Wow, we all know that commercial real estate can often times be slow to adopt to new trends in technology. So much of the industry is driven by personal relationships, referrals, and physical networking that commercial real estate providers and specialists aren't always as open minded about changes in technology as professionals in other industries are. Don't get us started down that road today, but what about on the consumer side of the business?
On Monday in my Real Estate Transactions class we had the pleasure of having Lloyd Goldman, CEO of BLDG and EVP Scott Zecher come to discuss their distressed purchase of 1372 Broadway in the Garment District in 2008. As the case states, they are “one of New York City’s savviest and most seasoned real estate investors” so it was very interesting to hear them discuss the ins and outs of that deal as well as hear their general thoughts on the industry. BLDG is both an investor and operator so they also had thoughts on the New York office and retail leasing markets.
There have been several reports recently that popular neighborhood grocery store Trader Joe's will be making its way to Houston soon, which made many locals who have visited a location in another market quite giddy. The outfit was started on the West Coast in the 1960's, and has built up a popular cult following ever since. Known for having "innovative" and hard to find foods that just so happen to also taste great, Trader Joe's was also known to be somewhat of a pioneer in its marketing efforts - putting out a newsletter in the 70's mainly about the wines and foods that were sold at the store, as well as having a line of private label products.
For an old-school oil and gas town, there is no shortage of awesome office spaces. The coolest thing is no matter how many great spaces we find, they all have their own unique energy and locations. This weeks feature is Culture Pilot, who is accelerating the design and marketing culture in Houston. Not only is their client list impressive (National Geographic and Style channel - to name a couple), but their commitment to Houston and the community is second to none. They work closely with organizations such as TEDx Houston, Support Local Grow Together. Their latest project is SURGE, a new energy accelerator in Houston. This is pretty exciting as this the first of its kind in Houston and has been a very successful model as TechStars, Y-Combinator, and Capital Factory have proved.
We talk a lot on TheSquareFoot about all kinds of issues that can arise when looking for office and retail space for lease, and we came across this article which does a great job of outlining some key issues specific to leasing restaurant space. Here are some of the points that hit home:
Although Houston commercial real estate has softened in recent years due to cyclical reasons (see 2008 - 2011 economy!), many predict Houston office leasing has other new issues to confront, one of which is letting employees work remotely (some call it tele-working). However, in an age where employees feel less and less engaged to their employers (meaning loyalty), is the savings in cost of not having or reducing your office space in Houston worth the potential loss in talent? The below infographic seems to support the the idea that having office space for your employees to connect can provide exponential benefits, including engagement and productivity, which ultimately hit your bottom line.
One thing that many prospective tenants often don’t think about when looking for space for rent in Houston is the financial situation of the landlord. Current tenants looking to renew overlook this as well. Over the last couple of years with the continuing problems in the economy, the landlord’s financial health has become especially important. If your landlord is not doing well financially several bad things can happen to you as a tenant.
TheSquareFoot got a chance to chat with Misti Morales - Marketing Director at The Dinerstein Companies, a fully integrated real estate development company with a focus on apartment homes and student housing across the U.S. She shed some light on how social media is changing the commercial real estate world right before our eyes.
This week we are featuring the Houston downtown office space of integratePR, a local public relations and social media firm located on Vine Street in EaDo Houston. TheSquareFoot had the pleasure of visiting integratePR's offices, located in a refurbished industrial-style complex with a historical look and feel. The building, named Vine Street Studios, was originally the Union Transfer and Storage Building built in 1917 and is listed in the National Register of Historic Places by the United States Department of the Interior. There is a total of 57,500 square feet of net rentable office/studio space, plus 25,000 square feet of rentable basement space, for a total of 82,500 square feet. Allie Herzog, Founder and President of integratePR was nice enough to give us a tour of her second story downtown Houston office which has an open concept, exposed air conditioning and lighting ducts, and is encased in red brick.[gallery link="file"]
Congrats, if you made it this far you are on the right path to finding the perfect space. As you may have heard, when searching and finding the right space you can expect to frustrated and baffled at times. Commercial Real Estate is a massive industry with lots of jargon that involves everything from buying land, to developing buildings, to leasing them, to selling them. In addition, its an old-school business, which has yet to adopt technology and which benefits from protecting information and uneducated consumers. For starters, the word commercial real estate is used interchangeably in all four aspects described above, but our goal is limited to helping consumers lease (some people use term "rent") space for their business.
