Houston Commercial Real Estate,Houston,Texas | Tenant Representation

by Patsy Fretwell on January 26, 2011

Houston Office Market

Houston’s office market is gearing up for increased leasing activity in 2011, particularly among Class A buildings, which ended the year with positive absorption, according to quarterly market research compiled by Commercial Gateway, the commercial division of the Houston Association of REALTORS®.   Citywide, the office market recorded overall negative net absorption of 144,279 square feet in the fourth quarter, contributing to the 2010 year-end total of a negative 1.1 million square feet. Class B buildings account for the most red ink both for fourth quarter and year-to-date, recording over 1.6 million square feet of the total negative absorption for the year.  Class A space continued its third consecutive quarter of positive absorption, 279,815 square feet, to finish out the year with a positive 683,337 square feet. Several submarkets finished 2010 with positive absorption but only four submarkets – Energy Corridor, Northeast, Uptown and West — reported positive absorption activity in both fourth quarter and for yearend.

The current 13.4% vacancy rate is 0.6 percentage points higher when compared to Fourth Quarter 2009’s 12.8%, and rental rates are decreasing. The overall annual, weighted averaged, gross rental rate quoted for this quarter of $23.03 per sq.ft. is 5.2% lower than the same quarter last year, which was $24.29.   The Central Business District’s (CBD’s) quoted rates dropped 6.4% to $29.69 from a year ago’s $31.71.  Rental rate concessions vary across the board, with tenants negotiating for the lower rates ahead of an anticipated increase in sublease space hitting the market. Overall sublease space, at 3.2 million square feet, decreased marginally from last quarter, but shows less square footage, 3.6 million, than reported in the same quarter a year ago.  The effects of various ongoing company consolidations in the marketplace have yet to be fully realized by Houston’s office market.
 

Houston Industrial Market

Houston’s industrial market continues to rebound with positive absorption recorded and limited major construction on the horizon, according to statistics released by Commercial Gateway. With a fifth consecutive quarter of positive absorption, the industrial market has seen a slow decrease in its vacancy rate and a stabilization of rental rates.  Vacancy overall is 8.5%, compared to 9.6% a year ago.

Properties classified as manufacturing are reporting the lowest vacancy rate of 4.1%, with crane-ready buildings in short supply.  However, warehouse/distribution property types are experiencing the most leasing activity this year, accounting for 83% of the total year-to-date.  Properties classified as warehouse/distribution represent about 72.6% of the total market.  Rental rates have increased slightly, about 2.3%, over the last year, with a quoted, weighted averaged annual rental rate of $5.45 per sq.ft. reported this quarter compared to $5.33 a year ago.  Sublease space reported in fourth quarter represents a slight drop from third quarter but a substantial drop from the first half of the year.

 HSACQ:
Very good article regarding Houston Commercial Real Estate Market.

Houston Site Acquisitions specializes in Houston Commercial Real Estate including , Houston Industrial Space, Houston Warehouse Space, and industrial investment property. For commercial real estate assistance please contact us at 713-789-8700 or fill out the easy to fill out form located at the top right hand corner of this page. http://www.hsacq.com

