Another Deal Sheet!
Houston and construction are nearly synonymous these days. Our office pipeline in Q4 ’13 was second-highest in the US, and combined with New York and DC, we made up half of the new space added nationwide last quarter. (Combined with those cities, we have a 12-win football team, too.)
A Newmark Grubb Knight Frank report says the country broke a string of 10 quarters where demand exceeded new supply. Nationwide, we delivered 13.2M SF of office product in Q4 and absorbed 9.3M SF. But executive managing director Brandi McDonald says Houston is different than the rest of the US. We may be topping development charts—our 7.2M SF under construction is only rivaled by Manhattan's 8.6M SF—but we have an unprecedented amount of pre-leasing. In fact, our vacancy fell from 14.5% to 14.1% in Q4 despite delivering 1.1M SF.
Houston's annual absorption totaled 3.6M SF. Brandi says our vacancy is declining more quickly than the nation because we're not facing the same shadow space challenges others are. (Great, until you're looking for a fright on Halloween.) And she's got great news for our remaining vacancies: Over the last six months, she's been bombarded with companies wanting to enter Houston for the first time. She tells us most will take short-term leases in existing product so they can see where their growth is before committing to long-term leases or new development.
Lisa Veatch joined Cencor as property manager. She will oversee management of a portfolio of retail centers in the Houston area. She was previously with Wulfe Management Services and Holt Lunsford Commercial.
Lewis Faraclas rejoined Henry S. Miller Brokerage as SVP in its investments-land division. He has 10 years of CRE experience and specializes in buyer/tenant rep of office and industrial properties.
Linh Le (pictured) and Bryan James joined Skanska as preconstruction director and senior estimator, respectively. Linh has 16 years of experience, most recently with Hunt Construction.
An undisclosed Houston LLC purchased Young Leaders—NNN, an 11k SF property in Sugar Land. It was built last year at the entry to Telfair. Marcus & Millichap’s Justin Miller and Derek Hargrove listed the net-leased property at $3M.
Southwest Realty Advisors’ Patrick McKiernan and Marc Drumwright repped Superior Industrial Holdings in two acquisitions. The firm purchased a 45k SF warehouse at 12047 Proctor St (JLL’s Kevin Erck repped seller US Steel) and 3.5 unimproved acres at 12201 Proctor St (where Patrick and Marc also repped seller Jesco Oilfield Equipment).
MHI Compressor Manufacturing purchased 26.2 acres on the west side of Kirby Drive south of Beltway 8. It will build its first US facility on the site. Ozene Realty Consultants’ Denise Ozene repped the buyer and Urban Meridian Group’s Justin Patchen repped seller Spectrum 86 Partners.
An undisclosed buyer purchased the 5200 Block of Navigation Boulevard. Sharon Ettinger repped the buyer and Urban Meridian Group’s Justin Patchen repped seller Bronze Knight Holdings.
An undisclosed buyer purchased Williamstown Apartments, a 272-unit community at 9200 Bissonnet. Transwestern’s Ed Cummins and team repped seller Optimum Williamstown. The transaction closed all-cash in only 14 days—Ed says the seller contacted his team on Nov. 4 wanting to close and fund the deal by year-end. The whole thing was done by Dec. 9.
Goodwill Select leased 24k SF in The Market at Hunting Bayou (I-10 and Hunting Bayou). NewQuest’s Brad Elmore repped landlord Inland American Retail Management and Wedemeyer Realty’s Barkley Wedemeyer repped the tenant.
NewQuest Epic Investments closed on a $75M JV with a $4B private equity real estate firm to purchase value-add grocery-anchored and power retail properties. Cassidy Turley’s Beth Lambert-Saul and Diego Arroyave repped the borrower. The equity placement will be deployed over the next 12 to 18 months in retail opportunities in the top 60 markets, select college towns, and resort communities nationwide. The partnership recently closed on three assets, including 194k SF Easton Commons Shopping Center in Houston.
Flagship Capital Partners purchased a $3.8M senior loan secured by a Class-C apartment complex. It’s seeking other note purchase opportunities in the major Texas markets.
Nelson Murphree Legacy Partners is gearing up redevelopment of 1885 St. James Place into a 135k SF, LEED certified Class-A office tower. Groundbreaking is slated for Q1 with completion in early 2015. JLL’s Chrissy Wilson and Chris Dekker are leasing the asset; Chrissy expects it’ll be substantially committed before delivery. Jackson & Ryan is project architect and Tellepsen is GC.
The Wyndham Houston West Energy Corridor hotel is halfway through its extensive $12M renovation. Above, an updated guest room. The 20-story, 344-key hotel was originally built in ’82 as a Holiday Inn Select and was later rebranded as the Crowne Plaza Houston West. In August 2012, it was reflagged as a Wyndham. GM Chris Miller says the renovations are meant to capture the strength and activity in the Energy Corridor. Structural improvements began early this summer and work has moved through interior and amenity upgrades and now is focusing on food and beverage. Bill Rooney Studio designed the renovations.
Morgan is planning to break ground this quarter on Pearl Woodlake, a luxury apartment development at 2033 South Gessner in Westchase. Regions Bank is providing construction financing. The 376-unit property is slated to open in summer 2015.