CREguy13

Costar article: Houston's coolest street is about to get cooler. A plan to transform a section of lower Westheimer into a trendy, tree-studded retail-office hub with a modern library is beginning to take shape in the Montrose neighborhood. Construction on Montrose Collective, a 150,000-square-foot-project, is officially underway, the project's developers have found a finance partner, and a lead office tenant has inked a new lease. Radom Capital, the Houston-based development firm known for creating hip, walkable projects such as Heights Mercantile, has formed a joint venture with institutional investors advised by JPMorgan Asset Management for the project. The team hired the Michael Hsu Office of Architecture, an Austin-based design firm behind Uchi restaurants, Understory and several other high-profile Texas projects. Montrose Collective is at 802 and 888 Westheimer Road in an area recently named as one of the nation’s top 20 coolest streets in a report by Cushman & Wakefield because of its walkability, diversity, nightlife, food scene and vintage stores. Nearly 97,000 people live within a 2-mile radius of the area with a median income of $83,233, according to the report. About 37% of residents nearby are millennials, the report found. Radom Capital and Michael Hsu sought to design a project that blends into the neighborhood with mid-rise buildings and a canopy of preserved live oak trees. Plans call for about 40,000 square feet of high-end shops and restaurants, plus about 110,000 square feet of office space and a modern roughly 16,000-square-foot public library building. The project is estimated to cost at least $38.9 million for the three mid-rise buildings, according to state records. With a planned opening of late 2021, Montrose Collective is expected to bring six new dining options, along with 15 boutique retail spaces for local and first-to-market retailers, plus beauty and service providers. The Montrose Collective team didn’t want to just create a "boring box" retail center or typical office building. "Montrose is really the hub of everything creative and has the No. 1 concentration of James Beard Award winners in the state. We wanted to do something scaled to the neighborhood," Steve Radom, principal of Radom Capital, said in an interview with CoStar News. The team plans to build a four-story structure that connects to a six-story structure with a cantilevered walkway. The buildings open to an outdoor plaza with seating, greenery, trees and unique lighting fixtures. Radom Capital hired landscape architect, the Office of James Burnett, to design exterior public improvements that include decoratively tiled sidewalks, an expansive green wall that wraps around one of the buildings, hanging plants and custom planters throughout the site. "This is truly a mixed-use project and it's going to look like it belongs in the Montrose neighborhood," said Parker Duffie, vice president at CBRE, who is handling office leasing for the project with CBRE's Elliot Hirshfeld. The project already has signed a lease with an undisclosed technology company for about 75,000 square feet of office space on floors 4, 5 and 6 in one of the buildings, according to the project team. There is roughly 35,000 square feet of office space left in the project, according to the team. The roughly 2.5-acre project is planned along the north side of Westheimer on both sides of Grant Street. The property includes the existing Uchi restaurant and the building next door with Hue hair salon and Rosemont Social, which will all remain on site. East of those buildings across Grant Street, buildings that previously housed a Greek restaurant called Theo’s and a city of Houston police station are getting demolished. Construction is starting after the Houston City Council in December approved a deal with the Montrose Collective team to transfer ownership of the land where the former police station was housed at 802 Westheimer to the developers. City officials closed the police station as part of an initiative to get more police officers on the streets instead of behind a desk, according to a Dec. 3 city council agenda item. The police department is expanding its online reporting services and closing police stations in most communities, according to the city. In exchange for the land, developers are building a new public library for the city to replace the aging Freed-Montrose Library at 4100 Montrose. The city will maintain ownership of the library at 10001 California St. through a condominium unit agreement with Montrose Collective. Radom said he sought a condo agreement for the library to secure financing for the rest of the project easier. The library building design includes a two-story custom art installation to be designed by a local artist, according to developers. The city expects to open the new library by 2022, and close the 70-year old Freed Montrose Library. It is rare for a public library to be in a privately built mixed-use project, but Radom Capital said the team is emulating Bookmarks, a public library in Dallas in the NorthPark Center. Radom Capital said it also took inspiration from the new Austin public library downtown that has drawn accolades for its design, retail and outdoor landscaped plaza near the privately built mixed-use Seaholm District. "I love taking my kids to the library. We really liked the idea of a mixed-use project, not just being your traditional mixed-use project. Our thought was what is more endearing to the community than a community library?" Radom said. He is envisioning a "dynamic, interesting" "house of books” with events, programming and retail. The plans will introduce new office to a neighborhood without a substantial amount of office space and bring additional retail to an area already attractive to real estate developers. The city of Houston granted 28 building permits for sites on Westheimer Road in 2018, which is double the number of permits issued in 2017, according to Cushman & Wakefield's report.

Had a chance to view these renderings. This building will have even more terraces than Texas Tower. I think this forum will be very impressed by the redesign. High quality project - hopefully it gets capitalized!

Crane is now up.

This will be a great vantage point over the next 12 - 18 months!

6 Houston has been dead quiet. Very little substance there for several years. My money would be on 1 Market Square. There is a huge shift to this part of downtown by the tenants these new buildings are trying to attract. There was rumor of the Developer being in negotiations with a couple large tenants last year that would have met the pre-leasing requirement to start construction - I believe around 2024. I am not sure of the current status, but as Texas Tower continues to fill up the availability for trophy Class A space considerably decreases. I would not be surprised if more information came out later this year and this project broke ground in the next 12 - 18 months. Just my opinion.

