Category: News & Market Reports

Hines, Ivanhoé Cambridge Top Out Texas Tower

Posted on by Sarah

by Beata Lorincz

Joint venture partners Hines and Ivanhoé Cambridge have topped out Texas Tower, a 47-story, 1.1 million-square-foot Class AA office tower in downtown Houston. Currently the city’s largest office project under construction, the structure reached the milestone several weeks ahead of schedule. The tower is expected to be completed in the fourth quarter of 2021. Construction of the Pelli Clarke Pelli-designed skyscraper commenced in 2018. The following year, the project earned LEED Platinum Pre-certification under the v4 for Core & Shell Rating System. The energy-efficient development also aligns with WiredScore and WELL Building Standards. Once completed, the building will house Hines’ headquarters, slated to take up some 180,000 square feet. The tower is currently 40 percent leased to a variety of tenants, including global law firms Vinson & Elkins LLP and DLA Piper. The latter committed to a 31,000-square-foot, 14-year lease in early 2020. Situated at 845 Texas Ave., the site is well-located between the Central Business District, the Theater District, and the Historic District. Last January, Hines renamed 600 Travis St., the tallest building in Texas spanning 75 stories and 1.7 million square feet, and situated just adjacent to Texas Tower. The supertall structure is now known as JPMorgan Chase Tower after its anchor tenant signed a 250,000-square-foot lease at the location in mid-2020. Click to read more at www.cpexecutive.com.

Analysis: Warren Buffett’s Power Play Puts a Price on Electric Reliability in Texas

Posted on by Sarah

Buffett’s Berkshire Hathaway Energy wants to build 10 electric plants in Texas, for use when demand peaks or other plants falter. And it’s the first time a price tag has been attached to a remedy since last month’s deadly storm. What would it cost to make the Texas electrical grid robust enough to weather a terrible winter storm? It would cost about $8.3 billion — if the state followed a proposal from the Oracle from Omaha, Warren Buffett. This year’s winter storm killed 111 people in Texas, the Department of State Health Services said Thursday. What’s being pitched by lobbyists for Buffett’s Berkshire Hathaway Energy might not be the only idea spawned by last month’s devastating statewide electrical outages, or even the best one. But it’s the first to price out the answer to a pressing question lawmakers are trying to solve in Austin: What would Texas have to do, and at what cost, to keep the lights and heat going if there’s another winter storm like the last one? The Nebraska cavalry has been working the Texas Legislature for a week and a half, according to The Texas Tribune’s Cassandra Pollock and Erin Douglas. The company’s proposal is for a Texas Emergency Power Reserve that would build 10 new natural gas-fueled power plants in the state. Those would be idle unless they were needed for times of peak demand — or when other electrical generation failed, as some did last month. It’s a slick presentation, complete with a poll and a slide deck that found Texans would pay $3 more every month to “significantly lower their risk of losing power during a winter storm.” As proposed, the new plants would be up and running by winter 2023. Click to read more at www.texastribune.org.

Houston Area Retail Deliveries Down as Market Attempts Rebound

Posted on by Sarah

Between pandemic-related lockdowns and a freak cold snap that saw snowstorms and power outages across large sections of the state, Texas has had a rough 12 months between spring 2020 and 2021. But a big part of the country’s economic recovery will depend on how retail and hospitality fare as vaccinations increase and restrictions are relaxed. According to numbers from NAI Partners, Houston’s retail sector has certainly faced its issues in the last 12 months, but it’s certainly a long ways off from its office market, which ended 2020 with the highest vacancy percentage in the country. This February, Houston had a total retail occupancy rate of 93.6%, down slightly from 94.2% during the same period a year prior. Despite the slow churn of retail leasing, the Houston metro area did see an increase in rent prices, at $18.68 triple net average. A year prior, the price was $17.94. Rents have steadily risen over the last few years, starting as low as just over $16 triple net in February 2017.

