Houston Industrial Market Fundamentals Stabilizing

Houston’s industrial market fundamentals continued stabilizing at midyear, with 1.1 million square feet of positive net absorption in the second quarter bringing the year-to-date total to 2.6 million square feet, a strong improvement from the negative net absorption of 22,087 square feet recorded through the second quarter last year. Occupancy also posted gains with the citywide average at 93.5 percent in the second quarter, up from 93.1 percent at this time last year. While quoted rental rates for industrial space fell below levels from this time last year, rental rates remained stable from the previous quarter.

On the leasing front, 14 leases over 100,000 square feet were signed year-to-date through the second quarter, with 5 leases over 200,000 square feet. A significant boost to the market’s stabilization has been the developers disciplined curtailment of new speculative construction activity, with only 238,518 square feet in the construction pipeline at midyear, compared to 2.6 million square feet under construction at this time last year.

Looking forward, Houston’s industrial sector is expected to continue strengthening as key economic drives move towards recovery.

Q2-2010 Houston Industrial Market Research Report

Houston Industrial Market Report: 2Q 2010 is a post from: The Tenant Advisor

The State of Distressed Commercial Real Estate

Scott Rechler, CEO of RXR Realty discusses distressed commercial real estate in an interview with CNBC. Rewind back to the 4^th quarter of 2009 and we kept hearing that blatantly over used catch phrase, “Commercial Real Estate, the next shoe to drop”.  I refuse to even utter the footwear/CRE description, frankly because I got so tired of hearing it from the media,  but I digress.

In the interview, Mr Rechler makes some solid points about the size of the CMBS market today and raises some key questions as to who will fill the void in the debt market for the massive amount of commercial real estate that will need to be re-financed. The volume of distressed real estate on the market that some predicted would materialize in 2010 has yet to occur.

“There is a tremendous amount of distress that is not really visible yet,”  said Rechler in the interview.  He goes on to suggest the big players and corporations sitting on a ton of capital, and who have the ability to infuse equity into these commercial real estate assets in order to meet the lenders book values are best positioned.

For the large corporate tenant who is sitting on a ton of cash, is this the opportunity to look at owning office assets as an occupancy strategy?  Is ownership more attractive because of the new lease accounting standards to be adopted?

What is your take? Has the CRE debt crisis been avoided or just delayed?

CRE Debt Crisis: Avoided or Delayed? is a post from: The Tenant Advisor

The Texas Medical Center

The Houston economy remains among the strongest in the United States. In March 2010, Forbes ranked Houston fourth among U.S. major metros where the recession is easing, due primarily to a solid diversified base of growth industries. When most people associate an economic engine with the Houston economy, the Energy industry is the first thing that comes to mind. Houston is without a doubt the Energy Capital of the world and also the home of NASA’s Johnson Space Center.

However, lesser known too many outside the city is the Texas Medical Center, the world’s largest concentration of expertise in medical treatment and care, medical research and medical technology. The TMC represents one of Houston’s major economic drivers and core industries with an estimated regional annual economic impact of $14 billion.

Texas Medical Center Facts and Figures

• 49 Member Institutions – including 25 agencies of government and 24 private not-for-profit health institutions
• 21 – Academic Institutions
• 13 – Hospitals
• 15 – Support Services Organizations
• 93,500 Employees
• 21,000 Physicians, Scientists, Researchers and other advanced degree professionals
• Size: 31 million gross square feet of patient care, education and research space, equivalent to the 12th largest business district in the United States. (46 million gross sq. ft. total when including the University of Houston and The University of Texas Medical Branch which are located outside the Texas Medical Center complex)
• Acres: 1,000+
• Buildings: 140+
• Future Growth: $7.1 billion in approved building and infrastructure investments between 2008 and 2012
• Annual Patient Visits: 6.0 million
• International Patient Visits:  18,000
• Daily Visitors:  160,000
• Regional Annual Economic Impact:  $14 billion
• Annual Research Expenditure:  $1.2 billion

• Learn more about Colliers International Healthcare Services

Houston’s Secret Weapon is a post from: The Tenant Advisor

Walt Rakowich, CEO of ProLogis discusses the prospect of a double dip recession with CNBC, as well as recent trends in occupancy rates and rental rates for the U.S. warehouse market. ProLogis is a leading global provider of distribution facilities, with more than 475 million square feet of industrial space in markets all across North America, Europe and Asia.