DLA Piper signed a lease for the entire 38th floor. 40% leased now.

Short article, but here you go! On-Site Grocery Stores Are Becoming a Thing in This Texas City's Apartments Trend is Taking Off in Areas Packed With Rentals, Offices and Retail Sprouting freestanding, suburban supermarkets with surface parking have long ruled in vast Houston. Today, grocers are affiliating with apartment and office developers to afford stores in pricier urban locations. Building multilevel stores allows grocers to consider smaller tracts while offering efficiencies like shared parking garages with apartment and office tenants. According to a recent Urban Land Institute study, grocers are especially attractive partners because they serve as a destination amenity for residents and office tenants in mixed-use projects. In fact, grocery-anchored projects can charge a 20% rent premium, whereas mixed-use apartment projects with retail and office can charge a 15% rent premium to residents. Last year marked the arrival of Houston's first two apartment buildings situated over grocery stores. The Morgan Group's Pearl Marketplace at Midtown boasts a Whole Foods Market on the ground floor and its apartment units, which recently were completed. Midway Companies' St. Andrie at Buffalo Heights, located at Washington Avenue and Studemont, also recently delivered, and boasts H-E-B's first mixed-use grocery store. These grocery-anchored mixed-use projects echo the densification of Houston, and are changing the way some urban residents live and shop. Rather than stocking up on the weekend, residents living above a grocery store can take several trips a week, enjoying fresh produce and meats. Furthermore, residents can drive less and walk more, developing health benefits, as the need for a car diminishes.

Wasn't sure where to post this, but AT&T is in talks to sell a 13-building portfolio, including the one pictured above. They plan to lease back 40% of the portfolio on a long-term basis, but did not indicate which buildings. So unclear whether they'll remain a tenant here or not, if the sale goes through.

Based on the render, did HCA Healthcare sign the lease to kick this off? Let the medical office boom begin.

Costar article: On the heels of wrapping up a high-profile residential skyscraper in Houston's Uptown-Galleria area, DC Partners has more plans to change the skyline in the area. DC Partners plans to break ground next quarter on a 92,340-square-foot office and retail building at 4411 San Felipe St., according to the developer and NAI Partners, which is leasing the building. The seven-story building is expected to be home to DC Partners' future headquarters. The mixed-use building is across the street from Arabella, its recently completed 99-unit condo skyscraper where units start at close to $1 million. The project comes as developers respond to ongoing demand for new office space in mixed-use projects and certain areas of the city, despite a stubbornly high office vacancy rate across the broader Houston metropolitan area. Although Houston has bounced back from the oil bust of 2015, its office vacancy rates remain the highest in the country at 16.4%, according to CoStar data. Yet office tenants continue to seek newer buildings in a so-called flight-to-quality, spurring developers to pour money into building new office towers even as large swaths of space sit vacant in some areas of Houston. In total, the 4411 San Felipe project has roughly 79,035 square feet of office space and about 17,000 square feet of retail. For the office space, about 50,000 square feet is still available, said David Bateman, senior vice president office project leasing with NAI Partners. DC Partners and NAI Partners declined to disclose any signed tenants. DC Partners plans to move its headquarters to the site from its existing headquarters at 2506 W. Main St. in the Greenway Plaza area, where it leases about 3,000 square feet of space, according to CoStar data. The San Felipe office project is designed to have three levels of parking with valet parking services, and an outdoor terrace with landscaping and views of Houston skylines. The building is just north of the River Oaks District, a 650,000-square-foot open-air retail center with high-end tenants such as Cartier, Harry Winston, Baccarat and Dior. Project cost estimates were not disclosed for 4411 San Felipe. Although the Uptown-Galleria area has a vacancy rate of 16.7%, brokers and developers are saying they’re seeing demand for newer office space in the area known as Houston's second commercial business district. "The trend for years now has been the flight-to-quality in Houston and that's true in Uptown/River Oaks District in particular. [Quality] in my definition doesn’t necessarily mean nicer or newer, it means better access, more efficient use of the site, better, efficient floor plates, new modern, bright finishes," Bateman said. He pointed to his own company as an example of how finding newer space with the right square footage in the Uptown area can be a challenge. At the time, there were "very few options" for roughly 20,000 square feet of newer space with "modern, updated amenities" in the Galleria, Bateman said. "We have first-hand experience," he said. NAI Partners ended up in about 20,300 square feet at 1360 Post Oak Blvd. After a big burst in construction activity that pushed up the Galleria’s total office inventory by about 11% from 2010 to 2017, new office construction in the area has slowed considerably this year, according to CoStar data. There is just about 133,000 square feet of new office construction in the area, including a 68,000-square-foot building as part of Zadok Jewelers’ mixed-use project, according to CoStar data. That compares to 1.3 million square feet of new office construction taking place in downtown, Houston’s other busiest commercial district. Nearby, a 210,000-square-foot building, called 200 Park Place, at 4200 Westheimer is underway by Stonelake Capital Partners. The 411 San Felipe building is expected to be completed in the first quarter of 2021, 200 Park Place should be completed around March 2020 and Zadok Jewelers building is expected to be done at the end of 2020. DC Partners first announced the mid-rise office building in 2018, and it even received some initial building permits, according to city of Houston documents. The project initially was supposed to break ground in September 2018, according to state documents. A DC Partners spokeswoman said the gap in time from proposing the project until now arose as the group was exploring multiple options with tenants. Also since then, DC Partners has been busy with several projects, including completing construction at Arabella and pre-development for The Allen, a $500 million mixed-use, six-acre project by Buffalo Bayou, which recently broke ground. Initial plans for the Allen include a condominium-hotel high-rise, but the developer expects to add one or possibly two additional office structures in future phases of the project along Allen Parkway. It is one of the many new mixed-use developments in the works for the Buffalo Bayou area spurred by the $58 million revitalization of the river. Meanwhile, Hanover and Lionstone Investments are also breaking ground on the first phase of a 13.5-acre mixed-project by Buffalo Bayou, which also could include about 300,000 square feet of office space.

