Southern Downtown Park, bounded by Fannin, San Jacinto, Leeland, and Bell, will add green space to downtown Houston.
Canada-based design and engineering firm Stantec Inc. (NYSE: STN) will consolidate all of its local employees into downtown Houston’s One Shell Plaza next month.
The company plans to move its approximately 175 local employees from its water, buildings, oil and gas, community development and transportation groups on Nov. 25, according to a press release. It currently has Houston offices at 20 East Greenway Plaza, 500 Jefferson St. downtown and 580 Westlake Park Blvd. in the Energy Corridor.
In its new office, Stantec will occupy the entire 26th floor at 910 Louisiana St. The firm’s architecture and interior design arm designed the new 23,000-square-foot office “to reflect the company’s collaborative culture and foster innovative thinking across several business sectors,” per the release. Features include “open, modern, flexible space with collaboration and group work areas, private and quiet work areas, and break rooms.”
“With one integrated group in one location, we’ll be better positioned to foster innovation, resilient-thinking, and inspire new design approaches,” David Irvine, senior vice president and geographic leader for Stantec, said in the release. “It’s important to us to bring together our diverse expertise to deliver the best solutions for our community and clients.”
With more than 45 years in Houston, Stantec has led the design of such projects as State Highway 288, Sterling Aviation Early College High School, Sul Ross Elementary School and several other K-12 schools. The firm also has led projects such as a large-diameter pipeline valve replacement for the city of Houston’s Southwest Pump Station, the design of the Lake Houston Dam rehabilitation, and program management for the Houston Airport System. It’s also serving as the lead designer for the estimated $90 million expansion of the Barry Rose Water Reclamation Facility in Pearland.
Stantec’s services include architecture and interior design; civil, structural and MEP engineering; surveying; land planning and landscape architecture; environmental services, transportation; and water and wastewater engineering.
In September 2016, Houston-based Shell Oil Co. announced it would completely vacate its namesake downtown tower. Shell Oil, the U.S. arm of the Netherlands-based Royal Dutch Shell PLC (NYSE: RDS-A, RDS-B), planned to move its One Shell Plaza employees to the company’s campuses in west Houston. At the time, only employees in Shell’s trading and supply division at 1000 Main were slated to stay downtown. However, the company still lists its U.S. Chemicals division as located at 910 Louisiana.
Since Shell’s 2016 announcement, several tenants have subleased space from the Dutch energy giant. Houston- and New Jersey-based NRG Energy Inc. (NYSE: NRG) subleased a record-breaking 431,037 square feet.
Metro Houston added nearly 1.3 million residents between ’08 and ’18, a 22.3 percent increase. A little more than half the growth came from migration, a bit less than half from natural increase. Metro Houston created 81,900 jobs, a 2.7 percent increase, in the 12 months ending August ’19, according to the Texas Workforce Commission (TWC). Nonfarm payroll employment was 3,166,900 in August, flat from July, and down from 3,185,200 in June. The drop reflects the temporary loss of jobs associated with education.
Sectors adding the most jobs over the past 12 months were professional, scientific, and technical services (21,100); manufacturing (11,500); other services (9,700); transportation, warehousing, and utilities (8,600); and health care and social assistance (8,200). Employment in oil field services peaked in May and has declined steadily since. This is not surprising given the loss of more than 200 working rigs since the first of the year.
The jobs gained in manufacturing are likely an overestimate given that three-fourths of the gains have been in equipment manufacturing and fabricated metals, sectors closely tied to upstream energy. Houston’s unemployment rate was 3.9 percent in August, down from 4.0 percent in July and 4.4 percent in August of last year. The Texas rate in August was 3.6 percent; the U.S. rate, 3.8 percent. The rates are not seasonally adjusted.
City of Houston building permits totaled $7.2 billion for the 12 months ending August ’19, up 16.3 percent from $6.2 billion for the same period a year earlier. Commercial permit values rose 31.8 percent to $4.4 billion, while residential permit values decreased 1.8 percent to $2.8 billion. The closing spot price for a barrel of West Texas Intermediate (WTI), the U.S. benchmark for light, sweet crude, averaged $56.67 per barrel in September, down 18.7 percent from $70.15 for September last year.
The 48-story tower is expected to fetch about $700 million or $650 per SF, according to Real Estate Alert. That sales price would make the building one of the richest deals in Houston’s real estate history..
