Category: Southeast Texas

Houston Office | Monthly Market Snapshot | December 2021

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Houston Office market vacancy at 25.4%.

HOUSTON OFFICE VACANCY STILL PUSHING UPWARDS
The vacancy rate increased 180 basis points to 25.4% as of November 30, compared to this time last year at 23.6%. Almost 2.6 million sq. ft. has been delivered to the market in 2021, with half of that space available for lease. At a time when leasing activity hasn’t returned to pre-pandemic levels, overall office net absorption registered at negative 2.4 million sq. ft.

CONSTRUCTION JUST UNDER 2.5 MILLION SQ. FT.
As of year-to-date November 30, 2021, there is 2.4 million sq. ft. under construction, representing non-owner-occupied buildings 20,000 sq. ft. and over. The submarket with the most square footage under construction is the Texas Medical Center, underscoring continued momentum toward life sciences office product. Texas A&M and partner Medistar are underway on construction of the 510,000-sq.-ft. Horizon Tower—a state-of-the-art life sciences building—at 6929 Main Street, which is expected to deliver in Q1 2023.

FUTURE JOB GROWTH EXPECTED FROM SECTORS OTHER THAN ENERGY
Houston shed 361,400 jobs at the start of the pandemic, but the metropolitan area has since recovered about 74.4% of those positions, according to the Greater Houston Partnership’s annual employment forecast. About 8,700 jobs are expected to be added in the professional, scientific, and technical services sector, which includes office-using industries such as accounting, engineering, architecture, and law to name a few. However, it’s not clear how many of the office-using jobs will translate to the need for more office space. Click to read more at www.naipartners.com.

Elandis Acquires 569-unit Multifamily Communities in Houston

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HOUSTON, Nov 2021 –Elandis, a real estate ownership and property management company, today announced that it has acquired Hudson & Crosby at Westchase, two multifamily communities with a combined 569 residential units in Houston.

Located at 2909 Hayes Rd., Houston, Texas, the two-story properties ideally match Elandis’s stated goal of acquiring workforce housing communities throughout the Sun Belt states. The acquisition price was not disclosed.
The centrally located communities, which were built in 1980, have three shopping centers within a half mile for ease of shopping and for meeting residents’ everyday needs. It is also within easy access of major thoroughfares.

Hudson & Crosby at Westchase feature one-, two- and three-bedroom residences, along with shared amenities which include a swimming pool and clubhouse, covered parking, business center, and a fitness center. The communities will benefit from a comprehensive in-unit upgrade program, along with upgrades to its common areas and amenities. Click to read more at www.elandis.com.

Major Texas Retail Markets are Back to Pre-pandemic Vacancy Levels

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The pandemic hasn’t exactly been kind to retailers as residents across the nation were asked to stay home for months on end last spring and summer. However, despite the ongoing nature of the COVID pandemic, there are not only signs of life for Texas retail, but an indicator that the health of the retail market is strong. Recent reports from NAI Partners specifically look at the markets in Austin, San Antonio and Houston, and offer compelling evidence of a return to normalcy.

Perhaps the biggest story in Texas retail at the moment is the success of the San Antonio market. According to the NAI Partners report, San Antonio retail rents have actually reached a new all-time high. Inflation concerns aside, the average triple net lease asking rent has risen by nearly a dollar from $16.08 in October 2020 to $17.06 this October. Vacancy and availability is also down in San Antonio. The current vacancy is just 5.2% while the availability rate is just under 7%.

The report also notes that this October was the first time in three years that the amount of net absorption was higher than the volume of deliveries between January and October, suggesting that demand is beginning to outpace supply.

There were a number of big deals that helped push the leasing activity well over 2 million square feet. Floor and Decor took 91,000 square feet at 13905 North I-35 while gyms LA Fitness and Crunch Fitness leased 50,000 square feet and 30,000 square feet respectively.

