Behind the Deal: Pearland Costco
Everyone’s abuzz about the Costco under construction in Pearland. The wholesale company seems like a natural fit for the rooftop-heavy area, but listing agents TNRG senior associates Reed Vestal and Taylor Schmidt tell us it was actually a complicated and time-consuming deal.
Taylor and Reed started listing 40 acres at 288 and CR 59 for Parkside Capital in January 2013. (Pictured, Parkside Capital president Joe Moody and VP Dan Moody with Reed and Taylor.) Parkside purchased the distressed property and put value into it, making it shovel-ready and building Business Center Drive to connect 518 to CR 59. Reed and Taylor contacted Costco on the first day of marketing, but were told Costco wasn’t interested in coming into Pearland because the population might not be sufficient. Nine months later, Costco reached out to say it was reconsidering. (The TNRG gents say they had to “rodeo clown” this deal—they had to relentlessly stay in front of Costco.)
It still took a full year to get a deal under contract for Costco to acquire nearly 17 acres; it only officially closed last month. It’s building a 150k SF store, which is scheduled to open by November. Other retailers are also starting to recognize the appeal of Pearland—Moody Rambin recently purchased 3.5 acres from Parkside to build a 30k SF shopping center, and Jimmy Changas restaurant has a site under contract there. Two more pad sites totaling 3.7 acres remain in Parkside’s tract—CBRE’s Jazz Hamilton, Alex Makris and Darin Gosda are listing them, and word on the street is that they’ve got potential deals working to close out the property.
Pearland’s big draw: an exploding population. It’s doubled in seven years, and multiple master planned communities totaling thousands of acres (including Sedona Lakes, Pomona and Meridian) are opening this year within four miles of the Parkside site. (Not to mention that Allied Orion just announced last week that it’s building a multifamily community nearby.) The demographics are strong and there’s still a lot of room to build and still be within a commutable distance to Houston’s employment centers. Reed and Taylor believe that the Pearland area is just scratching the surface, saying there is an immense amount of opportunity there for real estate professionals to uncover.