Nice article in the Houston Business Review on the 2015 Top Commercial Real Estate stories. See article here.
International investors are still bullish on Houston
Some of the biggest deals in 2015 involved international investors. Most notably, BBVA Compass Plaza at 2200 Post Oak Boulevard was purchased by a Spain-based private investor for a record-setting price. The building sold for roughly $442 million, or $527 per square foot. That set a new Houston record for per-square-foot pricing, according to Realty News Report
Foreign buyers continue to be very excited by the Houston Commercial market. This is also true for the local housing market. A lot of the deals being done today, especially in the rental market are with foreign investors who are looking for long term returns. This is having an interesting impact in the way we market and search for homes. I’ve personally had buyers bring Feng Shui advisors with them when shopping for a home. Many homes get immediately ruled out based on this methodology. More on this later in another article I’m planning to write.
Health care construction ramped up big time in 2015
There is almost $5 billion in development underway or planned for Houston’s health care sector. A big chunk of that is a $1.5 billion 30-acre research campus in the Texas Medical Center dubbed TMC3.
Health care is a massive growth industry and Houston continues to lead the nation in our investment in this area. The planned developments are a sign that this is not slowing down any time soon. In addition, this is a great counter balance to the slowdown of our other major industry – Oil and Gas.
Gone are the days of enclosed retail developments. In 2015, it was all about open-air.
One of the best examples of Houston’s newfound love for outdoor retail is the River Oaks District, which celebrated its grand opening in October. The development has since changed Houston’s retail scene by attracting a swath of ultra-luxe, international retailers to Houston. The district has served as a huge pull for new business players entering the Houston market.
Personally, I am big fan of this trend. Open air retail is here to stay… we continue to craft a better neighbood and retail mix in Houston and the surrounding suburbs. Sugar Land Town Square and CityCentere are other great examples of this trend.
Sublease space hit record highs due to oil slump, and the Energy Corridor felt the brunt of the hurt.
With oil prices staying low, the Energy Corridor’s office market has been hardest hit, with about 3 million square feet of sublease space available.
The oil price crash is clearly having an impact on the commercial market. I expect this to continue for a while as the forecast for oil price stabilization is still a ways off.
Petrochemical expansions have been booming throughout much of 2015.
There are more than $1 billion in petrochemical projects and expansions taking place throughout the greater Houston area.