The largest industrial land sale so far at Waco Gateway Park, the 153-acre tract between Bagby Avenue and Interstate 35, closed in August 2026. The seller and the buyer belong to the same company. Partners Land Fund I, the land vehicle sponsored by Houston-based Partners Capital, sold 16.7 acres to Partners Development Company, the firm's own development arm. The fund is putting the proceeds toward the extension of Gateway Boulevard to I-35.
For anyone pricing land or space along the south edge of Texas Central Industrial Park, that structure matters more than the road itself. The new front door to one of Central Texas's best-known industrial addresses is being financed from inside one sponsor's books. The trade that looks like the first comp is a transfer between related companies, and its price has not been disclosed. The first number on this edge of the park that reflects outside demand will most likely come from a tenant signing a lease in the spec building planned for that same 16.7 acres.
A road the city didn't pay for in cash
The Gateway Boulevard extension started with a different developer and a different deal. As the Waco Tribune-Herald reported, David Mercer originally held the agreement to build the road through a 215-acre tract he had acquired between Bagby and I-35. Under that agreement, Waco would waive $2 million in water, wastewater and roadway impact fees in exchange for Mercer's pledge to extend the road.
During negotiations, the city learned that Mercer had sold 152 of those acres to Partners Capital. Another 20 acres went to Stellar Group, which built the Virtu apartment complex on Bagby. The city then turned its negotiations to Partners Capital, which is now paying to build the road under an agreement with the city. The Tribune-Herald has reported that Waco would waive future development impact fees on the acreage. The research behind this post turned up no amount for the Partners-era waiver. It also found no sign of a TIF, a PID, or Waco-McLennan County Economic Development Corp. money for the extension.
On the city's side, the deal means giving up fee revenue it would have collected later, while the land fund covers pavement, water, sewer and drainage now. Partners says the fund is paying for that work with proceeds from its parcel sales, so each sale helps fund the road as well as being a real estate transaction. Partners' own description is direct. Dan Moody, the firm's managing director for its land fund, said that extending Gateway Boulevard and running municipal utilities through the development "is the work that makes the remaining sites buildable."
How the 153 acres have been carved up
| Parcel or event | Acreage | Timing | What it tells you |
|---|---|---|---|
| Fund acquires site from Mercer | 153 acres, all light industrial | November 2023 | Starting basis, entirely M-2 |
| Rezoning case Z-25-06 | 19.01 acres to C-2, about 23 acres to O-2 | Plan Commission Feb. 25, 2025; Council Mar. 18, 2025 | About 42 acres taken out of industrial use |
| CarMax sale | 4.74 acres on the I-35 feeder | Closed April 2026 | Retail buyer paying for highway frontage |
| Construction Edge sale | 4 acres | Reported August 2026 | Smaller user purchase |
| Partners Development sale | 16.7 acres | Closed August 2026 | Affiliate sale, price undisclosed |
| Remaining with Partners | About 124 acres | As of August 2026 | Inventory left to fund and fill |
Two things stand out in that table. The only outside buyer of meaningful size so far, CarMax, bought frontage for a dealership. It did not buy industrial dirt. The industrial sale came from inside the company. So the park's south edge has no arm's-length industrial land trade yet that a buyer could treat as a price anchor.
The rezoning changed what sits at the park's front door
The City of Waco staff report for case Z-25-06 covers a 152.71-acre tract. It moved 42.01 acres from an Industrial land-use designation to Office Industrial Flex. Within that, 19.01 acres went from M-2 Light Industrial to C-2 Community Commercial and about 23 acres went to O-2 Office-Residence. The city's descriptions of those districts matter for industrial users. C-2 is meant for "business and multifamily residential uses." O-2 provides for office and high-density residential development next to major thoroughfares.
Partners frames this as flexibility. Moody said the rezoning "is what lets the park serve more than one kind of user." For a land fund that has to sell parcels to pay for a road, the flexibility also works as a hedge. If industrial demand on the remaining acreage comes slowly, commercial and residential buyers give the fund other ways to raise the cash the road needs. For a manufacturer or distributor thinking about the 110-odd acres still zoned M-2, the hedge means the next neighbor could be a store, an office or an apartment building. No residential or retail project has been named for the rezoned lots in the materials reviewed. Apartments already sit on Bagby at Virtu, so mixed uses on this edge of the park are not hypothetical.
