perception, whatever that might be, completely turn it around,” he said. “We’re not merchant builders. This is not a slide in and slides out. We’re absolutely looking at this as a long-term hold. We want to be part of the community.”

Commercial real estate giant JLL announced plans to purchase Peloton Commercial Real Estate Thursday. The merger will effectively pull Peloton’s Dallas and Houston offices into JLL’s agency leasing and property management business lines.

As part of the merger, more than 130 Peloton employees will be joining JLL. The acquisition is expected to close in the next few weeks, with Peloton co-founding partners Joel Pustmueller and T.D. Briggs and JLL’s Jeff Eckert leading the statewide integration efforts.  Pustmueller and Briggs will work directly with the Dallas-Fort Worth and Houston offices while Eckert will oversee Austin, San Antonio, and Dallas-Fort Worth as the teams integrate.

Peloton Property Management partner John Myers will be named the regional leader of property management for DFW. “This is a momentous step in our journey to become a market-leading player in Texas,” said David Carroll, JLL market director for the South Central Region. “With the exceptional growth we have seen in those markets, Peloton’s position as a leading provider of leasing and property management services will greatly enhance our business capabilities and breadth of services. Just as importantly, we look forward to working with a team of professionals that share JLL’s strong commitment to collaboration and culture.” JLL has a long history of growing via mergers and acquisitions, including closing the $2B acquisition of HFF July 1. One of its most notable acquisitions in Texas was bringing The Staubach Co., led by Dallas Cowboys elite quarterback Roger Staubach, into its fold in 2008. Peloton is a leasing and property management firm that launched in 2002. It manages or leases more than 25M SF for clients.

Houston and two other Texas cities are among the nation’s most promising places to invest in retail real estate, according to a new Ten-X Commercial report.

Houston and two other Texas cities are among the nation’s most promising places to invest in retail real estate, according to a new Ten-X Commercial report.

Thanks to a booming economy and a resurgent energy sector, Houston ranked as the No. 4 “buy market” for retail real estate, according to Ten-X. Local retail rents are projected to rise by 4 percent to $17.42 per square foot per year by 2022. That compares with a projected 1 percent gain year-over-year in rents nationwide to $18.92.

The California-based company, which operates an online platform for commercial real estate transactions, ranked Austin as the nation’s top “buy market” ahead of San Francisco and Orlando, Fla. Dallas ranked No. 5.

 

Summer Moon is bringing Katy-area caffeine seekers a wood-fired option with the opening of a new coffee shop in Kingsland Plaza.

For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at: www.houstonrealtyadvisors.com  Thank you for your interest.