H-Town’s 7 Largest Real Estate Assets for Sale

HOUSTON (Bisnow) – July 31, 2017

Houston Center — 4.2M SF

The four-building, 4.2M SF Downtown Houston office complex Houston Center just hit the selling block, making it the largest office asset for sale in the entire Houston MSA. With the help of JLL and Avison Young,  BISNOW rounded up the biggest.

Greenspoint Place — 2M SF

Greenspoint Place is a 36-acre mixed-use development in North Houston that consists of six office buildings and three connecting retail centers. It is known for being the former home of a large portion of Exxon’s Houston operations. When Exxon left to consolidate in Springwoods, Greenspoint Place took a major hit and has yet to recover. Sitting at 40% occupancy, the asset is owned by the lender, Northwestern Mutual.

Esperson — 599K SF

Investors looking to enter the Houston office market could own a piece of history. Esperson consists of the 32-story Niels Esperson building, completed in 1927, and the adjacent 19-story Mellie Esperson building, completed in 1941. Five years after purchasing the building, Cameron Management is looking to sell the renovated Downtown icon.

Halliburton Oak Park Campus — 568K SF

Halliburton’s 48-acre former home is just west of the intersection of the Sam Houston Tollway and Bellaire Boulevard. The site includes a 568K SF office building, an 18K SF fitness center, a daycare center, a central plant and a five-level parking garage. Halliburton took good care of the structure built in 1979, making many cosmetic, mechanical and electric upgrades. The asset’s location makes it prime for a redevelopment play.

5959 Corporate — 567K SF

Prescott Group has developed 5959 Corporate into a premier Class-A telecommunications asset in terms of power, fiber and power systems. Features include a generator farm, two separate utility feeders providing 10,000 KVA of electricity power, multiple fiber optic entries, four 500-ton chillers backed up by two 1,400 KW generators and a 2,600-ton cooling tower. In addition, the property has a 20,000-gallon fiberglass tank for diesel fuel and a 20,000-gallon reserve water tank.

Sugar Creek On The Lake – 515K SF

Sugar Creek On The Lake is an 88.9% leased headquarters-quality office building just south of 59 between Sugar Creek Boulevard and Williams Trace Boulevard. Built in 2008, the asset is one of the newest assets on the list. The building was 100% leased by Chevron until 2010. Since then, it has had ups and downs. PMRG purchased the asset in 2012, and together with PCCP and Fuller Realty put $13M into capital improvements.

Pin Oak Park — 504K SF

The Offices at Pin Oak Park is a 504K SF office complex consisting of five buildings in a 12-acre campus that fronts Houston’s West Loop in Bellaire. The project is close to the Galleria and the Texas Med Center. Pin Oak Park is the only Class-B asset on the list.

Westway Plaza — 313K SF – Triple NNN Deal

Open in 2015, Westway Plaza is the newest building on the list. On nine acres just northwest of the Energy Corridor, Westway Plaza is leased primarily (70%) by General Electric. The asset was developed by Transwestern and is 100% leased to three tenants with long-term triple-net leases.

Bird’s Eys View of Houston Commercial RE

HOUSTON (Bisnow) – July 20, 2017 -Those waiting for Houston to bounce back will have to wait a while longer. Houston has made plenty of gains this year, signing 3.2M SF of office leases in Q2 alone, but with 11M SF of sublease space still on the market and more multifamily units opening every month, Houston’s rebound is hard to see.

Office

Houston’s office market has borne the brunt of the market’s downturn. Vacancy increased 60 basis points to 17.4% in Q2 as several large sublease terms expired, adding more than 600K SF of direct available space, according to CBRE data. Even with the removal of expired listings and increased sublease transactions, available sublease rose to 11.1M SF as more than 1M SF of new sublease listings were added this quarter. The combined result is Houston’s sixth consecutive quarter of negative absorption. Flight to quality is expected to continue as tenants benefit from lower rates and increased concessions. Long-term leases in prime locations are offering an average of 12 months free rent and $100/SF in tenant improvement allotments. Industrial

Industrial

Houston’s industrial sector has been keeping the area afloat. Nearly every metro in the country would love to have Houston’s vacancy rate at 5.5%. Q2 marks 24 consecutive quarters below the 6% vacancy mark. More than 60% of the 5.5M SF under construction can be attributed to four large projects, with an average building size of 850K SF. These major build-to-suits have dwarfed spec development recently: Only one spec project greater than 100K SF broke ground in the second quarter out of 1.4M SF of total starts.

Retail

This year leasing activity is struggling to keep up with the blistering pace set last year. A deficit of quality space has slowed leasing, CBRE research shows, causing Houston retailers to take down only 808K SF so far in 2017 (which is still double the 10-year average). In Q2 2017, approximately 774K SF was occupied in new projects. As the development pipeline slows, Houston’s net absorption continues to taper. Grocery expansion has slowed. The pipeline is mostly speculative strip centers and mixed-use developments. Only 1.2M SF of retail is under construction, a third of which is grocery-anchored. Development activity is concentrated in the Far North and Far West submarkets.

