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.
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
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.
Several times a week, a drone flies over Texas Tower, taking digital images that Hines compares with job specifications to confirm plans have been accurately followed.PHOTO: JEFF LAUTENBERGER FOR THE WALL STREET JOURNAL
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.
Workers at the Texas Tower construction site in Houston.PHOTO: JEFF LAUTENBERGER FOR THE WALL STREET JOURNAL
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 GroupCorp. 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.
Russell Kutach, a contractor for SiteAware, launches a drone that he uses to survey construction sites in Houston.PHOTO: JEFF LAUTENBERGER FOR THE WALL STREET JOURNAL
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.
Fuller Realty Partners buys Westchase office building
but the building is valued at about $14.8 million on Harris County tax records.
Houston-based Fuller Realty Partners has added another west Houston office building to its portfolio and will turn to fill the substantially vacant property.
It’s Fuller Westchase Place affiliate bought Westchase Place, a six-story office building at 11200 Richmond from Dallas-based Capstar Real Estate Advisors. The purchase price was not disclosed, but the building is valued at about $14.8 million on Harris County tax records.
The 150,000-square-foot-plus building was built in 1999 and substantially renovated in 2009 and 2013. An on-site garage has a generous parking ratio of 4.4 cars per 1,000 square feet.
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“We’re willing to spend money for building improvements to get it leased up,” said Steve Darnall, a principal, and chief operating officer of Fuller Realty Partners. “It’s only 44 percent occupied. The owner purchased this a while back and has lost tenants with the oil and gas downturn.”
Fuller should have an advantage in the market, Darnall said. “We liked it because this building, for its class, is probably the newest and nicest. Given our purchase price, we’re going to be able to compete or undercut rental rates of what we consider lesser properties.”
Rudy Hubbard, Kevin McConn and Rick Goings of JLL marketed the property for Capstar. The property last changed hands in 2013 when oil was riding high and companies were expanding.
The office availability rate, including sublease space, in Westchase reached 27.9 percent in the second quarter, according to commercial real estate firm Transwestern. That compares to 13.7 percent when the building was last sold, in 2013. By comparison, the Houston region overall posted a 23.5 percent availability rate in the second quarter, up from 16.2 percent at the time of the last sale.
Fuller Realty, which will manage and lease the property in-house, plans to break up some of the larger spaces to create speculative suites that will be easier to lease, Darnall said. In addition, the building could accommodate a company that needs up to two floors of contiguous space.
The Westchase submarket, centered around Beltway 8 and Richmond, absorbed 238,212 square feet of office space in the second quarter, according to Transwestern. Large deals included a 114,000-square-foot lease for Honeywell’s relocation to CityWestPlace, a 108,109-square-foot lease by Empyrean Benefits at Pinnacle Westchase, a 90,000-square-foot lease for LJA Engineering at Westchase Park II, a 67,000-square-foot renewal for ABB at Westchase Park I, and a 40,796-square-foot renewal for U.S. Physical Therapy at Briar Forest Crossing.
The deal comes as a number of office buildings have changed hands across the Houston market recently, including 600 Travis, 1616 Voss, 7500 San Felipe, 6363 Woodway and HP’s new campus in Springwoods Village.
“Due to the counter-cyclical nature of Houston’s economy relative to the rest of the country, combined with the overall capital markets environment and historically low-interest rates, the investor demand in Houston office is higher than we’ve seen since 2014,” said Kevin McConn of JLL.
The building is close to the new Trailside Park at the southern end a trail that extends northward to Houston Community College at Westheimer and Hayes. The Westchase District worked with area building owners on the park, which has a picnic table, zip line, chairs, and public art.
The Houston Country Club hosted Joe Theismann; Motivational Speaker, and former NFL champion this morning during a breakfast conference sponsored by Holba. He discusses his biggest tip for success: being in service to the world and he used JJ Watt as a prime example to explain that.
Joe Theismann says he remembers everything that happened that night he broke his leg. He says it was the day that he died and got brought back to life in a way that he is forever grateful for. He took all of the encouragement from the stands as they gave him a standing ovation. He was encapsulated by the roar of the crowd as he was being pushed away on the stretcher.
In a room full of Real Estate Brokers who were there to witness Theismann’s wisdom they deliberately ignore their eggs and bacon that’s in front of them, they are mesmerized by his presence. I mean, how can you resist that bacon smell? That’s how mesmerizing Joe Theismann’s energy was.
He has so much energy at 7:30 in the morning and wasn’t even drinking a cup of coffee. What is his secret? His secret is success and admiration. His top love language is probably affirmation I bet you his super bowl rings on that one. All of them.
Over the past few years, Houston has shown strong economic growth. It cannot be denied, however, that the commercial real estate industry in Houston does not contribute that much to the state’s economic growth. This is the main reason why the state is pursuing different businesses, particularly run by millennials, to invest in the commercial real estate industry.
Commercial Real Estate
By definition, commercial real estate pertains to various types of properties which are not used for residential purposes – this includes retail properties, office buildings, apartments, or even vacant land that can be developed for commercial purposes. Houston has several commercial real estate brokers, and CXRE Commercial Real Estate is one of the companies offering management and leasing services specifically for business properties. Even with top agencies such as CXRE, it is unfortunate that the commercial real estate industry still does not seem to witness its full potential. Hence, the commercial real estate industry in Houston aims to reinvent how they do business by enticing millennials who have the courage in starting up their own companies with a tenant-centric mindset.
Millennials and Start-up Companies
There are differences, but not opposing views, over the span of years that millennials are born. Nonetheless, millennials make up a quarter of the world’s population, making them a significant consumer group. They are also most passionate in what they believe in that the rise of social enterprises came hand in hand with the millennial generation. Alongside with the rise of social enterprises is the boom of start-up companies, powered by no one else but millennials themselves. These are the reasons why different industries attempt to lure millennials into their circle because millennials are considered the future of further economic growth.
Houston’s Commercial Real Estate and the Millennials
Houston’s commercial real estate industry is no different from other industries, attracting millennials to invest in their business. After all, the founder of the most popular start-up
companies born out of rented apartments are no other than millennials. Hence, most brokers now offer:
Connectivity. Brokers are ensuring that the properties and locations they offer have internet availability because this is the main factor that is essential for a business typically founded by a millennial.
Integrated Systems. Millennials prefer convenience, which is why walkability and systems integrated within the business location such as nearby hospitals, schools, parks, and grocery stores are being ticked as essentials in the property offer.
Neighborhood. Even business areas are now made friendlier, in favor of the millennials, both in terms of the amenities offered and environment sustainability. Studies show that more and more millennials are now being aware of the environmental impact of their actions, hence their goal is to minimize their carbon footprint, which is why they prefer locations that are environmentally friendly, at the same time economical.
Final Word
It is true that the millennial generation has a great impact, not only in the commercial real estate industry but in different industries. With the millennials accounting for a quarter of the world’s population, it cannot be denied that this generation has the potential to reshape Houston’s commercial real estate industry, and in a bigger sense, the future.
