(HOUSTON CHRONICLE By Nancy Sarnoff) July 14, 2014 ~
A developer plans to break ground next month on what will be downtown’s tallest residential tower, a project symbolic of this city’s healthy economy and downtown’s growing emergence as a place to call home.
The Texas-sized tower is set to rise 40 stories and house 463 apartments built to almost-condominium standards, the developers said Monday
“It’s big,” said Jack Lee, president of Oakmont Group, the project manager. “It’s bigger than any other downtown Houston high-rise rental property we know of.”
The project, to be called Market Square Tower, will be built just off Market Square Park on the southern half of the block bounded by Preston, Louisiana, Milam and Congress.
The building will target relatively affluent renters in the 30- to 45-year age range with rents soaring as high as $5,800 per month, though there will be small units that lease for less than $2,000.
“This is not a starter apartment,” said Philip Schneidau, president of developer Woodbranch Investments Corp. “This is for someone who’s gotten a promotion.”
The tower will be one of two new multifamily projects planned for this section of downtown.
At Travis and Preston on the other side of Market Square Park, developer Hines has blueprinted a luxury residential building. That project is slated to rise 33 stories.
Several more residential projects are under way or proposed in the broader downtown area. Many of the new buildings have been approved to participate in the city’s Downtown Living Initiative, which provides a $15,000 per unit tax rebate to developers who add residential housing in the city’s core.
Through the incentive, Woodbranch stands to benefit by nearly $7 million. The company declined to disclose the project’s cost.
Apartment construction has been on the rise downtown and in surrounding neighborhoods to the west where some 4,000 units are under construction, according to MPF Research, a multifamily industry consulting and data firm.
Occupancy in that area is 94.5 percent and rents are rising faster than greater Houston as a whole.
The market is being fueled by new jobs and a growing desire to live closer to employment centers, experts said. Many young Houstonians, too, are putting off buying a house while some longtime owners are selling in favor of apartment living.
“People are selling their homes with the ability to make a handsome profit and moving into very nice multifamily to see if they would like living there and to see if they want a smaller home,” said Pat Kiley, principal of Kiley Advisors, a consulting firm to the construction industry.
Greg Willett, MPF’s head of analysis, said downtown has a limited demand for such high-end units, but it has by no means been filled.
Downtown, he said has been undersupplied relative to the employment base.
“You reach a certain point where you cross a threshold where you get enough product with retail and support services that it becomes a more attractive living environment,” he said. “It looks like Houston has probably crossed that level.”
In Market Square Tower, typical units will range from 550-square-foot efficiencies to three-bedroom, three-bath spaces with around 1,950 square feet. Rents will range from around $1,800 to $5,800 per month. The average unit will have more than 1,275 square feet and rent for approximately $3,500. There will be a limited number of larger penthouses as well.
Jackson & Ryan Architects designed the building, whose address will be 777 Preston. A 10-story garage that shares the tower’s block will serve residents of the new building. The garage has 1,100 spaces now, but that number will be reduced to about 950 as the property is refigured.
About 150 spaces will be reserved for residents’ guests and visitors of some 22,000 square feet of retail space planned for the first floor.
The garage will continue to operate to the public and with its existing contracts until the building is completed
Excavation work is expected to start by mid August, and initial occupancy is slated for January 2017.