Downtown Ready to Soar

HOUSTON – By Cynthia Lescalleet (for Realty News Report) – Just as modern parks and public spaces have learned that active programming really draws interest and attendance, downtown Houston appears to be adopting the playbook to boost reasons to work, live, play – and even stay there.

In a 1Q 2024 market report shared by Downtown Houston Plus – which represents Central Houston, Downtown Houston District and Downtown Redevelopment Authority – the findings’ takeaway is in its title: On Solid Ground.

“The pandemic is in the rear-view window,” said Kris Larson, CEO and president of the organization, which stewards and monitors the economic performance of downtown.

Among the report highlights presented at the quarterly event:

  • The role of visitation continues to help drive downtown’s economic health, Larson said.

An example is the 270 events held in downtown parks in 1Q 2024, which grew the daily visitor count from 90,000 at the end of 2023 to 109,000, capped by a whopper weekend that drew 500,000 to several offerings, including the Astros’ Opening Day. All told, that’s 8.8 million visits in the first quarter.

Meanwhile, an economic impact deep dive during the inaugural Lunar Festival in February found that 73 percent of attendees dined downtown as part of their time in town. They spent an average of $94 per group, defined as 3.3 people.

With events a key community builder, the organization is partnering with landscape design’s SWA Group to study the impact of heat on the public realm, which affects usage and other decisions.

  • Retail occupancy sits at 86.9 percent for Main Street inventory, 83 percent for street level locations and 73 percent for tunnel offerings. The latter account for only one-quarter of the inventory.
  • Hotel occupancy also benefitted from the event calendar, particularly the NCAA Football Championship at the end of March, which saw 95 percent occupancy across downtown’s 8,648 existing rooms. Another 496 rooms are under construction.
  • Office vacancy overall sits at 24 percent, less than one percent better from first quarter 2023. On average, new leases (and there were 25 new move-ins in the first quarter) were approximately 1,500 SF larger than renewals.

Downtown’s office workforce sits at 148,000. The return to office rate improved ever-so slightly to 68 percent. The metric continues to be a critical marker, Larson noted.

With 47 percent of jobs able to be handled remotely, worker choice to be in a workplace is about more than just the desk. Office amenities – and that includes the colleague community — need active environs in their buildings but also nearby.

  • Residential vacancy downtown is 16.7 percent. Total supply is 7,999 units, with another round of Warehouse District underway to add 444 units of workforce housing.

Downtown Houston Plus is looking at how to grow living options as well as how to further diversify the type of housing it might be, Larson said.

May 3, 2024 Realty News Report Copyright 2024

Photo: Downtown Houston. Cynthia Lescalleet, CALpix Copyright Realty News Report 2024


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File: Downtown Ready to Soar

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