CREguy13

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.

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.

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...