The Ralph Bivins Project – Podcast Guest Trey Odom

HOUSTON – (Realty News Report) – RALPH BIVINS: Welcome to the Ralph Bivins Project. We’re here today with Trey Odom. He’s president and CEO of Avera Companies, a Houston development firm. He has built a lot of big buildings and has been in the market for a long time. He knows a lot of nooks and crannies that others don’t know.

TREY ODOM: Good morning, Ralph, thank you for having me.

To listen to the entire podcast Click Here for Spotify – or – Click Here for YouTube.

RALPH BIVINS: You have been around for a few decades. It’s the fall of 2024. What’s your feeling about the Houston real estate market?

TREY ODOM: Overall, I think we are in really, really, really good shape. The development pipeline has cooled dramatically. Year over year, we are off 70 percent in construction starts. That’s good. That’s right. Vacancy levels have come down. It’s not just capital markets that have contributed to that, though that is certainly the largest factor. But I think development sites and the entitlement of a site is probably double what it was eight years ago, if not possibly more, which then brings in more risk, right? We used to identify, build and lease on a lot within 13 to 14 months. Now, it’s more like two and a half years to kind of get it going, with all the processes that must be done, such as the architectural side. The service providers are really good here – the architects, engineers and so forth. The local municipalities – wherever they may be located, Houston, Pasadena or other places –are overwhelmed and understaffed for the most part.

RALPH BIVINS: Two and a half years. That sounds like California.

TREY ODOM: Who would have thought we would be that way. But there’s a lack of good sites, and that means you will work harder on the sites that five years ago we would have passed over because of the problems.

Now, because of the locations, you spend time on wetlands mitigation, pipelines and so forth. But it’s worth it. Generally, a well-placed site with a well laid-out building goes pretty quick.

RALPH BIVINS: And the interest rates, are they a hindrance to you guys out there?

TREY ODOM: Absolutely. It’s a line item that used to not really jump off the page, it jumps off the page now and hits you the face. That just puts pressure on all other line items, whether it’s hard or soft costs. You better know it and you don’t want to bust.

RALPH BIVINS: You bit off a big chunk when you embarked on the Baywood Logistics project, a 34-acre, 400,000 SF spec building along Red Bluff Road near the Ship Channel. It shows a lot of confidence to move ahead with this effort without a tenant in hand.

TREY ODOM: We have a lot of confidence. The project is located four or five miles from both container ports (Bayport and Barbours Cut.) It is directly across when you are on the side south of the channel. It’s good, it’s really good, but it’s hard. Everything takes longer. As far as this project goes, I believe we are in year 3 in the development stage and we haven’t even started building. How about that? But the location just keeps you coming back to solve the problems and tenant demand is good. The Port of Houston is fantastic.

RALPH BIVINS: I know land sites like this are rare and hard to find. How did you find this one?

TREY ODOM: Yeah, it was tough. And then you have to find sites that don’t have gas lines or other impediments cutting right across them. When you’re laying out a building, those types of obstructions can break it. But the tenant demand, the location, they gave us that willingness and drive to solve all the problems. This was the first site for which we did a fault line survey because we felt there was a risk – albeit a small one – for a fault that could go into the building.

This was the first fault line study we ever did on a land site. There are faults in Houston, you can see them in various neighborhoods. Doing that study was unique – and now, $35,000 later, we will end up having a better storefront.

This site — it just works for us. With the building that will be constructed on this site, it will put us in a position of having about 3 million SF of development in Pasadena. And we’re about to announce another project, probably in about 60 to 90 days.

RALPH BIVINS: This is also in Pasadena?

TREY ODOM: Yes, but it will be a build-to-suit.

Along this line, when we go back to the time when we constructed our first building down there, we have seen the way the city of Pasadena operates in the permitting process and the way they do it is so different now than the way it was done seven, eight, 10 years ago. I don’t know if it’s better, but it’s what you have to go through.

H.T. “Trey” Odom III biography

H.T. “Trey” Odom, president and CEO of Avera Companies, has more than 38 years of experience in commercial real estate, specializing in the development, acquisition and sale of single and multi-tenant office and industrial properties with a value in excess of $5 billion throughout the United States. Prior to the formation of Avera in 2003, Odom was a partner with InSite Realty Partners, where he served as principal and director of corporate services. During his tenure, IRP grew to a firm with a portfolio of some 8.5 million SF and development of more than 2 million SF of office and industrial projects. Odom was with CBRE earlier in his career.

He is involved in multiple organizations and has sat on the board of directors for the National Association of Industrial and Office Properties (NAIOP).