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You can try…but why? How many leases have you signed recently? Do you know the market rent for commercial space in each individual neighborhood or building in Houston? How large of a tenant improvement build-out package should you ask for? How about some free rent? Is this landlord known as being easy to work with or will he find clauses to squeeze you on in 6 months because he is having financial trouble?
As Prime Property pointed out this past Friday (try saying that 5 times fast!), Texas was once again in the top 10 for corporate relocations. Texas has had a significant positive inflow of corporates for every year in the last decade. This is obviously great news for Texas real estate...and every type of it. For starters it's great for Texas office space landlords. These corporations move to Texas and need Texas office space of course, but then think about the next group of happy landlords. Corporations bring workers, these workers need places to live (you're welcome multi-family landlords) and these workers shop (you're welcome retail landlords).
While talking to businesses all over the city about finding office, retail, or warehouse space for their company, a question that regularly pops up is whether or not the services of Houston commercial real estate brokers are needed when negotiating lease renewals. The short answer is ABSOLUTELY!
We've now heard rumors from several sources saying that the Galleria Houston retail space for lease currently occupied by Borders, could be the new location of hot clothing retailer H & M. The news coming out last month that all Borders locations will close nationwide, left questions as to what kind of large big name retail tenant could fill the sizable void in the Galleria left by such a large brand. We may have an answer, although it seems a little early to be sure.
Prospective Tenant – “Hey Dave, I just drove by a space and saw your name on the sign at the corner of Kirby and Richmond. It is in an incredible location and would be the perfect spot for my business."
Condemnation is a term that describes a government entity’s taking property through eminent domain. A commercial lease in Houston may be affected by condemnation through partial taking, in which an adjacent property or part of the property is taken, or it might be affected by total taking, in which the entire property is taken.
How's this for a traditional bank? Frost Bank opened state-of-the-art branch in Rice Village, which made for another of the more interesting new Houston commercial properties. Here's the kicker, it's not just a place for banking transactions, but can serve as an alternate location for businesses, organizations, and boards to hold special events and meetings. This kind of complex shows how cutting edge properties can diversify and get the most use out of a single location.
We had been anxiously waiting to go visit 8th Wonder Brewery; especially after all the press they had been receiving from Swamplot and CultureMap in Houston lately. We met one of the Co-Founders, Ryan Soroka at their newly leased location in downtown Houston (specifically Eado). You could see the excitement brewing (sorry couldn’t help it…) as he unlocked the door and rolled up the metal bay doors to his soon to be converted industrial space in Houston.
This week we are featuring the office of New Regional Planning, a full service real estate strategy and consulting firm based in Houston. I had heard through the grapevine that New Regional Planning had one of the most unique offices in the entire city, and we were lucky enough to be able to stop by and take a peak. It didn’t disappoint.
Check out Jonathan trying to find Houston office space!
In an effort to begin to understand the process and where the different people fit within the commercial leasing process, we are going to start a weekly series, The Players.
With the summer winding down (in calendar days, definitely not the heat...), let's take a look at a mid-year office market update and see how Houston stacks up against some other big markets in the country. According to CoStar U.S. office leasing remained very strong, despite slower than expected job growth. As we alluded to in our 2011 Q1 report, Houston office tenants have been taking advantage of very favorable concessions (i.e. giveaways from landlords) and rental rates and upgrading to nicer facilities offering bargain lease terms. The trend seems to be carrying on.
Building Class for commercial real estate in Houston refers to the quality of property. Class A office buildings are Generally 100,000 sq. ft. or larger (five or more floors), concrete and steel construction, built after 1980, business/support amenities, and well located with great traffic access. These properties are usually very well-managed with on site support day in and day out. Class B buildings are typically renovated and in good locations. Newer buildings are smaller in size, could be wood frame construction, and/or in non-prime location. They still have high quality management and tenants. Class C buildings refer to older, un-renovated and of any size in average to fair condition. Building infrastructure and technology is outdated. You'll often notice older/slower elevators, low ceilings, smaller bathrooms not in pristine condition, and poor parking conditions when touring a C class building.
In our attempt to show the world all of the different office leasing options in Houston, we came across another great concept that's perfect for entrepreneurs, start-ups, or anyone looking for their own desk or Houston coworking spaceaway from home.
The news broke a few days ago that the Borders Bookstore chain has filed for bankruptcy and will likely see close to 400 stores close down nationwide. Houston will most likely lose it's remaining five Houston Borders locations, which will add to the large amounts of vacant Houston retail space the city has been carrying for years. Not long ago we saw another big box retailer, Circuit City, share a similar fate and some of those vacancies have yet to be filled nationwide.