MAGNOLIA, Texas – Stratus Properties, an Austin-based developer, has secured construction financing and begun work on a mixed-use project in Magnolia, near Houston, that will be shadow-anchored by an H-E-B grocery store.
Named Magnolia Place, the project will include four retail buildings totaling about 35,000 square feet, five retail pad sites, 194 single-family lots and approximately 500 multifamily units. Construction on the first phase has started and will include two retail buildings totaling about 19,000 square feet, along with road, utility and drainage infrastructure to support the full development. H-E-B has also started construction on its 95,000-square-foot grocery store on an adjacent 18-acre site owned by the grocer.
William H. Armstrong III, Chairman of the Board and Chief Executive Officer of Stratus, said the company completed financing for the first phase of Magnolia Place and has adjusted plans to increase the residential component to meet growing demand across Texas. Stratus is evaluating the potential sale of the single-family land parcels and expects those actions to further enhance the project’s value for shareholders.
Financing for the first phase closed on August 12, 2021, when Magnolia East 149, L.L.C., a Stratus subsidiary, entered into a three-year construction loan agreement with Veritex Community Bank for approximately $14.8 million secured by the project. Remaining project costs will be funded through equity contributions from Stratus to Magnolia East. Stratus provided a completion guaranty and a 25-percent limited-payment guaranty in support of the loan.
In November 2017, the city of Magnolia and the state of Texas approved the creation of a municipal utility district for the area, which offers a mechanism for Stratus to recover road and utility infrastructure costs through the district’s financing structure.
H-E-B is actively expanding in the Houston region with several new store projects underway. In Manvel, south of Houston near Highway 288 and Texas 6, Weitzman is developing a grocery-anchored shopping center called Manvel Town Center, planned in phases to ultimately accommodate as much as 1 million square feet of retail space. The first phase will be anchored by a roughly 90,000-square-foot H-E-B and will include pad sites expected to host tenants such as Whataburger, McDonald’s and Heartland Dental.
Aug. 16, 2021 Realty News Report. Copyright 2021.
File: HEB Anchoring Magnolia Project
Rendering image: Courtesy Stratus, Business Wire
For additional background on Texas real estate, see Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins (ebook and print editions available).
File (2): Stratus Properties; H-E-B Anchoring Magnolia Project; Weitzman; Veritex Community Bank; Whataburger; McDonald’s; Heartland Dental.