Multi-Family

So far this year, Houston has delivered just over 10,000 units and absorbed just over 11,000, causing occupancy to increase. There are still roughly 7,800 units under construction across the city, for a total of nearly 18,000 units to deliver in 2017, ranking third in the nation. The building boom is pushing rents lower, down 1.9% from this time last year, according to Axiometrics.  By 2019, Houston’s pipeline will be down to only about 2,000 units.

Foreigners Love Texas Agricultural Land

AUSTIN (Austin American-Statesman) – July 20, 2017– Foreign investors buy more agricultural land in Texas than in any other state, snatching up 1.7 million acres over the past decade. That is more land than the State of Delaware.

Foreign-owned land totals an area the size of Travis, Hays, and Williamson Counties combined and is worth about $3.3 billion.

Canadian firms bought more than 800,000 acres over the last decade, much of it in​ timber-rich East Texas. Entities from the Netherlands, Germany, and Portugal bought a combined 600,000 acres. Other countries with a stake in Texas agriculture include Indonesia, Mexico, India, and Malaysia.​

The Lone Star State has more farms and ranches than any other U.S. state. Texas also leads the land in cattle, cotton, and hay production.

An Office Tale of 2 Cities

CHICAGO (RealtyNewsReport) – July 19, 2017 -– According to a midyear report by Cushman & Wakefield, Houston has the worst office absorption​ in the nation, while Dallas has the best.

Houston had just over 1.5​ million sf of negative net absorption in the first half of 2017. More than 11 million sf of sublease space is on the market, a slight improvement over last year. The vacancy rate is above 20 percent.

On the other hand, the DFW area had three million sf of positive absorption during that same period. The vacancy rate is at 16 percent, up from 22 percent in 2011. Leasing activity totals 6.3 million sf for the first six months of the year.

Cushman & Wakefield’s research covered 87 markets across the nation.

12 Big-Box Retailers Searching for Distribution Deals Greater than 500K SF

Houston (Bisnow) – July 18, 2017 – A recent industrial report stated that a dozen big-box retailers are looking for distribution deals greater than 500K SF. Most are being driven by e-commerce needs, with a core requirement to be as close to UPS and FedEx shipping hubs as possible. Continued demand for larger distribution facilities and a lack of developable industrial sites close to shipping hubs is driving counties like Waller to create incentive packages to attract developers.  Although the second quarter only saw 10K SF of positive absorption, nearly 5M SF of new leases were signed.

Roughly 3.4M SF of those lease agreements will not begin occupancy until mid-2018.  There is 4.3M SF under construction in the Houston industrial market, with only one-fourth of that space available for lease.  The asking rent for all sectors dropped 2.1% from Q1 2017 to $6.84/SF at the end of the second quarter as pressure from the continued low oil prices influences rates.

Texas Job Creation Continues to Exceed Nation

COLLEGE STATION (Real Estate Center) – July 5th, 2017 – Texas’ pace of job creation continued to exceed the nation’s last month, according to the Real Estate Center’s latest Monthly Review of the Texas Economy​.

The state gained 266,600 nonagricultural jobs from May 2016 to May 2017, an annual growth rate of 2.2 percent, higher than the nation’s employment growth rate of 1.6 percent. The nongovernment sector added 233,200 jobs, an annual growth rate of 2.3 percent, higher than the nation’s employment growth rate of 1.8 percent in the private sector.

Texas’ seasonally adjusted unemployment rate last month was 4.8 percent, up from 4.7 percent a year ago. The nation’s rate decreased from 4.7 to 4.3 percent.

All Texas industries except the information industry had ​​more jobs. The mining and logging industry ranked first in job creation followed by transportation, warehousing, and utilities; professional and business services; education and health services; leisure and hospitality; and financial activities.

All Texas metro areas except Odessa, Beaumont-Port Arthur, San Angelo, Wichita Falls, Longview, and Texarkana had more jobs. Dallas-Plano-Irving ranked first in job creation followed by Killeen-Temple-Fort Hood, Austin-Round Rock, El Paso, Tyler, Fort Worth-Arlington, Laredo, and College Station-Bryan.

The state’s actual unemployment rate​​ was 4.4 percent. Amarillo had the lowest unemployment rate followed by Austin-Round Rock, College Station-Bryan, Lubbock, Midland, and San Antonio-New Braunfels.

Largest Polypropylene Production Line in Americas Goes to City of La Porte in Harris County

LA PORTE – (The Real Estate Center Texas A&M) June 27, 2017 Construction on Delta, the largest polypropylene production line in the Americas, will start midsummer 2017.

