This Week's Houston Deal Sheet
Sublease space will continue to weigh on Houston through 2018, according to CBRE. But it’s not an even burden—80% of it is in one-quarter of our submarkets.
The sublease space is very consolidated in a few areas; 2.5M SF of the listings are from just over a dozen projects. And it’s no surprise that the energy-heavy areas are getting the brunt of sublease space (check out CBRE’s geospational heat map above). Although the 7.1M SF has held pretty steady now for about two quarters, things could get much worse—CBRE’s tracking eight industry M&As, and the companies involved occupy almost 10M SF of Houston office space. If/when those become final, operational consolidation would compound the problem. CBRE predicts our overall availability could climb to 20%. 2018 is the magic year of improvement—that’s when most of the existing sublease listings will move to the direct market, and that’s also when experts predict crude pricing will improve.
Jon Lindenberger joined Colliers as SVP of the industrial team. Jon has completed over 200 transactions in the past seven years.
Mowry ICC Real Estate Ventures purchased 1 acre on Intercontinental Crossing Drive. TNRG’s Robert McGee, Thomas Leger and Chase Cribbs repped seller TNRG Development.
Giri Real Estate Corp purchased a 21k SF facility at 19710 Aldine Westfield Rd. TNRG’s Stephen Kuper repped seller DFJ Aldine Westfield, and RE/MAX Metro’s George Froming repped the buyer.
An undisclosed South American buyer purchased Fairmont Parkway Shopping Center, a 172k SF power center at Beltway 8 and Fairmont Parkway in Pasadena. Transwestern’s Micha van Marcke, Paul Barile, Janice Sellis and Chace Henke repped the seller, and Transwestern’s Jan Sparks, Michael Snodgrass and Tim Bennett secured debt for the buyer. The center gets very strong retail sales PSF regardless of market conditions because of its proximity to the Port of Houston and the world’s second-largest petrochemical complex. Lots of investors were drawn to its long-term, stabilized returns. The center is 96% occupied and is dual anchored by 24-Hour Fitness and iT’Z Family, Food & Fun.
Reliance Commercial Realty’s Tom Pagel repped Town and Country Leather in two new locations. EDGE Realty Partners’ Hannah Smith and Josh Jacobs repped landlord Satya in both deals.
• 7,675 SF in Meadows III Shopping Center at the Grand Parkway and Long Meadow Farms in Richmond.
• 9,760 SF in Spring Park Village Shopping Center at I-45 and Cypresswood Drive in Spring.
Boot Barn leased 12k SF in Spring Park Village Shopping Center in Spring. EDGE Realty’s Hannah Smith and Josh Jacobs repped landlord Satya, and CBRE’s Rachel Farris and Brian Ashby repped the tenant.
Halloween City leased 40k SF in West Oaks Village on Westheimer. NewQuest Properties’ John Nguyen repped landlord BJ Investment.
The Shops at Kingsley in Pearland signed five new tenants. NewQuest’s Neal Thomson and Brad LyBrand repped the landlord in-house.
• Heartland Dental—3,200 SF. Centric Commercial’s Simon Ha and Daniel Hollek repped the tenant.
• Nails of America—2,500 SF. Stack Realty’s Greg Stackhouse repped the tenant.
• Bahama Bucks—2k SF. Windsor Realty Group’s Jim Haviland repped the tenant.
• The Tutoring Center—1,170 SF
• Liberty Tax—1,200 SF. NewQuest’s Shireen Owlia repped the tenant.
Grand Morton Town Center announced five new tenants. NewQuest’s Josh Friedlander and Rebecca Le repped the landlord in-house.
• Greater Houston Pediatric Dentistry—2,800 SF. Phelps Commercial’s John Phelps and Alan Clark repped the tenant.
• Smile Suite—2,450 SF. Phelps Commercial’s John Phelps repped the tenant.
• Today’s Vision—2,100 SF. Phelps Commercial’s John Phelps and Alan Clark repped the tenant.
• T Jin’s China Diner—2,100 SF.
• T-Mobile—1,750 SF. NewQuest’s Glenn Dickerson repped the tenant.
North American Recycled Clothing leased a 57k SF office/warehouse facility at 6830 Kirbyville St. First Houston Properties’ Jonathan McDaniel and Patrick McKiernan repped landlord Kirbyville Warehouse Associates. Brian Yates Interests’ Grady Tibbs repped the tenant.
NewQuest is breaking ground on Phase 1 of Marketplace at Ninety-Six in November. The 36-acre development is in League City and will be anchored by a 123k SF Kroger Marketplace. Site work is underway at the intersection of TX 96/League City Parkway and Hobbs Road. The first phase totals nearly $15M and will be built on 19 acres at the northeast corner of the intersection. It includes 26k SF of small shop space (some of which is pre-leased by Great Clips, Nail Bar of Texas and T Jin’s); it and the Kroger will open in October 2016. Phase 2 has six pad sites; that 19-acre section will break ground in 2017. Rebecca Le and Heather Nguyen are leasing the project. Osborn & Vane Architects handled design; CMB Landscape Architecture and Arch-Con round out the development team.
Hyatt Regency Houston Galleria is now open. Songy HighRoads developed the 325-key hotel, which is managed by Aimbridge Hospitality. It’s the ninth Hyatt to open in the Houston area and is part of the 7.6-acre Galleria Plaza development, where a Hyatt Place Houston Galleria is also under construction. (It’ll open early next year.) It includes 11k SF of meeting space through 10 private meeting rooms plus 7k SF of lobby and gathering space.
HFF’s Travis Anderson, Cory Fowler and Tyler Ford secured a senior loan for North American Development Group to refinance Northline Commons, a 472k SF power center in northern Houston. The 10-year, fixed-rate loan was placed with Wells Fargo. The property was built on 48 acres between ’07 and ’09 and is 91% leased.