In the urban core and beyond, new apartments sprout
A 29-story tower with two restaurants, a two-story fitness center and pool deck spanning nearly an acre, has broken ground in Midtown, the newest luxury apartment building to rise in the inner city.
The project, a development of Houston-based PMRG and AECOM Capital, is being built on formerly city-owned property at 3300 Main between Stuart and Francis in front of Metro’s red light rail line.
“3300 Main marks a continuation of AECOM Capital Real Estate’s strategy to invest in transit-oriented developments in transforming neighborhoods with strong development partners,” Timothy Haskin, AECOM Capital Real Estate’s senior managing director, said in a statement Friday.
The Midtown project joins other high-end high-rises that have broken ground in recent months.
In Montrose, Hines is developing the Residences at La Colombe d’Or, a 34-story tower being built in partnership with TH Real Estate and the Zimmerman family. The 285-unit building, designed by Muñoz + Albin and Rottet Studio, will
connect to the exclusive La Colombe d’Or hotel.
In Upper Kirby, Hanover is under way on a 39story structure with 370 high-end residential units and 10,000 square feet of ground-floor retail space.
Towering buildings by Australian developer Caydon Group and Houstonbased Camden Property Trust recently broke ground in Midtown and downtown, respectively.
“Others are getting ready to tee up,” said Bruce McClenney, president of ApartmentData.com.
Developers are again planning to add more apartments as Hurricane Harvey sped up Houston’s multifamily recovery. With low oil prices dragging down the economy, the market had been struggling with too much supply and not enough demand. Then the hurricane forced thousand of displaced homeowners into apartments.
Even as many of those renters have moved back into their repaired homes, and apartments that flooded themselves are beginning to come back online, developers are encouraged by stronger occupancy rates and rents.
“Job growth has picked up, our pipeline has dwindled, and those are key components for an investor to say, ‘Let’s go to Houston,’ ” McClenney said.
Proposals have been made for new buildings across the region, from Katy to The Woodlands to Baytown.
Though the market varies by location, Houston’s overall occupancy rate is 89.8 percent with an average rent of $1,024.
Landlords still have a backlog of new apartments to lease, but next year, delivery is expected to be no more than 6,000 units. By 2020, that should swing back up to perhaps as many as 12,000 units.
The 3300 Main property was purchased last year by PMRG, which has had the project in its sights for a while.
The 1.16-acre property formerly housed the city’s code enforcement offices before those operations were relocated and the building demolished.
The tower was designed by CallisonRTKL. It will have 14,967 square feet of ground-floor retail space, 328 apartments and 608 parking spaces. Units will average 1,114 square feet.
The building has been designed to attain a LEED Silver rating.
AECOM Hunt will serve as construction manager for the project, which is expected to open in 2020.
PMRG and AECOM Capital said Friday that they had secured debt and equity financing for the development. Broad Street Real Estate Credit Partners III, a fund managed by the Goldman Sachs Merchant Banking Division, will provide the construction loan.
PMRG, which also developed the 3737 Buffalo Speedway office building and 2929 Weslayan, a 40story apartment building, announced this week that it will merge with Washington, D.C.-based Madison Marquette.
Outside of D.C., Madison Marquette has offices in New York, Fort Lauderdale, San Francisco, Seattle and Los Angeles. The company’s projects include the $2.5 billion District Wharf in Washington, D.C., in partnership with PN Hoffman, and the Asbury Park Boardwalk redevelopment in New Jersey.
The leadership of both firms will remain intact and the combined company will maintain its primary office locations in D.C. and Houston, the companies said. The deal is expected to close within a month.