Bradley Freels, Chairman & CEO, Midway

In an interview with Invest:, Bradley Freels, chairman and CEO of Midway, discussed Houston’s evolving real estate market, the growing demand for mixed-use environments, and the infrastructure needed to support Houston and Texas’ continued growth. Summing it all up, Freels stated, “Informed Leaders don’t lease office buildings anymore; they lease environments.” 

How would you characterize Houston’s real estate market in 2026?

The market is still in transition following COVID. Certain sectors have remained strong, including industrial through reshoring and growing activity at the Port of Houston, medical through its continued growth in the Texas Medical Center and major expansions by Eli Lilly and Bristol Myers Squibb, and retail, which has continued to grow with the natural growth of the Houston MSA.

On the office front, COVID disrupted the office market and changed how people work. It also affected hospitality in this business-oriented city as it changed how people travel for business and communicate with employees and customers.

Employers are still trying to manage work-from-home, hybrid, and return-to-office policies, but it now appears that offices are not going away. Culture is part of that conversation, and I think it will take another three to five years for businesses to determine what works for them. 

Investment opportunities still exist throughout this transition. Retail remains extremely strong, and multifamily projects are basically full, but few new projects have been built or added to the pipeline recently because of the difficulty in underwriting them. Rents have not increased as quickly as construction, interest, and insurance costs.

What distinguishes Midway’s approach to mixed-use development?

Midway focuses on mixed-use development because we are not building commodities. We create environments where people want to work, shop, dine, recreate, live, visit, and experience. 

The changes that followed COVID have worked well for what we do because people want unique experiences. Our office buildings are full because they are located within our mixed-use environments. In this environment, one can go to the office, walk to a restaurant, and work out without leaving the district. It is far different from spending the day in a cubicle and having to get in your car every time you need something.

Mixed-use has moved to the forefront as companies and employees reconsider where they want to work. People still enjoy restaurants and shopping. Online purchases offer convenience, but many consumers want to see products before buying them. We also own hotels, but only within our mixed-use district, where office, retail, and restaurants support them. A hotel guest can walk to dinner or a meeting without needing to hail a cab or an Uber.

How is the flight to quality changing demand for integrated environments?

Midway is primarily a ground-up developer, but over the past few years, we have acquired more properties than we have developed. Because of the difficulty in establishing market value in office product coming out of COVID, we have been able to buy properties and convert them into mixed-use environments more economically than developing projects from the ground up. 

There is clearly a “flight to quality,” but much of the higher quality space has already been claimed by companies whose leases expired over the past few years. Today, the market is shifted from a “flight to quality” to a “fight for quality” as fewer new buildings are being constructed, and the Class A space has been absorbed at a disproportionate rate. Today, companies are looking well ahead of their lease expirations because they are concerned that suitable space may not be available later. As mentioned earlier, leaders today are not leasing office buildings anymore; they are focused on leasing environments. That will help them retain and attract the brightest.

For example, Midway purchased an office portfolio in ’23 with 3Edgewood, which included CityWest, the former BMC campus on Houston’s west side, with four buildings totaling approximately 1.5 million square feet, and Post Oak Central, a three-building development totaling 1.2 million square feet in Houston’s Uptown District. At City West, we converted the single-tenant property into a multi-tenant campus and attracted companies including Bechtel, Honeywell, Equinor, and Noble Drilling. We enhanced the amenities, including the fitness facilities and F&B options, turning this once corporate campus into what many now refer to as Houston’s Premier Corporate Environment.  

With Post Oak Central, now Central Park, we are in the process of adding approximately 150,000 square feet of retail and restaurants to the 17-acre urban site. We are transforming this Philip Johnson-designed office park into what will be Uptown’s only true mixed-use district.

What opportunities do you see along Houston’s eastern corridor?

We like the close-in East Side corridor and have acquired 150 acres with approximately a mile of water frontage on Buffalo Bayou. The east side, which has historically been more industrial, is experiencing outsized growth. Midway has recently completed the first phase of East River, which includes two Class A office buildings, a 350+-unit multi-family project, and integrated retail. We also recently completed Port Houston’s new headquarters building in this initial phase. I’m proud to say that all are fully leased.

While the first phase of East River has been extremely successful, the second phase is harder to underwrite again as rents have not increased at the same rate as interest, insurance, and construction costs. 

I love the east side because it is authentic, real, diverse, and has a strong culture. It is in the shadow of downtown, the theater district, the expanding convention center, and our professional sporting venues. I truly believe it will have significant potential over the next 25 years, and we are bullish on its growth.

How do you decide which developments, acquisitions, or redevelopments to pursue?

Midway is not a merchant builder. We have a more open-ended ownership mentality and strive to develop projects we would be comfortable owning for the next 50 years. We may sell sooner when someone thinks an asset is worth more than we do, but that is not the starting assumption.

We look at what the market is offering today. Development is our strength, but rather than repeatedly trying to underwrite a project that does not work in today’s environment, we often acquire properties if we can more cost-effectively improve them to our standards.  

We have purchased approximately 5 million square feet since COVID in mature markets where demand was already present. Often the market provides better opportunities than may be found through new developments. We remain adaptive while maintaining a narrow focus on the types of projects we want to pursue. 

We are currently underwriting another office building in CityCentre because we believe that market can support new construction. We would also like to start another office building in East River, but both will require some level of preleasing.

Which infrastructure investments are most important for Houston’s future?

Houston will continue to grow. It is a business-friendly, highly diverse city where people feel welcomed. Continued growth will require investment in infrastructure and freeways, but we also need to consider how people may commute in the future. Autonomous vehicles and changing travel patterns could affect the value of infrastructure built today.

When we build parking garages, we have migrated to flat floors rather than sloped grades because these buildings may need to be converted to another use in 10 years. Garages may be used less as people are dropped off by Uber or autonomous vehicles. Today’s infrastructure decisions should account for that possibility.

As a region, we must support the Port of Houston. The port supports not only Houston and Texas but also the United States, and we need to invest enough to keep it operating efficiently. It is cost-effective, centrally located, and positioned to continue growing, so federal support is important. Houston’s airline system must also stay ahead of growth.

Houston’s bayous are another infrastructure opportunity. Many are tree-lined and run through the city, and the region has spent roughly 30 years making them part of its lifestyle through trails and related improvements. In my humble opinion, we need to make them more adaptive to the possibility of putting boats on them as a transportation corridor for tourists, connecting people with businesses and restaurants along the waterways. I believe progress is possible over the next five years with this effort and will change how people view our city.  

What is your outlook for Midway, Houston, and the broader economy?

The outlook is good, although the next few years may remain rocky for the country. 

I am concerned about consumer debt and the federal budget. The country is spending money it does not have, and those issues need to be addressed. I have experienced seven cycles in my career, which may make me more cautious than most, but I do believe there are many issues that need to be addressed.  

Houston is in a sound position. Its bankers and lenders have been conservative and have not allowed businesses to overextend themselves as they sometimes do. Texas itself has several distinct regional economies. Dallas-Fort Worth operates differently from Houston, and Austin and San Antonio have their own unique economies. All of these economies are growing in different ways and through different sectors, but as a whole remain positive.

Personally, I am proud that Houston remains a welcoming city, and people seem to come here for that reason. I love being a Texan. The star on Texas is bright right now, and I believe Houston’s best days are still ahead.