HOUSTON (BISNOW) January 8, 2019 – Houston’s industrial market closed 2018 strong, with overall vacancy at a 10-quarter low of 5%, decreasing by 10 basis points quarter-over-quarter. Industry leaders expect the market to keep that same energy into the new year. Demand for industrial space remained healthy as 3.4M SF was absorbed in Q4, pushing the year-end total to 10.6M SF, according to CBRE’s industrial market quarterly report.
The Northwest and Southeast submarkets were particularly busy in the fourth quarter and consequently logged strong year-end totals. Northwest noted positive absorption of 2.7M SF in Q4, bringing year-end total net absorption to 5.4M SF. Southeast saw year-end net absorption of 3.2M SF with 750K SF coming in the fourth quarter. Four of the five biggest deals last quarter were in the Southeast market.
Valvoline inked a 473K SF lease at Port Crossing Commerce Center at 1302 Wharton Weens Blvd. in La Porte. Unis signed a 248K SF lease at Bayport South Business Park at 10565 Red Bluff Road in Pasadena. NT Logistics Inc. agreed on a 226K SF lease at Ameriport Industrial Park in Houston. Smart Warehousing signed a 150K SF lease at Energy Commerce Business Park in Pasadena. The only major non-Southeast deal in the top five was Palmer Distribution inking a 168K SF lease at Railwood Industrial Park in the Northwest submarket.
Industrial construction activity also hit a record-breaking milestone. The market saw 16.3M SF of new product break ground in 2018, which is 3.7M SF higher than the 2014 record high, CBRE reported. It was boosted by an active Q4, when 5.9M SF of industrial space was launched.
North Houston has been the major benefactor of the new activity as 5.1M SF of the 14M SF of industrial space underway is within the submarket. Vacancy in the North Houston submarket, bounded by Interstate 45, Highway 59, Highway 249 and the George Bush Intercontinental Airport, stands at 7%.
|WASHINGTON (U.S. Department of the Interior) – December 7, 2018 – According to the U.S. Department of the Interior, an assessment by U.S. Geological Survey (USGS) has found a portion of the Permian Basin contains an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids.
This is the largest continuous oil and gas resource potential ever assessed.
The Wolfcamp Shale and overlying Bone Spring Formation are in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province.
Although the USGS has previously assessed conventional oil and gas resources in the Permian, this is the first assessment of continuous resources in the Wolfcamp Shale and Bone Spring Formation. Oil and gas companies are currently producing oil here using both traditional vertical well technology and horizontal drilling and hydraulic fracturing.
According to U.S. Secretary of the Interior Ryan Zinke, “Christmas came a few weeks early this year.”
SPRING (Houston Business Journal) – November 2, 2018 – Hewlett Packard Enterprise will break ground on a two-building campus in the Springwoods Village community in fourth quarter 2019. The company has preleased 568,000 sf for its new campus, representing the largest office deal in the Houston area this year. The project will be at the southwest corner of East Mossy Oaks Rd. and Lake Plaza Drive within ear shot of Exxon’s new massive campus. Plans include a fitness center, café, and an adjoined open courtyard space.
DALLAS (Federal Reserve Bank of Dallas) – October 23, 2018 – “Monthly job growth has been volatile over the past few months with a weakening in July, a sharp bounceback in August, and then a slowing in September,” said Keith R. Phillips, Dallas Fed assistant vice president and senior economist. “Looking at the past three months, job growth was 2.4 percent—moderately slower than the 3.1 percent in the first half of the year. Job growth has been broad-based across metro areas with particular strength in Houston, which has grown at an annual rate of 3.9 percent over the past three months and 3.6 percent so far this year.”
Houston (Houston Chronicle by Andrea Leinfelder) – October 18, 2018 – City Council on Wednesday approved more than $18.8 million for the Houston Spaceport to begin developing streets, water, wastewater, electrical power distribution facilities and other basic infrastructure.
These are necessary to attract future development to Phase 1 of the Houston Spaceport, which is located at Ellington Airport. Officials are hoping to attract a cluster of aerospace companies that can invent, develop and manufacture space technologies.
“We have been talking about this project for now over two years,” said Arturo Machuca, the general manager of Ellington Airport and the Houston Spaceport. “This type of development requires a lot of work. … Now we are ready to move into a more finite offering to potential partners.”
In 2016, the Houston Spaceport opened a 53,000-square-foot Houston Aerospace Support Center. Clear Lake-based Intuitive Machines was the first — and so far only — business to open a location there in August 2016. The Houston Spaceport almost landed a Blue Origin rocket engine manufacturing facility, but it ultimately lost out to Huntsville, Ala.
One reason for Houston being runner-up was that Huntsville already had an experienced rocket engine workforce. To fix this problem, Machuca said the Houston Spaceport is in talks with San Jacinto College to open a location at the spaceport and help create a pipeline of talent for future companies.
Construction in Phase 1 will also eventually include a co-working space near the Houston Aerospace Support Center.
The money approved for the project includes a $1 million federal grant. The remainder will be paid through Houston Airport System revenues.
HOUSTON (TA&M Real Estate Center) – September 18, 2018 – The Bayou City had its eighth consecutive year of positive absorption for the local industrial market.
Net-occupier demand was 1.2 million sf last quarter, bringing the year-to-date absorption total to 4.8 million sf.
The construction pipeline grew by 3.6 million sf in new starts over the quarter to reach 10.7 million sf of new industrial and flex product currently underway.
AUSTIN (Houston Chronicle) – August 24, 2018 – Texas installed over 2,300 megawatts (MW) of wind power in 2017, more than any other state.
According to the Department of Energy, the additions push the state to nearly 22,600 MW of total installed wind power, the highest in the country.
The additions are lower than the 3,615 MW and 2,611 MW of wind installed in 2015 and 2016, respectively.
The report said that 14.8 percent of the energy generated in Texas in 2017 came from wind, up from 12.6 percent in 2016.
Oklahoma had the second highest 2017 wind installations with 851 MW. The state is second to Texas for total wind capacity at 7,495 MW. Iowa and California rank third and fourth with 7,308 and 5,555 MW, respectively.
According to the Electric Reliability Council of Texas, a megawatt can power roughly 200 homes during periods of peak demand.
COLLEGE STATION (Real Estate Center) – August 7, 2018 – Texas’ economic expansion continued amid increased activity in the goods-producing industries, but rising input costs, resulting from domestic tariffs, could deflate the rate of growth.
According to the Real Estate Center’s latest Outlook for the Texas Economy report, employment growth moderated to more sustainable levels after explosive growth to start the year. The improved workforce environment pushed the labor force participation rate to a three-year high. Average earnings remained stagnant but extended to a broader base of workers. Upward inflationary pressure, however, weighed on Texans’ purchasing power.
Shortages of entry-level homes lifted shelter costs and hindered housing sales despite strong demand. A declining trade environment remains the greatest headwind to the Texas economy, challenging some of the state’s most productive industries.