20
Apr 2020
0

Gov. Abbott creates strike force, starts loosening retailer restrictions, more

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Gov. Abbott creates strike force, eases medical restrictions and more in the plan to slowly reopen Texas

Texas Gov. Greg Abbott issued a series of executive orders Friday, April 17, with several directives meant to gradually reopen the state.

First, the governor is establishing a strike force that includes medical experts, business leaders, educators, and political leaders. This team will work together to find safe and effective ways to slowly re-introduce Texans to their usual way of life.

He said key members of the strike force include Rep. Dennis Bonnen, Attorney Gen. Ken Paxton, Lt. Gov. Dan Patrick and attorney Glenn Hegar.

The force will also have advisers from the business community such as jeweler Kendra Scott, Gallery Furniture owner Jim “Mattress Mack” McIngvale, and restaurateur and Houston Rockets owner Tilman Fertitta.

The strike force is broken into four core groups: economic revitalization, health care, and fiscal accountability and federal liaison.

One of the biggest announcements regarded school districts and universities, which are closed for the rest of the school year.

On April 27, Abbott said he will announce additional guidelines for the reopening of Texas.

Texas allowing nonessential retailers to do ‘to-go’ services

As part of his plan to reopen Texas, Gov. Greg Abbott will loosen restrictions on non-essential retailers and service next week.

Beginning April 24, businesses that are not essential but can be provided their product or services through pickup, delivery by mail or direct delivery to the customer’s home will be allowed.

This directive allowing to-go retail services is one of three executive orders Abbott announced Friday, April 17.

In the meantime, dining in at restaurants, food courts and bars remain closed. The same applies to gyms, massage establishments, tattoo and piercing studios, beauty salons.

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Gov. Greg Abbott Friday unveiled his plan to gradually reopen Texas, and it includes loosening some restrictions on surgeries.

Under the governor’s executive order in March, only surgeries and procedures that were “medically necessary to diagnose or correct a serious medical condition or to preserve the life of a patient” were allowed.

Other surgeries and medical procedures were canceled so Texas hospitals could make room for COVID-19 patients and focus resources on them.

Under the new executive order, there will be some exceptions beginning April 22.

20
Feb 2020
0

Deal Sikes 2020 Valuation Forecast: Houston Real Estate Values on Upward Trends as Economic Expansion Continues

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Houston’s commercial property values will continue to trend upward in 2020 as demand for development opportunities expands amid the region’s positive job growth, according to Deal Sikes, a leading Houston-based valuation firm.

“Although there are a few exceptions, the real estate market in Houston is headed for another good year,” said Mark Sikes, a principal with Deal Sikes. “The region’s economy is healthy and although the energy industry is in a lackluster period, the overall economic outlook is outstanding.”

Houston’s industrial market is attracting interest from around the nation and research indicates that more than 15 million square feet of warehouse space are under construction in the Greater Houston area.

“Prices for land or urban infill development property has risen significantly in recent years,” Sikes said. “Rising land prices have pushed the wave of industrial development farther away from the center of the city and outer suburban land prices have increased accordingly.”

Property values in the urban core of the city remain strong as developers and builders locate buildings for redevelopment or seek sites that are appropriate for new construction, Sikes said.

“Multifamily construction is strong in Houston and researchers report more than 25,000 units are now under construction, although the pace is expected to be slightly more moderate in 2020 as the new inventory is absorbed,” Sikes said. “Investor demand is good and multifamily valuations have not yet peaked in most submarkets.”

Newer office buildings and Class A towers under construction are leasing briskly, although Houston’s office market is the most sluggish sector.

The Texas Medical Center, where more than 100,000 people are employed, is a source of growth for Houston and several hospitals and research facilities are expanding.

“Houston’s commercial real estate values will be on a solid upswing in 2019,” said Matthew Deal, a principal with Deal Sikes. “With Houston expected to gain population significantly in the next decade, the long-term forecast must include rising property prices that will be very impressive over the long haul.”

