Downtown Office Market

[Houston19514]

going forward, please dont send me his quotes. seriously, please dont. i have him on ignore for a reason and dont want to see his comments anymore. thank you in advance for your coopertion.

last time, promise mods. this was just too funny since he brought up misleading dates and continues to lie. funny thing is, the link below proves that hes been trolling me for a while.

post from Friday, June 1st, 2007 @ 10:00am discussing HOTEL plans, not retail

and then further elaboration two posts down in the same link.

at the time, thats what he was planning. obviously, the market changed.

he can continue trolling me, i honestly dont care. he must be miserably banging his head on the keyboard and turning red with frustration. i will not derail this thread again and sorry for this one sided pissing contest.

I remember quite well that H-D posted some nonsense about HV supposedly planning to build a hotel. Funny thing. They already announced their plans for that site and the announced plans are what they are in fact building. I LOVE self-proclaimed insiders who post alleged inside scoops that are absolutely unconfirmable. I suppose it makes him feel important. I await some significant truly inside information from H-D. A quick scroll through his history of posts shows a paucity of verifiable insider advanced information provided by H-D.

(Perhaps my favorite post was when he popped in to pronounce 2727 on life support and three days later they finished pouring the foundation.)

And that quick scroll through H-D's posts shows a remarkably thin skin . . . anyone having the audacity to question his posts is immediately labeled a troll.

Everyone is obviously free to believe any posters they want and hang on every word of those who proclaim themselves to be insiders. Personally, any time someone reacts with such vitriol to any poster that dares question him, my antennae go up and I start doubting how much "inside" information they really have. Then when such person actually provides very little, if any verifiable information that is not publicly available with a minimal amount of effort, well, for me it's time to pretty much discount their posts.

(And trust me, there is no miserable banging of a head or turning red with frustration on this end. I could not be happier or less frustrated.)

Edited January 8, 2009 by Houston19514

[houston-development]

here's a real life example of what's going on. just got back from shopping a class "a" community, stabilized (93% occupied), 2 years old, and in a prime location (greenway/river oaks).

1) 2 months free

2) $1,000 look and lease

3) 100% locator fee

4) $99 move in

effectively, that's almost 4 months free on a 13-month lease. that's not a gimmick... ask any other board members that know the business (niche and tnj come to mind) how bad these concessions are.

is it a sign of things to come? no one knows for certain but it aint looking pretty.

[RedScare]

Thanks for your updates and insight, H-D. I appreciate your commentary on this forum. The other poster, not so much.

[Houston19514]

Oh my God! The sky is falling! The sky is falling! It's a BLOODBATH!

[totheskies]

No, not really. I once went through the demographics and determined that for about every one new household created inside the loop, about 22 were being created beyond it and elsewhere within the Houston-Baytown-Sugar Land MSA. A scarcity of land will do that, and residential density ain't cheap. If there's any doubt about this, the Texas Medical Center has available a map indicating into which Zip Codes employees tend to live. Many live inside the loop, with especially large concentrations in the many old apartments around Reliant Park. Many more live in Pearland or Sugar Land. The shiny new areas of the Inner Loop are a mere footnote in comparison. They may as well be Cinco Ranch. I suspect that Galveston County is now a prominent source area, what with the elimination of UTMB.

No, I beg to differ, it's much stronger than even three years ago (when I moved to Houston). Again, whether it be inside the loop or outside the loop, most of the larger residential projects are being constructed because of need, and not just for show. I'm well aware that most people in the area live outside the loop, but over the last couple of years the inner loop has significantly picked up it's growth rate. If you need evidence, just look around. Big retail outlets like Party City and Shoe Carnival just moved into Gulfgate (with Staples on the way). CostCo just opened up at 59 and Weslayan. The retail area around Target (I-10 and Taylor Rd.) has nearly tripled, and that was all in 2008. Why else would we be bringing the suburbs into town? It ain't just because the daytime population is increasing.

Edited January 8, 2009 by totheskies

[houston-development]

Thanks for your updates and insight, H-D. I appreciate your commentary on this forum. The other poster, not so much.

and i appreciate it, red. is there a group hug emoticon?

: group hug :

seriously, i wont allow his petty bs to bother me. i stand 100% behind my posts, especially the 2727 kirby thread. in fact, just went back to make sure he wasnt revising history (which he did). my info may not always be 100% accurate but ive never said it was.

again, no biggie but appreciated none the less. he's on a very short ignore list (1 of 3, in fact) and pretty positive he's doing this out of frustration:

good times.

[Houston19514]

and i appreciate it, red. is there a group hug emoticon?

: group hug :

seriously, i wont allow his petty bs to bother me. i stand 100% behind my posts, especially the 2727 kirby thread. in fact, just went back to make sure he wasnt revising history (which he did). my info may not always be 100% accurate but ive never said it was.

again, no biggie but appreciated none the less. he's on a very short ignore list (1 of 3, in fact) and pretty positive he's doing this out of frustration:

good times.