While we have yet to seen any growth in rental rates, the good news is the warehouse market has seen a recent uptick in occupancy rates for the first time since the 3rd quarter of 2007. This also bodes well for the national office market, as we typically have to see sustained improvement in the  industrial market prior any recovery in the office sector.

Moderate Growth Predicted by ProLogis CEO is a post from: The Tenant Advisor

Houston Office Assets More Attractive to Institutional Grade Investors

Houston has not always been a prime target market for many institutional real estate investors. In the past, the perception was that our economy was too dependent on the energy industry and too susceptible to economic volatility. However, today  the Houston office market is perceived as a strong performer and often on the radar of major institutional real estate investors. National Real Estate Investor recently reported that global real estate investing is up by 40 to 50% over 2009 levels. There is a ton of institutional capital looking for high quality real estate assets. How much of the pie will Houston get?

Investment sales activity in the second quarter marked an improvement over the first quarter, with better quality buildings trading at levels not seen since the credit crisis began in late 2008 and transaction activity came to an abrupt halt. Year-to-date through the second quarter, office transactions totaled 29 with a total dollar volume of $376M, averaging $92/SF with a 8.2% capitalization rate.

Among the most significant transactions closed in the second quarter were:

• Wells REIT II acquired the 332,000 SF Energy Center I from Trammell Crow Company for $94M ($283/SF). Located in the Energy Corridor, the building was completed in 2008 and at time of sale was 100% leased to Foster Wheeler USA.
• Beacon Investment Properties acquired the 162,909-SF One Park Ten Plaza from Parkway Properties for $15.7M or $96/SF. In a separate transaction Beacon acquired the 139,834 SF Atrium at Park Ten from KBS Realty for $14.9M or $106/SF. Both properties are located in the Energy Corridor.
• Victory Realty Solutions acquired the 101,880-SF office building located at 5850 San Felipe from American Spectrum for $10.5M or $103/SF. The property was 92.3% leased at time of sale.

The largest sale of the year so far was a user related transaction, when Anadarko Petroleum Corporation acquired its Woodlands headquarters office building for $166 million at the beginning of the year.

Heritage Plaza hits the Market

Last week, long-time Houston real estate reporter, Ralph Bivins broke the story that Atlanta based Goddard Investment Group was placing Heritage Plaza, the 1.1 million square foot Class A office building located at 1111 Bagby on the market. Commercial real estate professionals have speculated the building that Goddard acquired for $121 million in 2005 could fetch a sales price of more than $300 million. Heritage Plaza is well known because of its central location in the central business district skyline, and for the stepped granite feature located on the top of the building that resembles a Mayan pyramid.

Heritage Plaza was completed in 1986 and was once the poster child of the collapse of the Texas real estate, banking, and oil industries in the 1980s. The property sat mostly vacant until Texaco leased 550,000 square feet in 1989.

However, in recent years the building like the Houston office market has performed well. In 2005 when Goddard Investment Group acquired the building, over 700,000 square feet in the project was available. In 2006 EOG Resources announced its move from 3 Allen Center to Heritage Plaza, then in early 2007, Deloitte & Touche USA L.L.P. executed a major long term lease in the project.

Heritage Plaza-1111 Bagby

Submarket: Central Business District

Total Square Feet: 1,149, 635

Stories: 51

Total Available: 161,182 SF

Percent Leased: 90.4%

Asking Rental Rate: $27.00-NNN  (triple net)

Operating Expenses: $13.50 PSF (2009)

Major Tenants: EOG Resources, Deloitte

The sale of Heritage Plaza and at what value should give us a good read on the current perception and long-term view of the Houston office market among institutional grade real estate investors.

