iewpOint HT’ HE OR HOTO - Texas A&M University Houston’s industrial market, with its large...
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March 2016 CBRE Research © 2016 CBRE, Inc. | 1
viewpoint What’s ahead for houston?
One forecast doesn’t fit all commercial real estate sectors:
What’s ahead for Houston in 2016?
Throughout the past 18 months of dropping, volatile oil prices, news headlines and street
speculation have centered on how Houston will fare with ‘lower for longer’ energy prices. The result
is a mixed outlook for commercial real estate and reveals varying levels of opportunity in each sector.
• Theofficemarketisgarneringthemajorityoftheattentionasmostforecastingincludesasofteningmarketforthenearterm,concentratedinsubmarketssuchastheCBD,theEnergyCorridorandTheWoodlands.Subleasespacesurgesandclimbingdirectavailabilitywillbethemainconcernoverthenextthreetofouryears.
• However,compensatingforthissofteningisHouston’sindustrialmarketandtheresultinggrowthinHoustonretail:industrialmarketsarebuttressedbythehealthofthedownstreamandmidstreampetroleumsectors,whileretailmarketsarebenefitingfromadisciplinedconstructionpipelineandrecordpopulationgains.
• HighratesofreturnandlowvolatilityinHouston’sretailmarketareattractivetoinvestors,whowillbeginmoreaggressiveexpansioneffortsattractingadditionalnationalbigboxandjuniorchainstothemarket.
• ThemultifamilysectorisfacingasplitoutlookdependentonthesupplyanddemanddynamicsatplaywithintheClassAandB/Ccategories.
• Last,investmentactivityandcapratesshould,onthewhole,remainstablefortherestoftheyear.Variedoutlooksfortheindividualsectorswillmirrorinvestorintentions;strongindustrialandretailfundamentalswillattractthemostbuyersandlenders,whileasoftofficemarketwillcauseapprehension.
Robert Kramp
Director of Research & Analysis
Texas-Oklahoma Division
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Astheworld’senergycapital,Houstonisheavilyinvestedintheoilindustry’seconomicoutlook—bothforthehealthoftheregionaleconomyandbecausethepriceofcrudeoilisamajorpivotpointforlocalbusinesses.Despitesustainedlowoilcommoditypriceshittingtheindustryhard,Houston’seconomyhasmaintainedpositivejob,GrossMetropolitanProduct,andpopulationgrowthin2015.Eventhough2016willbeaslowgrowthyear,itwillbeayearofpositivegrowthaccordingtomultipleareaforecasts.
ThereasonsincludeamorediversifiedHoustonthathasemergedfromthe1980soilandgasbustwhichstillcastsshadowsoflingeringdoubtacrosstheU.S.Houstonlost221,000jobs,or13%ofthetotalworkforce,duringthatdownturn.Yet,regardlessoftheoilpricecollapseof2015,Houstongained15,200jobs.Asimilarexpansionisprojectedthrough2016buoyedbystronggrowthinthehealthcare,informationservices,teaching,andhospitalitysectors.Despitethatfact,energy-dependentsectorsarefacingchallengingmarketconditions.Theseconditionshavevisiblyincreasedvulnerabilitiesintheenergyindustrynationwide—forexamplenationalbankshavereportedeffortstoincreasecapitalreservesbybillionsofdollarsinlightofloanexposureintheenergysectorandamiddecliningsharevaluesandoilprices.
WhiledepressedcommoditypricesarenotidealfortheHoustoneconomyintermsoftheupstreamsectoranditssupportingservices(engineering,legal,accountingandmanufacturing),aboomingdownstreampetrochemicalmarketthatisleveragingthelowercostofpetroleum-basedfeedstockprovidesacounterbalanceofexpandingeconomicactivity.Inparticular,Houston’seastside—intheShipChannel,PortofHouston(POH)andGulfCoastindustrialareas—isattheepicenterofthispetrochemicalboom.
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Theperformanceofthesingle-familyhousingmarketin2015wasoneofthebestonrecord,secondonlytotheblisteringpacesetin2014.Single-familyhomesinthe$150,000-$250,000rangecontinuetoseestronghomesalesduetopentupdemandforaffordablehousingafterfiveyearsofexplosivepopulationandjobgains.Houstonaddedmorethan420,000newjobsinthefive-yearperiodbetween2010and2015,andifthereisonethingevidentinthedata:Houstonhashistoricallydemonstrateditsresiliencyinthejobsmarketdespitevolatilityincrudeoilprices.
