Mar 06
Houston-based Baker Katz has acquired a 108,000-square-foot shopping center in northwest Houston, its largest acquisition in three years.
The real estate company closed on the Lakewood Forest Shopping Center at the northwestern corner of state Highway 249 and Louetta Road on Oct. 31, Baker Katz Principal Jason Baker said.
Baker negotiated the purchase along with the company’s Kenneth Katz, Ben Brown and Jack Moody.
The seller was Los Angeles-based ACF Property Management, which had owned the property since at least 2012, according to Harris County appraisal records.
Baker did not disclose the purchase price. ACF did not return an email seeking comment on the sale. The property’s appraised value was nearly $16 million as of Jan. 1, 2025, according to the Harris Central Appraisal District.
The shopping center sits on 11.5 acres and is shadow-anchored by an adjacent 123,000-square-foot Target. Tenants include Planet Fitness, Dollar Tree, The UPS Store, Domino’s Pizza, Mayuri, The Thirsty Texan and Egg Rolls Chinese Café, among others.
Overall occupancy is above 90%, Baker said.
“We have had our eye on this project for a number of years,” Baker Said. “We made a run at it a couple of years ago and approached the seller back then. At the time, they didn’t seem to have much of an interest in selling it. But we really love the demographic makeup. We love the tenancy. We love the growth that’s happening in the northwest and far northwest Houston.”
The recent completion of the highway construction also helps, he added.
Surrounding retail, including the Target and nearby H-E-B across the freeway, bring additional customer traffic to the intersection. Baker Katz also liked the longevity of the existing tenants, which have been at Lakewood Forest Shopping Center for 12 years on average, Baker said.
The center was developed in the 1980s and had a Randalls as its original anchor tenant. The former Randalls space later housed a Stein Mart and has been a Planet Fitness for the past year, Baker said.
It’s Baker Katz’s largest acquisition since 2022, when it purchased the 108,000-square-foot Pecan Park Plaza on the corner of FM 518 and Interstate 45 in League City.
“It’s been hard to acquire high-quality real estate, partly because with occupancy going up and with rents continuing to go up as they’ve gone up for the last several years, I think that sellers have been less inclined or less motivated to sell maybe than ever before,” Baker said.
On the other hand, building from the ground up has become more expensive due to high inflation and building material costs.
“That’s made existing projects even more valuable,” Baker said.
Overall, Houston’s retail market maintained a healthy supply-demand balance in the third quarter, with a 5.6% vacancy rate and 812,168 square feet of absorption, according to Partners.
Leasing activity decreased 9.3% quarterly and 22.1% year over year. New retail construction was down 11.2% in the third quarter, with 2.5 million square feet under construction. Meanwhile, the average asking rental rate increased slightly to $20.49 per square foot from the previous quarter, according to Partners.