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.
I grabbed coffee earlier with Joe Stampone of A Student of the Real Estate Game. He knows his stuff and the blog that he has been writing for more than two years is a first rate resource to learn more about Real Estate as an industry. While it won’t help you find that perfect space TheSquareFoot, it is one of the best destinations for actual industry knowledge around. Also, for those of you looking to get into real estate as a profession, he has plenty of invaluable advice.
In order of importance….Happy Mother’s Day to all the moms out there!
Through the magic of twitter, I recently came across a different type of commercial real estate blog, Model For Success by REFM. The REFM blog covers all of real estate financial modeling including Excel tips and tricks, financial modeling education, market insights and career advice. As a CPA and finance major, I find the insights particularly interesting.
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.
An entrepreneur and real estate professional compare notes on Loopnet's asking price trends for commercial real estate in Houston, Texas:
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."
Reading the news of Exxon's move to the Woodlands as well as one of our previous posts on whether Houston's workforce will continue urban sprawl has sparked intense conversations on what this means for Houston residential and commercial real estate in The Woodlands as well as whether this is the right move for Exxon.
At TheSquareFoot, we have been discussing our launch with many members of the commercial real estate agentcommunity. Most importantly, since our first product will be geared towards commercial real estate industry in Houston, their feedback is of paramount importance. You should already know based on our posts, we believe the smartest way for a tenant to find space is to use qualified commercial real estate brokers in Houston.
Of course the huge news is the buzz around commercial real estate in downtown Houston this week is Chevron’s acquisition of 1400 Louisiana to go along with 1500 Louisiana, which it already owns. The deal is believed to be one of the richest of it’s kind for a Houston office building in terms of price per square foot. This news is interesting in light of Exxon's move of its corporate headquarters relocation to The Woodlands, which is completely counter to Chevron's decision to focus on the downtown Houston area.
I've now seen two separate articles in the last several days about how available large blocks of Texas office space are decreasing. Our friend Coy Davidson was commenting on the Houston market over the weekend (does he ever sleep?!?) noting how the increased leasing velocity in the city has led to fewer options for tenants needing large spaces. This lovely graph shows the decreasing availability quarter-over-quarter for the last 3 quarters. In all three buckets, the number of available spaces has decreased by about 20%. This is great news for the landlords but it leaves fewer options for tenants looking for Texas office space
As a CPA, tech, and CRE geek (I am the life of the party...), I found the recent article on Globe Street pertaining to the new commercial real estate leases accounting rules particularly interesting. The article points out the uncertainty surrounding when the new lease accounting rules will come into place. Having experience in the accounting world, uncertainty and drafts constantly changing is nothing new. What is interesting is the type of personalities at play between folks in the commercial real estate in Houston world versus the accounting world. From dealing with both sides, I will let you guess who would be more fun to converse with in a social setting...
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.
Mashable recently had an interesting post, The Love Equation: How Match.com Calculates Your Ideal Mate. Since one of TheSquareFoot’s goals is help “match” you to the right resources to lease commercial property (whether it be the right tenant broker or empowering you with educational content and tools), I thought it would be interesting to look at the most interesting similarities between Match.com’s equation and TheSquareFoot.
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.
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).
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.
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.
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.
Written by: Linda Day Harrison of theBrokerList.com, a way to unite commercial real estate organizations and affiliated members so brokers may message and find each other or groups of their colleagues for future reference.
Last week I attended a networking event at NYU poly labs hosted by CBS alumni who office there. I had a chance to catch up with our buddy Ben Zhuk of BestVendor. Trying to fish for some business, I asked him what happens when people outgrow their space there. He said most try to take over a lease of a startup who is in a space that has grown too small for them as they themselves need to expand. I told him those are great if you can find them, but they aren’t abundant in most markets.
Reading through Zag.com and TrueCar’s models, it struck us that car buying and commercial leasing is not all that different. We've already been explaining to people how the search for a commercial lease was changing in the same fashion that the car buying experience did about five to eight years ago. Back then, the average automobile consumer would drive to multiple dealerships, talk to salesmen, talk to their friends, and maybe buy a Kelly Blue Book or Edmunds magazine.The consumer was trying to get educated prior to making a major purchase. Today, the same consumer gets online, learns the process, the sales tricks, the best time to buy, and scans the available options. They arrive at the dealership with a graduate-level education compared to the old way of buying a car. The similarities don’t stop there. When you buy a car, the dealer has an end price in mind and tries to confuse the bottom line by lowering the sticker price, tweaking the down payment, adjusting the interest rate, or a multitude of other variables.
It doesn't seem that long ago when I attended Startup Weekend Houston in February, and really caught a glimpse of what the startup scene was like here. TheSquareFoot was a brand new idea then, and I was excited to attend an event like this for the first time. I remember being nervous walking in because A) this would be the first event I attended of its kind, B) I didn't know ANYONE, C) I knew I would be pitching for the first time in front of a large audience, and D) I had no idea what kind of feedback I would get on our concept. Most people outside of the industry don't know much about commercial real estate leasing, and it's almost impossible to make it seem like a glamorous business.
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.
After reading this article on leasing trends in commercial real estate, we began to think about what the metrics meant for tenants. Loopnet put together a very good info-graphic (below) on lease versus buy trends and I thought a few statistics were interesting from a prospective tenants viewpoint as they lease new or renew space for their business -
Noble Energy just signed a 497,000 square foot lease in the former Hewlett Packard building in northwest Houston. That is almost 11.5 acres and they will occupy all 10 floors with plans to expand in the future.