You might also like:

• Offshore Drilling and the Houston Office Market
• Houston Continues to Show Signs of Recovery
• Three Key Questions Persist for the Houston Office Market
• Energy Mega-Tenants Stir Up The Houston Office Market

Will Houston Office Building Sales Heat Up? is a post from: The Tenant Advisor

The Impact of the Offshore Drilling Moratorium

The Energy Industry is in a battle with the Obama Administration to resume deepwater drilling in the Gulf of Mexico. In Houston, there is a concern over what impact the drilling ban will have on our economy and among commercial real estate professionals, property owners and tenants, questions remain on how it will influence the office market and the timing of any recovery in market fundamentals.

“The moratorium will cost the Gulf Coast region jobs, money, and economic development. In fact, the moratorium could be more costly than the oil spill itself.” says economist, Joseph R. Mason, PhD, Louisiana State University.

Dr. Mason’s report: “The Economic Cost of a Moratorium on Offshore Oil and Gas Exploration to the Gulf Region” estimates the moratorium will see a loss of 8,000 jobs and $500 million in lost wages in the Gulf Coast in the first six months and Texas will see a decrease of approximately 2,492 jobs.

What’s the impact on the Houston Office Sector?

The moratorium has affected 18 firms active with deepwater rigs in the Gulf and 16 of those firms have a significant presence in Houston. The consensus opinion is that when drilling resumes, the industry will operate under stricter regulations and closer federal government oversight.

Houston is the energy capital of the world and its economy all though more diversified than years past is heavily dependent on the Oil and Gas sector. Many of Houston’s largest office tenants are from the Energy industry including; Exxon-Mobil, Shell, Chevron, B.P. and Anadarko to name  just a few, and even if there actual corporate headquarters are not located in Houston, their offshore operations are based in the Bayou City. The offshore exploration and drilling industry is heavily concentrated in Houston and it extends beyond the exploration companies to the drilling contractors, equipment manufacturers and engineering companies who design, build, supply and operate the drilling platforms.

The consensus is the large energy companies will survive the moratorium without significant damage. However for smaller mid-level operators, suppliers and small level service providers who are primarily dependent on the industry, six months or more without that revenue could result in a much more serious or even grave impact.

Prior to the B.P. incident, the Obama Administration was widely considered to be receptive to opening up additional U.S. waters for exploration and drilling. That’s clearly off the table now. Drilling in the Gulf at some point will return, but likely under a different economic structure. So for the Houston office market which needs job growth to improve market fundamentals, a sector of the economy (offshore exploration and drilling) which prior to the B.P. incident was a potential growth industry, now has some level of uncertainty.

In my opinion, over the long-term, I don’t believe the B.P. disaster in the Gulf will ultimately result in a severe blow to the fundamentals of the Houston office market. The Energy industry will survive the storm and the Gulf of Mexico is not the only place we drill for oil and gas. However, the drilling moratorium does further delay any recovery of the office market which has yet to show any significant signs of improvement since it began its decline in the 1st quarter of 2008.

There are three scenarios for the drilling moratorium:

1. Drilling resumes after the moratorium expires in November
2. The moratorium could be extended for another period (another 6 months or year)
3. Drilling could be halted in the Gulf permanently

The prospect of ending drilling in the Gulf is highly unlikely. Most Americans oppose the offshore deepwater drilling ban. However, until drilling resumes, it will serve as a drag on the Houston economy, offsetting job growth in other economic sectors and further delaying recovery of the Houston office market. I think it is important to note that Dr. Mason’s study is a projection. Who really knows how accurate it will turn out to be in reality. One thing is for sure, when there is uncertainty in the economy, companies typically do not tend to hire employees, and job growth is the sole factor that will cause the office market to begin a sustained trend of improvement. The state of the national economy is inflicting more pain on the Houston office market than the drilling moratorium at this point, but shrinking the Gulf’s offshore drilling business will not help matters.

You might also like:

• A Murky View for the Houston Office Market
• Houston Continues to Show Signs of Recovery
• Three Key Questions Persist for the Houston Office Market
• Energy Mega-Tenants Stir Up The Houston Office Market
• Anadarko Purchases its Woodlands Corporate Headquarters Building

Offshore Drilling and the Houston Office Market is a post from: The Tenant Advisor

Why Consider a Build-to-Suit ?

