PepsiCo has signed a long-term lease for 1.05 million square feet at 31270 Kingsland Blvd., marking the largest industrial transaction in the Houston market this year and reinforcing the region’s dominance in Sun Belt logistics, despite a cooling national development pipeline.

Announced in early October, the deal consolidates operations from three existing PepsiCo warehouses totaling roughly 550,000 square feet into a single, state-of-the-art distribution and mixing center. The facility, developed speculatively in 2023 by Dallas-based Hunt Southwest within the I-10 West Trade Center, will serve as PepsiCo’s inaugural “1NA Mixing Center” — an integrated distribution hub that combines Pepsi Beverages North America, Frito-Lay and Quaker Oats under one roof for the first time.

By co-locating beverage, snack and food production streams, the center is designed to reduce transportation redundancies; accelerate fulfillment to Texas grocers, restaurants and retailers; and support faster delivery across the Southern U.S.

The property features 40-foot clear heights; ESFR sprinkler systems; climate-controlled storage; advanced LED lighting; and parking for 374 vehicles, including trailers. A $5.3 million office build-out under “Project Otis,” designed by Powers Brown Architecture, began in July and is on track for completion by late October, paving the way for Q4 occupancy.

CBRE’s Nathan Wynne and Jason Dillee, who marketed the asset, represented the owner.

The lease lands in Brookshire, a once-rural Waller County community that’s now at the epicenter of Houston’s industrial boom. Year-to-date, the submarket has absorbed a record 3.4 million square feet of space, driven by direct I-10 frontage, Grand Parkway connectivity and proximity to the Port of Houston. Major players — including Amazon, Tesla, Costco, Goya Foods, Ross Stores and Rooms To Go — have all expanded nearby in recent years.

Waller County Judge Trey Duhon called the PepsiCo deal “another example of our success in attracting large corporate moves.” Specifically, he highlighted anticipated job growth and tax revenue diversification, although local infrastructure — particularly traffic and water capacity — remains a point of community discussion.

Looking at the Houston industrial market through Q3, vacancies sat at 6.4% in September — the lowest in the South — with asking rents at $7.15 per square foot and new leases averaging $8.52, according to Yardi Research data. Developers are also pushing ahead with 18.2 million square feet of projects, nearly double (91%) last year’s pipeline. Between population growth, e-commerce demand and continued investment at the Port of Houston, the corridor has momentum.