USA – TEXAS Law and Practice Contributed by: Taylor Cooksey, David Brooks, Serena Kramer and Philip Kinkaid, Cokinos | Young
Other Retail leasing remained strong in 2025, with tight supply leading to historically low vacancy rates and steady rent growth. Industrial leasing cooled in 2025 as a surge in newly built speculative large warehouses increased vacancy rates. However, demand remained high, particularly for smaller properties near transpor - tation and manufacturing hubs. Notable Transactions The following transactions are worth highlighting: • LaCenterra at Cinco Ranch – this 400,000+ square foot retail centre in Katy sold for USD223 million; • Legacy West – this mixed-use project in Plano with retail, office and restaurant space sold for USD785 million; • Houston Center – Stream Partners and an Austral - ian pension fund acquired ownership of this down - town Houston office complex via a joint venture for an undisclosed price; and • in one of the year’s largest public sector real estate deals, the City of Austin purchased a 142-acre tract of land for USD41 million+ to construct a new campus for the city’s water department. Disruptive Technologies Use of new disruptive technologies grew in 2025, as some developers began accepting cryptocurrency as payment and new investment platforms began tokenising real estate assets on blockchain networks, allowing everyday investors to purchase fractional ownership in types of projects that used to only be accessible to more sophisticated investors. However, despite considerable hype, the overwhelming majority of Texas developers, lenders and investors continued to operate much as they had in the past due to con - cerns about the legal and practical risks of adopting disruptive technologies. 1.3 Proposals for Reform Governor Abbott has proposed sweeping changes to Texas’s property tax system, including: • capping the increase in appraised values for all categories of real property at 3% per year; • decreasing the frequency of property appraisals from annually to every five years;
• abolishing school district property taxes; and • requiring two-thirds voter approval for any future property tax increases. These were publicly proposed very recently and no formal legislative proposals have yet been made, so it is too early to predict whether they will be enacted. The proposal most likely to be enacted is to modify certain technical rules governing votes on tax increas - es in counties with populations of at least 75,000. The proposed changes would make it more difficult for counties to offset tax revenue losses in future years without voter approval, thereby constraining the growth of city and county property tax receipts. This proposal passed the Texas Senate during the last spe - cial legislative session and is expected to be proposed again during the 2026 legislative session. 2. Sale and Purchase 2.1 Categories of Property Rights In Texas, real property rights include the following. Fee and Similar Estates • Fee simple absolute is the most complete form of ownership, granting the owner indefinite duration and the greatest control over real property. • Fee simple conditional is similar to fee simple absolute, but comes with specific conditions. If these conditions are violated, the property may revert to the original grantor or pass to a third party. • Life estate: this interest lasts for the lifetime of a specified individual. Upon the death of the grantor, the property typically passes to another designated person or reverts to the original grantor. • Future interests: these are rights to property own - ership and possession that will begin in the future, such as reversionary interests. Leases, Easements and Similar Interests • A leasehold estate is a temporary right to occupy and use property, typically established through a lease agreement. The duration and terms are defined within the lease contract.
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