Houston

Houston CRE Market Reports | Q3 2017

by CoyDavidson on November 3, 2017

Harvey Slows Houston Recovery in Commercial Real Estate Sector

Hurricane Harvey had a negative impact on Houston’s economic activity at the end of August and through most of September 2017. Downward revisions to payroll employment that came with the September data resulted in Houston growing at an annual rate of 1.9 percent from December 2016 to August 2017, down from the 2.1 percent reported last month. Houston created 53,500 jobs in the 12 months ending August ’17. Moody’s Analytics estimates Harvey’s losses for the U.S. at $97 billion, a revision from the previously reported $108 billion. The new estimate includes $87 billion in property losses and $10 billion in lost economic output. Most of the losses will be recouped in October as employees displaced by Harvey return to work and hiring for repair and reconstruction begins. By November, the region’s employment should surpass pre-Harvey employment levels.

Despite the economic challenges as a result of Hurricane Harvey, the mood of Houstonians is upbeat particularly since the Houston Astros just won their first world series title in franchise history.

Here are the Colliers International | Houston Third Quarter – 2017 Market Reports for the office, industrial, and retail sector.

OFFICE

Houston’s office market vacancy rate continues to struggle amid $50 crude prices
Houston’s office market continues to struggle as U.S. crude prices waiver around $50 per barrel. According to the U.S. Energy Information Administration (EIA), they are expected to stay in this range through 2018. With no indication that prices will rise substantially over the next few years, vacant office space placed on the market by firms in the energy industry will take longer to absorb. Recent news articles indicate that some of the large energy giants reported profits in the second quarter. However, profits were largely driven by lean budgets and staff reductions.Fortunately, most of the proposed projects that were in the construction pipeline when the oil slump hit were put on hold. Companies such as Bank of America, American Bureau of Shipping and HP, have signed leases in proposed buildings that have either recently begun construction or will begin in the very near future. Once these projects deliver, those companies will vacate their existing space…read the full article

INDUSTRIAL

Houston’s industrial market sees growth in distribution space and logistic hubs
During the third quarter of 2017, 3.0M SF of Houston’s industrial inventory was absorbed, pushing the 2017 year-to-date total to 6.2M SF. Although Houston’s economy slowed significantly in 2015 and remained weak in 2016, the demand for consumer products continues to spur growth in the industrial sector. Companies like Amazon, DHL and FedEx are just some of the tenants in the market leasing or building distribution and logistics hubs. Companies such as Ikea, Daikin, Lowes and Home Depot that manufacture and/or distribute buildings supplies for new developments, as well as now for rebuilding Harvey impacted properties, have expanded their footprint in the market as well. The average vacancy rate has remained low for several years now, hovering between 5.5% and 5.3%. Over the quarter, the average vacancy rate decreased marginally from 5.5% to 5.4%. A little over 2.5M SF of new product delivered during the third quarter bringing the 2017 new inventory total to over 7.6M SF. Currently, 5.3M SF of industrial space is under construction of which 30.7% is pre-leased… read the full article

RETAIL

Houston’s retail market sees a slight uptick in vacancy in the third quarter
Houston’s retail market activity slowed during the third quarter but still remains healthy despite a decrease in absorption and a slight uptick in vacancy. In August 2017, Houston faced one of the worst natural disasters in history. Hurricane Harvey, a Category 4 hurricane, slammed the Texas coast and dumped over 50 inches of rain in parts of Houston. The event caused widespread flooding, destroying homes, businesses and infrastructure. The retail sector saw supply chain interruptions which halted distribution logistics for a week or more. Ships carrying consumer goods were delayed due to ports shutting down and local distribution facilities could not get products delivered to consumers. A report by First Data shows that retail spending increased the week before the hurricane, but plummeted 58.7% week-over-week and 43.7% year-over-year in Houston and its surrounding areas at the peak of the hurricane. According to the Department of Commerce, September saw a slight uptick in consumer spending… read the full article

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Houston Retail Market Report | Q3 2017

November 3, 2017 Houston

Houston’s retail market sees a slight uptick in vacancy in the third quarter Houston’s retail market activity slowed during the third quarter but still remains healthy despite a decrease in absorption and a slight uptick in vacancy. In August 2017, Houston faced one of the worst natural disasters in history. Hurricane Harvey, a Category 4 […]

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Earned History

November 2, 2017 Houston

Hell and High Water Came, and Now We Get our Taste of History I hope my readers will indulge me to post on a subject from “out of left field” that doesn’t have much to do with commercial real estate. You may or may not be a baseball fan but by now you know that […]

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Texas Office Market Update | Q3 2017

November 1, 2017 Austin

The State of the Texas Office Market Third Quarter 2017 Office Market Reports for Austin, Dallas-Fort Worth and Houston. Austin’s office market sees continued construction and rising rental rates Austin Office Market Report | Q3 2017 Austin’s office market sees continued construction and rising rental rates. As predicted, the office market has remained extremely strong […]

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Top Posts for October 2017

November 1, 2017 Healthcare Real Estate

Most Popular Blog Posts from The Tenant Advisor (October 2017) In case you missed them, below are links to the most popular posts from The Tenant Advisor for last month: Houston Office Market Report | Q3 2017 Houston’s office market continues to struggle as U.S. crude prices waiver around $50 per barrel. According to the […]

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Houston Industrial Market Report | Q3 2017

October 25, 2017 Houston

Houston’s industrial market sees growth in distribution space and logistic hubs During the third quarter of 2017, 3.0M SF of Houston’s industrial inventory was absorbed, pushing the 2017 year-to-date total to 6.2M SF. Although Houston’s economy slowed significantly in 2015 and remained weak in 2016, the demand for consumer products continues to spur growth in […]

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Houston Office Market Report | Q3 2017

October 13, 2017 Houston

Houston’s office market vacancy rate continues to struggle amid $50 crude prices Houston’s office market continues to struggle as U.S. crude prices waiver around $50 per barrel. According to the U.S. Energy Information Administration (EIA), they are expected to stay in this range through 2018. With no indication that prices will rise substantially over the […]

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Houston Medical Office Building Sales

September 30, 2017 Healthcare Real Estate

Healthcare Trust of America Expands Houston MOB Portfolio The healthcare sector is increasingly on the radar of institutional real estate investors as the amount of capital pouring into the medical office building sector is robust driven by the recession-resistant fundamentals of this asset class and consistent rates of return. Nationally, publicly traded Healthcare REIT’s have […]

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Top Blog Posts for August 2017

September 6, 2017 Healthcare

Most Popular Blog Posts from The Tenant Advisor In case you missed them, below are links to the most popular posts from The Tenant Advisor in August 2017: Medical Office Has Never Been This Hot The healthcare sector is increasingly on the radar of institutional real estate investors as the amount of capital pouring into […]

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Houston Methodist Hospital is the Top Owner of Healthcare Real Estate In Houston

September 6, 2017 Healthcare

Revista Releases Update to List of Top 50 Healthcare Real Estate Owners Healthcare real estate research firm Revista has released an update to it’s List of Top 50 Healthcare Real Estate Owners in the United States. Houston Methodist Hospital is ranked the top owner of healthcare real estate in Houston with $4.2 billion in real […]

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Hurricane Harvey’s Impact on Houston Commercial Real Estate

August 31, 2017 Houston

CoStar Group has published an interesting white paper about the impact of Hurricane Harvey on the Houston commercial real estate market. Here is the link to the white paper: Hurricane Harvey Impact on Houston Commercial Real Estate Market CoStar Analysis Houston Properties in 100 Year Flood Plain by Coy Davidson on Scribd You might also […]

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