BTinSF
May 31, 2007, 12:09 AM
In Sprawling Houston, Urban Style Gains Traction
Slate of Mixed-Use Projects Shows City's New Embrace Of Live-Work-Play Notion
By THADDEUS HERRICK
May 30, 2007; Page B6
HOUSTON -- In recent years, as cities across the Sun Belt embraced urban-style projects featuring a mix of uses, this vast city sat quietly on the sidelines. Now Houston is making up for lost time.
More than a half-dozen high-profile developments mixing residential, retail and office space are either under way or planned here. The projects, which promise well over $1 billion in development, underscore a fundamental shift in the development patterns of a city that has long preferred sprawl to density. And they mark a significant breakthrough for the increasingly popular concept that developers pitch as "live, work, play."
"Houston is one of the last truly open markets for mixed-use development," says John Darrah, vice president of GID Urban Development Group, a division of Boston-based General Investment & Development Cos., which is planning a 24-acre project near downtown called Regent Square. Its first phase calls for 740 residential units, 250,000 square feet of retail space, 60,000 square feet of office space and a boutique hotel at a total cost of more than $100 million.
A desire to walk more and drive less is in part responsible for the proliferation of mixed-use projects, as is a broader national trend toward urban living. Houston's economy is also a factor. Buoyed by the oil and gas industry, job growth is up while office and retail vacancies are down. Meanwhile, the region's population grew at more than double the national rate in 2006 from a year earlier, to 5.5 million.
The development of so many projects at the same time has created a highly competitive environment in which there are likely to be winners and losers. Already, Houston Pavilions, a three-block, $170 million office and retail project in downtown Houston, developed by Geoffrey Jones and William Denton, has been forced to scrap its residential component because of the high cost of an underground garage. Mr. Denton acknowledges that residential space would have given the project more cachet but says Pavilions still will transform downtown Houston into a lively urban hub.
Even some of the developers involved in the Houston projects wonder whether they can all survive. "The big question is whether there's enough demand out there," says Ben Pisklak, regional vice president of investment for Gables Residential, a subsidiary of Lion Gables Apartment Fund LP. Gables Residential is building West Ave., a project near the fashionable River Oaks neighborhood that will feature 390 apartments, 180,000 square feet of retail space and 60,000 square feet of office space on about six acres at a cost of more than $100 million.
Today's mixed-use developments are rooted in the rise of New Urbanism, a movement of architects and planners dating to the 1980s that calls for a return to traditional towns. Such developments are more challenging to create than shopping malls, especially in urban cores, where land can be difficult to assemble. But they have proved popular in cities such as Atlanta, Dallas and Denver.
Now, with demand for mixed-use projects satiated in many cities, Houston's scarcity of such developments and its robust economy make it something of a prize. "There's sufficient pent-up demand," says David M. Schwarz, whose Washington-based firm, David M. Schwarz/Architectural Services Inc., has been involved in several mixed-use projects in Dallas and is the master-design architect planning Regent Square.
While a number of projects are sprouting up around Houston, including in far-flung suburbs such as The Woodlands, the biggest impact is likely to be felt in the city's urban core. Four projects are planned or under way along about a six-mile stretch from downtown west to the city's inner loop, including Regent Square and West Ave. Closer to the Galleria shopping area, longtime local developer Ed Wulfe and San Diego firm OliverMcMillan LLC are each planning high-end luxury projects.
Mr. Wulfe is betting on the $500 million BLVD Place, which calls for 525,000 square feet of retail space, including a flagship Whole Foods Market Inc. store, 150,000 square feet of office space and three high-rise residential towers, one of which is expected to be a luxury hotel with condominiums. But while Mr. Wulfe's 21-acre site is situated at a strategic intersection for both up-market retail and residential development, his project was announced more than a year ago and has yet to break ground.
"He's not getting the traction he needs," says Brian Cornelius, development director for OliverMcMillan. Mr. Wulfe says interest in his project is high and that construction will begin this summer.
OliverMcMillan, meanwhile, is developing The River Oaks District, a $750 million project on about 15 acres inside the city's inner loop. The project calls for 350,000 square feet of retail space, a high-rise tower with 300 luxury apartments and two hotels, including one with condominiums, and 250,000 square feet of office space. Mr. Cornelius says interest in the OliverMcMillan project is also high, but it isn't scheduled to break ground until the fall of 2008.
http://online.wsj.com/public/resources/images/MK-AK181_HOUSTO_20070529203633.gif
Write to Thaddeus Herrick at thaddeus.herrick@wsj.com1
URL for this article: http://online.wsj.com/article/SB118048770169018011.html
Slate of Mixed-Use Projects Shows City's New Embrace Of Live-Work-Play Notion
By THADDEUS HERRICK
May 30, 2007; Page B6
HOUSTON -- In recent years, as cities across the Sun Belt embraced urban-style projects featuring a mix of uses, this vast city sat quietly on the sidelines. Now Houston is making up for lost time.
