06
Nov 2019
0

Texas’ tallest skyscraper has sold

Article hradmin

The former Texas Commerce Tower opened in 1981.

Texas’ tallest tower has changed hands.

The 75-story 600 Travis skyscraper in downtown Houston was built in the 1980s by developer Hines.

Now the Hines firm has teamed up with Cerberus Capital Management to purchase the tower and the adjacent 601 Travis office building.

Opened in 1981 as the Texas Commerce Tower, the 1.7 million-square-foot skyscraper was designed by I.M. Pei & Partners.

It’s about three stories taller than Dallas’ highest building, the 72-floor Bank of America Plaza.

New owners Hines and Cerberus plan to make “significant capital improvements” to the downtown Houston landmark, including “major updates to the lobby and exterior plaza area, as well as the addition of connected, collaborative workspaces and enhancements to other building common elements, and the addition of a thoughtfully designed conference center.”

Architect HOK has been hired to design the upgrades.

“Our goal is to enhance 600 Travis’ position as one of the top office buildings in the southwest,” Hines’ John Mooz said in a statement. “With significantly more activated common space and opportunities, the repositioning will promote greater tenant attraction and retention and will be a testament to Hines’ unmatched ability to maintain an asset’s architectural heritage while fostering a contemporary image for the modern workplace.”

The 20-story 601 Travis building was recently renovated with a new fitness center, auditorium and additional parking.

06
Nov 2019
0

Houston real estate developers acquire former Sharpstown mall

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 Baker Katz, a Houston-based full-service commercial real estate firm, has purchased PlazAmericas Mall, an 850,000-square-foot enclosed center, on Thursday, Dec. 20, 2018, in Houston. Photo: Yi-Chin Lee, Houston Chronicle / Staff Photographer / © 2018 Houston Chronicle

PlazAmericas, the former Sharpstown shopping center that has struggled to find its footing as regional malls have fallen out of shoppers’ favor, has a new owner that wants to turn around the property while maintaining the diverse culture, particularly Latino, that exists there today.

Baker Katz, a Houston commercial real estate firm, has purchased the property from a Philadelphia financial company that acquired mall out of bankruptcy about a decade ago. The developers said they intend to make improvements, but will first spend time studying what the property needs most.

Baker Katz, a Houston commercial real estate firm, has purchased the property from a Philadelphia financial company that acquired mall out of bankruptcy about a decade ago. The developers said they intend to make improvements, but will first spend time studying what the property needs most.

“It’s not our goal to come in and be the big bad developer,” said Baker Katz Principal Jason Baker. “Our goal is to build on and improve on what’s there already.”

That will start by increasing occupancy at the 840,000-square-foot mall — now about 70 percent leased — and renovating some of the spaces, Baker said.

Located at the busy intersection of U.S. 59 and Bellaire, the former Sharpstown Center opened in 1961. Frank Sharp, who developed the Sharpstown neighborhood, naming it after himself, also built the mall.

In later decades, the shopping center struggled as newer malls opened. The ownership became fractured. Baker Katz is buying the mall’s largest section, but its purchase does not include any of the attached anchor stores or the 10-story building that rises from the property.

The former Montgomery Ward, JC Penny, and Macy’s buildings all have different owners. The high-rise, too, has a separate owner and so-called out parcels closer to the road are under different ownership.

That poses challenges for the new owner. The parties are bound by long-term agreements that were signed years ago but are still in place.

“Those agreements essentially prevent major changes from happening at the property in the near future,” said Justin Segal, president of Boxer Property Management Corp., which managed the mall several years ago and was involved in repositioning it from an outdated, struggling mall to PlazAmericas, which largely caters to area’s diverse population.

“There’s definitely a viable strategy of maintaining its current form and having an eye on the future for when it’s subject to fewer restrictions,” Segal said. “Baker Katz is a great company. They’re local, they’re well respected and they have a long history in retail.”

Segal’s company was hired by the previous owner, RAIT Financial Trust. During the Boxer’s involvement, the company changed the name and added programs to attract families from the neighborhood. It developed a market, called the Mercado, where small, independent retailers can sell their wares.

Retail developer Ed Wulfe, said the mall has a prime location but echoed the concern over the ownership issues.

“It’s fraught with problems that hopefully they can work out,” Wulfe said. “As far as I’m concerned, for first time it’s in hands of an experienced shopping center developer.”

Commercial realty firm CBRE put the property on the market earlier this year. There was not a public asking price. The Harris County Appraisal District values the property at $12.2 million.

The mall can be slow on weekdays, but it is busy during weekends when it becomes a gathering spot for families who come not only for shopping but also live music and entertainment for children. Still, the surrounding area has struggled from a reputation standpoint, following bouts of crime in previous years.