In order for a business to satisfy its office space requirements they have basically four options:

1. Lease or sublease space;
2. Acquire an existing building and renovate;
3. Build and own your own facility; or
4. A build-to-suit-to-lease.

The Build to Suit to Lease

The build-to-suit-to-lease is an alternative that allows the user/tenant to design and customize a new facility to meet the enterprise’s unique space needs without the large up-front capital expenditure that comes with building and owning.  In a build-to-suit-to-lease arrangement, a company selects a real estate developer to design and build a customized facility on a preferred site and then leases it from the developer. Under this structure, the user never owns the facility.

A build-to-suit can offer several advantages to the company whose current space no longer ideally meets their objectives. It allows the tenant to expand the realm of optimal location choices and maximum space efficiency, since the facility is designed specifically for the tenant. New construction allows a developer to incorporate the most recent cost-effective energy systems in the project, incorporate state of the art technology and construction materials with the goal of operating efficiency. The building can be designed to project the company’s image, attract and retain employees as well as enhance productivity and logistics. These key objectives can sometimes be challenging in varying degrees, when leasing or renovating an existing facility.

Long Term Solution

A build-to-suit is not a short term occupancy solution. A long-term lease commitment is necessary for the developer / owner to acquire financing and the tenant’s creditworthiness must be acceptable to lenders to obtain favorable financing terms.  The build-to-suit process is lengthy and may take several years to complete. Once the build-to-suit decision is made and a developer/owner is selected; a transaction has to be finalized which is inherently more complicated since there is a lease and complex construction component beyond your typical office build-out. In addition, the preferred land site has to be acquired and the building has to be designed and built.

Evaluating All Your Options

Build-to-suits are generally considered more expensive than leasing existing (vacant) space, particularly in today’s market where vacancy rates have risen and building owners are aggressively courting tenants with attractive leasing terms and concessions. However, the difference may be offset in the long-term by savings in space efficiency, reduced operating costs and improved company image.

When considering new construction, in some instances particularly for very large corporations, the user may have better borrowing power or a lower cost of capital than the developer. So it would seem owning the building yourself would be more cost effective. However, for most companies real estate is not their core business and they choose to allocate their investment capital to other strategic operating initiatives that offer a higher rate of return on their investment.

For every company each of the four occupancy strategies has its own merits and disadvantages. A prudent business owner or management team will evaluate each option with their real estate advisors to determine which alternative best suits their needs. In some cases some of these options may not be a realistic or viable strategy.  However, for the company desiring a building designed specifically for their unique needs, the build to suit lease model offers a new, customized facility without the significant capital expenditure of building and owning your space.

You might also like:

• Monetizing your Corporate Real Estate

The Build-to-Suit Lease Alternative is a post from: The Tenant Advisor

Market Conditions Continue Gradual Shift in the Office Tenant’s Favor

Houston’s office market once again posted anemic market indicators at midyear, including negative net absorption, rising vacancy and decreasing rental rates for all property classes. Although there were no dramatic decreases in any one indicator, the consistent decline – and in some instances, consecutive quarterly decreases (as with rental rates) – since late 2008, continued to weigh heavily on the market. Citywide, negative net absorption of 316,519 SF in the second quarter canceled out the first quarter gains, bringing the year-to-date total to negative 116,498 SF. In keeping with double digit vacancy, CBD Class B properties reported the largest rental rate decrease of 16.0% in the second quarter to $22.95/SF from $27.32/SF one year ago. In contrast, CBD Class A properties have shown remarkable resiliency with occupancy levels above the mark through the second quarter, although landlords still lowered rental rates by 7.5% to $35.86/SF in the second quarter.