Figure 1: historic Job Growth Shows resiliency Despite Oil Shocks
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Source: Texas Workforce Commission, CBRE Research, March 2016.
Intheyearahead,theHoustonregionwilllikelyexperienceamoderateeconomicslowdowninthewakeofthecrudeoilpricecollapse;however,thelocaleconomyshouldbebackontrackforaboveaveragegrowthratesbylate-2017.
Whattheseconditionsmean,then,foreachoftheprimarycommercialrealestatesectorsismorevariedanddependsontheireconomicinterrelationshipsandrespectivepropertycycles.
OFFice Market BearinG the Brunt OF the Oil Glut in ’16 anD BeyOnD
Withdemandlargelydrivenbytheenergyindustry,Houston’sofficemarketisthemostexposedofallthelocalcommercialrealestatesectors.Asoilpricesdroppedbelow$30/bblforthefirsttimein12years,itbecameapparentthatoversupplyincrudeoil—andvacancyinHouston’sofficemarket—willbeamajorchallengethroughout2016,2017andbeyondinallofthemostpragmaticandrealisticofscenarios.
Thelayoffsandreductionsincapitalexpendituresthatoccurredlastyearintheenergysectorareexpectedtocontinueforthedurationofthedownturn.Jobsheddinginthissectorhasfreedupexcessspacethatwasoncefilledwithemployeesorsetasidefor
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futuregrowth,leadingtoaburgeoningsubleasemarket.Sinceoilpricesbegantodropinlate-2014,Houston’sofficesubleaseinventoryhasspiked179%,recentlysoaringto8.5millionsq.ft.Thisnewlyaddedspacerepresentsabout4.8%ofthetotalmarketandisprojectedtoreachahistorichighof10.1millionsq.ft.laterthisyear.Forperspective,Houston’s15-yearaverageforsubleasespaceis3.8millionsq.ft.,withthepreviousrecordhighof5.2millionsq.ft.setbackin2004.
ThemajorityofHoustonsubleaseavailabilitycomesfromoccupiersintheenergysectorandprovidescompetitivealternativestodirectleasessuchashigh-endspaceandlongerleaseterms.Houston’sEnergyCorridorandCBDwillbethehardesthitsubmarkets,whereeachhasover1.5millionsq.ft.ofsubleasespacecompetingwithdirectavailablespaceandwilleventuallyapplyanaturaldownwardpressureonarearents.
Althoughoverallrentalrateshaveyettosubsidebyasignificantmeasure,landlordconcessions,suchasfreerentandescalatingtenantimprovements,havequicklybecomestandardofferingsforpropertieswithsignificantvacancies.Prime,well-leasedofficebuildingsareholdingthelineonaskingrents,andthiswillbeapatternthroughoutthemarketduringthenext12to18monthsuntilthesewell-capitalizedpropertiesfacethepossibilityoflosingalargetenant.Higher-riskproperties,withheftyamountsofcurrentorfuturevacancy,willbemoreinclinedtoadjustratesinordertosecureatenantandstabilizerentrolls.Concessionsforprimespacenowrangefrom6to18monthsoffreerentandupwardsof$50.00to$75.00persq.ft.oftenantimprovements.
Figure 2: Houston Office Availability Jumps to 21.3% in 2017 (%)
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Source: CBRE Research, February 2016.
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Compoundinganalreadygloomypictureforarealandlords,almost6.8millionsq.ft.ofnewproductisdeliveringin2016,addinganother3.3millionsq.ft.ofvacantspace.Houston’sfutureofficespaceavailability—whichincludessublease—willjumpfrom17.6%to21.3%in2017,aratenotseenthishighsincethemid-1990s.
Shadowspace,whichiscurrentlyleasedbutisknowntobecomeavailableinthenext6to24months,isamajorwildcardasmergerandacquisitionactivityintheenergysectorwillfurtherfuelflamesofspaceavailabilitywhenthesenewlyrestructuredcompaniesrightsizetheirrealestatefootprintsafterclosing.Addingtothealreadybleakoutlookintheofficemarketareadditionalbankruptciesfiledbyenergyoccupiersandtheirimpactonofficespaceintheyearahead.