However, absorption is down and deliveries are significantly lower with only 552,000 square feet of space going online in February 2021 versus nearly a million square feet in February the previous year. Just 590,000 square feet of space was absorbed over 43 buildings last month. Areas seeing the most construction activity include north Houston, the city’s inner loop, and northwest Houston. The regions with the least recent construction activity are the northeast and south. Big leases highlighted by NAI Partners include a 26,000-square-foot renewal at Vanderbilt Square by Barnes & Noble, a 22,500-square-foot deal for Burkes Outlet in Angleton, and a 15,000-square-foot lease by Aaron’s in Fairfield’s Jones Plaza.

One Year With COVID-19: The Pandemic’s Temporary and Permanent Impacts on CRE

Posted on by Sarah

March 2021 marks one year since the World Health Organization declared the COVID-19 outbreak a global pandemic, triggering a domino effect that has had a profound impact on Americans’ daily lives, as well as the commercial real estate industry. REJournals spoke to experts in the retail, office, multifamily and industrial fields to reflect on how each sector responded to the challenges posed by the pandemic and their expectations going forward.

RETAIL | “… everyone is so hungry …”

“Retail, more than other sectors of commercial real estate, offers its share of volatility and requires those of us who work in the sector to react and evolve quickly,” said Terry Ohnmeis, director at Cushman & Wakefield. He describes the industry as being at a peak in terms of occupancy, rent growth
and overall vibrancy in the first quarter of 2020. Retail being “more nuanced” than other property types, Ohnmeis acknowledges some locationally challenged malls, but generally, if Class A space became available in “A” and “A+” locations, he said it instantly had a dozen offers on it. “This run actually extended longer than many thought it would and left us wondering when it would end and why,” Ohnmeis said. “Still, no one thought it would be a pandemic until the reality of COVID-19 hit.” Click to read more at www.rednews.com.

Another West Coast Tech Company Relocates Headquarters to Austin in Big Move

Posted on by Sarah

Following in the footsteps of Oracle and others, another tech company is heading from the West Coast to Austin. CrowdStreet, which operates an online marketplace for investing in commercial real estate, announced March 19 that it’s shifting its headquarters from Portland, Oregon, to Austin. CrowdStreet is considering office space in downtown Austin and around North Austin’s Domain complex. CrowdStreet is targeting a June 1 opening date for the new office. CrowdStreet executives decided to relocate the headquarters from Portland to Austin largely because Texas ranks second among states sending the most investors to the platform and because a majority of the properties sold through CrowdStreet are in Texas. Co-founder and CEO Tore Steen says the company settled on Austin because of its status as a tech hub. Another factor in Austin’s favor: A CrowdStreet report put Austin at No. 2 among the best places for real estate investment in 2021. Raleigh-Durham, North Carolina, ranked first. “This move best positions CrowdStreet for growth, puts us front and center with marketplace investors and real estate sponsors, and provides our personnel with more flexibility about where and how they work,” Steen says in a release. Click to read more at www.austin.culturemap.com.

Will Multifamily Investments Continue To Show Strong Performance?

Posted on by Sarah

Last year will definitely be one for the history and economics books. It affected everybody differently—for me, more walks with my dog, Tessa. I was even able to shed a few pounds—not enough, though! Working from home and not traveling meant more time with our families. Zoom, Webex, or Teams calls are the new norm and will forever change our private and professional lives. I know we all hope that this virus will soon be in our rearview mirror, so we move on with our lives and enjoy getting together with family, friends, and business colleagues to rebuild what this virus has destroyed. The commercial real estate industry started strong at the beginning of 2020. During this long-lasting and ongoing economic cycle, all the signs of another booming year were present until it was thrown into a screeching halt in March. Initially, the lockdown threw the commercial real estate market in a state of shock and confusion for a moment but low and behold. It offered some extremely positive surprises, especially as it relates to multifamily apartments. As a result, it manifested itself in the following capital market trends: An enormous amount of pent-up capital has made the pursuit for “for sale” product extremely competitive. Click to read more at www.dmagazine.com.