Unit of Prudential Financial adds Katy’s LaCenterra project
PGIM Real Estate has acquired LaCenterra at Cinco Ranch, a mixed-use lifestyle development on 34 acres along the Grand Parkway at Cinco Ranch Boulevard in Katy.
The 412,900-squarefoot project, developed by Houston-based Vista Equities Group in partnership with Denverbased Amstar Group, established a town center for the surrounding Cinco Ranch masterplanned community
and beyond.
Since opening a decade ago, the development has grown to include more than 75 shops and restaurants, plus offices, among lakes and plazas. The final phase, to be anchored by an Alamo Drafthouse movie theater/restaurant, is scheduled to open in 2018. PGIM Real Estate, which acquired the property on behalf of institutional investors, is part of global powerhouse Prudential Financial. The deal follows investments in the mixed-use projects of Avalon near Atlanta and Kirkland Urban in Kirkland, Wash., last year.
“PGIM Real Estate’s acquisition of LaCenterra adds another high-quality income-producing asset to our investors’ portfolio,” Alfonso Munk, Americas chief investment officer at PGIM Real Estate, said in an announcement.
“We expect that Houston’s strong demographic trends will continue to support the retail market, while Katy’s favorable business climate, top-ranking public schools and proximity to affluent residential communities will continue to attract a diverse employer base to LaCenterra,” he said.
The property sustained minor damage from Hurricane Harvey that has since been repaired, according to PGIM Real Estate.
The company has engaged Memphis-based Poag Shopping Centers to handle leasing and management of the lifestyle center going forward.
Houston’s tight retail vacancy — currently 5.7 percent — and rising rents have attracted investors to the market, according to a third quarter report by Marcus & Millichap.
The sales price of multi-tenant retail properties in the Houston region averaged $217 per square foot over the last year, up 10 percent from the previous period, according to the report.
PGIM Real Estate, which declined to disclose the sales price, said its LaCenterra at Cinco Ranch investment includes 273,522 square feet of retail space and 139,378 square feet of offices. The existing retail space, anchored by a Trader Joe’s, is 93 percent leased. The office portion, including engineering, energy and flexible workplace companies, is 89 percent leased.
Mark Seedorff of PGIM Real Estate’s Atlanta office led the transaction.
PGIM Real Estate has $69 billion in assets under management worldwide. Prudential Financial has more than $1 trillion in assets under management.
In Houston, PGIM Real Estate owns about 1,300 apartment units and 530,000 square feet of retail and industrial assets, in addition to LaCenterra.