GALAXY NOT FAR AWAY
CLEAR LAKE (Galveston Daily News) – Construction crews broke ground last week on the city’s first Class-A office building in 20 years.
The five-story, 110,000-square-foot glass building, dubbed Galaxy II, is being developed by New Jersey–based firm Sherute LLC. The $15 million spec building is at 455 East Medical Center.
Houston-based architect firm Gensler will design the building, which is being touted as green. The project is expected to be completed next year.
SPECULATION ABOUNDS
HOUSTON (grubb-ellis.com) – The city’s almost 394 million-square-foot industrial leasing market posted 2.2 million square feet of positive net absorption during the second quarter, according to Grubb & Ellis’ second quarter Industrial Market Trends survey.
- Warehouse and distribution properties led again with over 1.6 million square feet of quarterly growth.
- General industrial product registered 470,157 square feet.
- R&D/flex product recorded 60,323 square feet.
Construction of nearly 7.4 million square feet is keeping up with demand. Consequently, overall
vacancy fell slightly by 30 basis points to 5.7 percent during the quarter.
Overall asking rents were up slightly by $0.10 to $5.13 triple-net per-square-foot-per-year (NNN PSF/YR) during this year’s second quarter, up $0.23 from the same time last year.
Speculative construction, currently about 6.7 million square feet, is now at its highest level in the past ten years.
MODERATE OFFICE LEASING GROWTH
DALLAS (grubb-ellis.com) – The office leasing market maintained a steady pace with 530,000 square feet of positive absorption during the second quarter, according to Grubb & Ellis’ quarterly Office Market Trends survey.
Local gains were 1.1 million square feet higher through last year's second quarter.
While almost all the first-quarter absorption growth was due to demand for Class-B space, nearly
80 percent of the second quarter’s total space gains occurred in Class-A.
Approximately 51 percent of the 900,000 square feet of new speculative space was available and vacant at the time of delivery. New speculative construction coming online combined with local tenants shifting to Class-B and lower caused vacancy to remain flat throughout the first half of this year at 19.8 percent.
Construction is up about one million square feet since this time last year, with 4.7 million square feet going up through the first half of 2007. Overall, Dallas–Fort Worth full-service asking rents were up $1.55 over the 12 months ending this June with a second-quarter average of $21.05 per-square-foot-per-year.
The metroplex’s office space totals almost 177.5 million square feet.
INDUSTRIAL VACANCY, RENTS SLIGHTLY DOWN
DALLAS (grubb-ellis.com) – Despite significant amounts of space coming online, vacancy in the city’s industrial leasing fell below 9 percent, or 1.8 million square feet of positive net absorption, says Grubb & Ellis’ second quarter Industrial Market Trends survey.
Area-wide vacancy in the more than 636 million-square-foot industrial market fell 20 basis points to 8.8 percent since March.
Flower Mound has increased the most this past 12 months with over two million square feet of new industrial space.
Average Dallas–Fort Worth industrial market asking rents lost $0.02 in the second quarter for an average of $4.62 triple-net per-square-foot-per-year.
About 12.2 million square feet were under construction and 5.1 million square feet of space was delivered to the local market through the first half of this year.
RECORD OF THE DECADE
HOUSTON (grubb-ellis.com) – The office leasing market's second quarter absorption count was nearly 2.7 million square feet, the highest absorption reading in ten years, according to Grubb & Ellis’ second quarter Office Market Trends survey.
Overall vacancy was down almost 4 percent from the same quarter last year and is the lowest level in seven years.
Much of the demand for office space has resulted from the energy industry's growth. Class-A absorbed the most space with Chevron’s move into 1.2 million square feet at 1400 Smith.
- Class-A posted 2.3 million square feet of positive growth. Rents increased by $2.04 to $27.47 per-square-foot-per-year (PSF/YR), a more than 25 percent increase within the past year.
- Class-B absorbed 595,207 square feet. Full-service asking rents increased by $0.74 to $18.77 PSF/YR, an increase of more than 11 percent over last year.
- Class-C absorbed 45,920 square feet.
Currently, the city has 159.5 million square feet of office space, with almost three million square feet under construction.
UPTOWN MOBILITY PROGRESS
HOUSTON (Realty News Report) – Continuing toward its goal of widening San Felipe and enhancing mobility in the uptown area, the Uptown Development Authority has purchased another parcel just east of San Felipe and Post Oak Boulevard.
The property, which had been used for retail customer parking, is one of four parcels the buyer has recently purchased between Post Oak Boulevard and Garrettson Street. Combined, the purchases cover about a half-acre at the San Felipe and Post Oak intersection.
Lewis Realty Advisors represented the Uptown Development Authority in the transactions. The seller was Rosario Messina Properties Ltd.
REDEVELOPMENT AT BULL CREEK, KINGSWOOD
AUSTIN (Transwestern) – Through two recent purchases, Atlanta-based Post Properties and local firm Ardent Residential have secured almost an acre for redevelopment.