12
Feb 2020
0

Hunt Real Estate Capital Provides $18.1 Million Fannie Mae MAH Loan to Refinance an Affordable Multifamily Property Located in Houston, Texas

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NEW YORK, Jan. 28, 2020 /PRNewswire/ — Hunt Real Estate Capital announced today that it has provided a Fannie Mae Multifamily Affordable Housing (MAH) Preservation loan in the amount of $18.1 million to refinance an affordable multifamily community located in Houston, Texas.

Copperwood Ranch Apartments is a 280-unit, garden-style multifamily community that was developed by the borrower in 2003 through the Low-Income Housing Tax Credit (LIHTC) program. Located at 6833 Lakeview Haven Drive, the property is situated on 12.1 acres of land and offers 48 one-bedroom, one-bathroom units; 168 two-bedroom, two-bathroom apartments; and 64 three-bedroom, two-bathroom units contained in 16 two- and three-story buildings. The community also features one single-story clubhouse building.

The 15-year loan features two years of interest-only payments followed by a 30-year amortization schedule. The property’s 15-year compliance period ended on December 31, 2019, through the borrower will ensure that 100% of units will be occupied by low-income households (household income not exceeding 60% of AMI) during a 15-year extended use period.

“This is the fourth Agency loan that we have closed for this experienced sponsor since 2016,” noted Paul Weissman, Senior Managing Director and Head of Affordable Housing Finance at Hunt Real Estate Capital. “The borrower currently maintains a Texas portfolio of 11 affordable housing communities with more than 2,300 units. Copperwood Ranch has been well maintained by the owner for the past 16 years, with more than $160,000 in capital expenditures invested since 2018.”

Property amenities include a swimming pool, recreation room, playground, laundry facilities, gated access, covered parking, fitness center, Wi-Fi in common areas, business center, and internet/computer library.

The property is located approximately 22 miles northwest of the Houston Central Business District.

About Hunt Real Estate Capital

Hunt Real Estate Capital (HREC), a subsidiary of ORIX Corporation USA, is a leader in financing, investing and managing multifamily housing and commercial real estate. HREC is a source of debt and equity capital for multifamily, affordable housing, manufactured housing, healthcare/senior living, retail, office, industrial, self-storage, and mixed-use assets through Fannie Mae, Freddie Mac, FHA, its own balance sheet and managed public and private investment vehicles.

 

12
Feb 2020
0

Houston Property Values In 2020 To Rise On Job Growth

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Commercial property values in Houston should trend upward in 2020, as the region’s positive job growth will increase demand for development opportunities, according to Houston-based valuation firm Deal Sikes. Bisnow/Catie Dixon Matthew Deal and Mark Sikes DATACENTER INVESTMENT CONFERENCE & EXPO (DICE) SOUTH 2020 APRIL 9, 2020 | REGISTER NOW   FEATURED SPEAKER ROMELIA FLORES Distinguished Engineer & Master Inventor, IBM “Houston’s commercial real estate values will be on a solid upswing in 2019,” Deal Sikes principal Matthew Deal said. “With Houston expected to gain population significantly in the next decade, the long-term forecast must include rising property prices that will be very impressive over the long haul.” The firm said rising land prices have pushed industrial development farther away from the center of the city, and outer suburban land prices have increased accordingly. But that hasn’t stopped development: More than 15M SF of warehouse and industrial space is under construction in the greater Houston area, the firm said. Meanwhile, property values in the urban core remain strong, as developers and builders locate buildings for redevelopment, or seek sites that are appropriate for new construction. “Multifamily construction is strong in Houston and researchers report more than 25,000 units are now under construction, although the pace is expected to be slightly more moderate in 2020 as the new inventory is absorbed,” principal Mark Sikes said.  “Investor demand is good and multifamily valuations have not yet peaked in most submarkets.” Though newer office buildings and Class-A towers under construction are leasing briskly, Houston’s office market is its most sluggish sector, according to the firm. The energy industry — a juggernaut in Houston’s leasing arena — is in the midst of a downturn, which is hurting growth. The healthcare sector is faring better. The firm identified the Texas Medical Center as a source of growth for Houston, pointing to the expansion of several hospitals and research facilities. “Although there are a few exceptions, the real estate market in Houston is headed for another good year,” Sikes said. “The region’s economy is healthy and although the energy industry is in a lackluster period, the overall economic outlook is outstanding.”