The building, which opened in 2017, is 94 percent occupied with Unired Airlines, Kirkland & Ellis and Goldman Sachs as tenants. Colvill Office Properties leases the 601 Main at Travis, which is catty-cornered from the historic Rice Hotel building which is now residential lofts.
Peloton Commercial Real Estate has operations in Dallas and Houston.
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Two big North Texas real estate players are joining forces.
Dallas-based property firm Peloton Commercial Real Estate is being acquired by JLL, the Chicago-based international real estate services firm.
More than 130 professionals in Peloton’s Dallas and Houston offices will join JLL, which already has a huge presence in the area.
It’s JLL’s second recent major acquisition. It just completed a purchase of Holliday Fenoglio Fowler LP, the Dallas-based investment sales and finance firm.
JLL said its purchase of Peloton will accelerate the growth of the company’s leasing and property management businesses.
“This is a momentous step in our journey to become a market-leading player in Texas,” JLL’s regional director David Carroll said in a statement. “With the exceptional growth we have seen in those markets, Peloton’s position as a leading provider of leasing and property management services will greatly enhance our business capabilities and breadth of services.
“Just as importantly, we look forward to working with a team of professionals that share JLL’s strong commitment to collaboration and culture.”
JLL already has about 700 people in North Texas.
Terms of the sale were not disclosed, and the transaction is still subject to closing conditions.
Peloton’s founders, Joel Pustmueller and T.D. Briggs, will continue to focus on the D-FW and Houston property markets in their new roles at JLL.
A medical office building changed hands in Sugar Land. An undisclosed buyer acquired Town Center Medical, a 30K SF medical office building at 16545 Southwest Freeway. The Class-A property is adjacent to Houston Methodist Sugar Land Hospital, a 319-bed general acute care hospital specializing in cardiology, oncology, sports medicine, and women’s care. Built-in 2008, Town Center Medical is fully leased. ENT and Allergy, an ear, nose and throat group, serves as the anchor tenant. “The Town Center Medical disposition highlights the robust demand for stabilized, on-campus medical office buildings in the Houston Metro area,” Transwestern Commercial Services’ Robby Winston said. “Sophisticated healthcare real estate investors continue to be optimistic about long-term yields from core medical office assets.” Houston Specialists Alliance Ltd. purchased the land in 2006 from Town Center Lakeside Ltd. for $750K, according to Reonomy. The assessed land value now is $1.3M while the total assessed value of the property is $5.3M, according to Reonomy. Winston, along with Eric Johnson, Lisa Bovermann and Brooks Creech, represented the seller. TCS Houston has executed 522 healthcare transactions during the last 24 months and manages a healthcare portfolio of 69 properties totaling more than 5M SF.
NEW YORK, Sept. 17, 2019 (GLOBE NEWSWIRE) — Greystone, a leading national commercial real estate lending, investment, and advisory company, announced it has provided $27,000,000 in bridge financing to Iliad Realty Group (IRG) for the acquisition of Villa Nueva Apartments, a multifamily property in Houston, TX. The transaction was originated by Daniel Wolins of Greystone’s New York office. Sal Torre with Estreich & Company brokered the transaction.
Originally constructed in 1980, the garden-style Villa Nueva Apartments community features 542 one- and two-bedroom units across a gated 47-building campus that has full-time security on site. Residents have access to three outdoor pools, common laundry rooms, and central mailbox centers. The property offers easy access to all of the Houston metro area’s major thoroughfares.
The $27,000,000 interest-only bridge loan carries a two-year term with two six-month extension options so that the borrower can acquire and rehabilitate the property while Greystone works to secure a low, fixed-rate permanent loan. Planned improvements include extensive exterior renovations to building facades, landscaping, and recreational areas, as well as interior structural improvements and fixture upgrades to each of the property’s units.
“Our bridge lending platform gives us the flexibility to put the right financing together for clients with diverse options for permanent financing,” said Mr. Wolins. “We are pleased that IRG was able to close quickly and get started on making capital improvements to the property while we work to secure long-term agency financing with our seamless bridge-to-agency lending process.”
