Howard Hughes grows profile in The Woodlands as developable local land dwindles

Howard Hughes Corp. will move from its current Hughes Landing headquarters in 2020. (Courtesy Howard Hughes Corp.)
Howard Hughes Corp. will move from its current Hughes Landing headquarters in 2020. (Courtesy Howard Hughes Corp.)

Howard Hughes Corp. will move from its current Hughes Landing headquarters in 2020. (Courtesy Howard Hughes Corp.)

Image description
Image description
Image description
Image description
Image description
Since announcing last year it will move its headquarters from Dallas to The Woodlands, the Howard Hughes Corp. has acquired the area’s two most prominent office buildings and positioned itself as a growing economic presence in the region. As the owner of The Woodlands Development Co.—which develops land in The Woodlands for residential and commercial purposes—since 2011, Howard Hughes officials said the company is looking at potentially completing single-family residential build-out by 2023. About 500 more homes can be constructed, company officials have said.

The company has stated it will continue to develop commercial and multifamily sites in The Woodlands while focusing on its master-planned communities around the country, including Bridgeland and The Woodlands Hills in the Greater Houston area.

“We are conservative in our development plans and carefully study the market demands prior to beginning any project,” said Jim Carman, president of the Howard Hughes Corp. Houston region. “We analyze the viability of the project based on that demand, while also considering how the project best fits ... within the overall master plan.”

Gordy Bunch, the chair of The Woodlands Township board of directors, said despite initial concerns about the deal, he feels the recent announcements represent an ongoing commitment to the community from Howard Hughes. After the company announced it would move its headquarters to The Woodlands, it also announced in 2019 it would explore selling its three hospitality properties in The Woodlands as part of a plan to sell noncore assets.

“It is a benefit to know Howard Hughes is committed to The Woodlands for the long term, and relocating their headquarters here solidifies that commitment,” Bunch said.

Office demand

With the late 2019 acquisitions of the former Anadarko Petroleum Corp. towers most recently owned by Occidental Petroleum Corp.—renamed The Woodlands Towers at The Waterway—the company added 1.4 million square feet of office space to its portfolio in The Woodlands. It also acquired an additional 9.3 acres of developable land in the township’s Town Center district.

As its builds on its remaining properties in the township, development will continue at the pace Howard Hughes sets, township Vice Chair Bruce Rieser said.

Howard Hughes officials said they did not have a calculation for the total amount of property the company owns in The Woodlands.

“They have complete latitude basically, in terms of how they go forward in terms of developing,” Rieser said. “The township doesn’t really have any authority whatsoever over the development corp. It’s only the court of public opinion that really will shape their behavior from time to time.”

With its $565 million Occidental acquisitions, the company is poised to become the township’s top taxpayer. In 2018, the most recent year available, The Woodlands Township listed The Woodlands Land Development Co. as its fourth-highest taxpayer, with a taxable assessed valuation of $109.25 million. Anadarko—the Occidental towers’ former owner—was listed as the top assessed valuation at that time, at $215.13 million, according to township records.

While Occidental plans to fully occupy one of the towers, the new Howard Hughes headquarters will occupy the smaller tower—leaving nearly 600,000 square feet of office space up for lease, according to Howard Hughes. Additional tenants for The Woodlands Towers at The Waterway aside from Occidental and Howard Hughes have yet to be announced.

Howard Hughes officials said in January the date for the headquarters move had not yet been set, and the number of employees it expects to bring to The Woodlands from other locations had not yet been established.

As of a fall 2019 financial report, Howard Hughes controlled nearly 2.6 million square feet of office space in the Woodlands market with an additional 180,000 square feet of offices under development.

Howard Hughes officials have stated additional office space is needed because the company’s vacancy rates in The Woodlands were only about 6% in 2019. The vacancy rate in The Woodlands office space was estimated at 9.2% in a fourth quarter 2019 report from Colliers International, less than half of the estimated 19.3% across Greater Houston.