12
Feb 2020
0

As energy sector contracts, Houston’s real estate market feels the pinch

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The Bank of America Tower, Wednesday, May 22, 2019, with the Esperson Building reflected in the windows. The Bank of America Tower, a 35-story office building and a development of Skanska in downtown, has been under construction for the last two years at 800 Capitol St.

The Bank of America Tower, Wednesday, May 22, 2019, with the Esperson Building reflected in the windows. The Bank of America Tower, a 35-story office building and a development of Skanska in downtown, has been under construction for the last two years at 800 Capitol St.

Photo: Karen Warren, Houston Chronicle / Staff photographer

Houston’s office market is bracing for another tough year as the energy industry shrinks in the face of lower oil prices, which dipped this week to their lowest level in more than a year.

“It remains a tenant’s market,” Lucian Bukowski, an executive vice president with CBRE, said. “I see that continuing.”

Oil companies, which have been steadily cutting costs and laying off workers, account for more than 30 percent of the local office market, said Bukowski, who represents companies looking for space. Demand is falling among other industries, as well. Leasing activity last year was down 17 percent from the previous year, CBRE data show.

That all amounts to a harsh reality for landlords carrying empty office space, and there are a lot of them. The vacancy rate for so-called Class A buildings — the newest properties with the most amenities — was 17 percent at the end of last year, the highest it’s been since at least 1992.

Large blocks of empty space fill skyscrapers from the city center to the suburbs. One of the former Anadarko towers in The Woodlands will be vacant by next month. The company was acquired by Occidental last year and employees are being consolidated.

Bob Parsley, co-chairman and principal in the Houston office of Colliers International, which is leasing the building for owner Howard Hughes Corp., said there’s been a strong interest in the tower.

“We were frankly very happy to get this building into the Howard Hughes portfolio because we didn’t have much space to lease,” Parsley said. “That market is tight up there.”

Jobs added – elsewhere

While certain submarkets have done better at controlling inventory, vacancy market-wide ended the year at 19 percent, well above the 10-year average of 15.3 percent, CBRE’s data show. Combined with sublease space, overall vacancy jumped to 22 percent across Houston.

Energy tenants are critical to the local office market. Yet employment in the industry is shrinking.

Houston is expected to gain 42,000 new jobs this year, but it will lose 4,000 in the energy sector, according to the Greater Houston Partnership.

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The energy sector won’t be a significant driver of demand for potentially years, said Patrick Duffy, president of Colliers International in Houston. Growth in 2020 is expected to come from health care, government, accommodation/food services, and construction, yet many of those companies are not big enough to lease the large blocks of space currently on the market.

“A huge medical deal is 100,000 square feet. A big law firm is 60,000, 70,000 square feet. And we need to take down millions of square feet,” Duffy said.

Houston is a roughly 213 million-square-foot office market. It could be a decade before the market returns to equilibrium, meaning anywhere from 11 to 13 percent occupancy, Duffy said.

“That’s assuming we don’t build a lot more and we don’t have a recession,” he said.

Powershift

Companies shopping for space today have leverage. Landlords are offering free rent, parking discounts, and generous tenant improvement allowances. Annual per-square-foot asking rents in Class A buildings range from $32.20 in the suburbs to $54.67, according to Colliers.

Bukowski, speaking at a commercial real estate market briefing last week, said landlords generally make money when their buildings are 85 percent to 90 percent leased.

Houston has 82 buildings with at least 100,000 square feet of space available. Twice as many buildings have at least 50,000 square feet up for grabs.

That’s why so many property owners are making improvements. Even Williams Tower, one of the city’s most prestigious office buildings, is undergoing a lobby facelift.

