Commercial development is on the rise along the perimeter of The Woodlands—namely along the FM 1488, Grand Parkway and FM 2978 corridors—as the master-planned community draws closer to build-out.
“The Woodlands has really increased the value of all the tracts around it and just outside its border,” said Robert Banzhaf, managing principal with Newcor Commercial Real Estate. “That’s been the case since its inception—there were private investors and developers that 30 years ago went in and bought land outside the perimeter of The Woodlands.”
Driving demand
A number of factors have contributed to increased demand along the border of The Woodlands, namely the lack of land within the township that is available for commercial development.
“The Woodlands is more or less built out—there is some availability on the west side, but The Woodlands in general has not had land available for purchase within the last couple years,” said Michelle Soderberg, vice presidents for Colliers in The Woodlands. “People want to be close, and the only way they can do that is going around [the perimeter of] The Woodlands.”
Newcor is developing several tracts that border The Woodlands, including land on the west side of FM 2978 and Woodlands Parkway and several tracts on FM 1488 near Kuykendahl Road. The number of new residential developments in the area, such as Woodforest and Carriage Hills, has also increased demand for commercial projects.
“When The Woodlands is almost out of being able to supply land to builders, they will look elsewhere,” Banzhaf said. “If [developers] can buy lots to build homes close enough to The Woodlands and still take advantage of all the amenities, they’re going to do that.”
Halberdier Real Estate has also capitalized on a number of land tracts along the perimeter of The Woodlands in an effort to provide mixed-use projects along the upcoming Grand Parkway segments and FM 2978.
“You have the ability to develop unrestricted sites into whatever you think the highest and best use is,” managing principal Trey Halberdier said. “You’re not at the mercy of a governing authority or larger conglomerate telling you what you can or cannot do. We like the freedom and autonomy of developing on the periphery of The Woodlands.”
“It’s a huge market we’re tapping into, it’s a movement.”
Halberdier is in the horizontal infrastructure stages of developing a number of mixed-use projects designed to be an extension of the explosive growth in The Woodlands. Work involves installing utility infrastructure, site work, architecture and securing end users on tracts off FM 2978, Grand Parkway and FM 1488 near prime developments, such as ExxonMobil and an upcoming Toll Brothers community.
“You’ll see our brand grow into other areas, predominantly north and west with the incoming Aggie Expressway on the books,” Halberdier said. “We’ve seen a lot of activity on the northwest corner of The Woodlands as you head west.”
Halberdier said he expects growth to continue to expand along all edges of The Woodlands as builders, developers and buyers want to explore more affordable alternatives to the master-planned community.
“It’s a huge market we’re tapping into,” he said. “It’s a movement.”
Challenges
Improved mobility because of the upcoming FM 2978 widening—expected to begin in Montgomery County in early 2016—and the opening of the Grand Parkway south of The Woodlands has also contributed to opening the corridors up for further development.
“At the access points the Grand Parkway does have you’ll see a tremendous amount of big box retail at those corridors,” Soderberg said. “The Grand Parkway truly is a game changer.”
Lack of mobility has been a barrier in the area in the past, but the road improvements are expected to drive new development, Banzhaf said. Three segments of the Grand Parkway are expected to open to traffic by early 2016, connecting Hwy. 290 and Hwy. 59.
“I think the potential is always there with the lack of zoning, but I hope every developer that ends up buying land along the [FM] 1488 corridor has a vision to keep things in a Class A environment,”
“If someone lives off [FM] 2978, they can [take the Grand Parkway to] get to [I-]45, the airport or down to Katy without having to take windy back roads,” Banzhaf said. “It’s a culmination of different factors that really opened up this development.”
On the northern edge of The Woodlands, increased development along the FM 1488 corridor brings worries the area could become similar to FM 1960 in Harris County, which is plagued with traffic and development.
“I think the potential is always there with the lack of zoning, but I hope every developer that ends up buying land along the [FM] 1488 corridor has a vision to keep things in a Class A environment,” Halberdier said.
Access to utilities has also been an issue in the past for developers along FM 1488 and FM 2978, with no way to get utilities for new developments in the unincorporated area. However, since utility lines were expanded along FM 1488, it has opened up the area for more development.
“Probably the biggest area is along FM 2978,” Soderberg said. “While there is a lot of development coming that way, there’s still lack of utilities. That’s why you see a lot of vacant land along that way. As infrastructure moves south, you’ll see that increase.”