According to Robert Gilmer, the director of the University of Houston’s Bauer Institute for Regional Forecasting, The Woodlands’ relatively low office vacancy rates remain an outlier among the region’s markets.

“The market has not absorbed much of anything since 2015, and new construction has mostly been confined to niche and build-to-suit offices since then,” Gilmer said in an email.

Residential development

The Woodlands has nearly reached residential build-out, with about 71 acres of developable land remaining for single-family development, said Heath Melton, the executive vice president of the master-planned communities residential division for Howard Hughes Corp. That represents about 500 new homes, he said.

“We expect [the homes] to be completed within the next two to three years, subject to the economy,” Melton said.

According to a recent company financial document, residential build-out in The Woodlands is expected to be completed by 2023.

Single-family residential development is ongoing in East Shore, Creekside Park and Indian Springs, and several opportunities remain in Sterling Ridge, Melton said.

However, Howard Hughes’ position in The Woodlands is near several other of its master-planned communities in the Greater Houston area. Woodlands Hills, north of Conroe, consists of about 2,000 acres and is in its second year of home sales, according to Howard Hughes Corp. Bridgeland, an 11,400-acre master-planned community located in Cypress, opened in 2006 and continues development, according to Howard Hughes.

The developer also has four multifamily developments planned or located in the township with a total of 1,389 units planned. Last year it announced 360 units in Creekside Park and 163 units in Town Center in addition to the planned opening of the 386-unit Two Lakes Edge complex in Hughes Landing this year.

Master-planned communities are desirable in the Greater Houston area for those that can afford to live in them because of the additional controls and protections in those areas, said Greater Houston-area Realtor Mark McNitt, who has sold homes in The Woodlands.

“Master-planned communities will always be popular as buyers see the big picture of an area that is zoned and restricted to protect their investment [versus] most of Houston with no zoning [or] deed restrictions,” McNitt said.

Hospitality sale possible

Despite its recent commitments in The Woodlands market, the company announced in November it was exploring selling its hospitality properties in The Woodlands: The Woodlands Resort & Conference Center, The Westin at The Woodlands and Embassy Suites by Hilton The Woodlands at Hughes Landing. The move is part of a corporate transformation plan to sell noncore assets, according to a company news release.

According to employment estimates from The Woodlands Area Economic Development Partnership, more than 550 people worked for Howard Hughes Hospitality as of January 2019.

Rieser, who is the chair of the Visit The Woodlands board, the township’s convention and visitors bureau, said he does not believe a change in ownership would affect the hospitality industry overall in The Woodlands.

“I don’t usually think about who the actual owners are of the hotel properties when I stay in them,” Rieser said.

Fred Domenick, the general manager of The Woodlands Waterway Marriott Hotel & Convention Center—a former Howard Hughes-owned property—said he believes Howard Hughes is likely to move forward with the sale of its local hospitality assets in the near future.

“I think it’s safe to say that Howard Hughes is getting out of the hotel business; they’ve made that very public, and I’m told that they’re very close to having a sale,” he said.

Howard Hughes officials declined to comment on whether they expected a sale to occur in the near future.

If a change in ownership does occur, Domenick said the arrival of a new, hospitality-driven owner for the three properties could create benefits for all of the area’s major hotels.

“It’s the old adage that the high tide lifts all the boats,” Domenick said.

Future collaboration

As The Woodlands moves toward a possible vote on incorporation this year following the conclusion of its ongoing study, whether the Howard Hughes Corp. will weigh in on the matter remains to be seen, company officials said.

“We are continuing to monitor the decisions and recommendations of The Woodlands Township board of directors as well as listening to our tenants, stakeholders and neighbors’ perspectives,” Carman said.

The developer and the township currently work together on developing amenities such as parks and pathways because of the way contractual rights and duties were dispersed when Howard Hughes Corp. initially acquired the development company, Bunch said.

