Belvoir keeps you informed on commercial real estate brokerage and industry news through blog posts and links to updates with our company. Stay up-to-date with the latest information so you can keep going places.
The historic four-story Sears building on the corner of Main and Wheeler has long awaited its renovation, after plans were announced in April 2018 for a new “innovation district” in Midtown encompassing 9.4 acres anchored by the former retail structure. The project, which rechristens the Sears building “The Ion,” was conceived as a hub designed to bring Houston’s entrepreneurial and technological ecosystem to a centralized space for investors. Ground was broken in late July.
Recognized as the energy capital of the world, it’s no surprise that Houston’s real estate focus is typically centered around the current oil and gas economy. However, the healthcare industry here has grown dramatically over the past 30 years, and now accounts for a significant portion of the overall Houston real estate market. The Texas Medical Center (TMC) – the world’s largest concentration of healthcare and research institutions – continues to expand, along with hospitals and medical office buildings being constructed in suburban areas outside of the city’s inner loop and far into the growing markets of Sugar Land, The Woodlands, Katy and Cypress as residents increasingly prefer to seek healthcare closer to home.
As one of Houston’s historically strong office markets with over 26 million square feet of office space, the Energy Corridor on the west side of town boasts big names in energy sector companies and proximity to suburban housing developments. In Q1 of 2019, the area saw several major acquisitions that hint at a trend of upward growth in the area, as well as accelerated investor interest.
2018 saw the start of 16 MSF of industrial construction, nearly a third of that in Q4 2018, which ended with the vacancy rate hovering around 5%, continuing a downward vacancy trend (and an upward absorption trend). And in 2019, the trend holds strong with Houston being a hub for capital investment, a home for several massive new warehouse facilities and an increasingly popular port. The market is hot, space is scarce, and rents are only going to rise. The time has never been better to get warehouse space in Houston.
Most small business owners lease their office space or commercial property, not realizing the benefits of commercial property ownership.
2018 was a big year for Houston commercial real estate, and 2019 may be its biggest yet. This year Houston became the inaugural partner for Microsoft’s Internet of Things initiative, and one of the first cities in America to be selected for the brand-new, high-speed 5G internet. And Texas Medical Center–the largest medical center in the world–unveiled plans for TMC3, a new $1.5B campus that’s set to break ground in 2019. Becoming the state’s center for technological innovation means growth, jobs and shifts in traditional office space.
Commercial real estate investors have yet another reason to look to the Houston market this year. 150 areas in Houston have been designated opportunity zones as part of the federal Tax Cuts and Jobs Act (TCJA) that was signed into law December 2017. Texas Governor Greg Abbott framed the opportunity zones as a boost for communities still recovering from the devastation wreaked by Hurricane Harvey in 2017. But for real estate investors, it’s a prime opportunity for tax breaks.
As Houston’s commercial real estate market heats up, CRE investment activity is on the rise. 10 years after the 2008 financial crisis, banks remain relatively conservative with their lending practices. Where previously they might loan 75% of a property to an investor, these days they’re lending closer to about 65%. That’s leading to alternative financing methods for CRE investment deals, such as debt funds, which typically leverage up to 75% of a property with one loan.
Austin and Dallas get a lot of attention, but Houston’s commercial real estate market is not to be missed. It’s home to a strong, diversified economy and office and industrial space for every business.
There are three things office building tenants complain about more than anything else. The bad news is: they’re environmental problems that are almost certainly plaguing your office right now. The good news? A building engineer can help your office work more comfortably than ever. Say goodbye to frozen fingers or stuffy workspaces. It’s time for a happy, productive workforce.
August 27, 2017 marked one year since Hurricane Harvey moved into Houston, ultimately dropping 9 trillion gallons of water on the Houston metropolitan area (and 19 trillion across Southeast Texas). We expressed confidence then that we would get through it and, despite catastrophic flooding to the city, Houston’s commercial real estate has, indeed, proven resilient.
As a commercial real estate leader in Houston, we’ve learned a thing or two about what great property management requires. It takes a special person, one who knows contracts, buildings and can work with anyone. Each building has slightly different requirements, but a successful property manager should have these three essential skill sets:
Co-working is quickly growing, and the innovative trend stands to significantly impact the landscape of commercial real estate in the coming years. For those unfamiliar with the concept, co-working brings together independent workers into a common, rented workspace as an alternative to the corner coffee shop or home office.
