Major Texas Cities Panel: CCIM Houston October Luncheon

Biggest office year yet-up to $36-37 rents; traffic bad in CBD; much of CRE growth is actually north of Austin where development permitting is much faster (1-2 months instead of 10+)
• Cap rate compression; many groups are scouring the market looking for value-add opportunities in the various segments; offerings are picked over; what’s left is at a premium
• “Houston is a better place to find value-adds”
• Austin total has less than 70 million SF industrial total, and much of it is in R & D and specialized manufacturing, such as in wafer chips which cannot have a building with any vibrations; minimal number of distribution centers; not much bulk distribution
• Development west of MoPac is on strong limestone ground, BUT is in the Edwards Aquifer Recharge Zone and there are strict limits on impervious cover; on the east side of MoPac the ground is ‘gumbo’, clay that expands and contracts with the moisture content in the soil-each area provides unique challenges and costs to developers
• Austin is only large Texas city with no Loop Road around the city
Click to