The family of the founder of Houston’s prestigious Tanglewood neighborhood plans to build a $300 million, 33-story condominium tower on the community’s southern edge.

The 1.3-acre site, at the northeast corner of Tanglewood Boulevard at San Felipe, currently houses the headquarters of Tanglewood Corp., a third-generation, family-run real estate venture founded by Tanglewood developer William G. Farrington. The ranch-style office building, which opened in 1949, the same year as the neighborhood, would be torn down to make way for the tower.

“We’ve been incubating this wonderful corner for approximately 70 years,” said Kendall Miller, Farrington’s grandson, who lives in the house his grandfather built nearby. “The plan has evolved over the years, but has always been the new commercial idea of the moment.” Click to read more at www.houstonchronicle.com.

While the Houston office market has had a rough 12 months, and will likely continue to lag in the coming quarters, the industrial market is booming. In fact, the industrial market in Houston is so strong, that the metro area has hit the highest quarterly leasing total on record, according to a recent report from NAI Partners.

By the end of the second quarter of this year, Houston’s overall industrial vacancy rate stood at 9%, more or less unchanged since the previous quarter, however, there were 12.5 million square feet of leasing activity recorded for Q2 of 2021, which is more than double the 6 million square feet of leasing activity during the same period last year. A wave of new deliveries from previous quarters has kept inventory levels stable and average gross rent rates relatively flat.

The news is significant for numerous reasons, but namely how the industrial market is helping bolster the broader commercial real estate sector as other asset classes continue to struggle since the start of the pandemic. But other economic indicators continue to show improvement, the report reveals, such as lower unemployment stats, the increase in drilling operations, and an uptick in new construction.

According to the report, the vast majority of industrial leasing over the last several years has been for warehouse and distribution space. The metro has had 12 straight years of positive net absorption, the report indicates, even as Houston continues to also witness record levels of industrial construction.

Major Q2 leases highlighted in the report include Ferguson’s 750,7750-square-foot lease at the Empire West Business Park, a 685,000-square-foot lease by Living Spaces Furniture Company at the Air 59 Logistics Center and a 645,000-square-foot lease at 4725 E. Grand Parkway by Webstaurant Store.

While 15 million square feet of new industrial space remains under construction, nearly 70% of it is already leased, the report indicates, further illustrating the high demand for industrial. Additionally, Port Houston’s container terminals have remained busy, with year-to-date activity increasing by 8% over the same period in 2020.

As Houston’s import-export activity increases and the economy continues to shift towards e-commerce and manufacturing on-shoring, and Texas’s population growth remains steady, the sky-high demand for new industrial products will likely continue for the foreseeable future.

The Houston metro area has a long way to go until its office market fully recovers. Houston led the nation in overall office vacancies at the new year at a staggering rate of 24%, but there is one bright spot in the market: medical leasing. It’s perhaps no surprise that there’s increased demand and growth in the healthcare and medical field across the nation during the pandemic, and the trend is likely to continue in the coming years. While traditional corporate offices sent their workers home throughout the worst months of the pandemic, medical businesses maintained a presence in the workplace as an essential service.

According to recent numbers from brokerage NAI Partners, a number of key metrics in the medical market in Houston reveal some optimistic signs. First, and perhaps most important, is the overall vacancy level of 16.8% from this past February was slightly lower than 17% from the same period a year prior. Additionally, gross average asking rent has increased slightly from $25.02 per square foot in February 2020 to $25.86 this last February.

However, there’s still a lot of space to fill and even more on the way. Overall medical office available increased from 18.5% to 21.1% year-over-year, and net absorption is way down, from nearly 157,000 square feet to -65,278 over the last year. There were no new deliveries to the market in February, but there remains nearly 864,000 square feet of office space currently under construction.

Leases of note mentioned in the report include a deal for a 35,000-square-foot space in the Bissonnet Medical Plaza in suburban Bellaire, a 20,000-square-foot lease at the Texas Medical Center near downtown Houston, and a 14,000-square-foot deal at the River Oaks Medical Center in Greenway Plaza.