It's a pretty long article: Houston's Buffalo Bayou Transformation Offers Flood-Plan Lessons to Other Cities How to Turn a Drainage Ditch Into a Regional Amenity in Era of Climate Change The growing climate change challenge facing commercial developers came into sharp focus as Hurricane Harvey dumped 27 trillion gallons of rain onto Houston two years ago, wreaking $125 billion in damage and displacing almost 30,000 people. Floodwaters rose 38 feet, destroying sections of a recently renovated public park. Urban planners and onlookers watched in astonishment as new lawns, picnic tables and shelters in Buffalo Bayou Park were swept into the flood that at one point made staircases, street signs and lamps barely visible. Mountains of sand and debris littered the park's western end. Yet within a week, joggers returned to the trails and the restaurant at the park resumed serving avocado toast to customers to raise money for flood relief funds. While it took a full year for the park to be fully restored, its basic functions were intact thanks to the $58 million revitalization that shored up the bayou’s historical role as a flood control mechanism for the city. Completed in 2015, it transformed what was basically a drainage ditch into a regional outdoor amenity with features that also serve as flood storage, according to an Urban Land Institute study. The relatively fast reopening signals how urban planning mitigated the damage of one of the costliest floods in U.S. history. And planners say it now holds broader lessons as the growing challenge to plan for the effects of climate change becomes a larger part of commercial development. “This is an issue that's facing cities across America in different ways," said Anne-Marie Lubenau, a Boston architect and director of the board behind the Rudy Bruner Award, a national urban planning accolade given to the Buffalo Bayou Partnership for its work along the bayou. "In Boston you've got coastal erosion and big snow storms; we’ve got fires in California; water is a challenge in [Houston] and this project addresses it in a bold way, but also in a way that, while it is unique and distinctive to the bayou, it also incorporates a number of design moves that can be adapted to other cities.” Houston, a city with no zoning codes that's not often held up as a bastion of urban planning, gained national attention from planners by showing how urban systems projects can create green spaces while planning for floods. The work included 2.3 miles of waterfront land along Buffalo Bayou, roughly the length of New York's Central Park, and it added 10 miles of walking and biking trails with four pedestrian bridges. The project spurred significant real estate building in the area. Since 2012, within a 1-mile radius of the project, nearly 6 million square feet of new multifamily and retail space was constructed, according to CoStar’s analysis. In total, about 50 new commercial properties were developed that, if sold today, could be worth about $1.4 billion, according to CoStar’s modeling. That's a significant return on investment for a project sparked by a partnership between the nonprofit Buffalo Bayou Partnership, the city and flood control district. It was kicked off by a $30 million gift from the Kinder Foundation, the nonprofit backed by Houston billionaire and oil baron Rich Kinder. Now, the Buffalo Bayou Partnership, the nonprofit behind that revitalization, is setting its sights on the east end of the bayou, which is much wider and less flood-prone, and it has long been an industrial area. The east end of the bayou turns into the Houston Ship Channel, home to 330 public and private terminals that are owned by more than 150 companies, and it empties into the Gulf of Mexico. Plans for the east end are much larger and more ambitious than what was done successfully on the bayou's west side. Buffalo Bayou East is a 20-year master plan expected to cost $200 million to transform four miles of waterfront land on the bayou and create 263 acres of parks and 40 miles of trails and paths with seven pedestrian bridges. Some land use experts are calling the plan one of the most complex waterfront redevelopment projects in the country. It comes as real estate investors are increasingly concerned about how climate change would affect real estate markets and urban planners from New York to San Francisco are looking for more ways to creatively manage water in growing population centers. “For those of us not from Houston, we don't think of the city as being associated with a strong ethic of planning. This really shifts the paradigm," said Lubenau. Former Industrial Sites In Houston, the bayou is not known for its pristine beauty – the brown, opaque waters of the river are home to bass, catfish, alligator gars, a fish native to Texas with razor sharp teeth, and alligator snapping turtles, as well as the occasional alligator. The bayou often has high levels of bacteria that make it unsafe for swimming and the Texas Commission on Environmental Quality recommends not to eat any fish caught in the bayou. Nevertheless, the Buffalo Bayou Partnership aims to transform a patchwork of public and private land, including several abandoned industrial sites, into an area focused on the water with seven boat landings. It aims to connect the African American and Hispanic communities of the Fifth Ward and Great East neighborhoods to one another and give the historically working class neighborhoods new access to nature and 200 acres of open space. “In some ways, what’s different about it is the scale and complexity of it all,” said Cary Hirschstein, a partner at HR&A Advisors, a real estate, economic development and public policy firm. It co-led the master planning process of the proposed east project along with landscape architecture firm Michael Van Valkenburg Associates. The project represents a unique infusion of investment into historically working class communities that typically don’t see investments of this scale, Hirschtein said in an interview. The restored industrial structures harken to other similar projects across the country, from Concrete Plant Park in the Bronx in New York City, Gas Works Park in Seattle or Steel Stacks Park near Philadelphia in Pennsylvania, which all turned industrial properties into nationally recognized community spaces. But this project would affect a much larger area than those parks in terms of acreage. “There are really incredible industrial elements that we want to celebrate. It’s going to be unlike any other place in Houston, if not the country,” Hirschtein said. The revitalization efforts focus first on 70 acres of land, including 50 acres owned by the Buffalo Bayou Partnership, running along a four-mile stretch of the river. But the plan envisions a much wider area of influence and aims to give developers and investors design guidelines and a vision for renovating the eastern side of downtown. The project is expected to be a game changer for commercial real estate in the area. “The Buffalo Bayou East revitalization plans are almost certain to lead to a rise in property values, which could drive a new vision for reimagining best-and-highest-use along the eastern portion of the bayou,” said Justin Boyar, director of market analytics in Houston for CoStar, in an email. Boyar notes two Houston neighborhoods, the Second and Fifth Ward, bordering the Buffalo Bayou