Houston Site Acquisitions provides fast, friendly, free location service to Houston, Texas corporate tenants with our Houston office space, Houston warehouse space, retail space tenant representation services, Houston Commercial Real Estate real time lease and sales listings, and Houston commercial real estate corporate facility leasing management services including searching, finding, identifying, negotiating, and securing Houston commercial real estate corporate facility sites for lease. Houston Site Acquisitions assists corporate tenants with identifying various types of Houston Commercial Real Estate current real time listings / options for lease including Houston office space, Houston office buildings, Houston warehouse buildings, Houston office warehouse space, Houston distribution center space, Houston shopping centers, Houston sublease space, Houston lifestyle centers, Houston mall space for lease, Houston retail box space for lease, Houston warehouse Space, Houston retail Space, big box locations, Houston law firm space, school space, medical space, call center space, Houston technology center space, cell site acquisition, telephone data rooms, pad sites, and raw land for Houston build-to-suits. Additionally, Houston Site Acquisitions services corporate business expansions and rollouts throughout greater Houston and the entire Houston, Texas area. Houston Office Space, Houston Industrial Space, Houston Retail Space -Start Search & Submit Requirements On-Line 24-7.Houston Tenant Representation Company. Houston Tenant Representation Broker. Houston Commercial Broker. Houston Commercial Real Estate Broker. Houston Office Space. Office Space in Houston. Houston Office Lease. Houston Office Space Lease. Houston Office Space Leasing. Start Search 24-7 by filling out the on-line form. Free Location Service Citywide for Houston Office Space, Houston Industrial Space, Houston Warehouse Space and Houston Retail Space. Houston tenant representation company. Houston Tenant Representation Broker. Houston Commercial Broker. Houston Commercial Real Estate Broker. Houston Office Space. Office Space in Houston.Houston Office Lease. Houston Office Space Lease. Houston Office Space Leasing. Houston Office Space, Houston office space for lease, office space for lease Houston, Houston Commercial Real Estate, commercial real estate Houston, Houston Industrial Space, Industrial Space Houston, Houston warehouse space, Houston warehouse space for lease, Houston Retail Space, Retail Space Houston, Office Space in Houston, Industrial Space Houston, Houston Office Spaces, Houston Tenant Representation, Houston Real Estate, commercial office space Houston, Houston office space for rent, Houston office space rental, lease office space Houston, office space rental Houston, office space rental Houston, office space for rent Houston, office space for lease in Houston, office space for lease in Houston TX, office space for rent Houston TX, commercial real estate Houston TX, Houston commercial real estate for sale, Houston TX commercial real estate, Houston commercial real estate brokers, Houston commercial real estate companies. Start Search 24-7 by filling out the on-line form. Free Location Service Citywide for Houston Office Space, Houston Industrial Space, Houston Commercial Real Estate For Sale, Houston Warehouse Space and Houston Retail Space. Houston Site Acquisitions 312 Main Street, Houston, Texas 77002 Telephone: 713-789-8700

Houston Office Space, Houston,Texas | Tenant Representation

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Feb 23, 2011  by REDNews
Houston’s Office Market Closes 2010 on a Positive Note… For Both Landlords and Tenants

On average, Houston’s landlords saw positive net absorption of office space during the fourth quarter, with the suburban sector outperforming the Central Business District (CBD). As a result of the year-end push, vacancy rates decreased slightly, with the year-over-year occupancy rate increasing from 83.5% to 84.0% citywide. Despite the overall net absorption gains, tenants were still able to take advantage of a drop in average CBD rental quotes for Class A buildings, which fell by 7.9% to $34.60/SF, down from $37.30/SF. During the same period, Suburban Class A rates decreased by 0.6% to $27.11/SF.

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Macro factors driving the absorption of office space ultimately ties back to job counts. According to the Texas Labor Market Review, total nonagricultural employment in Texas rose by 19,100 jobs in November, gaining jobs in eight out of eleven months. At the local level, Houston’s MSA had the laragest monthly job increase, with 10,900 jobs added in November. Dallas followed with 5,200 jobs added. Houston also led in the monthly growth of retail and government jobs, adding 7,400 and 2,300 jobs, respectively.

Looking forward, the outlook for the downtown office market reveals the potential for additional softness based on projected new vacancy in 2011, with approximately 1.2M SF of Class A space scheduled to become vacant during the next 12 months. This influx of new availability will add an additional 4.2% of vacancy on top of the current 10.4% registered for YE 2010. However, the majority of the additional vacancy will result from one of the city’s newest office towers, BG Group Place, officially coming on line during the first quarter. This 972,000 SF Hines development will carry a LEED Platinum pre-certification and approximately 480,000 SF of yet-to-be-leased Class A space. Additional large blocks of space coming on line during the year can be found on One Allen Center with 438,000 SF available in the third quarter and approximately 130,000 SF in the Bank of America building available in February. The Continental/United Airlines merger is expected to reduce the need for the newly merged company’s 650,000 SF of downtown space. With the company’s primary lease not expiring until 2014, it is expected that some of the Continental space may come to market as sublease space. Stay tuned.

