KKR Buys Houston Industrial Complex For $234M

KKR just dropped gobs of cash to acquire a massive industrial complex in a southwest Houston suburb, resulting in the second-largest warehouse deal ever in the metro.

The investment giant paid $234 million for Park 8Ninety, a 1.8 million-square-foot industrial park spanning 127 acres, at 9021 South Sam Houston Parkway, in Missouri City, Bisnow reported. The transaction comes to roughly $130 per square foot.

The seller, Artis Real Estate Investment Trust, developed the 13-building complex in five phases between 2017 and 2022. JLL brokers represented Artis in the transaction.

The complex is fully leased, with tenants including Comcast, Rexel, Texas AirSystems and VWR International. The site includes multi- and single-tenant buildings.

The acquisition aligns with KKR’s strategy to expand its industrial portfolio in markets demonstrating “strong demand fundamentals and comparatively low supply,” with Houston fitting these criteria perfectly, KKR’s Ben Brudney told Green Street. The firm also cited the property’s strong tenant roster and diverse rent roll as appealing features.

For Artis, the sale is part of its plan to liquidate. The firm previously considered selling the REIT. But after deliberation, Artis determined that while a buyer was not prepared to purchase the REIT at a reasonable value, “there remains healthy interest from potential buyers of high-quality retail and industrial assets and certain office assets,” the outlet reported, citing comments from CEO Samir Manji during a March 1 earnings call.

More than 32 million square feet of industrial space was delivered to Houston last year, marking a record high. The influx of supply drove up the city’s industrial vacancy rate to nearly 8 percent. However, that figure is expected to drop this year, as construction starts have dwindled in recent months.

Industrial sales of $25 million or higher fell by 35 percent in Houston last year, totalling $1 billion, the outlet reported. Still, it was Houston’s third-most prolific year for industrial trades, following record highs in 2021 and 2022.

—Quinn Donoghue