While the major energy players aren’t expanding — and are increasingly looking for ways be more efficient within their buildings — smaller, more entrepreneurial business is growing, said Griff Bandy, a partner with commercial real estate firm NAI Partners.

Bandy recently represented XCL Resources, a private oil, and gas firm, in a lease for 16,328 square feet at M-K-T, a new adaptive reuse project in the Heights. JLL is representing the landlord, a partnership of Radom Capital and Triten Real Estate Partners.

The development includes a collection of industrial buildings that are being repurposed to house offices, shops, restaurants and health, and fitness concepts.

Bandy and others said companies are looking for spaces that will wow potential employees and help retain the ones they have. To that end, new mixed-use developments and downtown towers with an abundance of amenities are winning out.

Colliers data show Houston office buildings constructed after 2005 have an 11 percent vacancy rate.

29
Jan 2020
0

Opportunities Ahead For Houston’s IDD Community As New Center For Pursuit Campus Breaks Ground

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In Houston, a new facility for The Center for Pursuit held its groundbreaking on a site in the East End.

 

An interpretation of mixed-use development, The Center for Pursuit’s next-generation facility broke ground this week in Houston’s East End, where it will relocate in 2021 to serve, support and empower the city’s adults with intellectual and developmental disabilities (IDD).

From its new campus, which starts construction next month, the nonprofit organization will also reach out into its neighboring communities with programs, public spaces and some retail, including a café.

Sitting on 3.8 acres of previously paved property, the new facility will encompass four buildings totaling 129,000 square feet, a 7,000-square-foot park and a 257-car parking structure.

The new buildings include a residential tower of 41 units; a programs building for adult training, employment services, and adult activities; a health and wellness building with fitness, medical clinic, cafeteria and café; and an administration building housing a welcome center, conference space, incubator workspace for other non-profit startups and one of the vocational programs.

A United Way agency, the 60-year-old organization now serves 450 clients, has 40 residents and provides daycare to 300 severely disabled adults, many of which arrive by Metro van daily, according to organization sources at the groundbreaking event.

The pedestrian-friendly project’s new location on an infill parcel near downtown is served by Houston’s Metro Rail, something key to site selection, project leaders said at the event, attended by representatives of city, county and state government, related agencies, East End community leaders and current clients.

Including property acquisition and improvements, the project’s total cost has an estimated value of $71 million, said Charles C. Canton, the center’s president, and CEO. Construction is slated to begin in early February, with completion substantially completed in early 2021, he noted in a follow-up statement.

Funds raised to date have included the sale of the organization’s long-term facility on six acres overlooking Buffalo Bayou as well as a phased capital campaign. The most recent push, tagged “Strive,” closes the remaining $16.5 million sought, Canton said.

Part of the new project’s vision process (and fundraising) was a 4,000-mile bike ride to assess best practices at 30 facilities coast-to-coast, led by David C. Baldwin of SCFPartners, a board member and Pursuit Foundation trustee, and a series of charrettes. Integrating and providing choice to the spectrum of constituencies served by the facility was paramount to the planning, he said.

Historic Community, Industrial Neighborhood

Houston’s East End is a multi-ethnic community where many of the city’s early industrial properties are under redevelopment, re-purposing, and replacement by both commercial and residential uses, especially townhomes.

Meanwhile, Buffalo Bayou Partnership last fall revealed its park and recreation master plan for the five-mile stretch of the bayou winding through the East End.

With gentrification concerns, a neighborhood issue, having community input as part of the new center’s planning process so that there was a relationship of trust established, said Marilu Garza, chief development officer for the organization.

Gensler’s Houston office designed the campus, excluding the residential tower, designed by Tramonte Design Studio with contractor Arch-Con.

The larger project team also includes landscape architects TBG Partners and construction by Harvey-Cleary.

“The beauty of the design is that it supports The Center’s mission of everyone having value and purpose,” noted Kristopher Stuart, Gensler principal, and design director, in a follow-up inquiry. “The Center for Pursuit and its board are to be applauded for the bold initiative they are taking to imagine a facility that not only serves their clients differently but also helps the rest of the society imagine a different role for these unique individuals.”

