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November 17, 2014

Springwoods' New Spin on Traditional Grocery

Cadence McShane Construction is a highly experienced provider of general construction, construction management and design/build construction services for the commercial, industrial, food processing, multifamily and educational markets throughout the State of Texas and on a national basis. Click here.

Exxon employees can now grab milk on their way out of the office...and jump through a splash pad. Springwoods Village is getting its first traditional grocery-anchored retail power center, a whopping 385k SF. And if it has its way, you'll never leave.

Regency Centers VP of investments Abe Pacetti tells us his firm will partner with Springwoods developer CDC to break ground on the Marketplace at Springwoods Village this time next year. It can build up to 50 acres of retail; Abe says it might not use them all, but it will need plenty of room for gathering areas, parks, splash pads and the like, aimed at increasing shopper “dwell time.” All 385k SF will likely be built in one phase to LEED Silver standards. The Marketplace's location has all the benefits of being in master-planned Springwoods (including residential and employment demand) but also sits on the Grand Parkway, making it a regional play.

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Abe (here at ICSC last week) says one of his favorite parts about building the Marketplace at Springwoods Village is having new Class-A product to lease. Regency owns 11 shopping centers totaling 1.8M SF in Houston, and they're 99.1% occupied. The firm is aiming to grow its platform (it tried to purchase AmREIT, but was outbid by Edens). Regency just delivered its final phase of Southpark at Cinco Ranch, and has only one 1,200 SF space available across the entire property. Its redevelopment at the corner of Woodway and Voss opens Q1. Abe says the upgrades and addition of Whole Foods has added a vibrancy to the center's tenant mix—the property now features less service retail and more soft goods/accessories/high-end boutiques.

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Houston's Boom Begins to Fizzle

The good news: Although our growth is slowing across metrics (population, jobs, absorption), we'll still stay above our own long-term averages and should still outpace the rest of the country for a few more years, according to Delta Associates EVP Sandy Paul who spoke at Transwestern's annual Trendlines Houston event last week. The WTI hit $75 a barrel last week, the lowest it's been since 2011. But that will stabilize here and increase 4% annually for the next five years, he says. Job growth will slow to 92,000 annually from 2014 to 2016, but that's still double our 20-year average and solidly above our last peak. (We've led the nation the past 12 months, with 4.3% job growth.)

That same trend is playing out across our real estate market. Sandy (here, showing his love for the Giants even when they've just given up five interceptions) projects the office sector will have demand for 14M SF over the next two years, while delivering nearly 20M SF. That may drive vacancy to 11.5% in late 2016 (up from 9.9% right now), but that's still enough to raise rents 2% to 4% a year across all buildings and submarkets. Similarly, Sandy foresees 6.5M SF of industrial demand over the next year, with 8.6M SF slated to deliver. Result: a vacancy bump to 5% late next year, with continued rent growth of 1% to 3%.

Sandy shared the stage with Ben Stein. Ben called Houston the most optimistic city he knows (and said this is the best time to be here), and assured the crowd he'd live here if he didn't hate humidity.

Many Transwestern pros were sporting their Movember best, including president of the Americas Chip Clarke and president of the Southwest Kevin Roberts. Nearly 20 gents from the office (including the entire, usually clean-shaven, tenant rep team) are participating to raise money for testicular cancer awareness. They've got about $2,100 raised thus far. (Kevin may not make it all the way through Movember--his wife hates the beard and wants him to shave it before Thanksgiving.)

  
  
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Kastle Systems Keeps an Eye on Your Property

Don't own a mega-property? That doesn't mean you can't have a first-class security system. Kastle Systems offers comprehensive managed security services for any size building, keeping the system simple, unobtrusive and cost effective. In fact, general manager Mike Slauson says that a marriage of access control and video can satisfy properties that don't have the resources to maintain a 24/7 physical presence. The innovative product, KastleVideo, is hosted in the cloud and can be accessed from anywhere on any device.  Also, since incidents and activities are stored as thumbnails, you can search it like Google as opposed to rewinding and fast forwarding. Kastle is the largest national provider of managed security services, but has been looking out for its hometown of Houston since 1981, supporting over 280 office buildings locally. For more info on our sponsor, and to learn how security in your facility can be enhanced with new breakthroughs, click here.

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Avanti Leads Senior Living Plans 12 New Facilities

The greater Houston area is about to get a new senior living community: Avanti Living will break ground in February on the 77k SF Avanti at Vision Park, which will include 50 assisted living and 40 memory care suites. Avanti COO Lori Juneau-Alford says construction halted on senior living projects during the recession. Most of the existing competition was built in the late ‘90s or early 2000s, she says. 

Lori tells us Avanti is taking advantage of the aging competition and plans to build 12 senior living facilities across three states (Texas, Louisiana and Florida) in the next two years. There are also projects in the works in the Dallas suburb of Flower Mound and in San Antonio. The $15M Houston-area project, at 9446 Vision Park Dr in Shenandoah, will be ready for occupants in Q1 '16.

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5 Blockbuster Developments

The recent ranking of cities with the most new construction got us thinking about some of the biggest headline-grabbing developments nationwide. To see five $1B projects in the works, click here.

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