“We were delighted that the Greystone team was able to move us seamlessly and rapidly through the bridge loan process so that we could start realizing our vision for Villa Nueva Apartments,” said Mr. Elliott Aronson of IRG. “Having acquired and renovated thousands of apartment units across Texas over the past decade, we understand what it takes to bring a property back to life. We are thrilled to have a team that is committed to getting us competitive financing terms so that we can get to work doing what we do best.”
About Greystone
Greystone is a real estate lending, investment, and advisory company with an established reputation as a leader in multifamily and healthcare finance, having ranked as a top FHA, Fannie Mae, and Freddie Mac lender in these sectors. Our range of services includes commercial lending across a variety of platforms such as Fannie Mae, Freddie Mac, CMBS, FHA, USDA, bridge and proprietary loan products. Loans are offered through Greystone Servicing Company LLC, Greystone Funding Company LLC and/or other Greystone affiliates. For more information, visit www.greyco.com.
For years, real-estate technology startups watched from the fringes as big banks and venture-capital firms lavished attention on financial-technology firms.
Now “proptech” has joined the party. Startups are raising more cash than ever while landlords are adopting a range of new software and hardware that is changing the way they do business.
New capital sources including some of the world’s biggest banks are taking notice. “We feel like we’ve hit that tipping point a couple of months ago,” said Allison Sedrish, co-head of the new proptech group at Barclays Investment Bank.
In the first half of 2019, venture investors poured $12.9 billion into real-estate tech startups, according to research firm CREtech, already surpassing the $12.7 billion record for all of 2017. In 2013, the total was $491 million.
Proptech Joins the PartyVenture capital invested into real-estate techcompaniesSource: CREtechNote: 2019 figure as of June 26
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New investors include some of the world’s biggest commercial property owners and brokerages. Toronto-based Brookfield Asset Management, which has $191 billion of real estate assets under management, last year began investing in proptech startups.
Brookfield is both a user of and investor in such startups as VTS, which provides commercial property owners with online tools for managing leases; Convene, a co-working and workplace amenities firm; and Honest Buildings, which helps owners manage capital projects.
“Innovation is causing revenue to go up and expenses to go down,” said Ric Clark, chairman of Brookfield Property Group.
The real-estate industry for years had a reputation for being slow to innovate, but investors are betting that is changing because of a confluence of forces.
For starters, the values of many properties have plateaued after rising steadily throughout much of the economic recovery. Many owners view technology as a way to keep growing their bottom lines, either by cutting costs or making their buildings more appealing to tenants.
At the same time, traditional owners are turning to technology to defend themselves against major disruptions in their businesses. In a retail world increasingly dominated by e-commerce, for example, mall and shopping-center landlords have started to test facial recognition and artificial intelligence technology to prove the value of bricks and mortar.
In-office space, the popularity of co-working firms like WeWork Cos. has triggered a race between startups and traditional landlords to provide better tenant amenities. Both sides, for example, are working with startups to develop such things as the best mobile app for office workers.
Openpath Security, which has raised $27 million, enables workers to ditch their card keys and enter their offices with a smartphone app. “We’re one of those amenities in the arms race to up the ante for tenants,” said James Segil, Openpath’s president and co-founder.
Changes taking place in Silicon Valley are making fundraising easier. Real-estate technology-specific venture funds have sprouted, including Fifth Wall Ventures, MetaProp NYC and Zigg Capital. Law firm Goodwin Procter LLP launched a proptech initiative in September with more than 60 attorneys from it’s real-estate and technology practices.
Since 2014, more than 20 proptech startups have joined the unicorn club, meaning they are worth more than $1 billion, according to Fifth Wall. Only one firm achieved that status between 2011 and 2014—Airbnb Inc., Fifth Wall said.
It helps that interest in real estate is growing among some of the world’s biggest players in technology. For example, Japanese conglomerate SoftBank Group Corp. has made big commitments to firms like WeWork and Compass, a tech-heavy residential brokerage.
“If you see someone like SoftBank piling in the extra hundreds of millions of dollars, it makes you more inclined to say ‘the money could come, so let’s make that early bet,’” said Mark Goldberg, a partner at Index Ventures.
Commercial real estate, of course, hasn’t been completely insulated from new technology until now. Data giant CoStar Group Inc. and software developer Yardi Systems Inc. are both over three decades old.
But many startups failed because they had a difficult time convincing users the costs were justified. “The reason there’s a graveyard of technology companies in real estate is they try to disrupt just to disrupt,” said Robert Reffkin, chief executive of Compass, during a panel discussion in 2015.
