HOUSTON – Houston realty outscored the nation in most categories last year.
The city has more than 17 million square feet of office space under construction, far more than any other city. And it had more single-family housing starts than any other market in the nation last year. Plus, existing single-family sales are on a record-setting pace.
While adding 125,000 new jobs – one of the city’s best job creation binges ever, Houston’s economy continues to impress.
Falling oil prices are going to cool things off in 2015. But before 2014 is gone, it’s time to take a look back at the big deals and catalyst developments that shaped this year’s real estate market.
Here is Ralph Bivins’ RealtyNewsReport List of Houston’s Top 17 Catalyst Deals of the Year.
1.Hines, the Houston-based international real estate firm, poured the concrete foundation for a downtown Houston skyscraper, the largest spec office project in the nation. The Hines project, 609 Main at Texas, will be a 48-story, 1,050,000-square-foot office tower at the corner of Main and Texas streets in Downtown Houston. No tenants announced yet, but market demand is high – even with rents quoted in the $50 per sf range.
- LaSalle Investment agreed to pay $450 million ($537 per sf) for the 1000 Main building in downtown Houston – the highest ever paid in Houston. According to the Real Estate Alert newsletter, the previous record was $524 per square foot. Bernard Branca, senior vice president in CBRE’s Houston office, marketed the 837,000-square-foot building, which was formerly known as Reliant Energy Plaza. The closing of the deal has not been announced. But if it goes down as planned, it will be a new high-water mark for investors in the future. 3.
- The Woodlands, Part Two. The developer of The Woodlands, the Howard Hughes Corp., purchased 2,000 acres for a sequel to The Woodlands – Houston’s largest master planned community. The site, where home sales will begin in 2016, is 13 miles north of The Woodlands on the west side of Interstate 45 near League Line Road and the town of Conroe.
- In downtown, Woodbranch Investments broke ground on its Market Square Tower, a 40-story apartment project with 463 units. This tower is one several residential projects underway in downtown and should give support to the nearby restaurants, retail and clubs. The city’s Downtown Living Initiative, providing $15,000 per unit tax incentives, worked well and developers responded with more than a dozen CBD projects. However, apartment developers have been hyperactive in Houston’s Inner Loop and that sector may now be getting overbuilt.
- A $43 million mansion, representing the most expensive residential listing in Houston real estate history, hit the market in September. The 27,000-square-foot home sits on 2.5 acres in the Memorial area and is the residence of Marie and Ed Bosarge. Kellie Geitner of Martha Turner Sotheby’s International Realty secured the listing.
- Downtown’s 1,000-room Marriott Marquis broke ground in April. The hotel, located across the street from the George R. Brown Convention Center, will support and elevate the city’s convention business. The Marriott Marquis, set for completion in 2016, is being developed by Houston First Corp. and Rida Development.
- Hearst Corp. selected the HFF commercial real estate brokerage firm to handle the sale of its Houston Chronicle property in downtown Houston. Hearst interviewed a number of Houston’s leading CRE brokers before selecting HFF. The 10-story Chronicle building, 801 Texas Ave., covers a full city block and comes with parking garage on another block. The newspaper’s departure will change downtown’s character.
- Cedar Crossing, a 10,897-acre industrial park near Baytown, was sold to TGS Cedar Port Partners in one of the largest land sales in Houston’s history. Cedar Crossing is considered the fifth largest industrial park in the world, according to the Cushman & Wakefield realty firm, which represented the seller. The site was formerly the location of U.S. Steel’s Texas Works factory and the steel company land that surrounded it.
- Ross Perot Jr.’s Hillwood Communities, in partnership with McGuyer Homebuilders, started developing its first Houston-area master-planned community. The 1,000-acre project, called Pomona, is off of Highway 288 in Manvel, south of Houston. Hillwood, a major player in land development, describes Pomona as a “relaxed coastal community” with 2,100 proposed homes.
- AmReit, a Houston-based real estate developer, is being acquired by Edens Investment Trust firm for $763 million. The firm has outlined a $1 billion redevelopment of Uptown Park development in Houston, located near the corner of Loop 610 and Post Oak Boulevard.
- Downtown’s old Houston Club Building was imploded in October, clearing the way for Skanska to develop the 35-story Capitol Tower, a 750,000-SF office buiding, at 808 Capitol Street, on a block bounded by Rusk, Milam and Travis streets.
- Six miles north of Interstate 10, Newland Communities is developing Elyson, a 3,619-acre master-planned community near Beckendorff Road and the Grand Parkway. This is part of a new trend in land development enabled by the major $1 billion-plus expansion of the Grand Parkway on Houston’s west and northwest suburbs.
- Sotheby’s International Realty acquired Martha Turner Properties, Houston’s second largest realty brokerage. The acquisition enabled Sotheby’s to enter the Houston market, where it now operates as Martha Turner Sotheby’s International Realty with six offices and 200 associates.
- Avera Cos., a Houston-based real estate development firm, has broken ground on a massive distribution center at the Port of Houston. The project, called 225 RailPort, is located on 47 acres at Beltway 8 and Highway 225, will be one of the largest rail-served properties in Texas. Frontier Logistics, which services the plastics industry, will occupy the facility. The Port area will benefit as the nearby chemical plants expand in 2015.
- Two office buildings are being constructed in west Houston’s Memorial City development, near the Energy Corridor, for the U.S. headquarters of Air Liquide, the French industrial gas manufacturer. Air Liquide will move its offices from the Galleria area of Houston to the Memorial City buildings, with a total of 600,000 square feet, that will be developed by Metro National, a Houston firm.
- Early in the year, AEW Capital acquired a controlling interest in the 53-story Heritage Plaza, a 1.15 million-sf downtown building, known as one of Houston’s most distinctive towers because its top resembles a Mayan temple. The deal, is valued at $475 million or $413 per square foot supported continued growth trends for trophy building sales over $400 per square foot – rarified pricing that was once thought to be unattainable.
- Exxon Mobil bought 385 acres in north Harris County about five years ago. The energy company is constructing 20 buildings on its new campus – some 3 million sf of space. The first of 10,000 employees began moving in 2014. But the Exxon Mobil campus, which happens to be very close to a major extension of the Grand Parkway, has generated a lot of deals and new developments. Real estate firms starting new projects or making deals near the Exxon site include: Hines, Skanska, Martin Fein Interests, CDC Houston, Partners in Building, Patrinely Group, USAA Real Estate, Johnson Development, Fidelis Realty Partners, Halberdier Holdings, Sullivan Brothers Builders, Taylor Morrison and Woodbine Development.
By Ralph Bivins, editor of Realty News Report.