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How will light rail construction impact the office market in the Galleria area of Houston ?

Houston Site Acquisitions specializes in Houston Commercial Real Estate including Houston Office Space, Houston Industrial Space, Houston Warehouse Space, Houston retail Space, and 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

Pinnacle HQ Groundbreaking Imminent
By Amy Wolff Sorter
PASADENA, TX-Groundbreaking on phase one of the 18-acre corporate campus – a 30,000-square-foot office building, is likely to take place in February.

Houston Site Acquisitions specializes in Houston Commercial Real Estate including Houston Office Space, Houston Industrial Space, Houston Warehouse Space, Houston retail Space, and 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

“Absorption in the best quality office properties was almost flat. Asking rents were mostly unchanged.”

Absorption was flat in the best quality Houston office buildings and asking rents were mostly unchaged. The rents have maintained most of the gain made prior to any downswing in the national economy. The real softness in the marketplace in my opinion exists more so with the Landlord’s who bought Houston office buildings within the past app. 4 years and that paid too much for those buildings at the time then they were worth. Based from a rental rate standpoint, I believe that Landlord’s of most office building classes purchased prior to 4 years ago have to be happy with the rents they are able to actually command for their office buildings. Tenants are having a difficult time realizing this and feel that they should get a better deal, and these dissapointments over not getting lower rents in a lease negotiation or a renewal are going to quickly turn into nightmares for these tenants when the Landlord’s start standing on their rates and holding their ground.

Houston Site Acquisitions specializes in Houston Commercial Real Estate including Houston Office Space, Houston Industrial Space, Houston Warehouse Space, Houston retail Space, and 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

Demand for office space was the worst it had been since the oil bust.

Houston companies slashed some 90,000 jobs, and the year posted 2.74 million square feet of negative absorption, meaning more space emptied out than was occupied, according to CB Richard Ellis.

The overall office vacancy rate rose to 15.9 percent from 11.9 percent in 2008.

Oil prices recovered in 2009, but it didn’t matter, as energy companies made cuts based on weakened global demand.

“We have a long way to go until we get back to needing the amount of space we did,” Sanford Criner, executive vice president of CB Richard Ellis in Houston, said last week at a commercial real estate outlook luncheon.

Transaction volume was dismal during the year, too.

The commercial real estate market topped out in 2006 and 2007 and has since fallen off a cliff.

Activity won’t return until banks holding real estate loans made when prices peaked realize losses on those that are now under water.

“Most every building bought in 2006 and 2007 with a loan is a troubled asset,” said Mark Dotzour, chief economist at the Texas A&M Real Estate Center.

When activity does return, high net worth individuals willing to take risk will be the first in the game, he said.

Institutional investors like pension funds, endowments and insurance companies will follow once they’re sure prices have stabilized.

In 2010, experts anticipate more negative absorption, deteriorating rental rates and increased foreclosures.

Not all the news was bad in 2009.

Absorption in the best quality office properties was almost flat. Asking rents were mostly unchanged. And construction of buildings in the suburbs was essentially completed.

Last year, developers built 5.4 million square feet of office space. Another 2.4 million square feet remains in the pipeline.

Most of that space is BP’s Helios Plaza on the Katy Freeway and downtown’s Hess Tower and MainPlace.

For now, though, new construction is a thing of the past.

Developers won’t start building again until 2012, Criner said.

Texas or bust
While the number of moves into Houston are down quite a bit from before the recession hit, Texas is still in the lead when it comes to states that folks are packing up for.

A report from Allied Van Lines said Texas had nearly 2,000 net relocations last year, meaning the company had more trucks en route to Texas than it had shipping people out of the state.

That was more than any other place in the United States and the fifth straight year Texas took the lead, according to the annual report.

Last year, Texas logged 1,900 net relocations.

Arizona placed a distant second in the most recent study with 566 net relocations, followed by North Carolina, Colorado and Florida.

The states with the biggest net losses were Michigan, Illinois, Penn-sylvania, New Jersey and California.