Looking forward, several key events this year are contributing to a cautious outlook for the local office market over the next 6 to 12 months. The announced merger between Houston-based Continental Airlines and Chicago-based United Airlines expected to close by year end is likely to result in local corporate positions being transferred to Chicago headquarters. In the suburbs, the end of NASA’s space shuttle program and debate among the Obama administration and Congressional leaders over the direction of the space program are also a concern. Some layoffs are expected by major employers in the NASA-Clear Lake area, all though maybe not on the same scale as once feared. On a larger scale, the moratorium on offshore drilling in response to the BP rig explosion and ongoing oil spill in the Gulf of Mexico is also likely to  have some negative affect on local energy firms who represent a significant component of the local office market tenant base. The moratorium has affected 18 firms active with deepwater rigs in the Gulf and 16 of those firms have a significant presence in Houston. The consensus opinion is that when drilling resumes, the industry will operate under stricter regulations, new economics and closer federal government oversight. While the long-term effects of each of these events remain to be seen, a primary concern is that they represent the potential loss of office employment for the Houston area.

Despite these challenges, Houston continues to be recognized as one of the strongest metros in the U.S. for business activity, with the employment sector reporting marked improvement from this time last year. In the twelve-months ending in May 2010, Houston’s job losses totaled 22,000, significantly below the 100,000 jobs lost in 2009, with the local MSA projected to end 2010 with positive job growth.

Occupancy & Availability

Houston’s office occupancy continued falling at midyear with the citywide average for all property classes at 83.5% in the second quarter, compared to 84.9% in the same quarter last year. With the exception of suburban Class B properties, occupancy levels citywide have decreased at a slow measured pace over the past year.

In the CBD, Class A office occupancy fell to 91.0% from 91.6% one year ago. The downtwn top-tier properties’ ability to maintain single-digit vacancy stood in sharp contrast to the CBD Class B occupancy at 77.2% (or 22.8% vacancy), down from 78.0% twelve months earlier.

Double digit vacancy continued for all suburban property classes at midyear. Suburban Class A occupancy fell to 80.4% (or 19.6% vacancy) at the end of the second quarter from 84.5% one year ago, marking the largest occupancy decrease citywide. Suburban Class B occupancy fell a more modest 0.1% to 83.7% from 83.8% during the same period.

Citywide, a total of 60 office properties had 100,000 SF or more available for lease in both direct and sublease space – with almost half of these (27) listing 200,000+ SF of available space – at the end of the second quarter. Sublease space on the market totaled 4 6M SF including 2 1M SF of vacant space and an additional 2.5M SF of subleases available for occupancy over the next 12 months. The largest sublease space being marketed is located downtown in the RRI Energy Plaza building (1000 Main, CBD) where 432,862 SF is available for occupancy in October 2010 (through October 2018). Outside the CBD, Williams Tower (2800 Post Oak Boulevard, Galleria) posted 127,464 SF for sublease, including 71,000 SF of contiguous space.

Absorption and Demand

Houston recorded negative net absorption of 316 519 SF in the second quarter 2010, compared to 471,229 SF negative net absorption in the same quarter last year. Positive net absorption for the first quarter was revised down to 200,021 SF bringing the year-to-date total negative net absorption to 116,498 SF. CBD Class A product continued to be the hardest hit sector with year-to-date negative net absorption of 241,856 SF, followed by suburban Class A with negative net absorption at 137,788 SF through the second quarter. In contrast, suburban Class B and Class C have managed to maintain modest positive net absorption year-to-date with 212,978 SF and 83,993 SF, respectively. Prevailing economic uncertainty is likely to continue negatively impacting overall absorption levels through the end of 2010.

Rental Rates

Office rental rates for all property classes continued to decrease on a year-over-year basis through the end of the second quarter, with CBD Class A and Class B buildings bearing the brunt of the economic slowdown. While tenants shopped for the best lease terms citywide, landlords increased lease concessions, including free rent and generous tenant improvement packages.

On a year-over-year basis, CBD Class A average quoted rental rates fell 7.5% to $35.86/SF (from $38.78), while suburban Class A rental rates decreased 0.9% to $27.35/SF (from $27.59). CBD Class B average quoted rental rates posted the largest decrease of 16.0% to $22.95 per SF (from $27.32), while suburban Class B rates fell 2.9% to $17.95 per SF (from $18.48) on a full-service basis. With supply outpacing demand for office space, the office market is expected to continue its gradual shift in the tenant’s favor that began in the first quarter of 2009, through the end of the year.

