By Katherine Feser
Principal Real Estate Investors will expand its Bay Area Business Park with a third phase that will add 1.33 million square feet to the southeast Houston industrial submarket, Stream Realty Partners announced.
Stream, a real estate development and management company, got approval to expand the park following Principal’s acquisition of 95 acres adjacent to the park, which was developed on 137 acres at Red Bluff Road and Bay Area Boulevard beginning in 2009. Stream developed the park, which will total at least 3.35 million square feet with the expansion.
Phase III will consist of three buildings of 250,000, 300,000 and 784,000 square feet, with the largest building expandable to 1 million square feet. The project is near Port Houston’s Bayport and Barbours Cut shipping terminals.
“(We) closely monitored overall submarket fundamentals and noted vacancy at an all-time low in the southeast submarket,” Stream Partner Justin Robinson said in an announcement. “These statistics, coupled with the extremely strong annual absorption trends, motivated us to build additional space and capture demand anywhere from 57,000 to over 1 million square feet.”
The southeast submarket has a vacancy rate of 5.2 percent, compared with 5.4 percent for the overall Houston industrial market, according to NAI Partners.
Stream will break ground on a speculative basis before securing leases from tenants. The new buildings will be at 10611 Red Bluff Road, 10619 Red Bluff Road and 10629 Red Bluff Road in Pasedena.
Tenants at Bay Area Business Park include Floor & Decor, Calpine, Honeywell and Dunavant. Phase I opened in 2009 and has 1.2 million square feet. The second phase added nearly 850,000 square feet in 2016.
Stream’s Kyle Valentine, Justin Robinson and Jeff Pate are developing and leasing the project. Powers Brown Architecture designed the project, and Rosenberger Construction is the general contractor.