Montrose Collective On Track To Open First Phase In Late 2021
Montrose Collective is on pace to open in the fourth quarter of 2021, introducing new office and retail space to one of Houston’s most popular Inner Loop corridors.
The mixed-use project is located at the busy corner of Westheimer Road and Montrose Boulevard. Houston-based developer Radom Capital broke ground in February 2020 on the project’s first phase: a six-story, 197K SF building that contains both office and retail. The creative office component accounts for 119K SF, while retail makes up the remaining 78K SF.
Radom Capital Managing Principal and founder Steve Radom told Bisnow that the outer shell is scheduled to deliver by late summer. The building is 61% pre-leased, and the first office tenants should begin moving in during Q4. Retail and restaurant tenants are also expected to begin moving in around that time, through Q1 2022.
As part of Montrose Collective, the firm is also building a structure on the other side of Grant Street, immediately to the west of the main building and directly behind Japanese restaurant Uchi and Southside Espresso. That building will house the new location of the Freed-Montrose Neighborhood Library.
Construction is slated to break ground this week, and the shell will deliver during the summer. The city of Houston will then begin interior build-out of the library, which is expected to open to the public in early 2022.
Radom said the coronavirus pandemic didn't affect the construction timeline for the project, but leasing activity for the firm did slow, particularly in the first few months.
“We went from having ... [an] oversubscription of demand for almost every single space at the ground floor to like, the phone's not ringing for three to six months,” Radom said.
The leasing slowdown has since reversed. Radom signed nine new leases in January, a significant increase compared with the firm’s cumulative 32 leases that were signed between the onset of the pandemic in March and the end of 2020.
“We're fortunately back to where the last 60 days and specifically, last 30 days, have been the busiest in our firm's history,” Radom said.
When Radom Capital was founded in 2014, it mostly focused on small-scale retail projects, before gradually branching into creative office. The firm’s ambitious M-K-T mixed-use, adaptive reuse project in the Houston Heights opened during the fourth quarter of 2020 and has received praise from industry professionals and the public.
M-K-T is a collection of five adapted industrial buildings along the hike-and-bike trail and has about 200K SF of creative office and retail space. Radom Capital partnered with Triten Real Estate Partners to develop the project. The firm brought on lauded Austin-based Michael Hsu Office of Architecture to design both M-K-T and Montrose Collective.
The success of Radom Capital’s Houston projects has prompted the firm to start looking at expanding into other asset classes, such as residential, as well as the prospect of taking on projects in other cities within Texas.
“We think at this point, to have a long-term sustainable company that is a little bit more diversified, it would make sense to have exposure to other markets and other asset classes,” Radom said.
Montrose Collective is not the only new mixed-use project underway in the immediate area. Skanska announced in August that it had acquired a 124K SF, 2.86-acre site at the corner of Westheimer Road and Montrose Boulevard, diagonal from Montrose Collective’s location.
Demolition of the existing retail center kicked off in January. Though Skanska has not released many details about the development, it is expected that the project will have both multifamily and retail. The proximity of the two mixed-use developments is expected to further improve the popularity and walkability of the area, Radom said.
D.E. Harvey Buildings is the general contractor for Montrose Collective. Project partners include Michael Hsu Office of Architecture, OJB Landscape Architecture, HOK, Kimley-Horn and DBR Inc. CBRE is overseeing office leasing, while Shop Cos. is handling retail leasing.
Radom secured $105M in financing for the project in March. JLL represented the firm in securing the loan from Bank OZK and joint venture equity from institutional investors advised by J.P. Morgan Asset Management. The project is the first joint venture between Radom Capital and J.P. Morgan Asset Management.