The story is similar in Austin as the city continues to witness tremendous population growth and investment. The vacancy rate currently hovers just under 4%, which is the lowest rate in three years, according to the report. This means that this is not only back to a pre-pandemic vacancy level, but this level of low vacancy predates the pandemic by at least a year. A year prior, the vacancy rate was slightly higher at 4.6%.

Also similar to San Antonio, overall availability is down and net lease prices are up. The overall availability this October was 5.7% — down from 6.3% a year prior — while triple net lease rents were up a few cents to $21.38.

There is less than 700,000 square feet of new retail space under construction in Austin, which could see vacancies and rents continue to head in the same direction as demand increases. Leasing activity was more or less unchanged between October 2020 and October 2021 at 1.78 million square feet.

Notable leases include H-E-B’s 102,000-square-foot lease in Liberty Hill and a 62,000-square-foot lease in Taylor, the report highlights. Ashley HomeStore claimed a 40,000-square-foot space in Cedar Park, also making it one of the biggest lease deals of the year for Austin.

And finally, we take a look at the Houston retail market, which is also quickly gaining ground. Unlike the office market, which has struggled in this last year, the retail market in Houston is back to pre-pandemic vacancy levels, the report reveals.

Overall retail vacancy was down to 5.8% this past October, which is a slight improvement from 6.1% during the same period in 2020. Availability is mostly unchanged at 3.925 million square feet versus the 4.046 million square feet from October 2020.

However, the big story here is leasing activity and net absorption. Year-to-date, Houston has witnessed 6.39 million square feet of lease deals and had 4.87 million square feet of space absorbed. The net absorption is almost double the number from the same period of January-October 2020. In fact, it’s the first time since 2016 that the city has seen a similar absorption rate, the report indicates.

The leases highlighted in the report include a 136,000-square-foot deal by Target in Montgomery County, the 77,697-square-foot lease by AXXA Auto on Gulf Freeway and Hobby Lobby’s 56,000-square-foot lease renewal in Willowbrook.

VLK Architects and Bridgeland High School CANstruction® Houston Team Takes Home Three Awards at the 25th Annual Competition and Exhibition

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(Houston, Texas) – On November 6th, the VLK Architects employees participated as the Professional Mentor to Bridgeland High School students of Cypress-Fairbanks Independent School District for the 25th Annual CANstruction® Houston Competition and Exhibition. The VLK Architects and Bridgeland High School CANstruction® Houston team received three awards, the People’s Choice, Most Cans, and Best Meal.

CANstruction, Inc.® was founded in 1992 and now has competitions in 200 participating cities. Professionals from the architecture, engineering, and construction industries team up to showcase the talents of design and construction industry professionals and students they mentor in this annual event. All proceeds are donated to benefit the Houston Area Food Bank (HAFB).

“Stop Hunger” was the 2021 competition’s overall theme, and “Good Night Hunger” was the theme of the VLK Architects and Bridgeland HS team’s structure. They used over 6,900 taco-inspired canned food items to feature the story behind Vincent Van Gogh’s painting, Starry Night. The team members found Van Gogh inspiring due to his ability to look past his hospital room’s barred windows to see the true beauty of the night sky.

“Couldn’t be prouder of Bridgeland High School for all their hard work,” said Krista Thomas, captain of the VLK Architects/Bridgeland HS team. “The students helped by solving some design challenges and also helped collaborate ideas to make our CANsculpture come to life. We are ecstatic to have been able to help the Houston Food Bank. We hope that through this event, we can impact the lives of those in our surrounding community.”

The competition had sixteen team structures on display at Understory in downtown Houston from November 7-13th. The awards were announced on November 15th. Every canned food item used in this competition was donated to the Houston Area Food Bank.

VLK Architects and Bridgeland High School would like to extend a special thank you to the 2021 team sponsors, Griesenbeck, Kroger, Acme Brick, and Bridgeland™.

