Grubb & Ellis - O'Connor & Associates

forestsaintregisΠετρελαϊκά και Εξόρυξη

8 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

62 εμφανίσεις

Houston’s Office Market First Quarter 2010

Henry Hagendorf, CCIM, LEED AP

VP, Office and Healthcare Investments

www.grubb
-
ellis.com

Really Bad Things Effecting the Office Market


Job Growth:
A little locally but none
nationally. Worse in other
cities/states/countries



Houston Recovery:
Tied to the Texas
recovery which is tied to the U.S.
recovery which is tied to the Global
economy


we seem to be getting better
but the U.S. and Global economies are
reportedly getting worse



Credit Markets:
Not fully recovered



Continental Airlines Merger:
Merger
with United will be bad for the CBD and
other submarkets



www.grubb
-
ellis.com

Really Bad News Effecting The Office Market



EXXON:
Consolidation and relocation will
hurt the Greenspoint submarket




NASA:
Apparently no longer a friend of
Washington. Crucial to the Clear Lake area
and surrounding submarkets




Oil Prices:
$80 per barrel is supposed to be
really good news for Houston


right? Why no
need for more office space?




BP Oil Spill:
HUGE but TBD




Patient Protection and Affordable Care
Act


dba:
Healthcare Reform


Tax
Increases?????


www.grubb
-
ellis.com

Source: BLS, Grubb & Ellis

2008
-
09

2001

1981
-
82

Job Losses Related To Recessions

1990
-
91

www.grubb
-
ellis.com

3
4
5
6
7
8
9
10
11
1980
1985
1990
1995
2000
2005
2010
Percent
Source: BLS, Grubb & Ellis

Unemployment Rate

Houston
8.5%

Note: Houston’s unemployment is lower than the National average

www.grubb
-
ellis.com

-
80
-
60
-
40
-
20
0
20
40
60
80
100
120
00
02
04
06
08
10
Thousands
Source: BLS, University of Houston Institute for Regional Forecasting

Annual Job Gains / Lost, Houston

www.grubb
-
ellis.com

Houston Office Statistics

Source: Grubb & Ellis

First Quarter 2010

Class

Total SF

Vacant SF

Vacant %

1Q 2010 Net

Absorption

Average

Asking Rent

A

84,305,024

12,844,640

15.2%

(928,539)

Chevron
-
Fluor
-
ABB

$29.65

B

66.979,757

12,545,919

18.7%

84,509

$19.85

C

17,308,844

2,920,856

16.9%

114,397

$15.33

Total

168,593,625

28,311415

16.8%




(729,633)

$23.53

www.grubb
-
ellis.com

Net Absorption vs. Vacancy Rate

-417,231
-2,906,419
-1,502,706
345,196
2,310,133
5,936,141
-729,633
-2,409,560
2,127,935
6,092,128
3,033,324
4,000,000
3,000,000
2,000,000
1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q10
5%
7%
9%
11%
13%
15%
17%
19%
21%
Net Absorption
Vacancy Rate
www.grubb
-
ellis.com

5%
7%
9%
11%
13%
15%
17%
19%
21%
23%
25%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q10
Class A
Class B
Class C
Office Vacancy Rates by Class

Source: Grubb & Ellis

www.grubb
-
ellis.com

Performance by Top Office Building Owners

Owner

RBA

Direct
Available

Direct
Vacancy

Annual

% Change


Hines

8,778,075

1,823,224

11.0%

+0.8%

Brookfield

8,465,430

958,491

6.0%

-
0.9%

Behringer Harvard

3,862,073

655,271

15.1%

+7.4%

Thomas Properties
Group

3,823,021

836,173

10.9%

+1.8%

www.grubb
-
ellis.com

Class A
0%
10%
20%
30%
40%
Greenspoint
NASA/Clear Lake
CBD
Uptown/Galleria
Citywide
Greenway
Allen Parkway
Katy Freeway
Westchase
The Woodlands
FM 1960
Sugar Land
Northwest Fwy
Source: Grubb & Ellis

Class B
0%
10%
20%
30%
Clear Lake
Greenway
Uptown/Galleria
The Woodlands
Westchase
Gulf Freeway
Katy Freeway
Citywide
Sugar Land
CBD
Greenspoint
FM 1960
Northwest Fwy
Office Vacancy Rates by Submarket

2010
-
Q1 Winners & Losers

www.grubb
-
ellis.com

Average Citywide Asking Rents

Average $/SF/Year Full Service Gross


$29.65

* As of 1
st

Quarter 2010

Note: Class A rates are $10/SF or 50% higher than Class B rates.
There does not seem to be a noticeable flight to quality.