As Houstonians who specialize in retail properties, the Baker Katz principals said they have for years studied the mall, which they say has several advantages, including a location at a busy intersection in one of the most densely populated areas in Houston. Baker emphasized the positive aspects of the property, including diversity and community involvement.

“We want to build on what’s there and hopefully turn this perception, whatever that might be, completely turn it around,” he said. “We’re not merchant builders. This is not a slide in and slides out. We’re absolutely looking at this as a long-term hold. We want to be part of the community.”

06
Nov 2019
0

Houston coworking startup aims to offer ‘grown-up’ option

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Weezie Mackey has heard stories about how coworking spaces operated by big national chains can be male-dominated, lack privacy and have a fraternity party feel that can be intimidating for users who want a more relaxed environment.

“People don’t necessarily want Ping-Pong being played when they work,” said Mackey, a writer who with her contractor husband is launching her first coworking facility in a North Post Oak business park. “We wanted to be a more grown-up version.”

The new space, Origin Cowork, fills nearly 10,000 square feet at 1000 North Post Oak near the Awty International School. The facility has 15 offices, 20 cubicles and 30 “hot desks” — unassigned spaces where people can work for the day.

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Mackey said there’s room for all models, especially in a city as large as Houston where potential coworking tenants might not want to go downtown or to the Galleria area where parking can be a costly expense.

“We have parking,” she said, “and it’s free.”

Users can buy month-to-month memberships ranging from $300 for a desk to $3,200 for an office suite. There are also $30-day passes and hourly meeting room rentals. Space also has podcast booths and a wellness room for nursing mothers

Mackey anticipates much of the demand at Origin to come from lawyers, accountants, architects, and freelance writers.

“They’re already established,” she said. “They just want a place where they can get work done and meet clients that’s not their dining room table.”

The new space will officially open next month, said Mackey, who is also a writer and editor at Rice University’s business school. Her husband Rob was the contractor for the Silos at Sawyer Yards artist studios and other inner-loop real estate developments.
06
Nov 2019
0

Real estate transactions: Terra Energy Partners inks office lease near Galleria

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 BH Properties has selected CBRE to lease and manage The Reserve at Park Ten office building at 15721 Park Row. Photo: CBRE

NIT Industrial bought a 151,260-square-foot distribution building at 12614 Hempstead Highway in northwest Houston. The seller, STAG Houston 3 LP, was represented by Ryan Byrd and Walker Barnett of Colliers International. Jason Tangen, also with Colliers International, represented the buyer. NIT, which plans to make capital improvements to the property, has retained Colliers to market the space to tenants.

Terra Energy Partners leased 33,457 square feet at 3050 Post Oak Blvd. in the Lakes on Post Oak office campus near the Galleria. Adam Grimm, Audrey Selber and Andy Iverson of Newmark Knight Frank represented the tenant. CBRE represented the landlord, Sinopec USA.

Terra Energy Partners leased 33,457 square feet at 3050 Post Oak Blvd. in the Lakes on Post Oak office campus near the Galleria. Adam Grimm, Audrey Selber and Andy Iverson of Newmark Knight Frank represented the tenant. CBRE represented the landlord, Sinopec USA.

The Richland Cos. renewed several tenants at its Bay Plaza Office Complex, 711 West Bay Area Blvd. The deals include DYB Advisory Group for 5,039 square feet, Simien Properties for 3,476 square feet and DFI Organics for 2,070 square feet. Angie Steadman represented the landlord in-house.

BH Properties has selected CBRE to lease and manage The Reserve at Park Ten office building at 15721 Park Row in west Houston. Constructed in 2009, the six-story building has 140,000 square feet available for lease. Kirksey Architecture designed renovations to the lobby, tenant lounge and a new conference facility. Steve Rocher, Parker Duffie, and Jackie Mendoza will lead the marketing efforts.

Pomo Resources, doing business as Pomgranit Stones, purchased an 84,894-square-foot industrial building on 5.9 acres at 5150 Blalock Drive. William Rudolf and Kyle Golding with CBRE represented the seller, 5150 Blalock LLC. Cindy Wilson with Groen Realty Partners represented the buyer.

Global Ship Services leased 25,949 square feet at Wallisville Industrial Park, at 9139 Wallisville Road. Jim Autenreith and Sam Rayburn of Moody Rambin represented the landlord.

Titanium Medical Imaging leased 13,310 square feet at West Hardy Business Park, at 15760 W. Hardy Road. Jim Autenreith and Sam Rayburn of Moody Rambin represented the landlord.

Legacy Community Health Services expanded its lease to 9,797 square feet at 2929 Allen Parkway. Elliott Hirshfeld and Kristen Rabel with CBRE represented the landlord, American General Life Insurance Co. Chris Volke of Texas Overland Co. represented the tenant.

