ExchangeRight Essential Income REIT Acquires 664,100-SF Dow Texas Innovation Center From Brixton Capital

Brixton Capital announced Oct. 8 that it has sold the Dow Texas Innovation Center, a 664,100-square-foot research and development campus in Lake Jackson, Texas, to ExchangeRight Essential Income REIT. The property is fully leased to The Dow Chemical Company under a single-tenant, triple-net lease. CBRE co-managed the asset with Brixton Capital and continues to serve as the campus's third-party property manager.

ExchangeRight Essential Income REIT Takes Ownership of Lake Jackson R&D Campus

The campus sits at 220, 230, 240 and 270 Abner Jackson Parkway in Lake Jackson, within the Houston metropolitan area, roughly 50 miles south of Houston. The 34-acre site comprises four buildings ranging from two to four stories. They include two R&D laboratory and office buildings, a warehouse, and an amenities building with a gym, a cafe and an employee medical center. The campus was built in 2016.

The property is 100% leased to Dow, an investment-grade corporate tenant. The lease runs through 2036, and Dow uses the facility to support products manufactured at its nearby Freeport complex. The property has been described as a Class A, LEED Gold-certified facility.

UPREIT and Debt-Assumption Structure

Brixton Capital said the sale was completed through a structured UPREIT and debt-assumption transaction. Under the structure, Brixton exchanged the property for REIT operating partnership units, a mechanism the firm said allows it to defer taxes while remaining invested in real estate.

"This property has been an important part of Brixton Capital's real estate portfolio, providing economic value and meaningful tax advantages while serving as a high-quality asset within the broader portfolio," said Corey Eagle, principal at Brixton Capital. "As we evaluated the next chapter of ownership, our priorities were to preserve long-term wealth, maintain exposure to institutional-quality real estate and achieve a tax-efficient transition. By exchanging into REIT operating partnership units, we were able to defer taxes, remain invested in real estate and position the proceeds for long-term growth and income generation. We are pleased with the outcome and view this transaction as a natural evolution of a successful investment."

Neither party was represented by a broker in the transaction. Brixton said that throughout the hold period it maintained the institutional-quality asset and its investment-grade tenancy.

Ownership History

Brixton Capital acquired the campus in 2023, when Lexington Realty Trust sold its interest in the property for $192 million, or about $289 per square foot based on the campus's 664,100 square feet. That 2023 transaction involved the assumption of a first mortgage with an unpaid principal balance of $179 million. The 2023 figures reflect a different transaction structure and are not directly comparable to the current sale.

Houston-Area Industrial Market Context

The Dow Texas Innovation Center is a purpose-built, fully occupied asset tied to a single investment-grade tenant, which sets it apart from much of the speculative industrial space entering the Texas market. In the Southwest Far submarket, which includes Lake Jackson, industrial inventory totaled about 29.4 million square feet in the first quarter of 2026. Net absorption reached roughly 1.9 million square feet over the preceding 12 months, while the submarket added about 4.3 million square feet of inventory. Vacancy stood at 5.2%, and market rents had grown 5.1% from 2025 through the first quarter of 2026. Properties delivered since 2022 carried vacancy of approximately 35%.

Statewide, Texas industrial vacancy was 7.6% in the third quarter of 2026. Stabilized Class A industrial capitalization rates generally ranged from 6.4% to 7.3% in primary markets and from 7.4% to 8.4% in secondary markets. CBRE separately reported an average vacancy rate of 8.6% across major Texas industrial markets in the second quarter, with 57 million square feet under construction and year-one taking rents down 3.4% year over year.

About the Firms

Brixton Capital is a private real estate investment company that focuses on multifamily and retail properties. It is headquartered in Solana Beach, California, and owns and operates a portfolio of approximately $2 billion across the western United States, with plans to expand into select East Coast markets. Brixton is an affiliate of Brutten Global, a family office-led investment management platform with approximately $10 billion in assets under management.

ExchangeRight and its affiliates manage more than $7.8 billion in assets across more than 1,400 properties and 31 million square feet in 47 states, as of Aug. 31, 2026. The company offers 1031 DST portfolios, the Essential Income REIT and cash management funds, and structures and manages net-leased portfolios backed primarily by investment-grade corporations in the industrial, necessity retail and healthcare sectors.

Sources

Brixton Capital, "Brixton Capital Completes Sale of Dow Texas Innovation Center": https://www.brixtoncapital.com/brixton-capital-completes-sale-of-dow-texas-innovation-center/