Welcome Group To Consider A Public Offering If Family-Owned Business Tops $1B In Assets

Bisnow/Tierra Smith
The Welcome Group Chairman Welcome Wilson Sr.

A prominent Houston real estate developer may take his family-run empire public after spending more than 60 years in Texas buying, selling and building all asset types.

If the Welcome Group amasses $1B in real estate investments, the company will consider a public offering, Chairman Welcome Wilson Sr. told Bisnow Monday. The exit plan, as he described it, should occur in about four years and will depend on market conditions.

"If you have a $1B portfolio, the opportunities open up for you," he said. "Cash equity has been hard to come by. But now, we will have all of the equity we can possibly use."

The other options leadership will consider around 2023 include recapitalizing the company with a REIT, paying back a $300M loan or selling the company, he said.

The Welcome Group in January secured up to $300M in growth capital from an investment fund managed by New York-based Almanac Realty Investors.

The company owns more than 4M SF of manufacturing and industrial property worth more than $450M across 87 locations. Wilson plans to leverage that $300M loan to buy about $800M worth of property, pushing the company's portfolio total to about $1.3B in assets.

The funds will allow the company to expand its investment strategy beyond single-tenant industrial buildings, which has been a hallmark asset class for Welcome since the late 1990s. The company will shift its focus to acquisitions, build-to-suits, value-add and spec development of industrial and office properties.

Historically focused on the Texas market, the company is reviewing deals in Atlanta, Birmingham, Alabama, Baton Rouge, Louisiana, and other cities along the Sun Belt, Wilson said.

"We know this market very well and know how to manage them well," Wilson said, noting that the company has maintained a 98% occupancy rate for many years. "We are sticking our neck out more now to get a higher return."

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