As e-commerce continues to challenge the growth, evolution and resilience of retail, brokers in Houston have reason to be optimistic about leasing velocity and absorption in the coming months, even as new construction floods the market. There’s no denying that in the past several years, the retail industry has experienced a shakeup. The move to online shopping has spared very few retailers, and Houston is no exception. The Houston MSA has seen its fair share of big box store closures, but tenants and developers alike appear ready to face the challenges head-on. The collective mood among retail professionals in Houston is one of acceptance of a new, tech-heavy retail landscape. The retail community has evolved into embracing the likes of pop-up shops, online platforms, curbside pickup options and a service-based shopping experience. Ultimately, however, it’s the consumers who decide the fate of certain retailers. The professionals who develop and lease retail properties are integrating more psychological analysis into their daily work than ever before. In today’s environment, even the slightest of nuances in consumer behavior can mold critical aspects of real estate strategies. The evolution of retail follows the evolution of human behavior. Market Fundamentals: Houston is one of the most […]
Market Reports
What’s Going On in the Office Market 2Q18?
The Woodlands office market has continued to perform well over the second quarter of 2018. The total office space leased in this market remains strong. 85.5% overall with Class A at 81.4% and Class B slightly higher at 88%. We are seeing a trend for Class A buildings as vacancy drops the rates follow suit. Class B rates are climbing allowing vacancy rates to hold steady. At the commencement of 2Q18, we see an increase in new and planned construction of medical office buildings in The Woodlands area as the health care industry continues to grow. This submarket is now home to Texas Children’s Hospital The Woodlands, Houston Methodist The Woodlands Hospital, MD Anderson The Woodlands, CHI St. Lukes Health – Lakeside Hospital, CHI St. Lukes Health – Springwoods Village Hospital and Memorial Hermann The Woodlands Medical Center, enticing medical doctors looking to enter the expanding market with so many options to send their patients to. There is no question that activity has continued to increase this year and vacancy rates are remaining steady. The future of office leasing in The Woodlands looks to remain strong as we head into the 3rd quarter. Presented by: Lisa Hughes & Pamela Sprouse of the J. Beard […]
What’s Going On in the World of Industrial 2Q18?
After experiencing approximately 125,000 square feet of negative absorption in the fourth quarter of 2017. The Woodlands industrial market has experienced a much more welcome trend thus far in 2018 with just over 100,000 square feet of positive absorption. Landlords have taken note of the improvement and rental rates have been rising while tenant concessions have been on the decline. As predicted earlier this year, much of the absorption can be traced to the steady rebound of the oil and gas industry. As the price of oil continues to improve we anticipate that there will be a sustained level of tenant demand in the market. With increased demand and dwindling supply, we forecast developers will look to take advantage of the improving market fundamentals. The past two and half years have been relatively quiet from a construction standpoint with approximately 170,000 square feet of new product delivered in that timeframe. While notable, it is significantly less than the approximately 400,000 square feet which was delivered between 2014 and 2015. While the fundamentals begin to signal a call for new product, it will also be imperative for developers to watch the rising interest rates and the impact they will have on […]
What’s Going On in the World of Retail 2Q18?
The largest global gathering of retail real estate professionals took place in late May and The J. Beard Real Estate Company team joined over 35,000 other professionals in the industry. While attendance levels were down from last year, overall it was a successful and optimistic week. As expected, the large block, big box & power center retailers and developers were more apprehensive than in year’s past; however, there was still a strong sense that the “Retail Apocalypse” is not coming our way. There is no denying that in the past year there has been a “shake-up” in Retail which makes it nearly impossible for the consumer not to be affected in some way by the new way we shop, but the consensus appears that Retailers and Developers are ready to mitigate the challenges head-on. In response to the “shake-up”, there was a lot of talk of “experiential” retail coming in and filling the holes where online retail has taken out some brick and mortar tenants with an overall sentiment that Technology is the largest factor in this shift. This is a bit of a familiar tale as it’s been on the horizon for quite some time, and now it’s hit the […]
What’s Going on in the World of Land 1Q18?
With the population growth of North Houston continuing to climb, the demand for land to develop follows suit. A ranking of the best places to live in the United States by niche.com lists three Texas communities in the Top 10 in the category of ‘Best Cities to Live in America,’ and wouldn’t you know, The Woodlands places at Number 7. Out of 228 ranked cities, The Woodlands is the second-best city to raise a family in America, according to the report. According to the Houston-Galveston Area Council (H-GAC), Montgomery County grew by 323% from 1980 to 2015 and is forecasted to reach 1,183,999 residents by 2040 (double the County’s current population). Additionally, of all counties in the U.S., Montgomery County was ranked No. 3 in counties with the fastest job growth in 2017 (5.9%), according to the U.S. Bureau of Labor Statistics. To keep up with the region’s explosive growth, H-GAC has worked with TxDOT and regional partners to advance mobility projects and address some of the most heavily congested roadways. According to H-GAC, over the next few years we will see the delivery of several Greater North Houston transportation projects that will become essential to travel and economic development […]
What’s Going on in the World of Office 1Q18?
In comparing the 1st Quarter of 2017 to the 1st Quarter of 2018, there has been a considerable reduction in overall available office space in The Woodlands to just below an estimated 2,000,000 square feet of direct and sublet space. While office space continues to lease up, the full service asking rates are slightly below where they were in early 2017. Competition for Tenants is fierce and what appears to be driving full service rents below where they have been in the past. While there is no new construction planned to date, this trend appears to be the norm for the foreseeable future. Class “A” and Class “B” vacant space in The Woodlands has begun to even itself out from a percentage basis. A year ago Class “A” clearly dominated the overall available space in the market. Now Class “B” has just over 42% of the vacancy in the market and Class “A” is just over 54%. Full service asking rates in The Woodlands are near an estimated $29psf/yr. and Down-town rates are not far behind at just above $28psf/yr. on average. There is no question that the execution of new leases in our market has picked up significantly this […]
What’s Going on in the World of Industrial 2018 YTD?
The Woodlands Area Industrial Market continues to grow in correlation with the steady increase in population experienced by South Montgomery County. The effects from major corporate relocation’s and expansions over the past decade have significantly driven supply and demand. According to Costar, the competitive industrial product in the market has surpassed 8.2 million square feet, which represents an approximate 5% increase in supply since 2014. Overall vacancy is currently 9.4%, which represents an increase over the market’s 5-year average (7.10% vacancy). The majority of the increase in vacant space can be attributed to the lingering effects from the downturn in the energy sectors combined with the additional supply added to the market. However, the overall consensus is that the continued rebound in the price of oil will increase tenant activity and in turn lead to expected positive absorption through 2018. In the meantime, we are anticipating landlords will remain aggressive in negotiations with prospective tenants considering competing properties. On the flipside, tenants looking to renew, expand and/or relocate in 2018 would be wise to do so as soon as reasonably possible to leverage the current fundamentals. Regardless of your industrial real estate needs, it is highly recommended that you consult […]