Truly pathetic. ANYONE can go through the threads and see that he pronounced 2727 Kirby on life support on the 20th of the month and other posters witnessed construction activity on the 22nd and witnessed a poured foundation and garage structure on the 23rd. How, exactly did I revise the history? (Notice he very slyly doesn't say...) Nor does he say what I am supposedly frustrated about... 'tis a mystery.

And for someone who has me on ignore and supposedly isn't "bothered" by my posts, he sure is quick to respond... ;-)

BTW, Red, I hope you didn't lose too much money investing with Madoff ;-)

[20thStDad]

Truly pathetic. ANYONE can go through the threads and see that he pronounced 2727 Kirby on life support on the 20th of the month and other posters witnessed construction activity on the 22nd and witnessed a poured foundation and garage structure on the 23rd. How, exactly did I revise the history? (Notice he very slyly doesn't say...) Nor does he say what I am supposedly frustrated about... 'tis a mystery.

And for someone who has me on ignore and supposedly isn't "bothered" by my posts, he sure is quick to respond... ;-)

BTW, Red, I hope you didn't lose too much money investing with Madoff ;-)

We don't care.

[Houston19514]

Interesting and relatively positive report from GlobeSt on Houston's apartment market

PS for 20thStDad: You actually took time out of your life to tell us you don't care?.... sounds like you really do care.... ;-) Thanks for posting.

Edited January 9, 2009 by Houston19514

[BryanS]

No fair using this graphic... That's TheNiche... replying to one of my posts...

[RedScare]

BTW, Red, I hope you didn't lose too much money investing with Madoff ;-)

Why would I invest with Madoff? I won the HAIF Finance Challenge. He should have called me for advice.

[houston-development]

some have asked me about the recent globest.com and ill gladly comment.

there are several reasons why i didnt when it came out last week. largely in part that i found it unrealistic, unreliable, and quite frankly, irresponsible. please keep in mind that these are my opinions as of today.. the market could change but i dont think that's likely.

1) there are plenty of properties that can be purchased at a 7.5% cap. problem is, they cant get financed while still achieving their irr (buyers today expect a 20% irr). after you factor in 0% rent growth (which will be addressed later), increased concessions, increased expenses, a 1.3+ debt service ratio, and maximum 75% LTV; the numbers dont work.

2) if they honestly believe employment increasing 13,400, more power to them. personally, i dont see it. i know of layoffs, hiring freezes, and moving people around internally but not one thing about growth.

3) we agree about vacancy increasing but i completely disagree in regards to rent growth. for example, im not aware of any lender that will allow rent growth for the next two years, especially on stabilized properties. additionally, most of the companies ive spoken to anticipate -1 to -2% rent contraction (not including increased concessions). the only exception would possibly be a seriously distressed property, in an established area, that is significantly below comps, and only after renovation. effective rents, including concessions, will probably be decline 10 - 15%, depending on the property.

4) in regards to buyers paying "premiums" for stable returns, again, i dont see it. there very well could be an exception but problem is, theres A LOT of available product. for the most part, every class "a" property that was built within the last year or two is available for purchase. problem is, buyers view the properties are worth (and in some cases, less than) the debt. they are going to cherry pick and wait for distressed opportunities rather than buying a trophy to inflate their ego. those days are gone, for now..

but what do i know.

[MadMax]

here's a real life example of what's going on. just got back from shopping a class "a" community, stabilized (93% occupied), 2 years old, and in a prime location (greenway/river oaks).

1) 2 months free

2) $1,000 look and lease

3) 100% locator fee

4) $99 move in

effectively, that's almost 4 months free on a 13-month lease. that's not a gimmick... ask any other board members that know the business (niche and tnj come to mind) how bad these concessions are.

is it a sign of things to come? no one knows for certain but it aint looking pretty.

My antecdote:

I own a business that had a 4 year lease come up in January. All year our agent was telling us that our class B space on the west side would get for their space whatever they were asking with no concession. Because that's just the way it was.

But we waited, anyway....

and in November, they matched an offer we had from Class C space down the street and added 3 months of free rent to sweeten the pot.

I'm happy we waited.

[houston-development]

heh

houston apartment update

[swtsig]

In the case of Main Place, they still have some major tenants on board for the project so it's highly unlikely that this particular project could get cancelled. Houston's vacancy rate may certainly grow over the year, but I don't see that happening much in downtown. Outlying office parks that are already on the downslide (think Greenspoint) are going to be the most vulnerable in the current recession. Houston has established too strong a pattern of inward growth... people moving inside the loop. So although some major projects will be halted or cancelled, people are going to take advantage of the little remaining space that is available, especially in downtown.