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About VLK Architects: With offices throughout Texas, VLK Architects provides architecture, planning, and interior design services to automotive, K-12, higher education, corporate, and institutional clients throughout Texas. For more information, please visit our website: www.vlkarchitects.com or contact 817-344-0344 or tbartley@vlkarchitects.com.  

About CANstruction®: CANstruction® is a unique international nonprofit organization that hosts competitions, exhibitions, and events showcasing colossal structures made entirely out of full cans of food. After the structures are built, the creations are displayed to the public as a giant art exhibition. At the end of the viewing, all food is donated to local food banks. For more information, please visit their website: //www.canstruction.org. 

TGS Cedar Port Breaks Ground on New Industrial Facilities

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TGS Cedar Port Partners, LP (TGS) today announced two new spec buildings to be delivered in 2022 at TGS Cedar Port Industrial Park— the largest master-planned, rail-and-barge-served industrial park in the U.S. TGS has broken ground, ordered steel and roof materials for both TGS Cedar Port DC 2, a 496,421 square foot warehouse, and TGS Cedar Port DC 3, a 150,000 square foot warehouse.

TGS Cedar Port DC 2, located at 4407 E. Grand Parkway S., will be delivered to the market 2nd quarter of 2022. DC 2 is expandable from 496,421 to 917,172 square feet that can be cross-dock or rail-served and has the ability to expand both truck and employee parking to well over 1,000+ spots. The building will feature highly desirable amenities such as 40-foot clear height, LED warehouse lighting, ESFR sprinkler system, oversized 185’ truck court, and a circulation and queuing ring road. Each DC’s 2 and 3 will have dual entries on the Hwy 99 aspect of the buildings with TGS Cedar Port’s signature 50’ tall clerestory glass office entry corners.

TGS Cedar Port DC 3, located on Nita Way, will be delivered to the market 3rd quarter of 2022. DC 3 is expandable from 150,000 to 600,000 square feet that can be rail-served, front load, or cross-dock and can expand both truck and employee parking to well over 500+ spots. The building will feature highly desirable amenities such as 36-foot clear height, LED warehouse lighting, ESFR sprinkler system, oversized 185’ truck court, and a circulation and queuing ring road.

The buildings are located in the booming, multi-modal TGS Cedar Port Industrial Park, ideally situated for warehousing, distribution, and fulfillment operations. The building locations allows prime access to State Highway 99 (Grand Parkway), Interstate 10, State Highways 225 and 146, FM 1045, and the Port of Houston’s Bayport and Barbour’s Cut container terminals. Industry leaders such as Wal-Mart, Floor & Décor, IKEA, Home Depot, Niagara Bottling, Webstaurant, Ravago and Vinmar all have major distribution and fulfillment centers in TGS Cedar Port Industrial Park, taking advantage of the location and access to abundant, cost-effective labor.

Powers Brown Architecture is the project architect, and E.E. Reed Construction L.P. is the general contractor. John Simons, Gray Gilbert, Chris Haro with NAI Partners are the leasing agents for the projects.

New Katy Retail Development The Shops at Ventana Lakes Expected to Break Ground in 2022

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Construction on The Shops at Ventana Lakes, a new retail development in Katy, is expected to break ground at the end of the first quarter of 2022. The development will be located near the northeast corner of Stockdick School Road and Peek Road, near Patricia E. Paetow High School and Stockdick Junior High School.

After breaking ground in 2022, the stores are expected to open early in the third quarter of 2023, according to Jason Gaines, senior vice president at NAI Partners, a commercial real estate agency. Phase 1 consists of 15,000 square feet available for lease, while Phase 2 will have 14,625 square feet of rentable space.

Currently, 6,000 square feet have been leased to medical tenants in the development, according to Gaines. NAI Partners, the company developing the center, hopes to lease spaces to various eateries and make the center convenient for the people living in Katy, Gaines said.

The Shops at Ventana Lakes’ design relies heavily on drive-thru lanes being present in most of the spaces to appeal to commuters, according to Gaines. Click to read more at www.communityimpact.com.