Sales Activity

Investment sales activity in the second quarter marked an improvement over the first quarter, with better quality buildings trading at levels not seen since the credit crisis began in late 2008 and transaction activity came to an abrupt halt. Year-to-date through the second quarter, office transactions totaled 29 with a total dollar volume of $376M, averaging $92/SF with a 8.2% capitalization rate.

Among the most significant transactions closed in the second quarter were:

• Wells REIT II acquired the 332,000 SF Energy Center I from Trammell Crow Company for $94M ($283/SF). Located in the Energy Corridor, the building was completed in 2008 and at time of sale was 100% leased to Foster Wheeler USA.
• Beacon Investment Properties acquired the 162,909-SF One Park Ten Plaza from Parkway Properties for $15.7M or $96/SF. In a separate transaction Beacon acquired the 139,834 SF Atrium at Park Ten from KBS Realty for $14.9M or $106/SF. Both properties are located in the Energy Corridor.
• Victory Realty Solutions acquired the 101,880-SF office building located at 5850 San Felipe from American Spectrum for $10.5M or $103/SF. The property was 92.3% leased at time of sale.

Leasing Activity

Houston’s office leasing activity reached 2.5 million SF in the second quarter, compared to 3.3 million SF in the same quarter last year. Although still below levels before the recession, an increasing number of office tenants are renewing lease commitments with better concession packages or relocating to buildings and/or submarkets offering more attractive terms.

Significant non-renewal office leases signed in the second quarter included: U.S. General Services Administration’s 132,896-SF lease at Wells Fargo Plaza (CBD); Aon’s 46,796-SF lease at Marathon Oil Tower (Galleria), relocating from Four Oaks Place (Galleria); Sutherland Asbill & Brennan’s 41,410-SF lease at First City Tower (CBD); Praxair’s 32,984-SF lease at The Reserve at Sierra Pines (The Woodlands); Houston Area Community Services’ 32,960-SF lease at Brooktree Office Building (Northwest); Petrohawk Energy’s 24,727-SF lease at Wells Fargo Plaza (CBD) and Ensco Offshore Company’s 20,717-SF lease at Two Park Ten Place (Energy Corridor).

Among the largest office lease renewals signed in the second quarter was SUEZ Energy’s 130,846-SF renewal of 130,846-SF at Post Oak Central Three (Galleria).

Office Development Pipeline

Houston’s development activity remained slow at midyear, with only 2.2M SF under construction year-to-date. Two new CBD office projects – Hines’ 972,474-SF Main Place (slated for delivery by February 2011) and Trammell Crow Company’s Hess Tower (formerly Discovery Tower, continue to be the sole high-profile buildings under construction at the end of the second quarter. Notably, both downtown projects began construction before the economic downturn of late 2008. Even under less than ideal market conditions for office development, however, a few developers have ventured to introduce new product in high-growth suburban markets, including two projects in the E. Fort Bend County-Sugar Land submarket: Midway Companies’ 152,619-SF Eco Center at Lake Pointe (scheduled for completion by January 2011) and Newland Communities’ 40,000-SF The Exchange at Telfair (expected by year end 2010). Other key suburban projects include Greenwood Corporation’s 156,000-SF Chasewood Crossing II in the FM 1960-Highway 249 submarket (scheduled for completion in April 2011), as well as Black Forest Ventures’ 70,000-SF Black Forest Park, located in The Woodlands submarket.

Houston Mid-Year 2010 Office Market Review is a post from: The Tenant Advisor

CBD Parking Rates Hold Firm

Parking rates in North American central business districts (CBDs) held firm over the past twelve months, according to our recent Colliers International 10th Annual Parking Rate Survey, despite overall downward pressure on sale prices and leasing rates in other segments of the commercial real estate market.

The median monthly parking rate for the 44 U.S. CBDs surveyed increased by 1.1 percent from June 2009 to June 2010, reaching $161.56.  The median monthly rate in the 12 Canadian cities surveyed increased by two percentage points in the past year to $224.10 CAD.  The median daily rate for the U.S. decreased by 1.4 percent to $16.36 during the period, while the median daily rate in Canada climbed by two percent to $14.83 CAD.