Overthenextfewyears,Houston’sbiggestchallengeintheofficesectoristorpiddemandcoupledwithincreasingnewsupply,nottrendingtowardequilibriumuntilasearlyas2018.Still,tenantsnowhavetheupperhandinleasenegotiations,apositiontheyhavenotdecidedlyhadinanumberofyears.
Inmanyways,though,thiscrudeoilglutconsequentlypresentsanewopportunityintheBayouCityofficemarketthathassomesaying“Boom, Bust, Repeat.”
inDuStrial Market BeneFitinG FrOM pOrt, petrOcheMical, plaSticS anD panaMa
Onesector’spainisanothersector’sgain.Lowcrudeprices,thoughnegativelyimpactingtheupstreamsideoftheoilandgasindustry(explorationandproduction)andofficeleasing,areaboonformidstreamanddownstreampetrochemicalmanufacturingandinvestment,whichcouldbethenext“industrialrevolution”forHouston’seastsidelandscape.Thisexpansionwillcontinueduring2016,providedthataboomindownstreampetrochemicalproductsdoesnotleadtoanewsupplysaturation;anunlikelyscenarioasindustrialvacancyisinthelow-singledigitsandisprojectedtoremaintherefortheforeseeablefuture.
“There is a lack of natural expirations in the market compared to past volume and we will not see an increase in market volume expira-tions until ‘18, ‘19, ‘20 and beyond.”
— CBRE Senior Vice President, Office Tenant Representation
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Whilelowoilpricesdotightenfundsavailableforcapitalexpenditureanddecreaseoverallprofitsforsomepetrochemicalproducts,cheapfeedstockandapremierlevelofavailableinfrastructurehasattractedbillionsinpetrochemicalcapitalprojectstoHouston.CombinedwiththeexpansionofthePanamaCanalandtheHoustonShipChannel,midstreamanddownstreamcompaniesseetheHoustonandGulfCoastregionasasolidinvestment—evidencedbyalmost$150billioninpetrochemicalprojectsalongtheGulfCoastsince2010,andbetween$50-60billionintheHoustonarea.Theexpansionbyonerefineralonewillincreaseexportsby12%andthecompletionofthePanamaCanalupgradeswillbeeconomicdriversgoingdeepinto2017and2018,furthersolidifyingHoustonasamajorplayerontheworldstageforglobaltrade.AndHouston’sindustrialmarket,withitslargewarehouseanddistributionclusterandaccesstosupplyandlogisticsnetwork,willcontinuetoreapdividendsbeyondthepricedoldrumsinthecrudeoilcommoditiesmarket.
Figure 3: Over $50 Billion in Petrochemical Construction Underway on Houston’s East Side
Type of Project Investment Value ($ Millions) Completion Date
LNG liquefaction project 14,000 2018
LNG export facility 10,000 2020
LNG export terminal 9,500 2018
Petrochemical Complex 8,900 2018
LNG export terminal 6,000 Q4 2015
Gulf Coast Petrochemicals Project 6,000 2017
Facility expansion 6,000 2017
Methanol production and export facility 4,500 TBD
Gulf Coast Expansion Project 4,000 2017
Propylene oxide and tertiary butyl alcohol plant 4,000 2018
LPG export terminal & NGL fractionator facility 3,000 2016
Propane dehydrogenation plant 2,000 Q4 2016
Petrochemical complex expansion 2,000 TBD
Expanded ethylene production 1,500 2017
Refrigerated ethane export plant 1,300 Q3 2016
Multiplant ethylene expansion 1,300 Q4 2015
Propane Dehydrogenation Plant 1,200 Q4 2015
Methane-to-propylene project 1,000 2017
Methanol Production Unit 800 Q4 2015
Ammonia Plant 600 2017
High-density polyethylene manufacturing plant 500 2016
Petroleum storage terminal expansion 400 Q2 2016
Methanol ammonia plant expansion 250 Q4 2016
Bayport Industrial Complex 230 Q1 2016
Ethylene Vinyl Alcohol Copolymer manufacturing plant 180 TBD
Source: Greater Houston Partnership, CBRE Research, February 2016.
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“Oil is not the only story in Houston.” — CBRE Senior Vice President, Industrial Brokerage
LastyearwasastrongoneforthePortofHouston(POH),closingtheyearwitharecordnumberoftonnagewhenithandledvolumetotalingover2.1millionTEU’sandaccepteditsfirstofthelargevesselsanticipatedtoarriveuponthecompletionofthePanamaCanalexpansion.Thesedevelopments,combinedwiththecessationofthe40-yearoilexportban,provideanenhancedoutlookforthePOHin2016andbeyond.