East project are located in opportunity zones with tax incentives likely to attract investors. “If done smartly and inclusively, this could also be an opportunity to serve and unite historically neglected working class communities,” he added. Redevelopment Interest On the east side of the bayou, private developers are already making massive changes that could further speed growth and gentrification in the hip, former industrial district called EaDo, short for East Downtown, which is similar to Deep Ellum in Dallas or East Austin, Texas, which were both noted as "Cool Streets" on Cushman & Wakefield's 2019 report on hipness. “It’s definitely growing very quickly, we have quite a few developers looking into the district trying to see which properties are available and how they can start to redevelop,” said Jessica Bacorn, executive of the East Downtown Management District, the local economic development group for the area, in an interview. Bacorn said the district has seen an “influx of development” in recent years from new restaurants to coworking spaces. “The vibe that’s in EaDo, with all the arts and culture that’s already there, I think we’re seeing a lot of developers coming in who aren’t looking to change the culture, which is one thing I love about the district and the area. They’re looking at what’s already there,” Bacorn said. Midway, the developer behind the CityCentre mixed-use project in west Houston, is preparing to break ground on a 150-acre project along the eastern end of the bayou spanning 60 city blocks in Houston’s Fifth Ward neighborhood, which also is located in an opportunity zone. The project, called East River, is being touted as walkable where urban-meets-nature oasis that “celebrates local cultures, cuisines, arts and history” with 8.9 million square feet of office, 1,440 apartments, 500,000 square feet of retail space and 390 hotel rooms, according to Midway's website. Midway’s East River site, which was pitched as a potential location to Amazon during its second headquarters search, is one of the largest contiguous blocks of land in the nation located within a mile of several major employment centers: downtown, the Houston Ship Channel, and the Texas Medical Center, said Boyar, the CoStar analyst. “Given the Buffalo Bayou East and East River plans, combined with its opportunity zone status, the area is solidly located in the path of growth for urban infill development,” Boyar said. The plans are creating some jitters about gentrification and concerns about pushing low-income communities out. At a public panel to reveal the master plan in October, three protesters disrupted the meeting shouting anti-gentrification slogans for 10 tense minutes before an audience member convinced them to leave after police were called. The protesters, who were not arrested but refused to speak to media or provide their names, argued that east end development would raise land values and price out working class communities. Anne Olson, president of the Buffalo Bayou Partnership, told CoStar News it was the first time the nonprofit had heard vocal opposition to their plans in more than two years of community engagement discussions. Reclaiming Waterfront Proponents of the plan say it was drawn up in a way that aims to maintain the character and people of the community. A handful of other low-income residents at the meeting expressed support for the proposal. The issue of equity was important to the nonprofit’s master planning as the consultants for Buffalo Bayou Partnership engaged in conversations with more than a 1,000 people, said Hirschtein, the partner with HR&A who has worked on the project for four years. “There’s been a tremendous amount of investment in open space across the city and it’s tended to skew toward affluent places. This allows communities to reclaim their waterfront. These are communities that have been disconnected from their water space,” Hirschtein said in an Oct. 28 panel discussion about the partnership’s master plan. Concern about pricing residents out drove the nonprofit to think more broadly than just planning a beautiful park, he noted. “The plan has a real focus on inclusive economic development. There are elements that you don't see in a normal park master plan like providing affordable housing on-site as part of this project,” Hirschtein said. As part of the proposal, Buffalo Bayou Partnership wants to build a mixed-income residential community called Lockwood South, which would provide a combination of multifamily, single-family homes and workforce housing near Lockwood Drive. It would be next to other mixed-income communities proposed by other nonprofits with the help of disaster relief funding, said Olson, president of Buffalo Bayou Partnership, in an interview. The nonprofit is also redeveloping a 50,000-square-foot former barge terminal, warehouse and wastewater treatment facility along Navigation Boulevard into a community event center and possible incubator space for neighborhood businesses and food service at a site called Turkey Bend. Olson added that the partnership would aim to work with local entrepreneurs and small businesses with ties to the neighborhood in finding any retail tenants or assisting with event programming. “We could sell that property in a minute to some developer who could turn it into a shi-shi bar, but it is something that but we want to make into an community space for the neighborhood,” Olson said. Awaiting 500-Year Floods Beyond economic and cultural resiliency, the proposal also aims to bolster the environmental strength of the eastern side of Buffalo Bayou. Parts of the bayou are still recovering from Hurricane Harvey, when the region was devastated by flooding over four days in August 2017. That’s sparked an effort to this day to determine how to make Houston’s waterfront more resilient. And planners with the Buffalo Bayou Partnership are trying to take lessons from the historic flood. To combat the impact of possible flooding, the nonprofit’s plan calls for stabilizing eroding banks, designing structures that can withstand 500-year floods and creating spaces that are easier to clean after major flooding. Those types of storms are an increasing concern, with executives naming climate change the top risk to organizational growth this year, according to KPMG’s 2019 Global CEO Outlook report. And the United Nations Intergovernmental Panel on Climate Change urges elected leaders to make sweeping changes to combat climate change and sea level rise, such as creating dikes or seawalls, maintaining mangroves or coral reefs and raising buildings along shorelines. Scott McCready, principal of SWA Group, a key planner in the western end of the Buffalo Bayou Park, agrees that preparing for flooding is an increasingly good investment. "While we never anticipated a Hurricane Harvey scale, we did anticipate [flooding]. We had serious discussions about where to place trails, how to design docks, all that kind of thing. So we had an incredibly responsive plan and responsible design to help minimize issues," he said in the panel discussion. But the park also owes its resiliency to the public-private partnerships the Buffalo Bayou has formed with the city, the Downtown Development Authority and the Harris County Flood Control District, he said. “We have this partnership in place and that is how I define resilience,” McCready said.

