Pre-Christmas 2015 Houston Industrial Real Estate ReportPosted
It’s never dull in Houston! At the time of this writing, the price of a barrel of oil had dropped under $38 which is not good news for much of the Houston industry. Interesting, however, that there is still demand for industrial space including lease and sale, multi-tenant and freestanding industrial buildings. When I go out and try to find a specific type of building for one of my clients, it seems there are only a few good choices. And, of those in which we are interested, there is a waiting line to buy or lease the property.
Also, if you have tried to get dinner reservations in the better restaurants, they are still difficult to get. So, there are a lot of optimistic folks out there spending their money on wine and food! Probably, I suspect, however, that they are spending less on the really expensive stuff. I also see that there are fewer “Holidays Parties” being thrown this year compared to past years.
However, there is some interesting news emerging from my industrial building real estate database which I have maintained for over 40 years (now including 3,875 freestanding buildings over 10,000 sf in size, located in the Houston metro area). I track new buildings coming on the market as well as those which have been sold or leased. Currently my database reflects 260 available freestanding industrial buildings over 10,000 sf, and of all descriptions. I am now on most commercial industrial real estate emailing lists, so fortunately I have the opportunity to update my database daily.
I am frequently seeing new announcements of price reductions and sublease of properties being offered. In my database, there are 33 buildings which have been reduced in asking lease rate or sales price, or are being offered on a sublease basis. That is about 13% of the available buildings where the owner or the broker has decided to be more aggressive in offering their properties on the market or where the occupant of the building has decided to move out for whatever reason. I expect this trend to continue. The breakdown is 16 buildings being offered for sublease and 17 buildings having price reductions. Other interesting facts are: about half of these price reductions and sublease offerings are crane served buildings … and only one of these 33 buildings is rail served. Rail served buildings seem to be in high demand right now.
Many of my Clients related to the energy industry put forward the opinion that it will likely be mid 2017 at the earliest before Houston’s industrial real estate market changes noticeably for the better, but who really knows! The “pendulum swing” between the surplus of supply & demand is generally faster than we often anticipate.
For more information on my Houston area commercial industrial real estate services, visit mhprop.com or call (713) 960-6060. In the meantime, please stay tuned as more information “from the street” comes to you ……….. !