Attention, fence-sitters
Pulte Homes hopes to make some sales in what’s a typically slow month by putting a little pressure on buyers who may be on the fence.

On Monday, the company is hosting a Tax Credit Blitz at its 22 Houston-area communities where employees will be calling potential homebuyers and real estate agents to make sure they know if they want to use the government’s $8,000 first-time home buyer tax credit, they’d better start looking soon.

Even though the deadline to qualify for the credit is six months away, Pulte said if buyers don’t decide by March, they might not meet the June 30 closing deadline because of the time it takes to permit a new house, build one and close.

Congress recently extended the tax credit for first-time homebuyers and expanded the program for repeat buyers.

Houston Site Acquisitions specializes in Houston Commercial Real Estate including Houston Office Space, Houston Industrial Space, Houston Warehouse Space, Houston retail Space, and 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

The rate of decline in commercial real values is slowing across the country and through all property sectors, according to a fourth-quarter report from Integra Realty Resources.

The report was based on a survey of 59 of Integra’s managing directors throughout the United States to determine the rate of change across the country and in all property types, including multifamily, lodging, industrial, retail and office.

To be sure, the value of commercial real estate is expected to decline further. Integra estimates 5 percent nationally over the next six months.

That rate, however, is well below the 11 to 17 percent depreciation across asset classes in 2009.

New York-based Integra, an independent commercial real estate valuation and consulting firm, said lodging and retail sectors saw the biggest value declines in the current market downturn, with the western part of the country hit the hardest.

The office, industrial, and multifamily sectors have only experienced a 3 percent drop in value in the past three months, with the lodging and retail sectors experiencing a 5 percent drop, according to the study.

This graph shows the stabilization in commercial real estate valuation for the past 18 months in the office, retail, industrial, multifamily and lodging sectors.

Houston Site Acquisitions. We help tenants with Houston office space requirements including purchasing and selling Houston office buildings. Contact us to assist with your Houston office space requirement. Free location service offered to tenants.
http://www.HSACQ.com

Houston Site Acquisitions. We help tenants with Houston office space requirements. Contact us to assist with your Houston office building requirement. Free location service offered to tenants.
http://www.HSACQ.com

Four Chasewood Almost Full, More Planned

HOUSTON-Four leases totaling 16,667 square feet have pushed the 105,223-square-foot Four Chasewood office building to 90% occupancy a little more than a year after coming online. Owner GenCap Partners Inc. is readying for the next step at Chasewood Technology Park: the 235,000-square-foot Five Chasewood.
“We’ve completed design development on Five Chasewood, and we’re looking for a lead tenant,” comments David Lee, senior vice president with Transwestern’s Houston office. Lee partners with Transwestern senior property management-management services Ray Kubiak and broker associate Courtney Carnahan on leasing and managing the 30-acre Chasewood Technology Park at State Highway 249 and Chasewood Park Drive in the far northwest submarket.

Four Chasewood’s newest additions are US InfraManagement LLC; InEnTec Chemical LLC, Advanced Micro Devices Inc. and Terrabon Technology Corp. Four Chasewood broke ground in early 2007, came online in September 2008, and Lee tells GlobeSt.com that 60% of the class A office building was leased by 2009.

Lee says location played a main factor in the building’s lease-up, especially in light of the economic slowdown. But it wasn’t always that way. “When I first started working with Chasewood Technology Park in 1996, brokers didn’t know how to get there,” he says. “Three Chasewood had just come on line, and I had to draw people a map to get there.”

Over the years, he continues, residential and retail moved northwest. It also didn’t hurt that Compaq Computer’s main campus was right across the way. Compaq was eventually taken over by Hewlett-Packard, and the campus sold earlier this year to the Lone Star Educational System. But the rebranding of the campus during the late 1990s and early 2000s helped boost leasing at Chasewood Technology Park, Lee notes.

The remaining 20 acres are being targeted for two additional office towers and a hotel. Lee says discussions are underway for the hotel component, adding that, upon build-out Chasewood Technology Park will have 1.2-million square feet of office space, some retail and a hotel.