Hines Global Income Trust bought Montrose Collective from its developer for $137.6M, it revealed in an SEC filing, setting a new price per square foot record in Houston.
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The sale of the 189K SF mixed-use property at 888 Westheimer Road comes out to about $727 per SF, more than triple the average retail price per square foot of $223 last quarter.
The previous price per square foot record was also set by Hines Global Income Trust when it bought 200 Park Place for $145M in 2023, CoStar reported. The office building at 4200 Westheimer Road sold for about $700 per SF.
Montrose Collective is a 2.4-acre redevelopment from Radom Capital at the corner of Montrose Boulevard and Westheimer Road that was completed in 2023. Radom broke ground on the project that combined repurposed structures and ground-up buildings in February 2020, right before the pandemic began, the Houston Business Journal reported.
The development has about 100K SF of office space, with tenants including California-based entertainment company Live Nation and renewable energy company Pattern Energy. Another 50K SF of retail houses high-end stores, restaurants and fitness providers like Uchi and Solidcore.
Montrose Collective is also home to the Freed-Montrose branch of the Houston Public Library. Radom Capital acquired the land previously owned by the city in exchange for building the public library on-site, CoStar reported.
The center is 100% leased, according to Hines’ disclosure in its Securities and Exchange Commission filing.
Hines Global Income Trust paid $137.6M, not including transaction costs and closing prorations, for the property on July 9, according to the document. Neither Hines nor Radom Capital responded to a request for comment by press time, but Hines Global Income Trust has listed the property on its website.
The trade of Montrose Collective wasn’t the only major retail purchase in the Houston area in July. New York-based Brixmor Property Group bought LaCenterra at Cinco Ranch, a 409K SF development in Katy, for $233M.
LaCenterra has tenants including Trader Joe’s, Athleta, a small-format IKEA, Lululemon and Sephora. The acquisition price came out to about $570 per SF, more than double the average price last quarter.
The Montrose Collective sale price could help local developers determine exit cap rates moving forward.
“Everyone’s holding their breath to see what it trades at,” Lincoln Property Co. Executive Vice President Gabe Lerner said at a Bisnow event in April.
Retail investment sales volume in the first half of this year was still well below 2021 and 2022 levels, when dollar volume neared and surpassed $1B.
But the sales of LaCenterra and Montrose Collective indicate dollar volume is way up from last year, when the highest dollar-amount sale of an office building was just $47M.