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VACANCY & AVAILABILITY
Vacancy levels were down overall for suburban properties and up slightly overall for CBD properties. Houston’s citywide office vacancy for all property classes averaged 16.0% in the fourth quarter, compared to 16.6% this time last year.

Vacancy in CBD Class A properties continued to soften reaching 10.4% compared to 8.4% a year ago. CBD Class B properties posted 21.5% vacancy, down from 22.8% 12 months earlier.

While the overall suburban vacancy rate remained in double-digits, Class A Suburban vacancy actually dropped between quarters to 17.6% from 19.3%. By comparison, suburban Class B vacancy remained unchanged at 16.3%.

Citywide, a total of 53 office properties had a minimum of 100,0000 SF available for lease in both direct and sublease space – 16 of those properties had over 200,000 SF available – at the end of the fourth quarter. Sublease space totaled 4.3 million, including 2.0 million SF of vacant space and 2.3 million SF of subleases available for occupancy over the next 12 months. The largest sublease space being marketed in Devon Energy’s space, 282,000 SF in Two Allen Center and 121,000 SF in Three Allen Center (available for occupancy 4/2011) in the CBD. In Westchase, 3600 Briarpark has the largest suburban contiguous block of sublease space available, 160,000 SF.

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ABSORPTION & DEMAND
Houston recorded positive net absorption of 618,000 SF in the fourth quarter, compared to 46,000 SF negative net absorption at the same time last year. City-wide year-end net absorption was positive 476,000 SF with suburban Class A space contributing most of that total with year-end positive net absorption of 748,000 SF, followed by suburban Class B space with positive net absorption of 191,000 SF. In contrast, CBD Class A and Class B space both reported negative net year-end absorption of 560,000 and 54,000 SF, respectively.

Prevailing economic uncertainty is likely to continue negatively impacting CBD absorption levels throughout 2011.

RENTAL RATES
Citywide rental rates have declined throughout the year.

On a year-over-year basis, CBD Class A average quoted rental rates dropped by 7.9% to $34.61/SF (from $37.36), while suburban Class A rates decreased 0.6% to $27.11/SF. CBD Class B rates increased by 0.2% to $23.95/SF (from $23.91), while suburban Class B rates fell 5.7% to $17.11/SF on a full-service basis. Until demand outpaces supply, the current tenant-friendly market is expected to continue.

SALES ACTIVITY
Investment sales activity in the fourth quarter remained at a slow pace with a handful of properties changing hands. According to CoStar, there were 57 office sales transactions with a total dollar volume of $1.1 billion, averaging $169/SF with a 7.3% capitalization rate.

Among the most significant transactions closed in the fourth quarter were:

Brookfield Properties acquisition of the 1.2M-square-foot Heritage Plaza from Goddard Investment Group for $322 million ($280/SF) in the CBD submarket. The building was completed in 1987 and at the time of sale was 84.0% leased.

LNR Property Corporation’s acquisition of the 466,026 SF One Westchase Center office building in the Westchase submarket from Walton Street Capital for $63 million ($135/SF).
LEASING ACTIVITY
Houston’s office leasing activity reached 3.0 million SF in the fourth quarter, compared to 3.6 million SF in the same quarter last year. Leasing activity is still below levels prior to the economic downturn, and an increasing number of office tenants are renewing lease commitments with better concession packages or relocating to buildings/submarkets offering more attractive terms.

The most significant new office lease signed in the fourth quarter in the CBD was the British Gas lease of 354,000 SF in Hines’ new pre-certified LEED Platinum development, BG Group Place (Formerly MainPlace). The new lease includes naming rights to the building, which will be ready for occupancy in February 2011. BG Group will be relocating from their existing Galleria area space in mid-to-late 2011.

The largest office lease renewal signed in the fourth quarter 2010 was Invesco’s renewal of 400,000 SF in 11 Greenway Plaza located in the Greenway submarket.

