HOUSTON – (Realty News Report) – Houston, which is becoming a gateway market for investors, boasts an industrial real estate market that is exceptionally strong as 2019 unfolds, Avera Companies’ Trey Odom told the annual BoyarMiller Real Estate Forum in Houston.
“The fundamentals are good with 11 million SF (built in 2018) and we absorbed 9 million SF of it, or 80 percent,” said Odom, president and CEO of the Houston-based Avera development firm, which specializes in industrial and distribution properties. “2019 will be good as well and Houston will see more large regional facilities. Some cost increases may result from the tariffs that have steel priced higher, but it will be a good year. The state of our industrial market is really, really good.”
Odom also predicts more inbound activity will be coming from the Far East this year.
Odom was a panelist at the BoyarMiller Annual Real Estate Forum recently along with Jimmy Hinton of HFF and ULI District Council Chair Abbey Roberson, vice president of planning for the Texas Medical Center.
“Our speakers highlighted the opportunities and challenges ahead for the industrial and commercial real estate markets in Houston, including progress on the city’s mobility and transportation issues,” said Chris Hanslik, chairman of BoyarMiller, a Houston-based law firm. “The discussion reflected optimism and pride in Houston as a more economically diverse city that is showing signs of being less dependent on the price of oil, and that was a refreshing and welcome message for our audience of about 150 Houston business investors and real estate professionals.”
Hinton, managing director of HFF and responsible for his firm’s research, said Houston has taken great strides towards becoming a gateway market, similar to San Francisco and New York, that attracts international real estate investors.
Hinton said 2018 was the first year that investors in the real estate industry truly considered Houston in context with other markets, and not in a separate category classified by its overarching banner as the energy capital of the world.
“It is a significant shift that people outside of Houston are recognizing the city as a gateway market, meaning it is a major international city that attracts overseas capital,” said Hinton. “We can thank the city’s developers for making that happen. They are listening to and addressing the needs of consumers with their products, like mixed-use properties with better mobility and walkability. That is the biggest change I saw last year.”
Hinton admitted that investors still care about the price of oil. “But it is seen less as an indicator of what will happen with property fundamentals, especially outside of the office sector,” he said.
“Houston was the number one growth market for jobs in the country last year, which is shocking in an environment of $50 oil. We are now considered to have more economies with many sectors and subsectors that attract investors. And that feels amazing.”
Roberson said there are 58,000 parking spaces at Texas Medical Center. However, there are also 110,000 employees, 40,000 students and hundreds of thousands of patients, family members and visitors that are going to TMC daily.
“That is a staggering fact. We absolutely rely on shuttles, buses and METRO light rail,” said Roberson. “We are examining what we can do within TMC and elsewhere to collaborate with mobility partners. We have both challenges and opportunities in looking at how we are connecting with autonomous vehicles, rideshare, and how we use our parking assets.”