Houston Realty Advisors Inc. has a new listing available FOR LEASE in Pasadena, TX. This property is located at 906 Witter St. it’s a Flex/ Warehouse/ Office Building. containing 13,450 Square Feet of Building.
The boutique small real estate firms of Houston are now even smaller. Chicago-based Cushman & Wakefield purchased Colvill Office Properties and now more Houston local brokerage offices are being absorbed by the largest brokerage firms in the world. Chip Colvill, the founder and former president/CEO of Colvill Office Properties, joins Cushman & Wakefield as Executive Vice Chairman.
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.”
Lee & Associates was awarded the leasing and management of five Houston office buildings totaling 430,000 square feet in 2019.
The company’s landlord agency team will lease and manage 550 Westcott (83,366 square feet); 4101 Interwood (80,000 square feet); 1505 S. Highway 6 (63,487 square feet); 16430 Park Ten Place (110,408 square feet) and 10101 Southwest Freeway (102,292 square feet). The buildings range from Class A to Class B.
“Our recent success has been due to the depth of our team and the focus we have on technology and platforms for today’s digital marketplace,” Robert LaCour, Lee & Associates principal said in an announcement.
Lee & Associates added a property management group in 2019. The company specializes in commercial real estate services for office, industrial and land real estate investments
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.”
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.”
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.
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.
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 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.
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.
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.
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.