The partnership bought Bull Creek Townhomes, the 140-unit residential community at 4320 Bull Creek Rd., and neighboring Kingswood Apartments, the 32-unit complex at 4318 Bull Creek Rd.
Transwestern’s Central Texas Multifamily Group represented the buyers and Bull Creek’s owners, an Austin-based partnership.
JOINT VENTURE PLUNGES IN AT WATERPOINT
CONROE (GPW One LLC) – Gordon Partners LLC and Winkler & Associates Inc. have broken ground on the 14-acre Waterpoint at Lake Conroe.
The mixed-use development at Hwy. 105 and Tejas Blvd. will have 90,000 square feet of retail, restaurant and office space and a 2,000-foot lakefront boardwalk. Construction on the first phase of 200 condominiums will begin later this year.
Live Oak Capital arranged the construction loan from Regions Bank. US Builders of Houston is the general contractor. The community was designed by Gordon Partners Design. The project team includes Ken Anderson & Associates Architects of The Woodlands and Century Engineering of Houston.
OFFICING AT LANTANA
AUSTIN (Austin Business Journal) – Locally based Stratus Properties Inc. will begin construction later this year on two three-story, Class-A office buildings at Lantana, a 500-acre mixed-use development.
The project will total 180,000 square feet and is expected to cost more than $36 million. Construction should be completed late next year.
FORMER COMPAQ HQ PURCHASED
HOUSTON (globest.com) – A joint venture has purchased a four-building office and manufacturing complex that once served as Compaq’s corporate headquarters.
The 44.5-acre property includes three office buildings totaling more than 487,000 square feet and a manufacturing building at 20445-475 Compaq Center Dr.
The buyers, Dallas-based Macfarlan Capital Partners and Buchanan Street Partners of California, plan to convert the manufacturing building to office space and rename the complex Centre at Cypress Creek. When completed, it will have about 630,000 square feet of offices.
Marcus & Millichap represented both sides in the transaction. Holliday Fenoglio Fowler LP arranged acquisition financing and joint venture equity totaling about $100 million for the purchase, renovation and repositioning. Locally based Transwestern will handle leasing and managing.
NORTH BELT III, IV SOLD
HOUSTON (Holliday Fenoglio Fowler LP) – Fort Properties Inc. has purchased North Belt Office Center III and IV from Rainier Properties LP.
The Class-A, single-story office buildings total 107,200 square feet. Located on more than ten acres at 600 and 700 North Sam Houston Pkwy., the buildings are fully occupied by the U.S. Postal Service, ExpressJet and Unisys.
Holliday Fenoglio Fowler’s local office marketed the property for the seller.
ENTERTAINMENT DEVELOPER'S NEW FOCUS
COLLEGE STATION (Bryan-College Station Eagle) – Developer Mike Logan plans to turn Wolf Pen Bowl and Skate into a family entertainment center with multilevel laser tag, indoor miniature golf and a bowling alley.
Logan bought the property from longtime owners Martha and Robert Camp. The sale also included Triangle Bowl, which will be closed.
Plans to transform the almost 72,000-square-foot Wolf Pen Bowl and Skate into Grand Station include renovating the existing bowling alley but scrapping the adjoining roller-skating rink. In place of the skating rink will be an 18-hole miniature golf course, an arcade and video game area, and a 6,000-square-foot, multilevel laser-tag arena.
Logan announced plans over two years ago to build a similar entertainment center at Boonville Road and Earl Rudder Freeway in Bryan. Those plans were put on hold when he found out Wolf Pen Bowl and Skate was for sale.
The renovations on Grand Station should be completed by November.
NEW LIFE FOR HEALTHCARE FACILITY
SPRING BRANCH (Houston Business Journal) – Houston-based CooperWelch has purchased a four-acre tract from Nashville-based HCA Inc. and Spring Branch Medical Center.
The property, north of Westview Drive, between Moritz Drive and Pech Road, includes a closed healthcare facility that will be replaced with 35 patio homes in a gated community and ten townhomes. The mission-styled residences will range from 2,500 to 3,300 square feet and sell for $400,000 to $600,000.
Construction will begin in about three months on the three-story townhomes, which will be ready in late spring 2008. The patio homes will be ready by fall 2008.
NAI Houston represented both the buyer and the seller.
ALAMO CITY'S APARTMENT MARKET COOLS
SAN ANTONIO (San Antonio Business Journal) – According to the latest report by Austin Investor Interests, San Antonio’s apartment market was noticeably quieter during second quarter 2007.
During the first three months of this year, the multifamily research firm reported that construction began on 11 new apartment projects, a new high for the city. In all, these projects are slated to bring another 2,473 units into the city’s multifamily sector.
Between the months of April and June, however, only three projects totaling 765 units got off the ground.
Currently, more than 7,000 new units are in the works in the area, and about 2,800 of those are slated to enter the market before year's end. Of these 2,800 units, 1,700 are market-rate projects, while the remaining 1,100 are for the affordable-housing sector.
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