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April 10, 2014
Oden Hughes Follows the Grand Parkway
Commercial Resource Capital (CRC) is sponsoring the "Impact of Oil & Gas on Commercial Real Estate" this Wednesday April 16 (register here). CRC provides capital solutions for all facets of your real estate transactions (click here).
When Oden Hughes runs, it sprints. The firm is launching two multifamily developments in Houston over the next few weeks, its second and third properties in our metro. The common thread: All three communities have access to the new Grand Parkway. (The perfect location for commuters and jewel thieves.)
Founder Craig Hughes (here beneath his name with co-founder Steve Oden) and director of development Mac McElwrath tell us first up is Parkside Place, a 384-unit Class-A community serving The Woodlands and Exxon. Craig says it'd be hard to find a better place in the entire country to build apartments—it sits at the heavily trafficked intersection of FM 2920 and Kuykendahl Road four miles from Springwoods Village/Exxon. Mac says the site's proximity to retail (including the popular Kroger Marketplace next door) was a big draw. (The first thing people do after getting an apartment is get a toaster.) Access is another—it's just south of the Grand Parkway.
Craig tells us the biggest challenge of Parkside Place was getting it entitled. That set them behind schedule, but he's not worried—Houston's economy and job market haven't slacked. Mac says the property will feature a mix of units: 63% one-bedroom to serve young professionals, 33% two-bedroom, and 4% three bedroom. This property will have a strong focus on outdoor amenities, including outdoor dining, community gardens, a dog park and dog wash station, and outdoor billiards. (You'll need to account for wind resistance when you try to pocket the 8-ball.) Parkside Place will open mid-2015.
Next in Oden Hughes' pipeline is Lakes of Bella Terra, a 342-unit Class-A community. It'll break ground on 15 acres at the SWC of Westpark Tollway and the Grand Parkway on June 1. Craig is very excited about the location, which happens to sit just south of Parkside Grand Parkway (rendered above), a 354-unit community Oden Hughes broke ground on last summer in Katy. That property began leasing a few weeks ago (in advance of its August grand opening) and is seeing great activity and rental rates.
What a Dollar Can Get You
Class-A office rents spiked $1 in Q1, says PMRG SVP/director of research Ariel Guerrero. That brings us to $33.71/SF citywide, and Ariel tells us it's the largest quarterly hike in rents we've seen since 2007. (And you thought a dollar wasn't even enough to get you a soda from the machine.) He attributes it to occupancy rates remaining over 90%, the delivery of new product, and increased taxes inflating operating expenses. He anticipates that Class-A rents will rise 8% to 10% citywide as quality space options remain limited. But relief is on the way for tenants as 3.9M SF delivers by year-end.
Greenspoint, in particular, blew us away with its 38% year-over-year increase, skyrocketing from $23.61 in Q1 '13 to $32.58 in Q1 '14. Ariel says that's largely attributed to the future Exxon-Mobil space availabilities in Greenspoint Place (pictured), which will undergo a comprehensive repositioning. Since those blocks—totaling 1.3M SF—are coming available for the first time in many years (the space has historically been over 95% leased), rents have shot up. Exxon will vacate 620k SF this year and continue rolling out of Greenspoint next year. Other markets with staggering increases: Galleria (14.7% growth to $35.28) and Greenway Plaza (12.6% to $34.46).
If you were hoping to put a tenant into Levey's Northwest Place Industrial Park, you're outta luck. With a 10k SF lease to Alpha Testing, the park has reached 100% occupancy. (They're the same people who take the last piece of pizza.) The Class-A business park includes five warehouse buildings. Cushman & Wakefield's Jim Foreman and Beau Kaleel repped Levey, and CBRE's Joseph Smith repped the tenant.
Have a H.E.A.R.T.
Transwestern's Houston philanthropy team volunteered at the Shell Houston Open, partnering with the H.E.A.R.T. Program. The Transwestern pros prepped and served food from a concession stand to hungry golf spectators, with donations supporting the H.E.A.R.T. Program. That org promotes structured independence for people living with developmental disabilities by providing innovative education, training, housing, and employment programs.
Don't Miss BASH!
Bisnow's national Annual Student Housing Summit (BASH) is a must-attend event for anyone who touches student housing. Join top owners and developers from all over the US, including American Campus Communities, EDR Trust, Campus Crest, Campus Apartments, and The Preiss Company, as well as 400 of your peers on May 6 and 7 in Philly at the swank Rittenhouse Hotel. Topics will include trends in university life and housing, product design and development, and the environment for deals and new development. Sign up today!
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