BMX Bandit said:
lutheran north school on 34th near shepherd announced they are closing at end of year.
question for those that know. its about 257,000 feet of land, what the going rate to purchase?
So it's actually just north of 352k sf / 8.02 acres (they have 5.92 on the east in an efficient rectangle and two parcels on the west side)
Comps say $65 - $80 psf range depending on size. Given the lack of development sites of this size in the corridor and that W 34th has already "turned" over the last development cycle. I anticipate this will get bid up and likely set the high watermark for the area.
I bet the school is thinking $25 - $30 M range tbh. ($70 - $80 psf).
Cap markets isn't where they need to be quite yet but the development cycle is about to unleash here towards the end of the year and you will be see development land transactions increase significantly into 2025 and 2026. This lull hasn't been a demand or micro (Houston) economic issue for the first time in a long time but very much a Cap Mkts/UW/Supply chain issue. Tons of pent up demand for housing across the board and this area has proven itself on the retail front and other supplemental uses to prove out MXU here.
The construction pipeline is about to fall off a cliff across use types (lag indicator from the IR/inflation/Fed/Cap Mkts turmoil beginning 18-24 months ago). Labor should get a bit cheaper due to lack of projects and construction costs have been slowly decreasing for the last 12 months.
Will come down to the schools objectives but would anticipate you'll see some private capital groups offer decent price in their low range of expectations with a quick close and institutionally backed developers offer a premium price with a longer contract to get their project planned out during DD etc.
Just my 2 cents. My value is valid as I've been talking to a lot of folks in the market about it the last few weeks.
