The Curious Case of Colony Ridge
Forty miles northeast of Houston, a new city is being built. This is the story of the strangest and fastest-growing residential development in the US today.
Thesis Driven dives deep into emerging themes and real estate operating models. This week’s letter explores Terrenos Houston, a large-scale master-planned development in east Texas.
Over the past decade, developer Colony Ridge Land has built the equivalent of a mid-size city in the piney woods northeast of Houston, Texas. Today, Terrenos Houston sprawls over 20,000 acres and is likely home to over thirty thousand residents—some estimate over 50,000—although there are no reliable sources of the exact number. “Seeing it in person was like nothing I’ve ever witnessed before,” said one Texas developer. “It’s so massive and nobody knows about it.”
Terrenos is not your normal placemaking project. All plots are for-sale; there are few for-rent units. And there is little in the way of amenities, development guidelines, or building code; almost anything goes—and many houses are completely DIY. The development is overwhelmingly Hispanic, with plots available to buyers without social security numbers or other documentation. And despite dramatic growth, Terrenos has been dogged by floods, legal battles with local authorities, and accusations of predatory behavior.
Today we’ll dig into Terrenos Houston, one of the strangest and most ambitious real estate developments being built in the United States today. Specifically, we’ll discuss developer Colony’s Ridge’s model, the economics of Terrenos landownership, and the broader implications of Terrenos’s rapid growth.