InordertoreadyHouston’sShipChanneltoacceptlargercargovessels,thePortofHoustonAuthorityannouncedplansfor$700millioninimprovementsoverthenexttenyears.TheseexpansionswillservetoaddmorefueltoHouston’sregionaleconomyoverall,andtoitsindustrialsectorinparticular.Overthelastfiveyears,thePOHcontributed$264.9billionofeconomicimpacttoTexasdespiteslumpingcrudeoilpricesandtrafficisexpectedtoincrease10-15%overthenextseveralyears.FortheeastsideofHouston,thissubmarketisalreadybenefiting:industrialvacancysitsat3.4%withexpectationsforanadditional170bpsdecreaseoverthenexttwoyears.Additionally,thePOH’sexpansionrepresentsmoreopportunitiestomanufactureandexportothercommodities,includingpetrochemicals,resinsandplastics,toadvanced-manufacturingcountriessuchasChile,China,JapanandSouthKorea.
Indeed,volatileoilpriceshaveyettoseriouslyderailindustrialdemand.OrganicdemandfordistributionspaceremainsstrongasretailconsumptionhassurgedinrecentyearsduetoaboominHouston’spopulationandstrongoverallemploymentgains.Buttheindustrialsectorisnotcompletelyimmunetotheeffectsoftheoilglut:particularlyhardhitarecertainportionsoftheheavyandadvancedmanufacturingindustrywithinfactoriesproducingequipmentandpartsrelatedtotheexplorationandproductionofoilandgas(whichisbeingseenintheregion’sdampenedsalestaxcollections).
Midstreammanufacturersintheenergysectorwilllikewisefacedifficultiesastheycontinuetoobserveslowingdemandin2016.Someofthesesmall(15,000–30,000sq.ft.)crane-servedbuildingswillexperiencesofterdemandandwilllikelybethesourceofprojectedincreasesforindustrialsubleaseduetoenergycompanyconsolidations.Recentleasingactivitysuggestthereisashifttowardssomeshort-termleases,asoccupiersseektomanageriskwhilewaitingfortheenergymarkettofirststabilizeandthenrebound.
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Figure 4: Retail Occupancy Reaches Historical High
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it iS all aBOut the rOOFtOpS: retail tapS recent pOpulatiOn GrOwth
Houston’sretailmarketispoisedforastronggrowthyeardespitethecrudeoilglutanditsprofoundimpactontheofficesector.Drivenbyrapidfiveyearpopulationgainsandanexpandingconsumerbase,Houston’sretailsectorlagsthecity’sothercommercialsectorsandiscurrentlyinthemidstofnewdevelopmentandrobustleasingcycles.
Since2010,Houstonaddedmorethan540,000residents,morethananyothermetroareaintheU.S.Bythesametoken,duringthattimeaddedverylittleretailspacedespiterecordbreakinghomesalesin2014and2015.Whilestillinpositiveterritory,Houston’snetmigrationswillslowslightlyoverthenexttwoyears,butpopulationisforecastedtogrowbynearly11millionresidentsby2045—adeepconsumerpoolbyanymeasure.
Suburbandevelopment,particularlysurroundingthenewlyopened180-mile-longGrandParkwaycircumnavigatingtheentiremetroarea,willkick-startHouston’snextlarge-scaleseriesofretailexpansion.Toputthispotentialintoperspective,since1980,Houston’sretailmarketaveragedabout37millionsq.ft.ofnewconstructionperdecade.However,inthelastsixyearsonly10millionsq.ft.ofnewretailproducthashitthemarket—duringrecordpopulationandjobgains.Andnearlyallofthatnewretailspacewasquicklyabsorbed,resultinginarecordhighretailoccupancyrateof93.9%byyear-end2015.Further,ClassApropertieshavevirtuallynoavailabilitywithascant2.4%vacancy.Infact,mostoftheremainingavailablespaceintheHoustonretailmarketiseitherinanundesirablephysicallocation,foundinolderproperties,orisin-linespaceunsuitableforjuniorandbigboxtenantsactiveinthemarket.
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Source: CBRE Research, February 2016.
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Therefore,despitetherecentslowdowninemploymentandpopulationgrowth,theretailmarkethasyettosatisfythecurrentspaceneedofHoustonshoppers.Currently,restaurantsandsupermarketsareseeingthebulkofthedemand;50%ofthedeliveredconstructionin2015wasingroceryanchoredcenters.
