A chill has blown through Texas’ luxury home market, but there’s a well-insulated pocket that’s untapped.
Demand is still swelling for luxury condo projects in the Lone Star State, where the market has been slower to develop than in other major cities.
Houston alone is on track for at least four branded projects, including: a Ritz-Carlton in the Woodlands, another Ritz-Carlton in the Galleria, a St. Regis project in Rice Military and Auberge condos in Upper Kirby.
After receiving a $255 million construction loan in July, Satya opened the sales gallery for the St. Regis, a 38-story, 90-unit tower that will be located at 102 Asbury Street in Houston’s Rice MIlitary neighborhood, just across the Buffalo Bayou from River Oaks. Satya expanded its plans for the condo tower earlier this year amid strong buyer demand.
Satya has surpassed $100 million in contracts signed since the gallery opened in mid-September. The most recent deal tops $2,000 per square foot, according to a release from Satya. Prices start at $3 million. The project is expected to be completed by the fourth quarter of 2027. Douglas Elliman is marketing the properties.
The price per square foot outpaces luxury single-family homes in Houston, which usually fetch between $500 and $1,000 per square foot.
The city’s most expensive September sale was a 9,900-square-foot mansion at 1 Longfellow Lane in Houston’s Museum District. The asking price for the home built in 1926 was $10.6 million or about $1,000 per square foot.
The St. Regis square-foot price also reflects the premium buyers will pay for branded condos versus other luxury high-rise properties.
For example, one of Houston’s most expensive homes sold in March was a luxury condo at the Hawthorne, a 67-unit luxury condo building from Pelican Builders and Ember Group that opened last year at 5656 San Felipe Street in Tanglewood. The sale price was not disclosed, but the 3,525-square-foot condo was listed for $3.98 million or $1,130 per square foot.
Texas luxury buyers have long favored the ranch over vertical living, and, as a result, the state’s market for luxury condos is still largely untapped.
Part of the reason for the market’s newness is that it’s hard to get condo projects financed in the Lone Star State. Texas is one of about a dozen states that does not allow developers to use deposits from condo pre-sales on construction. In states without those restrictions, deposits can finance up to 30 percent of construction costs, said DC Partners’ Roberto Contreras IV.
Developers are finding ways around the financing obstacles. For example, when developing the Hawthorne, Pelican Builders and Ember Group refinanced their debt on the project with a $111 million loan that leveraged the unsold inventory as collateral for the loan.
Despite the challenges, the city’s new condo projects have performed well, proving that there’s demand for luxury vertical living.
Randall Davis Company’s London House opened earlier this year in River Oaks with all but two units pre-sold.
In a similar demonstration of demand for these projects, Howard Hughes had to temporarily suspend sales for its Ritz-Carlton project in the Woodlands, since there was so much demand. When construction started, 69 percent of the project’s 111 units were pre-sold.
Read more
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Strong demand prompts Satya to expand St. Regis condo tower