OFFICE DEVELOPMENT PIPELINE
Houston’s development activity remained slow during the fourth quarter 2010, with only Griffin Partner’s four-story 102,000 SF Nassau Bay Town Square office building being added to the list of office buildings already under construction. Located in the NASA/Clear Lake submarket, this pre-certified LEED Silver office building is scheduled to come on line 60% pre-leased with Hamilton Sundstrand Corporation as the lead tenant. Also included in the 2.0 million SF currently under construction is Greenwood Corporation’s 156,000 SF Chasewood Crossing II in the FM 1960-Highway 249 submarket (scheduled for completion in April 2011).

Two CBD office projects – Hines’ 972,000 square-foot BG Group Place (formerly MainPlace, slated for delivery by February 2011) and Trammel Crow Company’s Hess Tower (formerly Discovery Tower, scheduled for completion January 2011 – continue to be the sole high profile buildings under construction at the end of the fourth quarter 2010. Notably, both downtown projects began construction before the economic downturn of late 2008.

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Houston Site Acquisitions provides fast, friendly, free location service to Houston, Texas corporate tenants with our Houston office space, Houston warehouse space, retail space tenant representation services, Houston Commercial Real Estate real time lease and sales listings, and Houston commercial real estate corporate facility leasing management services including searching, finding, identifying, negotiating, and securing Houston commercial real estate corporate facility sites for lease. Houston Site Acquisitions assists corporate tenants with identifying various types of Houston Commercial Real Estate current real time listings / options for lease including Houston office space, Houston office buildings, Houston warehouse buildings, Houston office warehouse space, Houston distribution center space, Houston shopping centers, Houston sublease space, Houston lifestyle centers, Houston mall space for lease, Houston retail box space for lease, Houston warehouse Space, Houston retail Space, big box locations, Houston law firm space, school space, medical space, call center space, Houston technology center space, cell site acquisition, telephone data rooms, pad sites, and raw land for Houston build-to-suits. Additionally, Houston Site Acquisitions services corporate business expansions and rollouts throughout greater Houston and the entire Houston, Texas area. Houston Office Space, Houston Industrial Space, Houston Retail Space -Start Search & Submit Requirements On-Line 24-7.Houston Tenant Representation Company. Houston Tenant Representation Broker. Houston Commercial Broker. Houston Commercial Real Estate Broker. Houston Office Space. Office Space in Houston. Houston Office Lease. Houston Office Space Lease. Houston Office Space Leasing. Start Search 24-7 by filling out the on-line form. Free Location Service Citywide for Houston Office Space, Houston Industrial Space, Houston Warehouse Space and Houston Retail Space. Houston tenant representation company. Houston Tenant Representation Broker. Houston Commercial Broker. Houston Commercial Real Estate Broker. Houston Office Space. Office Space in Houston.Houston Office Lease. Houston Office Space Lease. Houston Office Space Leasing. Houston Office Space, Houston office space for lease, office space for lease Houston, Houston Commercial Real Estate, commercial real estate Houston, Houston Industrial Space, Industrial Space Houston, Houston warehouse space, Houston warehouse space for lease, Houston Retail Space, Retail Space Houston, Office Space in Houston, Industrial Space Houston, Houston Office Spaces, Houston Tenant Representation, Houston Real Estate, commercial office space Houston, Houston office space for rent, Houston office space rental, lease office space Houston, office space rental Houston, office space rental Houston, office space for rent Houston, office space for lease in Houston, office space for lease in Houston TX, office space for rent Houston TX, commercial real estate Houston TX, Houston commercial real estate for sale, Houston TX commercial real estate, Houston commercial real estate brokers, Houston commercial real estate companies. Start Search 24-7 by filling out the on-line form. Free Location Service Citywide for Houston Office Space, Houston Industrial Space, Houston Commercial Real Estate For Sale, Houston Warehouse Space and Houston Retail Space. Houston Site Acquisitions 312 Main Street, Houston, Texas 77002 Telephone: 713-789-8700