(By Michelle Leigh Smith) HOUSTON – While the shorter lunch lines at Treebeard’s downtown reflect less density in office occupancy, NAI Partners executives say they have built the kind of personal relationships with tenants that ensures their strong position in what for some is a tenuous market.
“Our sublease inventory continues to grow – we added 400,000 SF last month for a total of 12.5M SF,” says Griff Bandy, NAI’s Partner over Office Tenant Representation. “The inventory of sublease space on the market across Houston has grown now over the past 6-7 quarters in a row. We’re not real sure when we will see that start to turn around and sublease inventory start to decline.”
NAR Partners delivered an update on the commercial real estate market earlier this week at the firm’s third quarter press breakfast.
“The good news is that in October for the first time since late 2014, we did not see any increase in the percent of availability that is sublease space,’ says NAI Managing Partner Jon Silberman. “This could be the start of a trend reversal and a bottoming out of the market or it could be a temporary pause. Only time will tell. In the interim, we’re seeing landlords heavily discounting deals primarily through the use of free rent which in some cases has been as much as 18 months free on a 10-year lease term.”
“I expect the first half of 2017 be a solid bottoming out in the office market with some improvement in the second half of 2017,” says Silberman. “Unless the energy biz experiences a significant upswing, I do not expect a rapid recovery in the office market. I think we are in for a two-to four year slow recovery back to a stabilized office market.”
Andrew Pappas, Senior Vice President over the Investment Fund, says NAI is bullish on San Antonio. “It’s still a little off the radar for Wall Street investors, and their unemployment is at 3.5 percent, with a projected population growth of 15-20 per cent over the next 10 years. There’s a huge drive for office space and a flood of big corporate clients coming in who will want full floor chunks of space. “If we accompany San Antonio as it continues to rise, we can capture quality Class B buildings that are a cut above,” says Pappas who doubled the size of his department this quarter. “There’s also a limited impact of the oil and gas slowdown.” He projects NAI will have $100M in acquisitions by next summer.
NAI Partners now has more than 4M SF under management. They were named to the Cougar 100, which includes the fastest growing (University of Houston) Cougar owned companies throughout the world and to HBJ’s Top Places to Work, a pattern that falls in line with their strategic plan of growing the company culture.
“Part of the reason we are where we are is because we’ve had an infusion of new blood,” says Larry Koestler, who joined NAI recently from CBRE as Vice President of Marketing. Among the top talent that’s come on board in the six months are Vice Presidents Alex Taghi from Cushman and Wakefield and Taylor Wright from Axis, in the Office Tenant Representation division.
Oct. 26, 2016 Realty News Report Copyright 2016