Stream Eyes National Expansion As Firm Increases Hiring, Tenant Rep Activity
Many companies have opted to freeze hiring and halt expansion activity in 2020, but Stream Realty Partners is taking a different approach.
Stream’s Houston office has been hiring more people throughout the coronavirus pandemic, and its other offices around the country are doing the same. The firm expects to open several more offices in new cities next year.
“Currently, we're in 12 cities across the country. I think that you'll see us probably in 16 to 17 by the end of 2021,” Stream Realty Partners Houston Managing Director Matteson Hamilton told Bisnow.
Historically, a large percentage of Stream’s business has been geared toward the landlord side in leasing and development deals. But this year, the firm identified a large growth opportunity in tenant representation services, and it is aggressively hiring more people to serve in that capacity.
“Tenant rep is a big push for us, specifically office tenant rep and industrial tenant rep. So we're going to continue to grow those teams quite a bit,” Hamilton said.
As part of that push, Stream hired Weldon Martin this month as a senior vice president in the firm’s Houston office division. Martin spent seven years working at CBRE as first vice president in advisory and transaction services and prior to that worked as an associate at Avison Young, where he was awarded North American Rookie of the Year.
On the industrial side, Stream brought Managing Director Tyler Maner down from the firm’s Dallas-Fort Worth office earlier this year to spearhead the growth of industrial tenant representation. Maner has been with Stream for eight years and specializes in industrial tenant representation, project leasing, development, acquisitions and investment sales.
Stream focuses on office, industrial and retail, but this has been a hard year for the office side of the business. Stream Houston Managing Director Ryan Barbles said office deal-making has slowed down in the wake of the pandemic, and company executives are holding off on making long-term office decisions until more workers are physically back at work next year.
Barbles said that despite the difficult environment, the office division has executed 87 deals since the beginning of the pandemic. That volume is anticipated to increase next year.
“The deals are going to come. It's just, 2020 has not been the year of Houston office,” Barbles said.
On the other hand, the industrial side of the business really shined this year. Hamilton said Houston’s industrial team has completed 176 deals in 2020 to date, with the largest amounting to 785K SF.
That deal was announced on Dec. 2, when Dunavant Distribution Group said it had leased one of three new buildings in Phase 3 of the Bay Area Business Park in Pasadena. Some of the additional deals announced in the last week include four tenants at Waypoint Business Park in Missouri City during the third and fourth quarters of 2020 for a total of 212.8K SF.
The firm also completed a number of deals in December that have not yet been announced. Stream exclusively told Bisnow that Crown Transportation leased 160.2K SF in Bay Area Business Park. Stream represented landlord Principal Real Estate Investors in the transaction.
In addition, Onus Global Fulfillment Solutions expanded its existing lease at Carson 249 in Northwest Houston. The tenant increased its lease by 89.5K SF for a total of 194.4K SF. Stream represented the landlord, The Carson Cos.
SpaceManager Closets signed a lease of 28.6K SF at Prologis Bondesen in Northwest Houston. The firm represented Prologis, the landlord, in the transaction. And TT Stone expanded and renewed its lease of 70.2K SF at Northwest Industrial Park. Stream represented landlord DRA Advisors.
Though Stream has enjoyed a busy pipeline of industrial deals this year, 2021 could be even more luctrative. Hamilton said he expects to see significant industrial rent growth in the second half of next year, specifically in Class-A space.
“Once we get through a little bit of the supply that's on the ground, speculative development supply, we think you're going to see significant rent growth in Northwest Houston, in the port submarket and in Southwest Houston,” Hamilton said.
Class-B industrial space should continue to perform at a very high level because of its typically infill location and because users are usually smaller and have less flexibility on where they can move. Hamilton also expects capitalization rates to compress further, based on the flow of capital into the industrial sector that may be reallocating out of other product types.
“There's just so much active capital chasing industrial that cap rates are absolutely going to come down,” Hamilton said.
Industrial has been the star of 2020, thanks to the meteoric rise in demand for e-commerce goods and services. That has placed major pressure on companies to invest in larger facilities closer to consumers.
Hamilton said that while last-mile conversions may be challenging economic propositions for some e-commerce retailers, the need for delivery speed could lead to some eye-opening Houston deals in 2021.
“Delivery timelines are compressing,” Hamilton said. “Two-day delivery is almost unacceptable at this point. It's going to two-hour delivery or one-hour delivery. So there's no way you can actually do that unless you have the appropriate infrastructure and facilities on the ground. Purely based on that thesis alone, you're going to continue to see that take off.”