Spring 2016 State of Houston’s Industrial Real Estate MarketPosted
Well, here it is spring of 2016 and I’m not sure I know what to make of the Houston commercial industrial real estate market. I get asked frequently what is going on now and how I might speculate on what might be coming in the near future. Here’s what I see:
- The Houston commercial real estate market is made up of several parts: Industrial real estate is what I do, however there are also other segments such as: office, retail, investments and land. Houston’s industrial real estate market seems to be holding up pretty well with generally good absorption of available buildings and lease space. However, I do see an upward trend in sublease space available and price reductions for buildings which have been on the market for a while. I see LOTS of land sites being offered for sale now and new construction on land sites seems to be slowing. Office, I hear, is a bloodbath with lots of downtown and suburban space coming on the market. This is a great time to be in the market for office lease space.
- Speculation (CNBC, Reuters, USA Today, etc,) is that price of oil is going to $85 per barrel THIS YEAR! If that happens, everything is back on the table again.
- Retail is interesting to say the least. My contemporaries tell me that this segment of the market is generally somewhat flat; but the announcement by SAKS FIFTH AVE. of their new luxury 200,000 sf store in the Galleria area is mind boggling. Apparently they are “betting on the come” with folks enjoying a good income again to spend money in their store.
- Layoffs are disturbing news, to say the least. Anadarko, National Oilwell Varco, Halliburton among others have had to let go lots of folks and income losses reports of those in the energy business are staggering. We read about this every day and it’s terrible for their employees.
- My sources tell me residential market is soft right now and especially in the high dollar homes in upscale areas in Houston. However, high rise luxury residential development seems to be flourishing. Wow!
The most interesting part of this, for me, is I am as busy as I have ever been with Clients asking me to assist with property acquisition projects … and I have now sold (or committed) almost every property I have had listed. There is a clear difference in the every-day street brokerage happening now and the global issues affecting our City and our Houston area industries. I’m just not sure what to think about it!
Healthy Commercial Real Estate Market Indicators:
- Restaurants are still full with patrons and reservations in the better ones are still hard to come by. Maybe really expensive wine is not in as high demand as before.
- The Medical Center continues to grow with new construction and renovations of facilities.
- The Panama Canal expansion promises to put a whole different look on the east side of Houston and the ship channel area.
It is never dull in the Houston commercial real estate market! Please watch for updates through the year as things change, which they certainly will! Let me know if there’s anything I can do for you, and stay tuned for more…