Additionally,CBRERetailbrokersaresaying“nationalretailconceptsarestillcomingtoHouston,”asthesheersizeofthemarkethascapturedtheattentionofretailers,placingHoustonastheirthirdmostsoughtaftermarketforexpansionbehindNewYorkandLosAngeles.Asnewretailcentersdeliverinsuburbanmarkets,U.S.retailerandbigboxactivityhasdramaticallyincreased—including2015—withbignamessuchasTargetannouncingintentionstore-enterHouston.AgrowingportionofHouston’shealth-consciouspopulationisdrivingexpansioninseveralretailtrends.Aninfluxofnewfitnessconceptsandjuicebarsareexpandinginthemarket,aswellashigh-endfitnesstenantsthattypicallytargetsuccessfulyoungprofessionals.
Ofcourse,lowoilpricesandabearishnationwideperceptioncouldderailahandfulofexpansions,butHoustonconsumers,justlikethoseeverywhereelseintheU.S.,arenowlessencumberedbydebtandarebenefitingfromlowergasprices.Ontheotherhand,salestaxrevenuesacrosstheHoustonMSAhavebeguntodeclinethisyear.Revenuescollectedduringtheholidaysalesmonthsof2015weredown2.5%year-over–year.Whilespendingmayhaveslowedslightly,Houston’sretailconsumerisstillconfident.InfactHoustonconsumersarespending42%morenowthanduringthe2010recessionwhichsawa16%contractioninsalestaxrevenuesduringthesameperiod.However,byyear-endorearly-2017,retailsalescouldsoftenfurtherasgainsintheserviceindustrycompensateforjoblossesinthehigher-payingenergysector,resultinginlessdisposableincomepercapita.
Figure 5: Houston Sales Decline yet nowhere near Recessionary Levels: Sales and Use Tax Revenues
2015 - 2016 Y-o-Y CHANGE 2009 - 2010 Y-o-Y CHANGE
City of Houston -5.3% -14.9%
Houston MSA -2.5% -16.0%
Asaresult,Houston’sretailsector—18-monthsintothecrudeglut—isweatheringtheoilandnaturalgaspricedownturnduetothecombinationofpopulationgainsboostingthegrowinglocalconsumerbaseanddisciplinedretaildevelopmentoverthepast10years.
Allocations are based on sales made in December by businesses that report tax monthly; October, November and December sales by quarterly filers; and 2015 sales by businesses that report tax annually.
Source: Texas Comptroller of Public Accounts, CBRE Research, February 2016.
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claSS B aFFOrDaBility iS the new Black: MultiFaMily’S Sweet SpOt
AswithHouston’sofficeconstructionpipeline,timingiseverythinginitsmultifamilydevelopmentcycle.AcombinationofheavyconstructionpatternscitywideoverthepastfiveyearscoupledwithslowingjobandpopulationgrowththisyearhasledtouncertaintyforClassAleasingvelocitythisyear,inamarketwheredevelopershavedelivered63,000unitssince2010—10%oftheregion’stotalinventory.Butunlikeofficespace,newurbanluxpropertiesarestillbeingabsorbed,justnotatthebreakneckspeedofthepastseveralyearsandthesuburbanapartmentproductisexperiencingsoftnessinjustahandfulofsubmarkets.
Astheconstructionpipelinebeginstodrainthisyearandintonext,Houston’smultifamilysectorwillbegintoquicklytrendtowardequilibriummuchmorerapidlythantheofficesector.Atthispointinthecrudeoilglut,aresurgenceintheavailabilityofthemoreaffordableClassBproductwillbeamajorfactor,particularlyonHouston’seastsideoftownwherepetrochemicalcompaniesareexpanding,creatingconstructionanddownstreamjobs.Clearly,inthewakeoflowoilprices,Houston’smultifamilysectoriscomingoffthemostactiveconstructioncycleever,andananticipatedcontractioninleasinganddevelopmentactivityisaneededadjustmentforwhatcouldbeseenasawhite-hotapartmentmarket.
Overall,apartmentsinHoustonarestillleasingunits,andalthoughfundamentalsarenotcurrentlyasstrongastheywereinthelastfiveyears,lendersareavailableifapropertyiswellleasedjustnotfornewdevelopment.SinceHoustonhas29,000unitscurrentlyunderconstruction,occupancyrateswilldeclinein2016andlandlords—forthefirsttimeinalongtime—areofferingconcessions:insomecasesuptoeightweeksoffreerent.