Breaking ground in Q1 2020, per HBJ article: Houston-based real estate investor Nitya Capital has partnered with Tema Development, also based in Houston, to bring another luxury apartment project to Hermann Park. Two Hermann Place will rise 32 stories at 1661 Hermann Drive near Jackson Street in the Museum District, next to One Hermann Place and The Parklane, both of which Tema also developed. The new tower is expected to break ground in the first quarter of 2020 and be complete in the winter of 2022, according to a press release. Page, an architecture firm with an office in Houston, is listed in the release, but a general contractor on the project was not included. “During our design process, we carefully researched every detail of this charming and historical area of Houston to build a residential space that effortlessly blends with the beautiful Hermann Park backdrop,” said Nadim Zabaneh, vice president of Tema Development. The release notes that some of the steps taken to capture the neighborhood's style in the design included matching the stone of the building to the nearby Museum District. “It was important for us to maintain the character of the Hermann Place area to create an authentic park-like setting for our residents,” Zabaneh said. The tower's 295 residential units will consist of 13 floor plans with an average size of 1,076 square feet. Units will feature high ceilings, quartz countertops and backsplashes, chef-inspired appliances, large closets with storage systems in every unit, USB charging stations and Nest thermostats. The tower's 18,000 square feet of community amenities will include a resort-style pool with a sunbathing ledge and cabanas, a 2,100-square-foot sky lounge on the top floor, a café bar, an 11,000-square-foot amenity deck on the eighth floor, a conference area, a dog park, a barbecue area and a fitness center overlooking the park. The building also will offer 24-hour valet service with transportation shuttles to nearby destinations, plus private garages, electric vehicle charging stations and other conveniences. The release also notes that Two Hermann Place is just the beginning of Nitya and Tema's partnership. "Both organizations look forward to a long-term partnership in efforts to design new structures and redevelop existing assets into modern and state of the art multi-use real estate projects," the release states. Tema completed The Parklane, a 35-story luxury condominium and apartment tower at 1701 Hermann Drive, in 1983. The developer broke ground in December 2014 on the seven-story, 224-unit apartment complex at 1699 Hermann Drive that's now called One Hermann Place. That project opened in 2016, and Tema said at the time that it was in the early stages of planning two high-rise residential towers called Two and Three Hermann Place on the remainder of the 6 acres next to One Hermann Place and The Parklane. Nitya is led by Swapnil Agarwal, a 2019 40 Under 40 honoree and a 2019 Most Admired CEOs honoree. He launched Nitya Capital, a privately held real estate investment firm, and Karya Property Management in 2013. Nitya Capital has grown from there to have more than $1.5 billion in total assets, including ownership and management of more than 16,000 units throughout Texas, as well as 250,000 square feet of commercial space.