As the world changed and technology improved, landlords lately have been much faster to adapt and adopt. Lincoln Property Co. is testing 16 different technologies, according to Eric Roseman, Lincoln’s head of innovation.
New technologies being used by Houston-based Hines, one of the biggest global developers, include a drone surveillance service provided by an Israeli startup named SiteAware. Several times a week, a drone flies over Texas Tower, a new office building rising in Houston, taking digital images that Hines compares with job specifications to confirm plans have been accurately followed.
Hines created the position of chief innovation officer in 2016, feeling the industry had changed more in the previous five years than in the preceding quarter-century, according to Charlie Kuntz, who was named to the job. “The volume of technology that was coming into real estate was larger than ever before,” he said.
For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Thank you for your interest.
Ed Ayres of Houston Realty Advisors
James Fisher Excavation has leased 6421 Cunningham in a 12,000 square foot building. Ed Ayres of Houston Realty Advisors represented the tenant. Copeland Rhea of Clay-CMBS GP represented the landlord.
For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Thank you for your interest.
When Ryan Hoopes of Cushman & Wakefield helps companies choose new headquarters, he often asks landlords a question that, not too long ago, would have been unheard of: “How do you plan to accommodate flex-space in your building? Because our clients are demanding it.”
Flexible, shared office space — think coworking spaces, incubators, and accelerators — is on the rise in Houston. Over the past 10 years, flex office space has absorbed a greater share of Houston’s office market, growing at a compound annual rate of 17 percent, while the office market only increased at a 1.7 percent clip, according to commercial real estate firm CBRE.
Flexible, shared office space — think coworking spaces, incubators, and accelerators — is on the rise in Houston. Over the past 10 years, flex office space has absorbed a greater share of Houston’s office market, growing at a compound annual rate of 17 percent, while the office market only increased at a 1.7 percent clip, according to commercial real estate firm CBRE.
With flex office space, companies and individuals can rent by the month and by the number of offices and desks needed, which can be scaled as the user shrinks or grows. The arrangement originally solved a problem faced by many startups with too much uncertainty to sign long-term leases. Now the practice has spread to all segments of the office market.
While the model still appeals to startups — The Cannon, which aims to build a tech culture in Houston, converted an entire oil and gas equipment manufacturing warehouse into a home for entrepreneurs — other industries have found a use for it as well. Coworking companies say they’ve seen sign-ups from individuals looking for a place to work on days they don’t commute to an office and from large corporations that want space for a satellite sales office or are staffing up for short-term projects.
“We’ve got realtors, we’ve got oil and gas companies, we’ve got consultants,” said content creator Carrie Colbert, who shares an office with three desks at Life Time Work with her partner, investor Mark Latham.
“I just got a call from a Fortune 1500 company looking for a way to put 2,000 people in a flexible workplace because they did not want to sign a long-term lease,” said Jacob Bates, chief executive of CommonGrounds, which will open a 27,136-square-foot coworking space in Greenway Plaza this September.
The explosion of coworking space has given rise to a variety of product offerings; it seems there’s a coworking company for every niche.
Into fitness? Life Time Work offers health-centric office spaces (lots of water stations for hydration and plantlife for productivity), and a membership comes with access to Life Time’s high-end gyms. James O’Reilly, president of Life Time Work, said the idea to expand into coworking came from seeing people working in the lobbies of its gyms. Life Time Work opened in City center in May and plans a downtown location in GreenStreet and a north suburb location in Shenandoah to open in 2020 and 2021, respectively.
A frequent flier? Several coworking companies are racing to open locations around the world, sometimes by franchising or buying local operations. Mark Patek, the director of sales for Venture X, said the company has sold more than 100 franchises around the world. “So if you travel to Chicago, New York or London, you can check into Venture X,” he said. The company, which has six locations in Dallas, recently announced it is encouraging franchises to open in Houston.
Hoopes, of Cushman & Wakefield, said he’s seen landlords begin to treat coworking spaces as an amenity, a way to offer companies happy hours, lunch-and-learns and the option to expand when necessary.
For more information on Houston office space, Houston retail space or Houston warehouse space and Houston industrial space, please call 713 782-0260 or see my web site at : www.houstonrealtyadvisors.com Thank you for your interest.