Lease-up has begun at the first grocery-anchored mid-rise in Houston.

Houston-based developer Morgan is constructing Pearl Marketplace, a Whole Foods Market-anchored development at 3120 Smith St. in Midtown.

“Combining a top-tier grocery store with a luxury-living community will create a unique offering in the Houston market," Morgan Development Executive Vice President Philip Morgan said in a release. "We believe this is a good example of urban development and is representative of what Houston needs to be competitive with other major metro cities like New York, Chicago and Los Angeles."

Pearl Marketplace features 264 units above the ground-level 40K SF grocery store, which is under construction and expected to open early next year. Residents will have direct access to Whole Foods via private elevator.

The mid-rise project is composed of studios, one-bedroom units and two-bedroom units. Units will feature open floor plans, hardwood flooring, Sonos sound systems, Nest thermostats, quartz countertops and gas appliances. Select units will feature Kitchen Aid appliances and wine refrigerators.

On-site amenities include a coworking lounge with private offices, a Sky Deck, a Sky lounge, for-rent private garages, a dog park and dog wash stations, a resort-style pool, a fitness center and an oversized kayak and bike storage room with Dero bike racks and bike repair tools.

The completion of Pearl Marketplace represents the continuation of a boom in luxury multifamily development in Houston. According to RENTCafé, high-end apartments made up 89% of the new developments in 2018 and 37% of the overall Houston market.

"I remember working one summer in high school on a construction site, building our first project in Midtown called 2222 Smith," Morgan said. "The neighborhood has come a long way since then and today boasts the highest walk score in Houston."

Mixed-use development is a growing trend in multifamily development in Houston and across the country. Midway is underway on a grocery-anchored mixed-use community on Washington Avenue. Buffalo Heights will feature a 96K SF H-E-B grocery store; St. Andrie, a 232-unit luxury community; and One Buafflo Heights, a 36K SF office portion. The site is owned by the Gordy family (BKR Memorial).

"Combining a Starbucks, a coffee shop, a restaurant, a grocery store or a hotel within or adjacent to an apartment building adds value, convenience, walkability and a unique experience for renters," ApartmentData.com President Bruce McClenny said. "Apartment developers that have mixed-use built into their projects have an advantage over apartment properties that don’t have such enhancements."

Built in 2008, One Park Place was ahead of its time by having a Phoenicia Specialty Foods on the ground floor in Downtown Houston, he said. Properties such as the Domain at CityCentre Apartments and the Ascent at CityCentre Apartments that are built as part of a town-center concept also offer abundant options for dining and entertainment for residents.

"Living in a walkable environment is a trend that we don't see going away. If anything, it's picking up momentum," Morgan said. "Successful mixed-use developments will be an important part in shaping the character of our urban neighborhoods going forward. We're currently pursuing several other mixed-use development opportunities, both in Houston and across the country."