Everyone knows Houston's strong economy bucks the trend from the nation and Houston commercial real estate is no exception. Tenants and businesses in Houston are leasing commercial real estate at high levels. Some highlights from the info-graphic -
As regular readers of TheSquareFoot know, Houston's economic success is tied closely to the growth of the energy industry. In fact, that market's resilience during the recession is one of the primary reasons that Houston has been able to emerge from a national period of economic struggles far better than many other cities.
For a time, businesses that acquired Houston retail space for lease did so without much competition and benefited from the city's relatively unnoticed rebound from the recession.
Long-time Houstonians likely remember Magic Johnson as the Los Angeles Lakers Hall of Fame point guard who, despite his impressive resume, lost twice to the hometown Rockets during the 1980s. Since his retirement, Johnson has continued to support the city of Los Angeles, as evidenced by his recent ownership stake in Major League Baseball's Dodgers, but now Houston too may be benefiting from Johnson's leadership.
Houston's office rental market could soon receive a boost in the form of a new multi-use facility just outside of downtown, near Buffalo Bayou in the East End.
The rate of absorption in the Houston office market continued to improve in the second quarter of this year, led in part by strong activity in the metro area's burgeoning energy industry. The market's vacancy rate also fell as more energy firms sought office space for rent in Houston.
Another report on the commercial real estate picture in the United States points to the continuing demand for new office and warehouse spaces driving up office leasing activity in key markets around the country.
Along with the other major office markets in Texas, Houston office space may be effected by urban areas leading population grown for the first time in 20 years.
As if it needed any more validation after getting voted as the 2011 2nd best-selling mater planned community in the United States, The Woodlands keeps getting good news on the commercial side as well. Anadarko recently announced plans to add a second office tower next to its headquarters on Woodlands Parkway. The new tower will hold 550,000 square feet of class A office space and will rise 21 floors above the 10 story parking garage it will sit on. We can certainly assume that the new tower will be constructed using state-of-the-art energy efficiency practices LEED certified. Based on the rendering, it looks like it will be gorgeous.
A provider of e-commerce technology and solutions has announced its relocation to the Dallas suburb of Texas in a move that could introduce as many as 650 new jobs to the area, according to a press release.
There have been a few stories that have come out recently saying that Starbucks will begin selling beer and wine at locations in several major US markets by the end of 2012. Starbucks began testing the concept in some of it's Seattle home based locations back in late 2011, and is planning on implementing the sale of beer and wine in cities like Atlanta, Chicago, and a few cities in Southern California soon. Word has it that they will start testing the concept in 4-6 locations in each of those markets and go from there. Seems as if Starbucks is attempting to become more of a true cafe, serving coffee, tea, beer, wine, to go along with pastries and Panini's. There are no immediate plans to expand the concept into any of the major Texas cities, but that could certainly change after seeing a positive response in some of the test markets.
It's always interesting to compare commercial real estate leasing trends from market to market. Different cities and regions produce unique leasing landscapes and a tenant leasing office space in Houston Texas may value certain amenities differently than a tenant leasing space somewhere on the East Coast. According to a recent article in Globe Street, CBRE sent an anonymous survey to decision makers of more than 100 large tenants across the state of New Jersey ranking the most important "must-have" amenities in an office building.
Chuck Gordon, founder and CEO of SpareFoot joined us to talk about their Austin office space and his experience with different office spaces through the growth of his company. SpareFoot is the world’s largest, simplest and best marketplace for self-storage. They also provide leading web marketing solutions for storage operators. SpareFoot currently offices at 701 Brazos Street, Suite 700 Austin, TX 78701.
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.
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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).
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."
This article from yesterday's Wall Street Journal discusses the "widening divide" seen in the recoveries of suburban and central business district (CBD) properties following the Great Recession. As usual, most of the data highlighted in the article centers around the major East Coast markets of New York, Washington DC, and Boston. The trends seem to pervade other markets as well, with Houston commercial real estate being not all too dissimilar.
This article in yesterday's Wall Street Journal discusses the recent development (forgive the pun) of Germans "moving back into city centers, abandoning outside villages." In the opening sentence, this is attributed to aging populations and to people putting added value on sustainability and green living. This is a trend that is sprouting up in the states as well except here we call our "villages", "suburbs" and our "lifts", "elevators."
After reading this except from a recent BestVendor Blog post, I thought about the short term lease options in Houston -
While the talking heads on CNBC and Bloomberg keep flapping their lips about if the recession is over or if the recovery has begun or “maybe something really cool that I don't even know about,” here in Houston we are starting to see signs pointing to a brighter future. Fresh on the heels of Hines’ completion of BG Group Place they are already preliminary discussions for another downtown office building. As this article points out, we will soon be seeing the first new office building in the Galleria area break ground over the summer.
In order of importance….Happy Mother’s Day to all the moms out there!
In light of the gargantuan announcement of CoStar’s acquisition of LoopNet for some $800 million, I thought it would be fitting to take a close look at why the two heaviest hitters in the online commercial real estate world became one.