From Skyscrapers To Food Halls To AstroWorld: The Biggest Houston CRE Stories Of 2018
After a few years of pain, 2018 has been a year of progress in Houston. Oil prices bottomed out, and some new projects broke ground. Industrial was on fire, an opulent hotel delivery raised the level of Houston hospitality and food halls took Houston by storm.
Bisnow compiled some of the biggest projects of the year.
The office portion of the 750K SF building is 72% pre-leased. Announced tenants include Houston-based Waste Management Inc., which signed a 284K SF lease in November, and Bank of America, which inked a 210K SF lease in April.
Capitol Tower will also be the home of Understory, a 35K SF community hub and culinary market that was announced in November. Boomtown Coffee, East Hampton Sandwich Co. and Mama Ninfa's Tacos y Tortas, a new concept from The Original Ninfa's on Navigation, will open inside the market.
Australian developer Joe Russo has made a big splash in his American debut. Earlier this month, Caydon Property Group topped out 2850 Fannin, the first high-rise residential development in Midtown. The 27-story luxury complex is at 2850 Fannin St.
The 357-unit property will feature 13K SF of ground-level retail on Drew Street. Atlanta-based eatery The Flying Biscuit has been named as one of the tenants. All units are projected to be ready by summer 2019.
Russo owns adjacent land near the property and plans to construct a mixed-use center spanning over three city blocks with more food and beverage offerings.
The Post Oak at Uptown Houston
This year could mark a notable shift in luxury accommodations for Houston. Hotel experts told Bisnow that the hospitality industry is watching the trajectory of The Post Oak Hotel at Uptown, owned by Houston Rockets owner and billionaire Tilman Fertitta, to see if the city has the bandwidth to support higher daily average rates. If the project takes off, experts predict more luxury brands will seek out Houston.
The Post Oak opened in March and is off to a grand start. It earned the prestigious Five Diamond designation by AAA, one of only two Texas hotels to receive the ranking for the upcoming year.
Downtown is undergoing massive expansion and revitalization efforts, and food halls are leading the charge to add vibrancy and elevate the restaurant scene. The Conservatory opened in 2016, but the concept took a big leap this year with Bravery Chef Hall (opened this summer), Lyric Market (opening in Q2) and Finn Hall (opened in December) all newly in place or on the way.
"Food halls are a disrupter and have a different business model," Bravery Hall partner Anh Mai said at a Bisnow event in September. "With food halls, you can open a business for less, operate a business for less, and there is a user experience for most food halls. The compromise is you don't get to control it as a single operator. You control it when they come up to your booth, but not overall experience. So our job, and [U.S. Property Management CEO] Jonathan [Enav's] job, is to try to curate a bunch of concepts that can [provide] the experience we are hoping to produce."
Houston has known since the start of the year it wasn't going to land Amazon HQ2. In November, the e-commerce giant announced two places — Long Island City in Queens, New York, and Crystal City in Arlington, Virginia — will split the coveted prize of its second headquarters.
One reason cited for Houston not even being a finalist was an insufficient tech and innovation community. In response, Rice University and the city of Houston announced plans in April for the Innovation Hub, which will transform the landmark Midtown Sears. Rice University Director Doug Miller said the Innovation Hub will be ready for occupancy in the fourth quarter of 2020.
With a $100M redevelopment effort, Rice Management Co., which owns the property, will convert the 200K SF building into a startup incubator with coworking space, classrooms, meeting areas, offices, restaurants and other amenities.
AstroWorld was reborn this year ... sort of. The former beloved Six Flags amusement park closed its gates in 2005 but returned to prominence this year for two major reasons: past respect and future expansion.
Houston native and rapper Travis Scott not only named his third studio album "AstroWorld," but also re-created the carnival experience by hosting a sold-out festival in November. The concert recaptured the nostalgic feeling with rides, games and an all-star music lineup. He also plans to open a permanent AstroWorld-themed storefront, Space 2019, next year, according to ABC13.
All of the AstroWorld talks collided with redevelopment plans for the 100-acre site where the park was, which is adjacent NRG Stadium. While the property has changed hands several times and plans have been announced and dropped, the Houston Livestock and Rodeo Show now owns the land and it plans to construct a building to fulfill its agricultural and educational mission year-round.
Bonus: "Robot Brothel" To Houston
It may not have been one of the year's biggest deals, but Houston's proposed "robot brothel" got the most national attention. Canadian-based KinkySDollS, which allows patrons to rent or buy human-like sex dolls, announced in late September it wanted to open a store near Chimney Rock in the Galleria area, the first sex doll brick-and-mortar location in the U.S.
But it faced roadblocks immediately — the city halted construction, saying the company did not secure the appropriate permits. Then a few days later, the city and Harris County passed legislation that made it illegal to engage in sexual contact with anthropomorphic devices within business premises.
According to the company's Facebook account, interested customers can send an email for rental options. No update on a physical location in Houston or elsewhere.