Houston Real Estate Market a Mixed BagPosted
I received a call yesterday from one of my long-time Clients, asking “…what is going on in the real estate market in Houston right now?”. I realized that I am remiss in posting new information regarding the Houston commercial real estate market, so here are my thoughts:
- The Houston real estate market is somewhat of a “mixed bag” right now, depending on what type of real estate and where in Houston we are talking about.
- Office in Houston is suffering badly.
- Retail seems to be holding up pretty well.
- Residential is pretty interesting right now with all the NEW up-scale high rise projects that have been announced. I hear from my sources that expensive homes are in large supply and most residential real estate activity centers around the middle-income residential homes.
- I will focus now on my specialty: the Houston industrial real estate market.
- The East side of Houston is where the action is right now with the perceived new activity with the Panama Canal expansion, which will surely have an impact on our Port area industrial properties. The Northwest and Southwest industrial real estate areas of Houston are traditionally still the most in demand, but there are a lot of buildings in inventory and available in both of those areas.
- The depressed Energy industry still causes new industrial building and leasing activity in Houston to be slow. Recent information would indicate that this should change in the somewhat near future but the question is “when?”
- The multi-tenant leasing of industrial building spaces seems to be going OK, but not at what one would call a “brisk” rate.
- The market for freestanding buildings seems to be the most active right now. However, the more interesting situation here is the number of price reductions and buildings being offered for sublease. As an example: In my company’s commercial real estate database of over 3,900 Houston area buildings, there are 14 properties for sublease, and there are 35 price reductions announced. As a reference point, I update this database daily and track available freestanding buildings in Houston over 10,000 sf. There are approximately 242 at present. 20% of the available inventory with price reductions (or being marketed as subleases) is high for our market.
- Land sites for sale (or lease) are in large supply all over Houston.
In summary, now is a great time to be investing in the Houston industrial real estate market by buying or leasing industrial properties, whether it be completed buildings, or buying Houston area land to build on.
Please stay in touch and let me know if I can be helpful to you in any way!