Bunch said developments he would like to see, whether The Woodlands remains a township or becomes a city, will depend on that continued collaboration between the company and government.

“I would like to see more affordable entry-level housing, more Class B office space, new family entertainment options, more trees retained and additional at-grade roadway improvements,” Bunch said.

Vanessa Holt Ben Thompson


Following Gov. Greg Abbott's March 2 announcement that the statewide mask mandate and COVID-19-related business restrictions will be lifted as of March 10, Harris County and city of Houston leaders are weighing in, and local health care providers are urging residents to continue to take precautions. (Courtesy Pexels)
Harris County, Houston leaders call end of statewide mask mandate a 'distraction' from power grid failures

"At best, today’s decision is wishful thinking. At worst, it is a cynical attempt to distract Texans from the failures of state oversight of our power grid," Harris County Judge Lina Hidalgo said.

As of 11:30 a.m. on March 2, eight areas across Harris County remained under boil water notice affecting about 2,300 residents. (Courtesy Adobe Stock)
Thousands in unincorporated Harris County remain under boil notices

As of 11:30 a.m. on March 2, eight areas across Harris County remained under boil water notice affecting about 2,300 residents.

The Holcomb Family YMCA will be built on the shores of Lake Holcomb in Spring's Falls at Imperial Oaks development. (Courtesy YMCA of Greater Houston)
Construction on new outdoor YMCA facility in northeast Spring set to begin in March

The first phase of the outdoor Holcomb Family YMCA facility on Imperial Promenade Drive is expected to open this fall.

The statewide mask mandate will end March 10. (Courtesy Adobe Stock)
Montgomery County Judge Mark Keough, local officials weigh in on end of state mask mandate

Montgomery County Judge Mark Keough thanked the governor for planning to lift state mandates March 10.

The Houston Ballet Nutcracker Market is returning in person for its spring iteration. (Courtesy Jennifer Greene/HoustonBallet)
Houston Nutcracker Market to make in-person return this spring

Of the 150 merchants on the roster, nearly 50 will be making their spring debut in 2021.

Texas Gov. Greg Abbott announced March 2 that mask mandates and business capacity restrictions will be lifted in Texas. (Courtesy Office of the Texas Governor)
Gov. Greg Abbott lifts statewide mask mandate, business restrictions in Texas

With vaccine distribution increasing, Gov. Greg Abbott said "people and businesses don't need the state telling them how to operate." Some local officials are pushing back, saying the relaxed restrictions are coming too early.

A team of All Nations and Journey school students recently competed inn the VEX IQ robotics challenge co-hosted by Clemson University. (Courtesy All Nations Community School)
Oak Ridge North approves 2-year permit extensions for All Nations, Journey schools

City Council renewed specific-use permits for two Robinson Road schools housed in the Sojourn Baptist Church building during a special session March 1.

Most of the electric grid in Texas is managed by the Electric Reliability Council of Texas, which is not linked to other interconnected national electrical systems. (Courtesy Electric Reliability Council of Texas)
Leaving the Texas power grid 'not likely to be an option' for Harris County, official says

Just two weeks after severe winter weather dropped Harris County temperatures below freezing for three consecutive days, which led to widespread power outages, loss of water and the deaths of at least 50 county residents, Harris County Commissioners Court called for major reform at the state level regarding the Texas power grid and related energy policies.

Hank's Crab Shack gets and sells several hundred pounds of crawfish daily, especially during the peak of crawfish season. (Morgan Theophil/Community Impact Newspaper)
Hank's Crab Shack serving Katy; 16 Spring-Klein business updates and more Houston-area news

Read the latest business and community news from the Houston area.

(Courtesy Top Sushi)
Top Sushi The Woodlands opens in Metropark Square

The sushi restaurant is the sixth for the company in the Greater Houston area.

Houston City Hall in rainbow lighting
Greater Houston LGBT Chamber of Commerce celebrates five years of service

The organization is open to all and serves members throughout the Greater Houston area.