Constellation Announces Ninth Industrial Project Since 2021 As Bigger Tenants Return To Market
While Houston brokers and developers are again turning their heads toward tenants demanding 1M SF of industrial space, the appetite for midsized buildings isn't depleted just yet.
Constellation Real Estate Partners announced plans on Monday for a two-building, 422K SF speculative industrial project. Constellation Mills Road will be situated on 37 acres at 8175-8225 Mills Road in Northwest Houston.
Plans call for one 334K SF cross-dock building and one 88K SF front-load building, a groundbreaking in July, and estimated completion in the second quarter of 2027, according to a press release.
The news follows a December announcement that Constellation was planning two other industrial developments in Houston, one measuring 376K SF and the other 282K SF. Mills Road will be Constellation’s ninth Houston development since 2021.
Stream Realty Partners is tracking 126 speculative industrial buildings under construction in Houston. Only five are over 500K SF, and two of those have leases in place, Stream Executive Managing Director Matteson Hamilton said at Bisnow’s Houston Industrial Summit at Hilton Houston Post Oak by the Galleria on Thursday.
Smaller buildings are being constructed because smaller sites are available but also because it’s easier to get smaller projects capitalized, he said.
“It's really hard to get a bigger goal capitalized because it is such a binary outcome, and the risk spectrum gets wide,” Hamilton said. “I call it the Houston Special, which is a 250K SF cross-dock with four entries, and it’s leased to four different tenants.”
Anecdotally, the Houston market has shown healthy demand for midsized industrial buildings throughout the first quarter. Enchanted Rock leased a 407K SF building under construction by Prologis, Modular Power Solutions leased a new 436K SF building developed by Lincoln Property Co., and Triad Electric & Controls leased 535K SF across two buildings at Jackson-Shaw’s greensPORT Logistics Park.
But there is also demand for bigger buildings, and Houston developers should build more of them, Hamilton said. Brokers at the event said tenants like Amazon have returned to the market, as the number of 1M SF leases in Houston dropped to zero in 2023.
“Houston has got to figure out how to get more bigger boxes on the ground because the demand is there,” Hamilton said. “Of those five buildings under construction over 500K SF, they’re going to severely outperform [smaller buildings].”
The number of companies taking 500K SF or larger leases surged 32% nationally in 2025.
Along with securing capital, another major challenge to developing big industrial is unlocking land and providing utilities, Hamilton said.
Constellation “executed a complex assemblage” with four owners and coordinated with multiple government agencies to secure the site for Constellation Mills Road, Constellation partner J.W. Fields said in a statement.
“The Northwest Houston submarket has strong fundamentals with infill leasing demand outpacing supply,” he said.
John Ferruzzo, William Carpenter, Woody Hillyer and Jax Rawlinson with KBC Advisors will handle marketing and leasing for Constellation Mills Road.
Also in Northwest Houston this quarter, Trammell Crow Co. and Clarion Partners delivered the third and final phase of Weiser Business Park, and Transwestern started another four-building phase of its Innerbelt Northwest Logistics Park.
Overall, Houston’s industrial absorption remains strong despite a huge spike in construction in the early years of the pandemic. The market saw 14.6M SF of positive absorption last year, according to JLL.