Subsidies aside, this is an extremely impressive project. There are a lot of start ups here, some of which are really starting to scale and getting large valuations. The Cannon is having to expand much quicker than they anticipated. Major Energy companies are putting teams out here (Chevron Technology Ventures, Shell Lubricants, etc) there are a lot of VC's and angel investors here, major law firms have presences out here, banks, cpa firms, etc. It really is crazy what they've done in a short amount of time and with its proximity to the Energy Corridor, I would not be surprised if its as successful or more successful than the Ion. Fortunately, I think it will be less of a competition, but instead have more alignment and promote one another's missions for the betterment of Houston. It will be exciting to watch both grow over the next 3-5 years and beyond.

Drove by earlier this evening and they had pump trucks parked and workers on site pretty late in the night. My thought is this will be starting within a few hours.

From Costar: Luxury apartment developer Hanover Co. and partner Lionstone Investments are getting closer to breaking ground on the first phase of a mixed-use project that is expected to be the first of its kind for both developers in Houston. The 13.58-acre site is about 2 miles west of downtown Houston, near where Allen Parkway and Shepherd Drive intersect by Autry Park and across from the western side of Buffalo Bayou Park, a sprawling public park stretching along the bayou. Site preparation is underway on the roughly $200 million apartment portion of the project, which is expected to include 744 units spread across a 22-story high rise and an eight-story mid-rise tower, according to the developers and state documents. Although details are not finalized yet, the mixed-use project could ultimately include a roughly 275-key room hotel, a 300,000-square-foot office tower, two apartment towers and a new 0.5-acre park, the developers told CoStar News in interviews. Hanover started demolishing structures at the site earlier this year and is now "actively working" on utilities and infrastructure work, Hanover CEO Brandt Bowden said in a phone interview. "We anticipate commencing vertical construction next month," Bowden said, pending additional permitting approvals from the city of Houston. The developers have received several permits related to preparing the site and laying the foundation for the apartment towers, according to city of Houston records. The multifamily portion is expected to take two years to build, Bowden said. Hanover and Lionstone, both based in Houston, have not finalized the name of the project. The full project cost for the mixed-use development wasn’t immediately available, but initial architectural estimates filed with the Texas Department of Licensing and Regulation estimated it would be $108 million for the eight-story mid-rise with apartments, retail and precast parking garage, and an additional $109 million for the mixed-use skyscraper with a five-story precast parking garage. An entity tied to Hanover bought a portion of the property, a 4.54-acre tract at 3540 W. Dallas St., from the city of Houston for about $30.6 million in April, according to a city of Houston agenda item and Harris County deed records. The property has an appraised valued of $21.5 million, according to the Harris County Appraisal District. Entities tied to Hanover purchased multiple parcels along Dallas Street and Marston Place from nonprofit organizations earlier this year, according to Harris County deed records. The total project size is 13.58 acres, according to a January variance request for the project filed in the city of Houston’s Planning Commission by LJA Engineering on behalf of Hanover earlier this year. Hanover plans to build a "highly programmed urban park," said Bowden. The office portion of the project could include roughly 300,000 square feet in a tower about 20 stories or more, roughly 300 feet high, Bowden added. Jane Page, president of Lionstone, said in an interview that the developers are still evaluating the "right mix" of office, hotel and retail components and have not fully committed to the office tower yet. "We’ve done a lot of homework and a lot of brokers are saying, 'if you build it in that location, they will come,'" said Page, who was speaking at a Nov. 14 event in Houston organized by the Urban Land Institute. Page said Lionstone's research suggests that out of the last 16 new office projects built in Houston, nine buildings are within mixed-use environments and those towers are 98% occupied on average. "Those are some pretty strong stats that people want new [and] people want mixed use. So we’re really excited to continue building that space out now," Page said. The Allen Parkway location would offer office tenants convenient access to downtown Houston with relatively easy commutes from the Heights, West University and Kirby Drive areas, said Page. The ground floor level of the office structure would have a retail portion "that really mixes everyone together in a collaborative" way, she added. The proposal includes adding a stoplight along Allen Parkway at the entrance of the mixed-use so "there will be direct connectivity" to Buffalo Bayou Park, Page said. The developers are working with multiple architecture firms on the project, including Ziegler Cooper, DCI Architects, the Office of Michael Hsu, said Bowden. Additional permitting documents with the state also list Houston-based architecture firm W Partnership. Separately, adjacent to Hanover’s project, apartment developer Wood Partners is planning a 364-unit midrise multifamily project called Alta River Oaks at 3636 W Dallas St. The project is expected to open by the fourth quarter 2020, according to a statement from Wood Partners. Wood Partners’ project will be built on roughly 3 acres, as part of a larger 26-acre super block that will be subdivided, said Bowen, Hanover’s CEO. The superblock also contains Hanover and Lionstone mixed-use development, the 2.5 acre Autrey Park, which will grow in size, and a new 0.5-acre park proposed by Hanover, he added. The projects are popping up in a corridor along Allen Parkway that has attracted more attention from real estate developers after the $58 million revitalization of the western end of Buffalo Bayou. Boston real estate firm GID Development and Houston-based DC Partners also are building large mixed-use projects in the area. Hanover, which specializes in building and managing luxury multifamily projects across the country, has been busy with several Houston projects lately, including the recently opened Hanover Blvd Place in the Uptown-Galleria area that includes office space for Hanover's corporate headquarters. Construction is underway on Hanover's The Driscoll, part of a $150 million, 30-story high rise as part of a venture with Weingarten Realty Investors. The Driscoll is less than a mile south of the Allen Parkway proposed project. Meanwhile, Lionstone, a Houston real estate investment firm started by former Hines leaders, is increasing its exposure to office projects located at mixed-use developments in Houston, such as its recent purchase of CityCentre Five in CityCentre.

