Houston's 14 Biggest Deals of 2014, Part 2
Let's bid a final adieu to 2014 with seven more of the largest, most impactful commercial real estate deals of the year. Check out Part 1 here.
Houston had its eyes on Springwoods Village all last year. Exxon began moving employees into its campus, and there was a major new project announcement every few months. The biggest was CityPlace, Springwoods’ 60-acre town center project developed by Patrinely and USAA. With 4M SF of office and 400k SF of retail, multifamily by Fein and two hotels developed by Woodbine, it’ll be a game-changer for the area. Phase 1 is slated to break ground this month. Elsewhere in Springwoods, Regency Centers announced nearly 400k SF of retail (Marketplace at Springwoods Village), and CHI St Luke’s Health bought 23 acres for a medical campus.
Novare Group and friends were the first to capitalize on the Downtown Living Initiative, getting a tax abatement to build multifamily in the CBD. Residents started moving into the property--SkyHouse Houston--in August, and Novare says the project is beating expectations. But that’s not all--in 2014, the partnership (including Simpson Housing, Batson-Cook and Pete Dienna) also broke ground on SkyHouse River Oaks (the 25-story community is well underway) and in December closed on a tract to build SkyHouse Main (rendered here). It’s adjacent to SkyHouse Houston and will be a sister 24-story tower with ground-floor retail. Cushman & Wakefield’s Dave Cook, Jeff Peden, Will Condrey and Scott Miller repped Novare in the site acquisitions.
1000 Main's Record Price Tag
When 1000 Main was put up for sale in September, experts predicted it would break our sales per SF price record. They were right--in December, it sold to LaSalle Investment for $450M. At $537/SF, that handily beats the former high, Hess Tower’s $524/SF in 2011. The deal’s even more impressive when you consider that Invesco had just bought the property in 2012 for $340M. CBRE marketed the 36-story, 837k SF building.
In just one of a whole slew of projects announced around the Grand Parkway last year, Parkside Capital bought a 120-acre site at the northeast quadrant of I-10 and the Grand Parkway. It’s calling the site Verde Parc and plans a mixed-use development with office, retail, restaurants, entertainment venues, hotels, medical facilities and multifamily. Parkside plans to complete infrastructure work early this year and beginning selling tracts. UCR’s Ed Page handled the $26M transaction and will lease the retail development. Some other 2014 Grand Parkway developments--tons of multifamily groundbreakings (Oden Hughes alone built three, Landmark’s doing two), Grandway West and One Grand Crossing.
Fallbrook Pines Business Park
Trammell Crow/Clarion slipped in just under the wire, breaking ground on Fallbrook Pines Business Park in mid-December. With 709k SF in the first phase, it’s the largest industrial project underway in Houston today. The JV’s going spec on four tilt-wall office/warehouse buildings (they’ll deliver in Q1), and then look to do build-to-suit or more spec on the remaining 66 acres.
After nearly two years of planning, the Marriott Marquis broke ground Downtown in April. The hotel will be a unique and beautiful one, with 1,000 rooms, a Texas Sky River on the tower roof and amazing views of Discovery Green. Even better, it’s part of a major revitalization going on in the convention district, and could seriously improve Houston’s convention/tourist cred. The Marriott Marquis, developed by Rida in partnership with Houston First, is scheduled to deliver in September '16.
Oil Prices Drop
Despite all of these amazing projects and new records, 2014 just may be known as the year the bottom fell out. This morning, the West Texas Intermediate dipped below $50, the lowest point in five and a half years, and a 50% drop since June. We still have a ways to go before hitting the lows of the recession--at the end of 2008, the WTI was around $40 a barrel. We have yet to see what the drop will do to Houston; many experts are saying there won't be a major impact and at most we'll just slow to a sustainable growth level. But others point out that rig count and employment in the shale plays are already taking a hit, and skittish investors could seriously affect our commercial real estate market.