Texas Southwest Floors leased 27,925 square feet of industrial space at 1350 Salford Drive. Chris Kugle of NAI Partners represented the tenant. Ed Bane and Jon Michael of Bridge Commercial Real Estate represented the landlord.

Adaptive Construction Solutions leased space at Northwest Place Industrial Park, a development of Levey Group at West Little York and Bingle Road.

FlowCommand leased 3,206 square feet at Fairway Park Business Center, 10606 Hempstead. Garret Geaccone and Boone Smith with Stream Realty Partners represented the landlord, Brennan Investment Group.

Baker & O’Brien renewed and expanded its office lease to 9,589 square feet at 1333 West Loop South. Jason Presley and Warren Savery with CBRE represented the landlord, Park Towers Investment. Craig Beyer and Wyatt McCulloch with CBRE represented the tenant.

Owens & Minor Distribution extended its lease of 124,044 square feet at Claymoore Distribution Center at 2700 Brittmoore. Adam Faulk with Newmark Knight Frank represented the tenant. Jeff Pate and Boone Smith with Stream Realty Partners represented the landlord, DRA Advisors.

Siltstone Capital extended its lease of 6,288 square feet at 1801 Smith St. downtown. Allie Hubbard with Limestone Commercial represented the tenant. Ryan Barbles and Craig McKenna with Stream Realty Partners represented the landlord, DRA Advisors.

290 Homestead LLC purchased 120 acres at U.S. 290 and Jones Road in Hempstead. Brad Elmore and Austin Alvis of NewQuest Properties represented the seller, Asset Preservation. Melissa Hegemeyer of NextHome Realty Center represented the buyer.

Asset Preservation purchased 3.8 acres at Fry and Longenbaugh roads in Cypress. J.J. McDermott of NewQuest Properties represented the seller, McMischer LP. Dimitri Jordan of Marcus & Millichap represented the buyer.

06
Nov 2019
0

Study finds lots of people are moving to Houston

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HOUSTON – As Houston continues growing into the third-largest city in the United States, more and more people are migrating to Space City for the city’s appeal, health care system, and job opportunities.​​​​​​​​​​​​​​

According to a study from Commercial Café, a commercial real estate blog, “More than 45 million Americans changed residences between 2017 and 2018, according to U.S. Census Bureau estimates. This means that more than 14% of the total U.S. population moved in the course of a single year. Migration has been a defining characteristic of Americans since the frontier expansion; nowadays, Americans move more often than most people in the world.

 

Many of the shifts in population within U.S. borders can be attributed to residents moving from one Metropolitan Statistical Area (MSA) to another. To see which metros are the most popular destinations, we analyzed net population gains through metro-to-metro migration for U.S. cities and their respective MSAs. We used U.S. Census estimates for 2013-2017, the latest data released as of August 2019.”

The top 10 metro areas for metro-to-metro migration were:

1. Phoenix

2. Inland Empire

3. Houston

4. Dallas – Fort Worth

5. Austin

6. Orlando

7. Charlotte

8. Las Vegas

9. Nashville

10. Tampa

According to Commercial Café, “Houston rounds out the podium for net metro-to-metro migration. On average, it gained 32,821 residents per year from other U.S. metros. Texas sees a lot of intra-state migration. The biggest sources of new residents for Houston—as well as the three most popular destinations for people moving out of Houston—are the three other large metros in the state—Dallas-Fort Worth, Austin, and San Antonio. Houston comes out even in most of these population exchanges, except for the Austin metro, which gains far more residents than it loses to Bayou City.”

Commercial Café continues by stating in the study, “Among the three Texas metros on our list, Houston saw the largest population increase through metro-to-metro migration. This growth is visible in Space City’s many business districts, which added almost 18 million square feet of office space between 2013 and 2017, according to Yardi Matrix data. This amount surpasses that of any other metro in the top 10. The Houston housing market is also on the upswing. The number of housing units here increased by an average of 2.1%—or 52,841 units—each year. Furthermore, the healthcare sector provides Houston with a steady flow of income and job openings, and the city is home to the largest medical complex in the world, according to the institution’s website. Houston’s port is also among the busiest in the U.S. by international waterborne tonnage, and the oil industry is booming. Considering these factors, it’s easy to see why Houston is flourishing.”

06
Nov 2019
0

The future of coworking spaces and landlords

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In order to successfully compete, landlords will need to offer more flexible terms for coworking space.

The coworking phenomenon has certainly disrupted the commercial real estate (CRE) market over the last few years, as well as changed the way we perceive office space. With a possible economic downturn looming around the corner, the question of how the coworking trend will be affected has become a common discussion among CRE professionals and office building landlords.

