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Real Estate Bisnow
January 3, 2013 
A Rush of Office Sales

The Energy Corridor District is a sponsor of our Energy Corridor event on Feb. 1. Defined by many international energy companies that call it home, The Energy Corridor offers some of the most desirable residential and commercial addresses in the greater Houston area. Find out more here and register for our event here.


Forget the Atkins Diet. A number of you seemed to be on the "Shed Buildings" diet in December. (Capital gains taxes light a fire under many an investor.)

Rudy Hubbard

JLL managing director Rudy Hubbard (above) and VP Kevin McConn closed four office sales in the last two weeks of 2012. They repped seller Capital Commercial Investments in the sale of 12301 Kurland, a four-story 196k SF office project in the Gulf Freeway submarket. Mission Companies purchased the tower, which is 92% leased. Rudy tells us the submarket is small but many credit tenants need to be there because of the Ship Channel and petrochemical plants. Once investors understood the uniqueness of the location, they liked the asset and competed.

Brookfield Mini3 HOU
12301 Kurland

JLL also helped Mission secure a senior mortgage loan through Deutsche Bank, which provided a 10-year CMBS loan to facilitate acquisition. Paul House and John Ream led the financing team. This deal included 12 acres of additional land. 12301 Kurland received a $7M upgrade in ’06 and is designed to withstand hurricane conditions. (It’s never lost power.)

Bisnow (PropManage)
San Felipe

Rudy and Kevin also repped Morrison Karsten Group in selling 4295-4299 San Felipe (two buildings totaling 92k SF) to Equitas CRE Holdings. Rudy tells us the property is Class-B in a Class-A location, which drove lots of competition. It was 99% leased (it lost a tenant during the marketing process and replaced it within weeks) and boasts very high rents for its asset class. The property includes 2.5 acres of additional land, which Rudy says is a great opportunity for residential, multifamily, hotel, or office development. Rudy and Kevin closed two other office sales last week and just came to market with One Westchase (466k SF).

Rosy Stats for 2013
Boyar Miller panel

The numbers are in from Boyar Miller’s annual CRE forecast: On the industrial front, we've got 5.3% overall vacancy and 2M SF under construction, but that’s 43% preleased and we’re nabbing over 4M SF of annual absorption. GSL Welcome Group CEO Welcome Wilson Jr. (second from left) says rents are increasing dramatically, and the number of bidders for each Class-A sale has doubled in the past few years. He predicts we’ll see more design-build—driven by low interest rates—and less BTS (instead, users will fill spec space) this year. We snapped him with former Boyar Miller chairman Bill Boyar, NewQuest managing partner Jay Sears, Colliers co-chairman Bob Parsley, Trendmaker Homes prez Will Holder, and Boyar Miller chairman Chris Hanslik.

Will Holder

Will says there’s a major shortage in single-family homes and lots. We have 20,000 houses under construction, but job growth suggests demand for 30,000. Lot absorption is double lot delivery, and homebuilders are struggling with capacity. It costs more today to rent a home than buy it, and it’s rapidly becoming a sellers’ market. Jay says retail is a suburban story: Katy and Pasadena/Deer Park/LaPorte are the strongest performers in the MSA. Grocers are still rolling—Kroger posted its 36th straight quarter of positive identical supermarket sales and has record-high earnings per share. There are 22 grocery-anchored projects in the local pipeline. In well-anchored centers, Houston leads the country in rent growth.

Bob Parsley

Bob (a former lawyer, which Bill says makes him the envy of all lawyers) broke down some strong office submarkets. The Woodlands boasts 2.1% Class-A vacancy, 1.1M SF under construction, and 3.4M SF proposed. The Energy Corridor and Westchase also have single-digit Class-A vacancies (4.2% and 7.8%, respectively) and together have 1.8M SF under construction and 4.3M SF proposed. The CBD is interesting: It has 10.9% Class-A vacancy and nothing in the pipeline. 1M SF available in the Allen Center could push vacancy to 15% if no leases are signed before expiration, but Bob sees that as more of an opportunity than a concern.

A Holiday Convergence
CREW ladies

The holiday season was the reason for this blend of CREW ladies during a NAIOP event. Colliers VP Laura Schlameus (front, black blazer) tells us she and dad Ace Schlameus signed four significant leases in December. Two were in 16055 Space Center Blvd, repping the landlord in two leases to PAS and Embry-Riddle Aeronautical University totaling 32k SF. They also renewed the GSA’s 18k SF lease in 7141 Office City Dr. and (with Jenny Seckinger) signed Superior Energy for 15k SF in 13333 NW Freeway.

Welcome to lucky 2013. How'd you spend your holidays? Let us know, catie@bisnow.com.
Old Republic2 HOU
Woodlands (StillLife)
Brookfield (OneAllen4)
Arch Con (Retail2)
Moody Rambin (Ashford6)
Briarhollow (Dairy4)
US Prop (LyricCenter2)
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