HOUSTON – (Realty News Report) – A company led by Robert Clay has a number of large developments underway in the Houston area.
Click Here (Spotify) or Click Here (You Tube) to Listen to the Entire Podcast
RALPH BIVINS: This is Ralph Bivins with the Ralph Bivins Project. We’re here with Robert Clay of Clay Development and Construction. The company has been around since 1998, and they have built a lot in that time – 22 million-plus SF, which translates to 378 football fields, right, Robert?
ROBERT CLAY: Right. I like the football analogy. It makes it feel good.
RALPH BIVINS: Of course, you’re not the only guy out there building. There has been a ton of construction in recent years – e-commerce, industrial space, distribution space, some of which is directly for Amazon and for other companies involved in e-commerce and distribution. I checked the latest CBRE numbers for the first quarter and found out a total of 12 million SF is still under construction in the Houston area. Some people wonder if we are overbuilt. What is your feeling about that? Are we overbuilt?
ROBERT CLAY: You know, I don’t think so. The demand has been there. Houston has been a great place to be in… well, for my entire career. I started in the real estate business in 1990.
I tell people that with a few exceptions – 2009 being the only full-year exception – every day has been better in the commercial real estate world in Houston, Texas. What I see in the future is more of the same. We’ve got everything going for us. We are the only ones who can screw this up.
RALPH BIVINS: Robert, you have a large project underway, the Twinwood Distribution Center, a building of almost 800,000 SF in Brookshire. It’s a speculative project. Tell us about Twinwood.
ROBERT CLAY: Regarding Twinwood in general, I’ll go back to the beginning when our company started in 1998. At the time, we would do about 30 buildings at any given time. During that period, the runup of buildings for the manufacturing industry was our main focus. It was everyone’s main focus because there was no construction of distribution buildings, and there weren’t any built, literally, until we constructed one on the southeast side in 2006. Before we did it, it hadn’t been done since 1985. So, from 1998 to 2006, we built single tenant manufacturing facilities, serving as the developer and owner.
Around 2014 or 2015, we saw the price of oil go down. Manufacturing slowed, but the market was still good. But we were not building any new manufacturing facilities. So, my partners, my father and I who all had a lot of experience in the real estate industry under our belts – I had about 25 years alone—we said that we were killing ourselves by building these 20,000 to 50,000 SF buildings. We decided that building a 100,000 SF or a 200,000 SF or a 500,000 SF or an 800,000 SF or even a million SF building is just as hard as building a 25,000 SF building. So, why should we keep constructing the smaller buildings? It was hard for me to say no, but finally, I did.
So, we just started to go with the larger buildings. We started with 200,000 SF and 250,000 SF structures, then we did a 900,000 SF, an 800,000 SF, several 750,000 SF buildings, plus or minus. And we haven’t had a problem. We’re building a 400,000 SF build-to-suit right now. We did one last year for Crane Worldwide logistics not a build-to-suit, but a design-build. We finished it at 450,000 SF. We could have gone with doing one of these projects every couple of years, but we kind of decided to go with a 1.5 million SF building every couple of years. As long as the market allows us to do it, we’ll do it. And we’ve been doing it for the past 10 years. It has worked out.
RALPH BIVINS: You would not have seen any million SF buildings in 2006. Nobody was building warehouses that large.
ROBERT CLAY: That market for large buildings has just gone crazy today. Even to us in our office, it’s unbelievable that if we think of constructing a building of 350,000 SF or less, we would just say, “Sure, let’s go do it. It’s kind of not a big deal.” In 2006, we built a 100,000 square footer on the southeast side around Deer Park. It was leased right away – and it was a big, big deal! Then, we did a 200,000 SF building and we thought we were crazy, crazy, crazy. And we were the only ones doing it.
Then, we went from there to a 900,000 SF building – and that was crazy. We probably shouldn’t have done it. But we did it – and we had a good partner. We were a private group, and we’d never take money from anybody. At that time, we had a deal – I think with ING. They did what’s called a “participating loan” with us so we didn’t have to put up all the equity, and it was a non-recourse loan – the only one I’ve ever done.
So, we had some help with that, and the market was good. We had a good track record, so it all worked out well. Right away, we got a tenant and sold the building. It worked out well, and that park – Underwood Business Park (at the intersection of Highway 225 and Underwood Road) has been a phenomenal success. We sold that park to Blackrock in ’07 or ’08. Since then, they sold it to Hines – and everyone made money.
RALPH BIVINS: It was a good investment.
Click Here (Spotify) or Click Here (You Tube) to Listen to the Entire Podcast
Robert Clay biography
Robert Clay co-founded Clay Development & Construction, Inc. in 1998 with his dad, Al Clay. Robert received his Bachelor of Science degree from Texas A&M University before joining United Equities where he focused on construction supervision, property management and leasing. After four years at United Equities, Robert joined Moody Rambin Interests, where his attentions were directed to project leasing and construction supervision. At Clay Development, Robert manages day-to-day decisions and oversees all development, construction, and acquisition strategies.
May 1, 2024 Realty News Report Copyright 2024
THE RALPH BIVINS PROJECT PODCAST
LISTEN: THE RALPH BIVINS PROJECT with Carolyn Wolff Dorros of Wolff Companies
LISTEN: THE RALPH BIVINS PROJECT with Robert Clay of Clay Development
LISTEN: THE RALPH BIVINS PROJECT with Alma Zavala of CommGate
LISTEN: The RALPH BIVINS PROJECT with Adam Lair of Partners Capital
LISTEN: The RALPH BIVINS PROJECT with Jake Donaldson of Method Architecture
LISTEN: The RALPH BIVINS PROJECT podcast with Bill Baldwin of BLVD Realty
LISTEN: The RALPH BIVINS PROJECT podcast with Johnny Cruz of RAMSA
LISTEN: The RALPH BIVINS PROJECT podcast with John Breeding of Uptown Houston
Listen: THE RALPH BIVINS PROJECT podcast with Dean Strombom of Gensler
LISTEN: THE RALPH BIVINS PROJECT podcast with Lou Cushman of Cushman & Wakefield
LISTEN: THE RALPH BIVINS PROJECT podcast with Edward Griffin of Griffin Partners