Category: Southeast Texas Market Reports

Houston apartments change hands as Wisconsin buys portfolio of workforce housing

Posted on by Sarah

A Wisconsin company purchased several Houston workforce housing properties as part of a portfolio transaction, CBRE announced this morning. The 10 properties acquired by commercial real estate investor MLG Capital were built in the 1970s and ’80s and charge relatively affordable rents due to their age. The sale included two apartment complexes in west Houston, at 2475 Gray Falls Drive and 1015 Country Place Drive, and two in northwest Houston, at 12811 Greenwood Forest Drive and 905 Cypress Station Drive. Workforce housing, or housing with relatively low rents, has been a hot commodity as demand outpaces supply. Most multifamily construction has focused on luxury apartments, noticed the commercial real estate firm Marcus & Millichap. “With workforce housing at its lowest level in 20 years, prospective renters will face difficulty finding an available unit to occupy,” the company wrote in its multifamily investment forecast released this week. As a result, Marcus & Millichap is expecting workforce apartment rents to increase 4.3 percent over 2020, compared with 3.3 percent for luxury apartments. Click to read more at www.chron.com.

Allied Orion Sells 281-Unit Beacon at Buffalo Pointe Apartments in Houston

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The Beacon at Buffalo Pointe in Houston totals 281 units. The property was built in 2017.

HOUSTON — Locally based multifamily development and management firm Allied Orion Group has sold The Beacon at Buffalo Pointe, a 281-unit apartment community located near the Texas Medical Center in Houston.

Built on 32.4 acres in 2017, the property offers one-, two- and three-bedroom units averaging 862 square feet. Amenities include a pool with a sundeck and cabanas, outdoor grilling areas, a fitness center, a demonstration kitchen and coffee bar, a dog park and concierge service.

Chris Curry, Todd Marix and Bailey Crowell of JLL represented Allied Orion in the transaction and procured the buyer, Morgan Group Inc. The sales price was not disclosed.

Originally posted by Texas Real Estate Business

Ray’s Buzz: O’Connor & Associates Land Forecast Luncheon-Speaker: Davis Adams, Managing Director, JLL

Posted on by Sarah

Bullets-General:
• As infill development continues in multi-family and retail, land prices continue to rise
• Increasing density equals increasing traffic on our streets-we are all noticing that
• Houston area population has grown from 6 to 7 million in last ten years, and is projected to grow by 3 million more in the next 10-15 years…the equivalent of moving the combined populations of Austin and San Antonio into Greater Houston-how will all the cars fit?
• In spite of our hearty growth rate, the DFW Metroplex is growing just a little bit faster
• Oil industry technology continues to lower the cost of producing oil & gas, which has mixed results for the Houston economy
• Infill land prices are ranging from $80-120 in The Heights and from $20-35 in nearby Garden Oaks

Click to read more at www.rednews.com.

TEXAS JOB FORECAST

Posted on by Sarah

DALLAS – Texas employment will grow 2.1 percent this year, according to the Texas Employment Forecast by the Federal Reserve Bank of Dallas. Based on the forecast, the state will add 263,700 jobs this year. Employment in December 2019 will reach 12.9 million. This prediction comes after incorporating September 2019’s annualized employment growth of 0.7 percent and a decrease in the leading index. “After strong growth in June and July, Texas jobs decelerated in August and September,” said Keith R. Phillips, Dallas Fed assistant vice president, and senior economist. “The weakness in oil and gas extraction is spilling over to other sectors such as transportation and warehousing, which experienced job losses in both August and September. “Manufacturing employment continues to grow at a good pace, however, in part driven by continued strength in petrochemical and refining activity. Construction activity also remains robust.” Click to read more at www.recenter.tamu.edu.

Houston Office Q3 2019 Quarterly Market Report

Posted on by Sarah

Vacancy rate at 21.6%: The vacancy rate in the Houston office market was close to unchanged quarter-over-quarter, up 10 basis points from Q2 2019. The amount of vacant office space on the market is approximately 51.1 million sq. ft.—comprised of 47.6 million sq. ft. of direct space and 3.5 million sq. ft. of sublease space. The Central Business District vacancy rate is at 24.9%, up slightly from this time last quarter at 24.7%, while the Energy Corridor vacancy rate is at 32.7%, down 70 basis points from 33.4% in Q2 2019. Net absorption moved into positive territory at 58,000 sq. ft. compared to this point last quarter when the total was negative 700,000 sq. ft. The increase was primarily due to significant move-outs in Q2 2019 that included HP vacating 260,000 sq. ft. at 11403 Compaq Center W. Dr. and BP vacating nearly 195,000 sq. ft. at Three Eldridge Place in the Energy Corridor. Of the almost 2.5 million sq. ft. currently under construction—57% of which is being constructed downtown, about 35% of that space has been spoken for. The overall Houston average asking full-service rent has steadily grown over the past years to its current rate of $29.32 per sq. ft., while the Central Business District is averaging $41.41 per sq. ft. Click to read more at www.naipartners.com.

CCIM August Luncheon with Andy Icken, Chief Development Officer, City of Houston

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Takeaway: Instead of restrictive red tape controls (such as zoning) the City of Houston is unique among big cities in that it lets ‘The Market’ control development. When there is a deal that the City wants but it is not quite viable, after in-depth study, the City, with approval by the Mayor and Council, may offer incentives to ensure the deal happens. This often takes place in underdeveloped neighborhoods that are hard for developers to ‘sell’ to their equity investors or lenders. If the deal is beneficial to the City, the City has a number of economic tools to help make it happen.

Andy Icken, who has had a long and successful career developing for Friendswood/ExxonMobil and the Texas Medical Center, has been called the City’s “Development Concierge”, as he meets with various parties to begin the process of identifying projects good for Houston and Houstonians
• Incentives are only offered if otherwise a desired project would not quite work

Click to read more at www.rednews.com.