Houston-based Pagewood has completed its first industrial project, The Great 290 Distribution Center in Waller, and signed a full-building tenant.

Japanese air conditioning and refrigeration manufacturer Daikin Industries Ltd. has signed a multiyear lease for all of the 500,840-square-foot warehouse located on 64 acres along the southern edge of U.S. Highway 290 between Field Store and FM 2920.

The lease marks an expansion of Daikin’s existing footprint less than 4 miles down Highway 290, where it occupies a 4.3 million-square-foot manufacturing and distribution facility, at 19001 Kermier Road. The new facility will house Daikin’s logistics and distribution operations, Pagewood said.

Nathan Wynne and Jason Dillee with CBRE represented Pagewood, and Seth Koshak, Tyler Maner and Heath Donica with Stream Realty Partners represented Daikin in the lease negotiations.

The Houston Business Journal has reached out to Stream and the brokers representing Daikin.

Pagewood acquired the land and started construction on the distribution center last year. It engaged Houston-based Powers Brown as the architect and Sugar Land-based E.E. Reed Construction as the general contractor.

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.

The project was delivered in September. Daikin signed the lease the same week, after about three months of discussions, Pagewood Managing Principal Paul Coonrod said.

“For us to get a signed lease essentially the same week of obtaining a certificate of occupancy is about as much as you could ask for, so we were very excited about that,” he said. “Plus, Daikin is just a great tenant with a big name.”

The Great 290 is only Pagewood’s second development and first industrial project since Coonrod founded it in early 2021 after spending 14 years at Stream.

The first was The Quad at Brittmore, a collaborative office building community being redeveloped from four 10,000-square-foot warehouse buildings near CityCentre and adjacent to The Cannon West Houston.

The company has since 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; and East Blocks, a collection of former warehouse buildings in Houston’s East End for a “big adaptive reuse redevelopment” to be announced soon, Coonrod said.

In addition, Pagewood has at least seven more properties under contract.

Pagewood relies on a self-developed machine learning algorithm called The Lighthouse to help it identify ideal locations for commercial properties based on millions of data points collected from public records, economic reports and government surveys. 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.

The system certainly worked in the case of the property for The Great 290 in Waller, Coonrod said, adding that his team is actively looking for more opportunities in northwest Houston.

“It’s pretty darn close to hitting all of our assumptions from understanding the market supply and demand fundamentals,” he said. “We didn’t really have a whole bunch of time to talk to many other tenants because Daikin came here and scooped this up about as quickly as you possibly could.”

The 290 corridor has gotten on the radar of a growing number of both commercial and residential developers as the area northwest of Houston is experiencing fast population growth, helped by the recent widening of the freeway and by the Grand Parkway.

Houston-based Hines has just announced it will develop a community of 1,400 single-family homes on 528 acres north of Waller. The company also owns just under 78 acres, which it bought from Houston-based Wolff Cos. in late 2021 for industrial development in the Beacon Hill master-planned community just west of Waller.

In 2018, Wolff Cos. purchased the original 521-acre property along Highway 290 for Beacon Hill and later added 43 acres. In 2020, it sold 270 acres to Long Lake Ltd., which is building around 870 homes on the land.

Other residential development in the area includes Howard Hughes Holdings Inc.’s Bridgeland in Cypress, the 1,327-acre Dunham Pointe on the southeastern corner of 290 and the Grand Parkway, and Johnson Development Corp.’s 1,622-acre Jubilee, which recently started construction near Hockley.

Other industrial development along 290 outside the Grand Parkway includes Houston-based The Avera Cos.’ 1.3 million-square-foot facility 290 Grand Logistics at Kermier Road and a 2.5 million-square-foot development by Houston-based Parkside Capital and Vigavi in Prairie View.

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