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One Month In, Texas Reopening Has Boosted Some Sectors But Not Others

Just over a month ago, Texas Gov. Greg Abbott removed maximum capacity restrictions on businesses and lifted the statewide mandate on face coverings, making Texas one of the first states in the country to return to pre-pandemic guidelines.

For some commercial real estate sectors, the impact of the governor’s decision has been swift. Hotels have seen a major rebound in room bookings since the beginning of March. Retail and office brokers have seen a noticeable uptick in inquiries and requests for tours.

“I mean, just some of the deals I'm working, my deal flow tripled in the month of March,” Stream Realty Partners Managing Director Ryan Barbles said.


The increase in deal-making activity and interest from tenants and buyers is partially due to the governor’s reopening decision, which has emboldened some to start making real estate moves again. But the speed of the vaccine rollout has played an even bigger role, according to many of the brokers, developers and owners that have spoken to Bisnow over the past month.

“Our restaurants are experiencing an uptick in customers given a return to 100% occupancy and the return to restaurants by those that are fully vaccinated,” Wulfe & Co. Senior Vice President Kristen Barker said. 

Not all asset types have been affected by Abbott’s executive order. The industrial and land markets have not seen any real change in the number of inquiries or transactions following the decision to reopen at 100%, according to feedback from brokers. Industrial has continued to burn hot throughout the coronavirus pandemic, spurred by demand for e-commerce goods and services, while land transactions can be slow-moving, and the impact of Abbott’s decision may not be seen for months.

The sectors that interact directly with the public, like office, retail, hotel and multifamily, have been more likely to benefit from Texas’ approach to reopening. Similarly, the reopening has attracted enthusiastic business owners and investors from other states, with several brokers telling Bisnow that they have seen a significant surge in requests for tours from out-of-state clients. 

“There is no question that the governor’s steps to reopen Texas have had a positive impact on how investors view Texas real estate,” Berkadia Senior Managing Director of Investment Sales Todd Marix said.


Satya Inc. sold 32 acres within the Moran Ranch development to Fidelis Realty Partners in March. The site, situated on the east side of I-45 and FM 1097, will be used for future retail development.

New retail leasing volumes fell very slightly between February and March: from 491.9K SF down to 486.9K SF, according to CoStar data. However, it is common for month-over-month volumes to fluctuate, and multiple retail brokers over the past month have told Bisnow that interest in retail has increased, particularly from restaurant operators.

Barker said she saw a jump in inquiries at Wulfe & Co. during March and early April, which has helped many brokers feel that the industry is back in business. Much of the activity is coming from the restaurant sector, as newly vaccinated members of the public become more confident about dining out.

“It is the restaurant sector that seems to be the most active with many restaurateurs looking for opportunities to backfill restaurant spaces that may have closed during Covid,” Barker said.

Barker noted that retail concepts are also seeking opportunities, but that many retail tenants are still just getting back on their feet and are not necessarily in expansion mode yet. Relocations are more common; Barker has recently signed leases with operators that moved into the Houston area to establish their business in a strong trade area. 

“Some moved from areas where they just couldn’t survive in smaller markets at 50% occupancy with the lower volume of customer traffic,” she added.

That being said, many of Houston’s restaurant operators have opted to maintain lower occupancy rates and require masks of both staff and patrons until health guidance says otherwise.


Axiom Space Inc. leased 32.4K SF of office space at 1290 Hercules Ave. in Clear Lake, expanding to another full floor in the building in March.

Leasing activity in the office sector saw a major jump in March. New leases rose from 659.2K SF in February to 861.6K SF in March — an increase of 31%, based on CoStar data.

In 2020, many executives chose to “kick the can down the road” and hold off on making any major real estate decisions, which left the sector in a rut for most of the year. But the growing momentum behind the vaccination rollout, along with hybrid office and remote working arrangements, has prompted more people to return to the office.

Barbles said that after Abbott announced the executive order, the office team saw inquiries almost triple in March compared with February, and his team has gone from conducting office tours once or twice a week to every day.

“Just as far as data that we're tracking, you can certainly see how much activity has picked up,” Barbles said.

In conversations with other Houston office brokers, Barbles noted that it also seemed like many have been much more active in March and April than they were only a few months ago.

“The more senior brokers that have been in the business for a while, they're all busy,” Barbles said.