More than a half-dozen high-profile developments mixing residential, retail and office space are either under way or planned here. The projects, which promise well over $1 billion in development, underscore a fundamental shift in the development patterns of a city that has long preferred sprawl to density. And they mark a significant breakthrough for the increasingly popular concept that developers pitch as "live, work, play."
"Houston is one of the last truly open markets for mixed-use development," says John Darrah, vice president of GID Urban Development Group, a division of Boston-based General Investment & Development Cos., which is planning a 24-acre project near downtown called Regent Square. Its first phase calls for 740 residential units, 250,000 square feet of retail space, 60,000 square feet of office space and a boutique hotel at a total cost of more than $100 million.
A desire to walk more and drive less is in part responsible for the proliferation of mixed-use projects, as is a broader national trend toward urban living. Houston's economy is also a factor. Buoyed by the oil and gas industry, job growth is up while office and retail vacancies are down. Meanwhile, the region's population grew at more than double the national rate in 2006 from a year earlier, to 5.5 million.
The development of so many projects at the same time has created a highly competitive environment in which there are likely to be winners and losers. Already, Houston Pavilions, a three-block, $170 million office and retail project in downtown Houston, developed by Geoffrey Jones and William Denton, has been forced to scrap its residential component because of the high cost of an underground garage. Mr. Denton acknowledges that residential space would have given the project more cachet but says Pavilions still will transform downtown Houston into a lively urban hub.
Even some of the developers involved in the Houston projects wonder whether they can all survive. "The big question is whether there's enough demand out there," says Ben Pisklak, regional vice president of investment for Gables Residential, a subsidiary of Lion Gables Apartment Fund LP. Gables Residential is building West Ave., a project near the fashionable River Oaks neighborhood that will feature 390 apartments, 180,000 square feet of retail space and 60,000 square feet of office space on about six acres at a cost of more than $100 million.
Today's mixed-use developments are rooted in the rise of New Urbanism, a movement of architects and planners dating to the 1980s that calls for a return to traditional towns. Such developments are more challenging to create than shopping malls, especially in urban cores, where land can be difficult to assemble. But they have proved popular in cities such as Atlanta, Dallas and Denver.
Now, with demand for mixed-use projects satiated in many cities, Houston's scarcity of such developments and its robust economy make it something of a prize. "There's sufficient pent-up demand," says David M. Schwarz, whose Washington-based firm, David M. Schwarz/Architectural Services Inc., has been involved in several mixed-use projects in Dallas and is the master-design architect planning Regent Square.
While a number of projects are sprouting up around Houston, including in far-flung suburbs such as The Woodlands, the biggest impact is likely to be felt in the city's urban core. Four projects are planned or under way along about a six-mile stretch from downtown west to the city's inner loop, including Regent Square and West Ave. Closer to the Galleria shopping area, longtime local developer Ed Wulfe and San Diego firm OliverMcMillan LLC are each planning high-end luxury projects.
Mr. Wulfe is betting on the $500 million BLVD Place, which calls for 525,000 square feet of retail space, including a flagship Whole Foods Market Inc. store, 150,000 square feet of office space and three high-rise residential towers, one of which is expected to be a luxury hotel with condominiums. But while Mr. Wulfe's 21-acre site is situated at a strategic intersection for both up-market retail and residential development, his project was announced more than a year ago and has yet to break ground.
"He's not getting the traction he needs," says Brian Cornelius, development director for OliverMcMillan. Mr. Wulfe says interest in his project is high and that construction will begin this summer.
OliverMcMillan, meanwhile, is developing The River Oaks District, a $750 million project on about 15 acres inside the city's inner loop. The project calls for 350,000 square feet of retail space, a high-rise tower with 300 luxury apartments and two hotels, including one with condominiums, and 250,000 square feet of office space. Mr. Cornelius says interest in the OliverMcMillan project is also high, but it isn't scheduled to break ground until the fall of 2008.
http://online.wsj.com/public/resources/images/MK-AK181_HOUSTO_20070529203633.gif
Write to Thaddeus Herrick at thaddeus.herrick@wsj.com1
URL for this article: http://online.wsj.com/article/SB118048770169018011.html