InLight Capital Acquires Sugar Land Office Building

InLight Capital has purchased an office building in Sugar Land, 20 miles southwest of downtown Houston, in an accelerated auction.

The firm, which is based in Sugar Land, acquired the property from CWCapital. The price wasn’t disclosed, but the Fort Bend Appraisal District valued it at $21 million this year.

Sitting on 6 acres at 77 Sugar Creek Center Boulevard, it was built in 1999 and renovated in 2018, bringing it up to Class A status.

Those updates didn’t make it immune to the Houston metro’s struggling office sector. The property’s taxable value fell 40 percent between 2022 and 2023. It was 66 percent leased as of acquisition, according to JLL Capital Markets, which spearheaded the auction with RI Marketplace.

The JLL Capital Markets Investment Sales and Advisory team, led by Rick Goings, Marty Hogan and Will Sledge, helped close the deal.

Sugar Land has been on the decline in recent years. The former sugar plantation is the only city of the trio that constitutes the Houston-Woodlands-Sugar Land metro’s namesake to see a population decline. The population fell more than 8 percent between 2019 and 2022, from 118,000 to 109,000, according to the U.S. Census Bureau.

While Sugar Land’s office vacancy rate of 24 percent sits slightly below the metro’s average of 25 percent, its net absorption was in the negative last quarter, down nearly 14,000 square feet, according to JLL. However, Sugar Land’s Class A office supply has slightly elevated numbers, exceeding 26 percent vacancy while the metro’s Class A vacancy hovers just under 25 percent.

The city of Sugar Land knows it is vulnerable.

The Sugar Land Economic Development Corporation unanimously approved an agreement last November to allow financial incentives to companies that stay in the city. The incentive awards upwards of $6,000 per full-time employee to companies that renew their leases within the city limits for five-to-10 years and retain at least 50 primary jobs on an annual average. It also requires a minimum of $1 million capital investment for office build-out or improvements, due to the city’s aging office buildings.