Over 70% of economists are predicting another recession by 2021

The coworking trend has been a quick solution for filling empty office spaces. Landlords have been satisfied with positive returns from long-term leases, especially after experiencing gaps in time without tenants. This sounds like a win-win situation until the coworking company can’t afford to maintain their business model. While they’ve grown at a rapid pace, various coworking companies are now facing financial problems that have been headlining in the media.

WeWork reported losses of over $1.6 billion last year

If economists are correct with their prediction of another recession, the CRE industry needs to be prepared to adapt to a new wave of coworking trends. This poses a big opportunity for landlords looking to take back their spaces from large, unstable, coworking companies and run a coworking facility of their own.

The future of coworking could consist of working directly with landlords instead of through subleases at premium rates

In order to successfully compete, landlords will need to offer more flexible terms for this type of space. They will need to hire the right leasing and management team to offer this service and present higher commissions to get their leasing team interested in handling smaller deals. Similarly, Regus has offered a 10% commission to brokers for years and at one point, WeWork offered the entire first year’s rent as a commission. It doesn’t need to be that drastic but 6 to 10% shouldn’t be out of the question.

The cost of space should be adjusted accordingly to be competitively priced against other coworking options. These spaces will also need a higher management fee, as small tenants tend to move in and out more frequently, which requires extra work and dedicated staff on-site. To save money on legal costs, they will also need a simple lease document that can be quickly edited.

Both landlords and tenants will benefit from this competitive edge

The rent on coworking spaces can be $100- $140 per square foot in buildings with third-party providers, compared to a direct lease in the very same buildings for $35 – $50 per square foot. The landlord can likely offer this same space for $50 – $70 per square foot, which would be essentially half the cost to the tenant, assuming a full occupancy, could achieve a higher return. This shift in the coworking business can be very lucrative. TRC Capital Partners is doing this in their 3773 Richmond Avenue building and it has been very successful.

Cost savings is the main advantage

Landlords could still market the coworking space as available and if they find a lucrative long-term tenant, they could exercise 30-90-day termination notices in their coworking leases to make the space available. There is virtually no risk just upside, aside from any build-out costs. This model works especially well where the floor is already built out for a single-tenant use, minimizing the capital outlay.

If landlords happen to have multiple buildings all across town, they can sell a “membership” where a tenant can drop in at any of their buildings, depending on where they are working that day. Each building could have a full floor of “flexible” space for “hoteling” their tenants. And with the steady rise of cloud storage and commuting, many tenants don’t need hard copy files or permanent storage space. Lee & Associates has offered this service to landlords with vacant floors when discussing the leasing of the building. This is a great “incubator” space for small startup companies who may eventually take a larger, more permanent space in the building.

06
Nov 2019
0

Houston, famed for sprawl, bets on growing up

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A time-lapse image of a series of major highways headed into a line of skyscrapers downtown.Developer Jacob Sudhoff remembers when Houston had a much different profile when the Texas metropolis was considered just a “cow and oil town” built around sprawl, suburbs, and anything-goes zoning.

But in the last few years, Houston has seen a boom in a high-rise, multifamily living that’s transforming neighborhoods around the famously decentralized city with numerous new 40-story towers taking root. Walkable neighborhoods and the condos and apartments drawing residents to these areas are revitalizing the Heights, Midtown, downtown, the Outer Loop, and the forthcoming McKenley Memorial City as well as the neighborhoods near the new Buffalo Bayou Park and the Allen Parkway.

Houston is projected to add roughly 16,000 units this year alone, according to a report from commercial real estate firm JLL, with another 23,000 in the pipeline. As prices have crept up to historic heights—$1,050 a month on average, making Houston one of the nation’s best rental bargains among big cities—occupancy remains at 90 percent, leading to strong rental demand and a positive outlook for the future. For the first time this year, according to the long-running Kinder Houston Area Survey administered by Rice University, a majority or near majority of local respondents wanted to live in denser, mixed-use neighborhoods.

“Houston now has an inward migration,” says Sudhoff. “A lot of people are moving to the urban core. We’ve never seen so many high-rises going up in the city, and every submarket has more going up.”

Vertical living taking root in Houston

While Houston isn’t changing overnight—the city’s expansive system of interstates and expanding rings of suburban development aren’t going anywhere, and more than 60 percent of the cities housing stock is single-family homes—there’s been a noteworthy shift toward apartments and condos, both as a lifestyle choice and an investment opportunity. In a metro were building out has been gospel—teachings challenged as the city’s highways become increasingly congested and Hurricane Harvey flooding brought issues with the city’s floodplain maps and development patterns to the fore—many Houstonians are looking for something different.

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