With the economic recovery unfolding in slow-motion, parking rates are expected to show little change over the next 12 months, reports Colliers. Rates are expected to trend upward beginning in the second half of 2011, however.

Stabilizing office occupancies is one of the underlying reasons for the slight uptick in monthly parking rates.  Supply and demand is another major factor in the stability of parking rates in North America, according to Ross J. Moore, Executive Vice President and Chief Economist for Colliers International in the U.S.

“Parking availability in only four of the 56 Central Business Districts surveyed were described as ‘abundant’ with the remainder being ‘fair’ or ‘limited,’” said Moore.  “That situation is not expected to change much, with only six new garages containing less than 4,000 spaces to be added in the next two years in the U.S. and 10 new garages with 1,800 spots to be added in Canada.”

New York City’s two CBDs again topped this year’s list of the most expensive cities to park  in the U.S., with Midtown Manhattan’s monthly median price tag hitting $538 and Downtown not far behind at $529.  Both were more than three times the national average.  Following Manhattan’s two CBDs was Boston at $425, San Francisco at $375, and Chicago at $320. The average monthly parking rate for a unreserved space in Downtown Houston is $146.00, below the national average of $161.56.

Canada’s top five included (in Canadian dollars) Calgary at $453.38, Toronto at $336.25, Montreal at $280.62, Edmonton at $275.00, and Vancouver at $266.81.

All of these high-cost U.S. and Canadian cities seem like a relative bargain when compared to parking rates in cities in Europe, Asia and even Australia.  Globally, London – City was the most expensive place in the world to park, with an astronomical $933 median price for a monthly spot.  London’s West End was close behind at $873.50 per month.  In Asia, Hong Kong and Tokyo both topped New York’s median monthly cost for a parking spot at $744.72 and $654.00, respectively.  Sydney, Australia also topped the Big Apple with a median cost for a monthly spot at $591.28.

Among the U.S. cities with the lowest median monthly parking rates were Phoenix at $40, Reno, Nev. at $45, Walnut Creek/East Bay, Calif. At $47.50, Ft. Lauderdale, Fl. at $53.00 and Bakersfield, Calif. at $55.00.  Canada’s bargain spots include Kitchener-Waterloo, Ontario at $116.94 CAD per month and Saskatoon, Saskatchewan at $147.00 CAD.

Data for the 2010 Parking Rate Survey was collected during the month of June 2010 and includes all relevant taxes.  Sources for the data include third parties, owners/operators and Colliers International.  Survey data includes only covered or underground parking garages in prime central business districts.

2010 CBD Parking Survey

Parking Rates Defy Other Real Estate Market Segments is a post from: The Tenant Advisor

NASA / Clear Lake Office Submarket Update

In Houston, there has been a lot of focus on the B.P. disaster lately and uncertainty regarding its impact on jobs and the Houston economy as the offshore drilling industry is heavily concentrated in Houston.

However, the B.P oil spill is not the only event creating uncertainty for the Houston economy. Last February, the Obama Administration unveiled a controversial new plan for human space exploration, which has business leaders in Houston and property owners in the Clear Lake area deeply concerned.

Thus far, Obama’s new vision for NASA has been vigorously opposed by congressional representatives from Texas and other states that are most affected by the cancellation of Constellation including Florida, Alabama and Utah. All though the President seems to have made some assurance to Florida leaders regarding his plans impact on their state, the other states are feeling somewhat slighted. Most opponents of Obama’s plan are fighting to save the Constellation program, and a few are seeking to extend the Shuttle Program. According to many industry insiders, both of these outcomes are highly unlikely since they would take a lot more money than is likely to be approved.

The Impact of NASA on the Clear Lake Office Market

The NASA / Clear Lake office submarket is small in comparison to the major submarkets in Houston as the area has slightly less than six million square feet of office space. This submarket approximately 18 miles southeast of Houston’s central business district is highly dependent on Johnson Space Center. The Petrochemical industry and the Port of Houston are other key economic drivers for the Bay Area Houston region but in terms of office space users they pale in comparison to the NASA contractors.

NASA: One Big Question Mark ? is a post from: The Tenant Advisor