This mix is new for the park. Texas Central Parkway, the park's existing spine, serves more than 90 businesses and 14,000 jobs, according to an October 7, 2025 City of Waco presentation. The same presentation laid out a $10.968 million maintenance plan for drainage, Union Pacific rail coordination and pavement rehabilitation, phased from 2025 through 2028. The old corridor is publicly maintained and entirely industrial. The new connector is privately funded and mixed-use.
Why the spec building is the real price test
On the 16.7 acres it bought from its sister fund, Partners Development plans a 226,800-square-foot speculative industrial building at Bagby Avenue and Gateway Boulevard. According to the Tribune-Herald, the marketing brochure lists a 32-foot clear height, 64 dock doors, sprinklers, LED lighting and 245 parking stalls. The building can be split in half or into 50,000-square-foot segments, at a base lease rate of $10 per square foot, triple net, as of August 2026. Partners said it planned to start construction in October, with delivery around early 2027. Moody told the paper the company had "a user we are close to going under contract with," without naming it. As of this writing, the sources reviewed confirm neither the construction start nor the tenant.
The divisible format is what makes this building a useful signal. Two of the park's recent large commitments each involved a single user:
- Electrolit received a temporary certificate of occupancy this spring for its 600,000-square-foot plant in the park. Its incentive package included a 15-year personal-property tax grant and a $2.5 million Waco-McLennan County Economic Development Corp. grant for electric infrastructure and a natural-gas extension, as the Tribune-Herald reported.
- MGM Transformers signed a 10-year lease in July 2024 for the 460,000-square-foot former Sherwin-Williams distribution center at 2700 Texas Central Parkway. The deal was negotiated in under four months.
One came with a public incentive package and the other was a single negotiated lease on a 460,000-square-foot building, so neither tells a 60,000-square-foot user much about price. A building leased in 50,000-square-foot bays at a published triple-net rate would produce something the south side of the park doesn't have yet. It would show what mid-size users will pay per square foot for new, modern space with direct interstate access. The research for this post found no Q2 or Q3 2026 Waco industrial vacancy or average asking-rent figure, and no recent Waco spec building with a measured lease-up period. That makes the $10 ask one landlord's August 2026 position, not a benchmark. How quickly the bays fill, and at what effective rate, will be the first outside reading of land values along the extension.
The access the rent assumes isn't finished
The $10 ask prices in a road that isn't done. Moody told the Tribune-Herald that work on the extension had resumed in August, along with water, sewer and drainage improvements, and that crews "will be under construction into the spring 2027." The city's staff report adds that any future traffic-control improvements at the existing I-35 underpass require TxDOT review and approval.
When the road is finished, the payoff is direct. Daryl LaFitte, who manages the Old Dominion Freight Line terminal on Bagby about a quarter-mile from Gateway Boulevard, told the Tribune-Herald that truckers will get "a little bit of a shortcut" into the park. The brochure places the building in the same park as Hello Bello, the Mars Wrigley candy plant and the Amazon fulfillment center on Exchange Parkway. The building and the road are both aimed at roughly the same window, early to spring 2027. A tenant who signs in late 2026 is betting on both finishing on time.
FAQ
Is Waco Gateway Park the same as the Waco Gateway retail deal at Loop 340? No. In May 2026 the City Council approved a separate development plan for 252 acres at Loop 340 and I-35, owned by Waco Gateway LLC, built around a "retail warehouse" user and other big-box retailers, according to the Tribune-Herald. Waco Gateway Park is the 153-acre Partners tract between Bagby Avenue and I-35.
Did the city put cash into the Gateway Boulevard extension? The reporting describes impact-fee waivers, not direct city funding. Partners Capital is paying for construction under its agreement with the city.
How much land is left? As of August 2026, Partners held about 124 acres after the sales and the right-of-way taken for the road.
If you're weighing a site along the Gateway extension or a lease on the south side of Texas Central Park, Kelly Commercial can help you put arm's-length data, road timing and neighboring zoning into your underwriting before you commit. Let's Get Started.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
