Pagewood sells Highway 290 distribution center after Daikin lease

 

Houston-based Pagewood has sold its first ground-up development.

A few months after completing and securing a tenant for The Great 290 Distribution Center in Waller, the 3-year-old company sold the 500,840-square-foot project to Dallas- and Shreveport, Louisiana-based Sealy & Co.

Pagewood completed the facility along U.S. Highway 290 between Field Store and FM 2920 in September and secured Japanese air conditioning and refrigeration manufacturer Daikin Industries Ltd. as its full-building tenant the same week.

Two weeks later, Pagewood listed the property for sale through JLL’s Trent Agnew and Charlie Strauss. The deal closed on Jan. 31.

The cross-dock warehouse features 36-foot clear height, 130 trailer and 218 car parking spots, and about 3,000 square feet of office space, all on 41 acres of the property, giving the tenant more than 20 acres for possible parking or storage expansion. About 32% of the site’s perimeter has frontage along Highway 290.

Daikin, which also occupies a 4.3 million-square-foot manufacturing and distribution facility less than 4 miles away at 19001 Kermier Road, is using The Great 290 for its logistics and distribution operations, Pagewood previously said.

From the beginning, the goal was to sell the warehouse, Pagewood founder and Managing Principal Paul Coonrod told the Houston Business Journal.

“Normally, we’ll identify a site or a property, we will buy and build on it — or buy the property and fix it up — and lease it or push rents and then exit,” he said.

While Coonrod declined to disclose the sales price, he said he was happy with the deal.

“It was a successful transaction all around,” Coonrod said. “Our first round-trip investment with Pagewood and all parties are happy, and we’re ready to get going on the next one.”

Pagewood identifies sites for development using a self-developed machine learning algorithm called The Lighthouse, which tracks thousands of properties across Houston and other cities by millions of data points.

Coonrod has referred to the method as the “Moneyball of real estate,” a reference to the 2011 baseball management movie starring Brad Pitt and Jonah Hill and based on a book by Michael Lewis.

“Essentially, we have — from what we believe — a kind of unfair competitive advantage, if you will,” Coonrod said. “And it’s leveraging The Lighthouse and how to not necessarily just identify viable options but then also the ability to rank those options and therefore help us provide conviction on where to focus and then also how much we need to push on price to secure whatever real estate we’re looking to purchase.”

The company recently acquired its first apartment complex, Costa Mesa at 14150 Tomball Parkway, based on the same method.

Pagewood’s first project is The Quad at Brittmore, an adaptive reuse development turning four small warehouses into collaborative office buildings near CityCentre in west Houston. That project is about halfway completed and serves as Pagewood’s headquarters.

The company also acquired and upgraded Market Street Business Park, a six-building industrial office park totaling nearly 100,000 square feet at 10205 Market St. in Jacinto City.

In November, Pagewood announced it will redevelop several warehouses near the intersection of McKinney and Hutchins streets east of downtown into East Blocks, a walkable district with restaurants, shops, offices and green space.

For Sealy & Co., The Great 290 is the second distribution center along Highway 290. The company’s portfolio, as listed on its website, also includes Sealy 290 Distribution Point, a 479,806-square-foot warehouse at 18140 Kickapoo Road, just across the highway from Daikin’s manufacturing center.

In addition, Sealy & Co. has six other industrial developments in Greater Houston, including the two-building, 716,000-square-foot Anserra Business Park in Katy, which Sealy & Co. co-developed with Houston-based Investment & Development Ventures LLC. They completed the project about three months ago and are in the lease-up stage, according to Cushman & Wakefield’s Jim Foreman, who is marketing the property.

Sealy & Co. did not respond to requests for comment.

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