New Construction & Development Still Needed In Key Areas Of Houston, Like Generation Park
Though the Houston market has slowed dramatically, construction and development is still happening in places that need it. Generation Park, northeast of Houston, is one such place. With a $130M pipeline (including hotel and multifamily projects breaking ground in the next few months and a 75% pre-leased office building underway), McCord Development is learning how to build a city from scratch.
McCord Development president Ryan McCord was joined by a panel of construction and development experts at Bisnow's 5th annual Construction & Development event, where he spoke about McCord's efforts surrounding Generation Park.
(Ryan's second from the right here at our event with Thompson & Knight's Bruce Merwin, Arch-Con's Michael Vaughn, Page's David Euscher and Arch-Con's Michael Scheurich.)
With strong demand in the area, the office building in the works is already 75% pre-leased. Stolt Neilsen will move its corporate HQ to a 6-acre tract in Redemption Square.
The area is ripe for multifamily as well. There's only one Class-A asset in the entire submarket, and it only has 12 units. With 2,000 new FMC employees in the area, the fundamentals look good for leasing another couple of hundreds units. The details are still in the works, but Ryan tells us McCord will be breaking ground on a new multifamily development in the next six months.
The Smith Travel report shows there's not a hotel within five miles of Generation Park either. Surprise—McCord is jumping on that opportunity as well. A 147-room Courtyard Marriot is set to break ground soon with structured parking nearby.
Generation's Park biggest challenge is also its advantage. "There's not an existing submarket for any product type in the area," he says. The first difficulty was financing. The first 11 banks McCord approached couldn't wrap their minds around what the firm envisioned. Luckily, Woodforest understood the story, the need for product and the advantageous barriers to entries in the submarket.
To build up the submarket properly, McCord approached FMC to do a survey, asking what types of things the workers wanted in the area. Some of the results were surprising, like auto care and doggie daycare. To that end, McCord is also working on ground-floor retail and a multi-tenant fitness center. But wait, there's more! Lone Star College and San Jacinto College have inked deals at Generation Park.
The projects are focused around Redemption Square, a mixed-use development on the doorstep of FMC Technologies. Once completed, Redemption Square will feature 1.5M SF of office, 650 hotel rooms, 800 residential units and 275k SF of retail.
McCord wants its project to become the next Woodlands (don't we all). With a submarket population of 375,000, exceeding that of The Woodlands, it's entirely possible. (Between 2000 and 2015, the submarket population grew at 210% the Texas average.) Within a three-mile radius of Generation Park, the average household income is $110k. Additionally, there are 13,000 homes under construction in the area at an average price of $350k.