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Real Estate Bisnow
January 14, 2013 
Spec Cash Drought?

Moody Rambin Interests is sponsoring the Future of The Energy Corridor on Feb. 1. Click for info about Houston’s largest locally-owned, full-service commercial real estate brokerage and management firm. Register here for the big event!


Despite record-low industrial vacancy in Houston, spec financing is scarce. (The only thing more rare is people who were surprised by the ending of Zero Dark Thirty.) What’s the deal?

David Hudson

Duke Realty SVP David Hudson told the crowd at Bisnow’s industrial summit last week that equity requirements for spec projects (often 35%) are keeping private developers from building without pre-leasing. The spec projects under way are from groups like EastGroup and Duke that can use their own money. (EastGroup closed a $225M unsecured line to finance its six ongoing Houston projects.) The good side: Only the top developers are going into the ground, preventing overbuilding.

Bisnow (PropManage)

250 attendees joined us bright and early at the Westin Oaks. David says there wasn’t a lot of investment-grade product sold last year, and cap rates are killer. He was in the finals for the Beltway 8 and Windfern package, which ended at a 5.5% cap. Duke ended up buying only one Houston asset last year, a 135k SF building on the east side. He surprised people by bidding, but David says competition for Duke’s usual product is pushing him to other properties. (Always have a plan B, or else you end up going to the prom with your sister... so we're told.)

Mike Plank

Want an alternative to Northwest Houston? National Property Holdings CEO Michael Plank likes the east side of town; most of the 1,500 acres he controls are near the Port. He says the submarket is well-situated to distribution and manufacturing product (especially because of the rail system, which is Michael’s focus) and is doing very well thanks to oilfield activity. Energy companies have announced $11.5B of projects there, and $30B is in the pipeline. He’s starting to eye West Houston but hasn’t made a move yet. EastGroup is confident in that area: Arch-Con VP Jason Cooper says he’s doing three projects for the firm in the Katy area.

Caleb Lawson

Avison Young principal Caleb Lawson is focusing on the north part of town. That’s more of a logistics and transportation market, and Caleb says those users are seeing a change in demand and product requirements. They now need more outdoor storage and warehouse capacity, and Caleb thinks we’ll see development over the next 12 months shift to accommodate.


We ran into EE Reed’s John Trevilion, Powers Brown’s Joe Powers, and Architects Plus’ Bob Mitchamore during the networking. Powers Brown is designing Texas Instruments’ 160k SF office in Telfair. (We rounded up the SF because we couldn't find a calculator.) Joe tells us the LEED Silver property includes a tech lab, which is a little different to design. Architects Plus just finished five buildings for EastGroup Properties. Bob says it’s signing contracts for three projects, one BTS and two spec properties.

Eric Thomas, Carlos Guzman, Bryan Kesman

Here’s Bank of Texas’ Erik Thomas, Pearland EDC’s Carlos Guzman, and Keybank’s Bryan Kesman. The bankers both say they’re looking to make loans (everyone loves BTS, Bryan says). Carlos must be a quick learner: He moved to Houston only three days before and already found out where all the cool kids hang out.


We snapped Q10 Kinghorn, Driver, Hough, & Co’s Ben Johnson, M Kidd Properties’ Mark Kidd Jr, and Holt Lunsford’s John Kruse networking away. John says he’s focusing on leasing up his portfolio. In particular, he has a 136k SF rail-served building in Northeast, and a 46k SF block of vacancy in Northwest Houston. Mark is working on bringing a light industrial user into Houston through a BTS, and Ben says his firm is doing a lot of financing for single-tenant industrial product.

Secret Job Opening at Bisnow
Bisnow wants to let you in on a happy little secret: we’re hiring. However, we can't tell you the role specifics until we meet in person. It's kind of a big deal. Think high level sales but on a higher level than you just thought. Requirements: love to travel, work hard, play hard, hustle, and have fun. Non-negotiable: you need to be amazingly proactive and be able to easily chat up super-intelligent people. That’s right – we’re seeking the embodiment of charisma and attitude (the right attitude, that is. If you’re the right candidate, you’ll understand the right attitude). Clock-watchers and complainers need not apply. Zest for life a major plus. "People-persons" are encouraged. Send your resume to careers@bisnow.com.

Upcoming Bisnow Events!
Friday, Feb. 1, 7:30am-10:30am. Bisnow's Houston Future of the Energy Corridor. Hear experts talk about the area with over 20M SF of office space and another 13M SF projected by 2030. Register today.
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