I was eating turkey when I saw the Bat Signal: Houston luxury condominium developer Pelican Builders plans to break ground next quarter on a 17-story skyscraper near Houston's Uptown-Galleria area. Called the Hawthorne, the $100 million condo tower aims to lure empty-nesters from the tree-lined upscale Tanglewood neighborhood with "pet-potty" porches and designer finishes. The Hawthorne is the first high-rise luxury condo project to be built in 40 years in the middle of Houston's upscale single-family neighborhoods like Tanglewood, Briargrove and the Memorial Villages, according to Derek Darnell, principal at Pelican Builders. The average price for a home listed for sale in Tanglewood is $2.7 million, according to the Houston Association of Realtors. In the first month after opening a glitzy sales gallery for the Hawthorne at 5656 San Felipe St. in September, Pelican Builders sold about 13% of the 67 units, Darnell said. He expects to sell about 15% of the units by the end of the year. Pelican Builders secured a $7.3 million loan earlier this year from an undisclosed national real estate finance company to buy the 1.26-acre development site for the Hawthorne, according to a statement at the time from Mission Capital Advisors, which arranged the loan. Pelican Builders, which says it is responsible for developing almost half of all high-rise condo projects in Houston, is aiming to cater to wealthy empty-nesters with its latest project. The Hawthorne features floor plans between 1,700 square feet and 4,000 square feet and prices range from $1.1 million to $3.5 million per unit, according to Pelican Builders. That compares to Houston’s median price for condominiums-townhouses sold in October of $164,500, which includes new homes and resales across the entire metropolitan area, according to data from the Houston Association of Realtors. To attract high-end buyers, Hawthorne units are expected to have large terraces with "pet-potty" porches and resident amenities such as a 67-foot lap pool, fitness center, lounge with a bar and fireplace and 24/7 concierge and valet. Kirksey Architecture designed the Hawthorne, the Houston-based architecture firm's third project with Pelican Builders. Lauren Rottet of Rottet Studio is designing the public indoor-outdoor spaces for the Hawthorne. The luxury condo market in Houston is still a relatively niche market. Last year, only 32 condos built after 2010 priced above $1 million sold in Houston, according to data from the Houston Association of Realtors analyzed by the Houston Properties Team at Keller Williams. Another 30 condos priced above $1 million built before 2009 sold last year, according to the data. If condos priced above $1 million sold at that current pace in Houston, it would take about 26 months to work through the current inventory of homes, including newly built and resale condos. "Right now, Houston's $1 million condo market is one of the biggest buyer's market with over 26 months of inventory," which doesn't include all of the inventory that builders haven't listed on the open market yet, Paige Martin, a broker associate with Keller Williams, said in an email. "In my opinion, there are some great new construction condos. However, we have definitely seen an overbuilding of the luxury condo market in Houston." But Darnell with Pelican Builders has a calculated optimism about the condo market in Houston, and he points out that location is vitally important. So far, Pelican Builders has had a penchant for picking areas with hotter demand. The company sold out of condos at The Wilshire, a 96-unit luxury high rise at 2047 Westcreek Lane that was financed by the Carlyle Group in the Galleria area. And, Pelican Builders' Revere at River Oaks, a nine-story condo project located at 2325 Welch St., is about 85% sold with move-ins on track for the second quarter of 2020, according to the company. IBC Bank provided the construction loan for the Revere. Darnell said he is seeing demand for new condos pick up in Houston, but he doesn’t expect it to reach the same fever pitch that the apartment market is seeing now. "It will never be as big as the apartment market, and that’s just true in any city. Houston and all Texas cities are continuing to grow" by population and jobs, so the "condo market will continue to grow, but I don’t expect it to just take off. I think it will always be very calculated and measured," Darnell said. Also near the Uptown-Galleria area, other new high-rise condo projects include the Arabella and Astoria from Houston developer DC Partners. Elsewhere in Houston, DC Partners recently broke ground on the first phase of a $500 million mixed-use project by Buffalo Bayou, west of downtown, called the Allen, which is expected to include a 34-story condo-hotel high rise. Construction on the Hawthorne is expected to take two years. For the Record Ludlow & Associates Construction is expected to break ground on the Hawthorne in the first quarter of 2020. Darnell said Pelican Builders is evaluating multiple options for a construction loan. Mission Capital is helping to secure the construction loan and arranged the loan for the land from an undisclosed lender. Jason Parker, Steven Buchwald and Alex Draganiuk with Mission Capital arranged the loan for the land. Douglas Elliman Real Estate, a New York City-based residential brokerage that recently entered the Houston market by acquiring Houston-based Sudhoff Cos., is handling sales and marketing for the Hawthorne.

Tower crane base was up this morning.

