After the Storm – Assessing the Impact of Harvey on Houston Commercial Real Estate
A Message from Managing Director Matthew Goldsby
In late August, Hurricane Harvey inflicted unprecedented damage to Houston and southeast Texas, unleashing nearly 25 trillion gallons of water on our state as well as Louisiana. Harvey set a record for rainfall from a single event in the continental U.S. As this graphic from The Washington Post illustrates, that’s equivalent to a cube measuring over five and a half square miles and nearly three miles high. While the full extent may not be known for weeks, an initial assessment by CoStar Group indicates that more than 25% of Houston’s commercial real estate market – with a total property value of $55 billion – may have suffered damage.
Our Belvoir team was very fortunate to avoid most of the flooding and damage that affected so many. On a personal note, I’m proud to note that our team members – on their own initiative and without any organization by the firm – found ways to volunteer and help others. Like so many other first responders and volunteers, they displayed the spirit of this city, which is neighbors helping neighbors and communities pulling together.
While it will be many months before things start returning to normal, we were out as soon as it was safe to tour client properties. We are currently working with clients who either have been displaced by Harvey or simply need to make a move now to expand their business operations.
While Houston has received some criticism following the storm regarding the effectiveness of its reservoirs and drainage systems, I can’t help but be impressed with how much water the system was able to process. Again, there’s simply never been this much rain over so much of our metropolitan area.
Certainly, there will be some hard lessons learned. Many commercial properties have now experienced their third significant disruption in as many years due to storms, and their fourth or fifth going back to Tropical Storm Allison in 2001. This will likely affect decisions on where to build, and while not an easy decision, many may conclude that it no longer makes sense to place commercial buildings in the potential path of floodwaters. For other owners, investments in infrastructure may now be needed such as floodgates and elevated parking garages to protect people, vehicles and equipment.
Given our existing infrastructure, economy and the resilience of our people across Houston and southeast Texas, I fully expect our market to come back stronger than ever, though it will require time and considerable effort.
For those who were spared the brunt of the storm, there are several ways to help:
American Red Cross – You can donate to victims of the hurricane by texting the word HARVEY to 90999 for a $10 donation, or visiting redcross.org or calling 1-855-999-GIVE. The Red Cross is also training volunteers to work at its shelters. Learn more
Hurricane Harvey Relief Fund – this fund, established by Mayor Sylvester Turner and administered by the Greater Houston Community Foundation, accepts donations to provide flood relief for area victims. Learn more
J.J. Watt Foundation Houston Relief Fund – established by the NFL star, the foundation has already raised millions for flood victims. Learn more
For additional insights regarding Houston’s commercial real estate market and opportunities, contact us.