Open and Activated for Opportunity and Outreach

The project required creating a collection of buildings that serve their unique purpose while embracing the unique East End community, Stuart said. The buildings incorporate warehouse-style brick and exposed, painted steel beams to “reflect the historically industrial yet emerging character” of Houston east of downtown. In addition, the “aspiration” was for the facility to be embedded in the life of the surrounding community as well as a participant in it.

Garza noted the new site and build-out has higher visibility for the organization. “We want to be seen,” she said. “It’s important that the community embrace us.”

Canton said, “We’re excited by the quality of the new buildings.” To have renovated the existing ’70s vintage existing facility was cost-prohibitive. Hanover Co. acquired the property last year as part of its plans for a mixed-use development.

Since then, The Center for Pursuit has moved its administrative functions, programming, and daycare for severely disabling clients to a temporary facility south of downtown. The organization’s residential building, however, remains in use until the completion of the new residential building on the new campus, so that residents need only be moved once, Garza said.

Margaret Wallace Brown, city planning director, said the center’s new campus is an example of transit-oriented development, a city initiative.

At the groundbreaking, Houston Mayor Sylvester Turner spoke of Houston’s notable diversity, adding “being diverse means little if you’re not inclusive,” which the new facility has as part of its mission. The beauty of the center’s build-out — for a population often overlooked, he said — “speaks to our city’s values.”

28
Jan 2020
0

Bye Bye, Booze: WeWork Killing Kegs At North American Locations

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A beer tap is kept locked in a Washington, D.C., WeWork location

Bye Bye, Booze: WeWork Killing Kegs At North American Locations NationalCoworking January 27, 2020, Ethan Rothstein, East Coast Editor Bisnow/Ethan Rothstein A beer tap is kept locked in a Washington, D.C., WeWork location. WeWork’s free beer taps, one of the defining attributes of the halcyon days of the coworking company, are almost kicked. WeWork is phasing out free beer and wine at it North American locations, a spokesperson confirmed to Bisnow Monday. The company doesn’t have kegs at all of its 600-plus locations, but they were staples of WeWork’s earliest outposts, which were also its most successful, according to WeWork’s financial disclosures last year. By the end of February, the taps will all be phased out, the spokesperson said. Business Insider first reported the change Monday morning. “Data from an expanded member satisfaction survey we conducted last year indicated many of our members wanted a greater variety of beverage options, and we are pleased to roll out these expanded offerings, including a selection of cold brew, kombucha, seltzer, and cold teas, in response,” WeWork said in a statement. “As part of this beverage refresh, WeWork will also phase out on-tap alcoholic beverages in U.S. and Canada locations and aims to complete this process by the end of February.” The beer and wine taps are expected to be replaced with nonalcoholic options, rather than removed. The decision came as a result of new WeWork Chairman Marcelo Claure’s go-forward plan for the business, and was prompted by a member survey, not as a cost-cutting move, a WeWork source said. Booze will still be served at WeWork happy hours and other events, the source added. Alcohol was once a pillar of WeWork’s identity, from bottomless-drink member parties to CEO Adam Neumann’s infamous penchant for shots of tequila. But the company was sued in 2018 by a former executive who said she was sexually assaulted twice at WeWork events, which she claimed “center around partying and reflect the frat-boy culture that starts at the top.” That litigation is still ongoing and is in the discovery phase, according to New York State court records.  A month after the sexual harassment suit was filed, WeWork shifted its alcohol policy, from offering unlimited drinks and blatantly promoting consumption to a four-drink maximum. While the company claims cutting kegs isn’t about costs, its other recent stratagems have focused squarely on its blood-red balance sheet. After losing $1.25B in Q3 2019, WeWork nearly stopped leasing new spaces altogether in Q4, laid off 20% of its staff and has sold several previous acquisitions, including its stake in women-focused co-working company The Wing and digital meeting startup Teem in the last month.