Ask and you shall receive: Morgan Group to Break Ground on 13-Story Tower in Houston Exclusive: Developer to Start Construction on Project That has Been on Hold The developer behind a Pearl-branded apartment project where a new Whole Foods is opening in Houston's midtown area this week is already planning to move forward with another project about a half-mile away that has been on hold. Morgan Group, a Houston-based developer that has built $3.1 billion worth of multifamily projects nationally, is reviving plans to build a 13-story luxury apartment tower at 102 Dennis St. in Houston. The project is tucked on a quiet residential street in one of Houston’s hottest neighborhoods for apartment and retail development. Construction on the new project is expected to start in December or the first quarter of 2020, Philip Morgan, vice president of the Morgan Group, said in an interview with CoStar News. The project for now is called the Pearl Rosemont, although the developer is not solidified on a name, he said. In building documents with the city, the project has also been referred to as Pearl on Helena. Morgan Group has used the Pearl brand for at least 10 other apartment projects in Houston as well as projects in Austin, Texas; Phoenix; California; and Miami. The developer's proposed Houston project will include 298 apartment units on top of a parking podium. The total project will be 260,000 square feet, Morgan said. Originally, the Pearl Rosemont project was pitched in 2015, but like several other real estate projects in Houston, plans were put on hold after oil prices started to decline around that time. But Morgan said the market conditions are improving, spurring more multifamily development in midtown, Montrose and the River Oaks neighborhoods. "Midtown has changed a lot in the last decade and there’s other high-rise buildings in the market getting done," Morgan said. "The market is improving and the neighborhood is improving. We’ve already opened our other projects nearby." Earlier this year, Morgan Group opened Pearl Marketplace, an eight-story, 264-unit apartment project located at 3120 Smith St. A 40,000-square-foot Whole Foods Market opened this week on the ground floor of Pearl Marketplace at 515 Elign St. In 2014, the development group built a five-story, 154-unit apartment complex nearby called Pearl Midtown at 3101 Smith St. The newest proposed project, Pearl Rosemont, will be "a step up from Pearl Marketplace in terms of finishes and views. Being 13 stories high, it will have nicer views and I think that neighborhood is a little quieter," Morgan said. Morgan Group will serve as general contractor for Pearl Rosemont and the architect is Ziegler Cooper. Renderings of the project were not available. The project was originally slated to cost $20 million, according to state documents, but in more recent filings that estimate was listed at $92 million. However, Morgan said those estimates are incorrect. He declined to disclose the project's estimated cost. The midtown market has seen more multifamily growth in recent years as more workers look to be close to downtown and the nearby Montrose neighborhood continues to attract national attention. The Lower Weisthemier-Montrose area was recently named one of the nation’s top 20 coolest streets in a report by Cushman & Wakefield. The report rated it as one the hippest areas because of its walkability, diversity, nightlife, food scene and vintage stores. Nearly 97,000 people live within a 2-mile radius of the area with a median income of $83,233, according to the report, and about 37% of residents nearby are millennials. The city of Houston granted 28 building permits for sites on Westheimer Road in 2018, double the number issued in 2017, Cushman & Wakefield said. Overall, there are 5,064 apartment units under construction in downtown Houston and another 5,634 units under construction in the submarket that contains Midtown, River Oaks, Montrose and Rice Military, according to CoStar data.

Let's move on. There is a $1B+ campus on the way, with a lot of private industry expressing serious interest to complement TMC3. Developers are gearing up with sites acjacent to or near TMC3. This is a clear net positive. I trust the leadership involved and the amount of capital being invested shows that others do too.. No way to predict what will happen, so let the chips fall where they may.

From Costar: Whitestone REIT, a Houston-based real estate investment trust, sold three industrial sites and plans to invest the proceeds into “e-commerce resistant" properties. All three properties are in the Houston area and traded for a total of $39.7 million, according to filings with the Securities and Exchange Commission. Whitestone received $11 million in cash as a result of last month's sales, which were part of a joint venture with Houston-based Pillarstone Capital REIT. HMC Fuller bought the portfolio, which included: Corporate Park West at 1718 N. Fry Road, Plaza Park at 7503 South Freeway and Corporate Park Woodland at 210-240 Spring Hill Drive in The Woodlands, according to the filing. Overall, Whitestone owns 57 properties, comprising 4.8 million square feet, that were 90.4% occupied at the end of the third quarter, up from the 89.4% occupied rate at the end of the second quarter, but down from the 91.9% occupied rate at the end of the third quarter last year. "We tend to focus on service tenants, not soft line retailers that today are fighting to stay relevant," Jim Mastandrea, Whiteston'e CEO, said in an earnings call. The company’s average annual rent per square foot grew 4% year-over-year from $19.64 per square foot in the third quarter to $18.97 per square foot in the same quarter last year. Whitestone signed 68 leases in the third quarter, representing $18.6 million in total lease value and comprising 175,714 square feet, Dave Holeman, Whitestone’s chief financial officer, told investors on the call. That compares to 75 leases representing $23.8 million and comprising 170,944 square feet for the same quarter last year. During the third quarter, Whitestone completed development of two multitenant sites in Anthem, Arizona, and a 100% lease-up of a multitenant pad side in Chandler, Arizona. Whitestone's "e-commerce resistant focus is primarily on local and service-based entrepreneurs," said Mastandrea on the call. The REIT posted a net income of $1.8 million in the third quarter this year, compared to $7.8 million for the same time last year. "Our model has greatly reduced our exposure to the headwinds affecting others in our space," Mastandrea said in a statement. Another Houston-based REIT, Weingarten Realty Trust, expects to sell up to $450 million in properties this year as it transforms its portfolio to centers anchored by trendy grocery stores and new residential development projects.

It looks like this site closed this month and was sold to Woodbranch - the developer of Market Square Tower. I would not be upset if there was another MST quality project here...

I imagine Hines has some great plans in store for the 600 Travis plaza and a much improved ground-level experience for both blocks. https://www.chron.com/business/real-estate/article/Houston-based-Hines-buys-Texas-tallest-tower-14568037.php

They started pouring the final garage floor this morning. We should start to see glass go up in the next few weeks.

https://www.rchstudios.com/projects/the-lynn-wyatt-square/

I'll be curious what type of tenant this attracts now that there are a few thousand residents with disposable income within walking distance. I wouldn't be surprised if a more high end clothing store set up shop and/or athletic clothing store. I mentioned it a few years back, but I still believe this general area will see more of the desired retail before the area along Dallas Street. In the long term Dallas Street may make more sense, but this area is where the momentum and higher income wants to live/spend time.