$10
$15
$20
$25
$30
$35
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q10
Class A
Class B
Class C
$19.85

$15.66

www.grubb
-
ellis.com

Office Asking Rents


Class A

Average Class A $/SF/Year Full Service Gross

* As of 1
st

Quarter 2010

$36.54

$27.96

Note: Average overall $29.65

$15
$20
$25
$30
$35
$40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q10
CBD
Suburban
www.grubb
-
ellis.com

Office Asking Rents


Class B

Average Class B $/SF/Year Full Service Gross

* As of 1
st

Quarter 2010

$25.85

$18.86

Note: Average overall $19.85

$12
$15
$18
$21
$24
$27
$30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q10
CBD
Suburban
www.grubb
-
ellis.com

Houston Sublease Space Available

0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
4.66 MM

Note: Good News


The sublease market is not growing

www.grubb
-
ellis.com

16


Nearly 8.4 million SF (59 Buildings) of new construction
has delivered since 2008


Leasing activity within these new projects have been
steady but cumulative vacancy is 50.7 percent vacant


Only 1.8 million square feet of speculative construction
underway i.e. MainPlace (10% leased), EcoCentre at
Lake Pointe (under construction).


Numerous potential troubled assets that have been
recently delivered with vacancy exceeding 50%


Houston Office Construction Statistics

www.grubb
-
ellis.com

Large Blocks of Space in New Projects

Trophies or Train Wrecks


Simmons Vedder Partners

Simmons Vedder Partners

$22.50 NNN

168,621 SF

38.1%

Aug 2009

272,361 SF










Westchase Park Bldg 1

Granite Properties

Stream Realty Partners

CB Richard Ellis

Transwestern

Leasing Company

Granite Properties

Opus West

Behringer Harvard

Transwestern


Owner

$19.50 NNN

Negotiable

$22.50 NNN

$22


$24 NNN


Quoted Rental Rate

123,906 SF

192,771 SF

305,528 SF

350,000 SF

Direct Space Available

39.5%

19.4%

0%

0%

Leased

Sep 2009

Mar 2009

Oct 2009


Year Built

210,968 SF

239,114 SF

305,528 SF

350,000 SF


Square Feet










Granite Towers Phase II










Energy Crossing I










Three Eldridge Place










Eldridge Oaks


Phase I







Sep 2009

www.grubb
-
ellis.com

Houston Office Investment Trends

www.grubb
-
ellis.com

Top 20 Office Investment Markets


Q1 2010

Source: Real Capital Analytics

www.grubb
-
ellis.com

Houston Tenants Can Expect:


Asking rents will hopefully bottom out late 2010 or early 2011.


Net absorption: Remain in moderate negative territory as
businesses cut overhead and/or reduce their SF.


Very aggressive landlords: Don’t loose a tenant and roll out the
red carpet for all good prospects.


Sublease Options: Will continue to compete with landlords.


Distressed Sales: Could have an impact on certain submarket
rents. Lower investment basis could allow new owners to ask for
even lower rents.


www.grubb
-
ellis.com

Really Good News:


Houston: Best office market in the U.S.


Houston: Getting very positive press
nationally and internationally and
attracting global investor interest.


Energy Prices: HIGH and getting
HIGHER.


Energy Demand: Increasing. Does the
U.S. have the “@?<#$*%$” to meet the
demand (offshore drilling?)


U
-
Haul: Houston #1 out of 50 cities for
one
-
way destination rentals.


Labor Availability: Houston and Texas
provide strong labor pools (and labor for
your pools), strong infrastructure, low
costs of living and a business friendly
local and state government.

www.grubb
-
ellis.com

Update on
“Green”
Buildings

www.grubb
-
ellis.com

Houston LEED Office Building Inventory

Non LEED,
158,607,405
LEED
Certified,
15,994,977
Inventory Breakdown

www.grubb
-
ellis.com

Houston LEED Certified Office Space Trends

3
7
11
34
0
10
20
30
40
2006
2007
2008
2009
0
2,500,000
5,000,000
7,500,000
10,000,000
12,500,000
15,000,000
2006
2007
2008
2009
Total # Projects Achieving Certification Per Year

Total SF Achieving Certification per Year

www.grubb
-
ellis.com

LEED Certified Office Buildings by Submarket

0
2,500,000
5,000,000
7,500,000
10,000,000
CBD
Uptown/Galleria
Katy Freeway
Northwest
Freeway
Woodlands
8 Buildings

3 Buildings

6 Buildings

9 Buildings


1 Building

www.grubb
-
ellis.com

Chase Tower

1,683,893 SF

LEED, Gold

CBD


Williams Tower

1,476,973 SF

LEED, Gold

Uptown/Galleria

First City Tower

1,333,312 SF

LEED, Gold

CBD

One & Two Shell

1,792,214 SF

LEED, Gold

CBD

919 Milam

542,919 SF

LEED, Silver

CBD

Houston LEED Certified Office Buildings

Houston’s Office Market First Quarter 2010

Henry Hagendorf, CCIM, LEED AP

VP, Office and Healthcare Investments