“The Houston apartment market is still leas-ing units and lenders are available if a prop-erty is well leased.”
— CBRE Executive Vice President
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Considerthis:26,000unitswilldeliverin2016,andwithfivetosevenjobsnettingoneapartmentrenter,themarketwillnaturallyhavesomechallengesleasingthem.YetHoustonmultifamilyrentshavenotyetregisteredanydownwardpressure.ClassArentsattheendof2015werepracticallyunchangedfromthepriorquarterat$1.53persq.ft.or,$1,458permonth,andratesarenearly25%higherthanin2011.
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Asaresult,Houston’sInnerLoopispricingoutsomerenters,specificallywould-behomebuyersconstrainedbyahotsinglefamilymarketorbudgetconsciousyoungprofessionalsseekinganurbanlivingexperience.Middle-tierpropertiesarescarceinHouston’sInnerLoopandnoneexistatallDowntown.Houston’seastsidesubmarketsofClearLake,Webster,LeagueCityandBaytownfeaturestrongClassBappetitefromthemiddleandworkingclassresidentsthatdominatethearea.Atthecloseof2015,occupancyinsoutheastHoustonwas91.7%comparedtotheClassAInnerLoopmarketwhichsatat87.1%occupied.
Lookingahead,ononehandthemultifamilymarkethasalargepipelinetoabsorbinalessthanfavorableeconomicenvironmentwhichwillimpacttheurbanClassAoccupancyandpossiblyleaserates.Ontheotherhand,stabilizedClassBpropertieswillbethesweetspotforHoustonuntilstrongeremploymentandpopulationgrowthresumes.
Figure 6: Class B Occupancy Steadily Strengthens As Class A Adds new Supply
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Source: CBRE Research, February 2016.
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viewpoint What’s ahead for houston?
in cOncluSiOn
SlowingemploymentgrowthstemmingfromacontractioninworldwideenergymarketswillhaveameasurableeffectontheHoustoneconomy,butbynomeanswillin-migrationsfalltozeroorbegintoreverse.Houston’spopulationpatternsshownomodernhistoryofnetout–migrations;currently,theconditionsnecessarytoreversethislong-termtrendsimplydonotexist.ThisisnotHouston’sfirstoildownturn,andjustasthememoryofthecrippling1980sbustlivesoninthenationalsentiment,ithaslingeredinthefabricofHouston’seconomy.Howeverthistimetheconfluenceofstablejobgrowth,recentpopulationgains,andamorediverseeconomyhaswellpreparedtheHoustoneconomytobearongoingvolatilityintheoilpatchwithresiliencyandpositivegrowthrates.ForecastsforHouston’seconomyandjobopportunitiesmaynotbeasbullishastheyweretwoyearsago,butanalystsatForbesexpectHoustonwillcontinuetogrowasoneofthenation’smostprosperouscitiesoverthenexttenyears—anoutlookthatismirroredlocallyinHoustonians’renownedoptimismwherenearly90%recentlyagreedthat;“Ifyouworkhardinthiscity,eventuallyyouwillsucceed.”Houston’sworkethicisalive,well,andflourishingandsotoowillitscommercialrealestatemarket—andthatisoneforecastthatfitsallsectors.
capital MarketS OutlOOk
Investment activity, on the whole, will remain stable throughout the year and capitalization rates will likely see little movement. The varied outlooks for the individual sectors mirror investor intentions; strong industrial and retail fundamentals will attract the most buyers and lenders, who, while cautious, are still willing to put forth financing for all transaction types. In one measure, Houston’s status as the fourth largest commercial market shows less than 10% of lenders are pulling back at this time.
Office property is of growing concern to both buyers and lenders—especially as the sublease glut grows along with vacancy. Over-performing rates of return relative to other major metropolitan markets and an aversion to be the “first to enter” the market means that opportunistic buyers may wait for fundamentals to further soften before closing a deal and although Houston has seen fewer bidders on current listings, assets values are currently showing bullish performance.
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viewpoint What’s ahead for houston?
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Robert C. KrampDirector of Research & Analysis Texas-Oklahoma [email protected]:@RobertKramp
Analee Bivins MichelettiResearch [email protected]
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