Casey Butaud and Brent Wood: Is Industrial Development Still Hot?
It’s hard to know just what’s going on in the industrial market—some developers aren’t seeing much dip in activity, while others are pausing projects to watch the economy. That's why we're excited to get some clarification from the experts at Bisnow’s 5th annual Industrial Real Estate Summit on Jan. 29 starting at 7am at the JW Marriott—join us!
There’s lots of industrial activity beyond oil and gas projects, says Stratton Development & Construction president Casey Butaud (a panelist at our event, here with his wife at the Astros Gala). The dip in oil prices hasn’t stopped the phones ringing from a wide variety of users—he’s building for a sports field turf manufacturer and a furniture/mattress retailer, is working through details for a 10k SF BMW repair shop (cheaper gas will make driving those Beemers more fun), is under contract with a food distributor for a 10k SF project, and has a 30k SF LOI from a New York-based group wanting to do engineering testing.
Stratton has eight development tracts working now ranging from four to 10 acres between Richie/Rankin and 242, and five buildings under construction from 6k to 25k SF. Casey says one exciting new trend is a bump in office/warehouse/showrooms in retail corridors. He’s building a 25k SF one for a Brazilian granite manufacturer fronting 1960, the first industrial showroom fronting the road in that stretch of retail. It broke ground before Christmas and will deliver in the first part of the second quarter. Of course, Casey’s also got some unique energy projects—he just finished significant assignments in North Houston for Swagelok, National Precision Air and Thigpen Energy.
Three or four months ago, EastGroup Properties SVP Brent Wood (another panelist) thought land constraints--availability and pricing--would be the story of 2015. But now short-term uncertainty has taken over, and it's putting groundbreakings on hold. He thinks we’ll still have activity (and the long-term outlook is great), but it’ll be a bumpy year. EastGroup does phased business park development, which limits its risk, but it still only has one groundbreaking planned for the next three to six months—it’s kicking off the fourth of five buildings in West Road Business Park soon. Here’s Brent with his son Wade (and photobombed by oldest daughter Ansley) after Ole Miss beat Alabama last fall—Brent and his wife are Ole Miss alums and big fans.
EastGroup’s going forward with that 65k SF rear-load building because of the strength of the Northwest submarket and great activity in the park, Brent tells us. The firm just came off a big development rush and has deliveries coming soon in three projects, including a 78k SF building completing in West Road Business Park in the next 30 days. (A fifth future building would bring the park to 380k SF.) Over in the West submarket, EastGroup has completed six buildings in Ten West Crossing (pictured above) and has one under construction. That 68k SF property is available and will deliver in a couple of months. An eighth building is planned, which would bring the park to 580k SF.
EastGroup’s also continuing its build-out on one of the biggest and most successful business parks in Houston, the World Houston Business Park. (That North Houston project near Bush Intercontinental is at 3.6M SF and still going.) The existing 39 buildings (3.2M SF) are 96% leased, and EastGroup just delivered, or is about to deliver, three more buildings totaling 400k SF. One is 100% leased, one is 50%, and the last is 16% full. (Pictured above, that 105k SF building just completed.) The park’s got land for more development in the future. Don’t miss our Industrial Summit with Casey, Brent and others—sign up here and we’ll see you at the JW Marriott on the 29th at 7am.