With the engineering design phase well underway, the new production line will have a manufacturing capacity of 450 kilotons (kt), or the equivalent of approximately one billion pounds, per year.

The construction Delta PP production line is expected to positively impact economic activity in the region, employing approximately 1,000 development and construction workers to fully construct the facility.

Upon final completion, which is targeted for first quarter 2020, the company expects the new line to bring an additional 50 permanent full-time jobs.

Braskem, the company building Delta, will commit up to $675 million in investment capital towards the design and construction of the new facility which will be named Delta and will be located next to Braskem’s existing production facilities.

Braskem is a Brazilian petrochemical company headquartered in São Paulo. It is one of the world’s leading plastics and chemical companies with 41 industrial plants in Brazil, the United States, Germany and Mexico. The company is the largest petrochemical company in Latin America and has become a major player in the international petrochemical market.

 

Port of Houston a Powerhouse

​HOUSTON (Colliers International) – June 6, 2017 – The Port of Houston has made Colliers International’s list of “industrial port powerhouses.

Collier’s report cited Houston as one of the only major U.S. ports where a majority of loaded cargo handled is from exports. Although loaded exports dropped by 3.4 percent last year, they still represented 51 percent of total loaded container volume.

“The port has been instrumental in the city of Houston’s development as a center of international trade,” the report said. “Carrier services on all major trade lanes link Houston to international markets around the globe, and the ship channel intersects the busy barge traffic lane of the Gulf Intracoastal Waterway. Surrounded by one of the nation’s largest populations, Houston is also centrally located as a strategic gateway for cargo originating in or destined for the western and midwestern United States.”

port cited Houston as one of the only major U.S. ports where a majority of loaded cargo handled is from exports. Although loaded exports dropped by 3.4 percent last year, they still represented 51 percent of total loaded container volume.

“The port has been instrumental in the city of Houston’s development as a center of international trade,” the report said. “Carrier services on all major trade lanes link Houston to international markets around the globe, and the ship channel intersects the busy barge traffic lane of the Gulf Intracoastal Waterway. Surrounded by one of the nation’s largest populations, Houston is also centrally located as a strategic gateway for cargo originating in or destined for the western and midwestern United States.”

Houston Still Top Destination For U-Haul Trucks-8 years In a Row

HOUSTON (U-Haul) – June 1st, 2017 – Houston remains the No. 1 U-Haul U.S. destination city for the eighth year in a row, according to the latest U-Haul migration trends report.

While Houston witnessed a 3.4 percent decline in 2016 arrivals compared with 2015, it continued to be the busiest domestic market for incoming U-Haul trucks.

Following Houston in the rankings were Chicago, San Antonio, Orlando, and Austin.

U-Haul destination cities are ranked according to the total number of arriving one-way U-Haul truck rentals to a city in the past calendar year. Destination cities do not account for departing traffic, so they don’​t necessarily reflect growth like U-Haul growth cities​. Destination cities reflect the volume and regularity of do-it-yourself movers coming into a community.

There are 32 U-Haul-owned stores and 140-plus independent neighborhood dealers within the Houston city limits.

Texas Historical Commission Aims To Revitalize Small Town Texas

Dallas/Ft Worth (Bisnow-Julia Bunch) – May 11, 2017 – Texas is benefiting from a major population boom and urbanization in its major metros. But that sometimes comes as a detriment to smaller towns. The Texas Historical Commission is trying to change that by making historic downtown properties all over Texas more easily accessible to investors, developers and business owners.

Through its Texas Main Street Program and Town Square Initiative, THC launched a web application on May 1 called DowntownTX.org that serves as a public inventory of buildings in need of tenants, new ownership or renovations. “The goal is to highlight properties we think are ripe for reinvestment,” THC director Brad Patterson said. “When we envisioned this, we knew those smaller markets were typically lost in the big sites. This highlights properties and makes them more visible for investors.”

DFW is adding 393 residents daily and Austin adds 159 per day. Harris County’s population growth has slowed, but still looks robust with the addition of 56,600 people in 2016.

Bexar County added 33,200 residents in 2016. But you will not find any of Texas’ biggest cities on DowntownTX.org. From suburbs like Georgetown and McKinney to towns far from metros like Paris and Alpine, the site showcases towns with a mix of populations. Nineteen cities are available for searching on the site, but Patterson said several other towns should be live in upcoming weeks.

Most cities were introduced to the database through the Texas Main Street Program, which has 89 participating cities. Eventually, THC hopes they all will be on DowntownTX.org.  “I think it’s the greatest thing to happen to the Texas Main Street Program since it was established,” Bastrop Main Street Program director Sarah O’Brien said. “There’s nothing like it anywhere else.

I think this is something that will be emulated in other states.” O’Brien hopes DowntownTX.org will connect Bastrop to investors and developers to grow the downtown’s retail offerings.