The Mark at CityPlace Springwoods Village, a 286-unit multifamily community in north Houston that was acquired in early April by CDC Houston.

Builders brought 1,255 new apartment units online in Houston during the first quarter, a significant slowdown from the near-record pace in 2020, according to Berkadia’s Q1 2021 multifamily market report. In comparison, 21,270 units were delivered last year.

The majority, or 78%, of all deliveries were in the central Houston region. That new inventory facilitated leasing activity, as net absorption was positive in those areas during the first three months of 2021.

On the investment side, Marix said that throughout March and into early April, Berkadia has seen a noticeable uptick in activity and aggressive bidding on available multifamily properties, which is pushing prices up and going-in cap rates down.

Marix said activity was higher in Q1 2021 than the prior quarter when looking at the number of confidentiality agreements, property tours, upward pressure on pricing and the growing size and aggression of bidder pools.

Houston has a few advantages relative to other major markets, including a more attractive basis as compared to replacement cost, as well as generally higher going-in yields and higher exit caps, according to Marix. In addition, Houston’s rents are recovering very quickly. 

“These positive trends are all a reflection of the governor’s executive actions to reopen the state, the continued vaccine rollout, oil price recovery and a declining new multifamily supply pipeline going into 2022,” Marix said.


The dual-branded Holiday Inn Express Houston and Staybridge Suites Houston in the Galleria area of Houston, which opened in late March.

Hotel occupancy in Houston increased from about 47% in February to 60% in March, according to CoStar data. That was slightly stronger than the national average, where U.S. occupancy grew from 45% to 55%.

Since early March, Houston weekends have averaged in the 66% to 75% occupancy range, while weekdays have averaged between 53% and 55%, CoStar reports. But the weekend of spring break stood out, with a weekday occupancy of 60% and weekend occupancy of 81%.

Houston hotel owners and operators previously told Bisnow that vaccine distribution has been a major factor in encouraging people to start traveling again. The timing of Abbott’s decision to increase business capacity to 100% and lift the mask mandate has also boosted the confidence of many people thinking about traveling.

American Liberty Hospitality President and CEO Nick Massad said that leisure travelers on weekends continue to drive most hotel room bookings in Houston. That’s a departure from the past, when weekday business travelers were usually the dominant group in his hotels.

“Like him or not, I think the governor was bold with what he did. And I think that resets the minds of a lot of people out there,” Massad told Bisnow earlier this month.


A rendering of Seton Lake Logistics Center in northwest Houston, which broke ground in March.

Industrial leasing volumes in Houston saw a significant increase in March, jumping from 3.1M SF in February to 3.7M SF in March, according to CoStar. However, this is nothing new — the sector has been picking up steam throughout the pandemic, driven by large e-commerce retailers like Amazon and third-party logistics firms.

“There is no direct correlation in the market that can be made to Abbott’s mask executive order,” CBRE Senior Vice President Faron Wiley said.

He said March began with robust industrial activity and ended the same way. However, the firm tracks activity by the quarter, not the month, and so any significant improvement will probably not show up in the numbers for at least another three to six months.

E-commerce logistics and warehousing for consumer goods of all types are the dominant drivers in the Houston industrial market right now, according to Wiley. In both cases, access to Port Houston is a significant factor in those users opting to lease space in Houston.


The 187-acre site purchased by DR Horton for the expansion of the firm's Tamarron Lakes master-planned community in West Houston.

There is limited land market data available for Q1 2021, but land sales in the greater Houston area have been growing for months, thanks to low interest rates and a surge in demand for single-family homes across the region.

JLL Managing Director Simmi Jaggi said that overall, JLL has seen an uptick in activity and an increase in consumer confidence, which has also boosted the appetite of clients to buy, sell and list land parcels.

“This is due to pent-up demand while people were forced to wait for recovery,” Jaggi said.

Jaggi noted that land doesn’t transact in a month as it has a long closing cycle, so the impact of Abbott’s executive order is unlikely to appear in any numbers. However, Jaggi said she does think that closings have increased, as have offers and listings. 

In terms of the main drivers behind land deals right now, Jaggi pointed to the stronger asset types that land is being acquired for: single-family residential, industrial, medical and suburban multifamily.

“There are several drivers that have contributed to this — Houston’s lifestyle, cost of living, the strong medical industry, oil and gas and the ability to still ​experience shopping and dining in a safe environment,” Jaggi said.