Houston’s economy has historically been strongly tied to the state of oil prices, and commercial real estate was certainly affected by the 2014 downturn, yet its overall breadth and increasing diversity have kept the city resilient. The Houston metro area ranks #2 on Site Selection magazine’ list of the top U.S. metropolitan areas for new and expanded corporate facilities. Bob Harvey, president and CEO of the Greater Houston Partnership, noted that Houston’s diversity and skilled talent base, “coupled with a low-cost of doing business, offer global companies vast opportunities for growth and investment.”
Houston enters into partnership with Microsoft
On Friday May 4, Mayor Sylvester Turner announced that the city of Houston has entered into an Internet of Things alliance with Microsoft. In addition to providing education to promote technology, the alliance should help elevate the city as a prime location for businesses focused on innovation and technology.
A recent CBRE report cited portfolio agility—or the ability to rapidly adapt, scale and reposition assets to support shifting enterprise needs—as being the most important type of reactive adaptation for business success.
In the wake of the tax bill passed on December 22, the commercial real estate industry has come out ahead in terms of benefitting from new changes. The National Association of Realtors (NAR) cited sections dealing with like-kind exchanges, carried interest, cost recovery, qualified private activity bonds and the low-income housing tax credit as “major [victories] for real estate stakeholders.”
News broke this week that Amazon had released a shortlist of cities under consideration for their highly anticipated HQ2. After an outrageous bidding war which included proposals from 238 North American cities, the tech giant has narrowed the list of potential cities down to 20—and it doesn’t include Houston. While this is a huge let down for the Greater Houston Partnership which lobbied hard for H-Town, many are hopeful that Houston may still get a piece of the pie if Amazon settles in another Texas city.
Despite fears of a looming office market bubble and general urban migration, the commercial real estate outlook is bright moving into the new year. Q4 momentum will likely carry over to Q1, with the exception of multifamily and industrial submarkets which may see a slight decline of 5-10%. The National Association of Realtors attributes this potential slow down to “a mismatch between the worldviews of buyers and sellers.”
As oil prices approach $62.oo/barrel, experts predict an eventual rebound for Houston’s office markets. This optimism is tempered by a report from JLL, which warns that “a record overhang of sublease space coupled with permanently changed capital expenditures and space requirements means despite the optimism, recovery for energy-related markets is still a long way off.”
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.
Rolling Dough, LTD., a franchisee of Panera Bread, recently signed a twenty year ground lease with the help of experienced commercial real estate representatives from Belvoir Real Estate Group. Panera Bread is a bakery-café chain, founded in 1981, and was recently named Culinary/Operations, National Chain Winner at the COEX Innovation Awards. The new lease, a 4,500 square-foot location at 851 & 857 Dairy Ashford in Houston, is scheduled to commence the first quarter of 2018. Matthew Goldsby and Rin Willis of Belvoir Real Estate Group LLC represented the landlord, 929 LLC, while David Littwitz with Littwitz Investments, Inc represented the tenant, Rolling Dough, Ltd.
UYL Color recently signed a lease for their new corporate headquarters with the help of experienced commercial real estate representatives from Belvoir Real Estate Group. UYL Color is a family owned business, recently featured by Microsoft in a Surface promotional video, that provides vehicle and light industrial support services and distributes cutting edge performance coatings. Their newest 20,000 square-foot headquarters at 1180 West Loop North in Houston marks their fifth location in the area, with plans to open an additional four to six over the next year. Matthew Goldsby and Sam Chang of Belvoir Real Estate Group LLC represented UYL Color Inc., while Kelly Landwermeyer of Hold Lunsford represented the landlord, Centerpoint Properties Trust.
Belvoir Real Estate Group is excited to announce their ongoing support of Combined Arms, a Houston-based veteran services program.
Belvoir’s contributions help Combined Arms build an integrated network for local veterans to increase the impact they have in their communities. With over 300,000 military veterans in the Greater Houston area, all sectors can be positively influenced by their presence, from workforce, to neighborhoods, to culture, to schools.
“We are honored to partner with such a special organization that not only helps veterans, but takes pride in building the Houston community,” commented Matthew Goldsby, Managing Director of Belvoir. “Houston’s business community is quite dynamic, and we recognize that former service men and women are an integral part of this growing market.”
In late 2016, Belvoir helped Combined Arms to lease 16,000 square feet of office space at 2929 McKinney for The CAX Center – “The Veteran Hub of Houston.” The location had its grand opening on January 26th, where Houston’s Mayor SylvesterTurner was present to proclaim it “Combined Arms Day.” In the lease, Combined Arms was represented by Matthew Goldsby and Sam Chang of Belvoir, and the Landlord was represented by Steven O’Connor of Principal Realty Group.