Two-and-a-half years after launching its residential division, Houston-based Fidelis has started leasing its first apartments, three more complexes are underway and more are in the planning stages in Greater Houston.
Leasing started two weeks ago at Fidelis | Cypresswood, a garden-style apartment complex on East Cypresswood Drive, between Interstate 45 and the Hardy Toll Road in Spring. Rent will range from $1,300 to $2,120 at the 287-unit, three-story complex.
The 12-acre property used to be home to a driving range that went out of business when Topgolf opened a location nearby in 2014, said Kenady Davis, vice president of acquisitions at Fidelis Residential.
Construction on Fidelis | Cypresswood started in August 2020.
Fidelis’ next multifamily complex, the 317-unit Grand Central in Conroe, broke ground a year ago and is slated to deliver its first apartments in mid-June. It will be inside Fidelis’ 336 Marketplace retail center, which is part of Houston-based Johnson Development Corp.’s master-planned community Grand Central Park on the Boy Scouts’ former Camp Strake land.
Originally, a Walmart and a theater had planned to develop in the site, Davis said.
“The Walmart eventually decided they're going to concentrate on e-commerce and backed out of the deal,” he said. “And when they backed out, the theater backed out as well, which left us just over 14 acres.”
In November, Fidelis Residential received property inside Fidelis’ Westlake Marketplace shopping center in Atascocita just inside Beltway 8 near Generation Park.
Initial work involved tearing down a former Lowe’s building that was 90% finished but which the retailer never occupied, Davis said. He expects construction for a 278-unit Westlake apartment complex to begin the first week of March.
Groundbreaking for a yet-to-be-named fourth apartment complex, which will have 350 units, is slated for the first half of next month in Cypress at Fry Road and Longenbaugh Drive.
All four complexes were designed by Austin-based Kelly Grossman Architects. OHT Partners, also based in Austin, is the general contractor for Cypresswood and Grand Central, and Houston-based Strategic Construction is building Westlake and Cypress.
They will all have one-, two- and three-bedroom units ranging from 715 to 1,439 square feet, with rent to be determined at the complexes that are still under construction.
Fidelis expects to break ground on a fifth multifamily project, a 252-unit complex in Willis, this summer or fall, Davis said. It will be at the H-E-B-anchored The Market at Willis shopping center that is still under construction.
Another apartment complex is planned at San Jacinto Mall in Baytown after the JCPenney and Macy’s stores are demolished, said Ford Allen, vice president of investments at Fidelis Residential. The groundbreaking for those projects is expected early next year
The company has its sights on more properties, including another one Cypress and one in Denton, outside of Dallas, inside Fidelis’ Rayzor Ranch Town Center mixed-use development.
Additionally, the residential team is looking at all three major Texas markets.
“Austin's a tough market,” Davis said. “But since we have such a big retail group and we have a health care group and industrial group, we can go after bigger tracts of land that some other multifamily groups can’t go (after).”
Being able to build inside its retail or multi-use developments also gives Fidelis an advantage, he said, because it already owns the land, and residents appreciate being within walking distance of grocery stores and other retail.
Fidelis Residential plans to develop two to four multifamily projects per year. It is targeting the suburbs for now, Davis said, where a lot of people are moving to the outskirts.
“Not just Millennials moving out there to have families or whatnot, but just the migration into Texas (overall is fueling growth in the suburbs),” he said. “And the high cost of living in the urban core has pushed people out to the suburbs. You can just see the growth out in all these suburbs around Houston's going in every direction.
While Fidelis Residential is focused on multifamily projects for now, Davis said the team is in discussion about entering the single-family and build-to-rent markets in the future if they determine that they have the capacity.
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