Two Houston developers who have been in the business for many years are preparing to begin work on the second office condo project. District West is a mixed-use area near the southeast corner of Westpark Tollway, and Grand Parkway.
District West is located in the master-planned 1,300-acre Parkway Lakes community to the south of Cinco Ranch.
Allen stated that Grand Park Professional Place, Grand Park West and Grand Park East are the first two projects under the Grand Park Brand Milton Allen and Bobby Ferguson created a few short years ago.
Each office park is located on an average of 5 acres, and has 10 buildings with a total area of 5,000 square foot. The two developments together total 83.750 square feet in Class A office space.
Allen stated that the $12 million Grand Park Pro Project at 7103 S. Peek Road started about 18 months back. The first three buildings were completed and sold, while the fourth building of the second phase is already 65% sold. The buildings are between 4,500 and 6,500 square foot, but can be divided into smaller units.
Allen anticipates breaking ground within the next two month on Grand Park West. This $14 million development is located at 21611 FM1093 in a tract to the east of Stripes convenience stores. He said that half of the land has already been sold.
Allen stated that the partners are also in negotiations for contracts to develop two additional Grand Park office condominium parks in the Pearland region.
These new developments are coming at a time when the office market is struggling, because of the pandemic that has caused more people to work from home. This means employers have less space for offices.
According to Partners, the submarket of Katy/Grand Parkway West had a 14.7% office vacancy rate in the first quarter. This is well below Houston's 25.2% vacancy rate. The submarket extends from the Westpark Tollway up to Interstate 10 West, on both sides of Grand Parkway. It does not include the Grand Park developments.
Allen says that offering office space to small users for purchase is a more profitable business model than leasing.
He said that the lease market was where there is a lot of softness. We tend to focus on the medical and health-care market because it is a large, untapped area. These people are easy to finance and we let them focus on what they studied.
Ferguson Family Partnership is the developer of the 100-acre District West Project.
Robert Ferguson Sr., Bobby Ferguson and Corey Ferguson are the heads of The Ferguson Family Partnership. They took over the management of this master-planned community after their father.
Allen is a consultant for the development of District West. In 2017, The Houston Business Journal stated that the District would include 500,000 square foot of retail, restaurants, offices, health care, and hospitality developments, and cost $500,000,000 to develop.
Infrastructure and utilities are already in place. The Kelsey-Seybold Clinic, Whiskey River country dance hall/grill and Star Cinema Grill have all been there for years.
Allen explained that the developers had secured leases with Luna Y Sol Mexican Cafe and Los Cucos Mexican Cafe. However, the Covid-19 Pandemic Plans changed the plans and the restaurants moved elsewhere. Allen said that the team was in negotiations with other developers and hoped to begin vertical construction in District West by the fourth quarter this year.