One thing I really like about Houston right now... most of our projects have been borne of necessity. The projects of lesser need have quickly fallen away, and the few things that remain are only going to benefit the area.

while there is zero chance that mainplace gets cancelled, there are also zero major tenants on board save for KPMG (which at 4 floors isn't all that major). i take that back, there is one major prospective tenant out there that i'm aware of but it's so "up in the air" that i assure you it isn't making the folks at hines sleep any better at night. that being said, class A cbd buildings are still performing better vacancy-wise then their historic averages.

[Houston19514]

heh

houston apartment update

Run for the hills! It's a blood-bath, I tell ya'. ;-)

[TheNiche]

It's a blood-bath, I tell ya'. ;-)

Not just quite yet. But once my military enlistment (prompted by the failure of the real estate development biz) goes through and I get trained and shipped off, I'll be sure to communicate back the number of confirmed kills.

[crunchtastic]

Not just quite yet. But once my military enlistment (prompted by the failure of the real estate development biz) goes through and I get trained and shipped off, I'll be sure to communicate back the number of confirmed kills.

WTF Niche!!! You did NOT! That's not just crazy, that's Roky Erickson crazy.

[mkultra25]

WTF Niche!!! You did NOT! That's not just crazy, that's Roky Erickson crazy.

Maybe he wants to work in the Kremlin with a two-headed dog.

[N Judah]

Not just quite yet. But once my military enlistment (prompted by the failure of the real estate development biz) goes through and I get trained and shipped off, I'll be sure to communicate back the number of confirmed kills.

Army?

Edited February 18, 2010 by N Judah

[crunchtastic]

Maybe he wants to work in the Kremlin with a two-headed dog.

he he. Nice one. But now we've gone and given the lad ideas.

wait a minute.....all this talk about acid....I just finally clued in to your screen name. Now that's some crazy. I hope there's not a direct connection between mkultra and you??

oh, and how 'bout those class A vacancy numbers! (......feeble gesture at staying OT.......)

[TheNiche]

WTF Niche!!! You did NOT! That's not just crazy, that's Roky Erickson crazy.

Nothing is official just yet. Still have to go to MEPS.

[TheNiche]

Army?

Possibly. We'll see.

[names]

Nothing is official just yet. Still have to go to MEPS.

The ASVAB test is basically an IQ and aptitude test covering things like mechanical ability' date=' organization and work efficiency, reading comprehension, and the like. It's designed to seperate the people able to re-wire a circuit board from the mouth breathers.

ASVAB has quite a few different scores that it spits out once it's graded but I believe the 'G.T.' score is the one most look at as a basic indicator of the testees ability to perform brain surgery and/or put food in their mouth when they are hungry and dress themselves with their underwear on the inside of their clothes.

I believe 60 is the low end and with a score like that you can pump gas, make a burrito, and point and fire your weapon in the general direction of brown people. Your essentially a high functioning excitable fixed gear enthusiast with a score like that but you're still good enough for the military.

90 - 110 is above average and you're probably capable of doing just about anything in the military while 120 and above is way above average and you won't even be offered shitty jobs once you have your sit down with the recruiter at the MEPS station. You will be offered jobs that can be very lucrative in the civilain sector so you will be offered big bonuses tacked on to longer then average enlistments.

Once your test has been graded you'll have a sitdown with a MEPS recruiter who will pull you back in an office cubicle and present to you a piece of paper with a bunch of jobs on it like 'helicopter rotor washer', 'fuel technician', 'chalk block'. Never select these jobs unless you want to make bread pudding all day, wash dishes, fill fuel tanks, or basically just stand around trying to look busy. these are 'Needs of the Military' jobs and they are offered to everyone who sits down.

the good jobs are in the computer and you have to ask to see them. they will be dictated by your ASVAB score and there is no getting around this so even if you want to fly Apache's really really bad if you have an ASVAB score of 70 the closest you will ever get it filling it's fuel tank.

as for how the different militaries dictate job placement i know this...

Air Force - they will let you pick a career field dictated by your Asvab. You will not be able to pick a specific job. so say you really want to work in Network management on the IT side of things. you can pick that field but you might end up pulling and digging trenches for cat-5 cable through a war zone. air force...additionally everyone at one time or another wishes they had joined the air force instead of army/navy/marines/coast guard. their bases are always in big cities next to big airports or in amazing places like the mediterrain or some coastal tropical island.

Army - you can pick your specific field and job. you will get stationed in shit holes through out your career. You will wish you had joined the air force.

Navy/Marines - I believe you get to pick your specific field and job but i could be wrong. i didn't even talk to either of their recruiters because I know I don't like sitting on a boat in the middle of the ocean for 6 months out of the year and Marines are always deployed to conflicts and war first.

let me know if you have any other questions.[/quote']

[TheNiche]

It's a whole lot easier for me than most new recruits. I am degreed and test exceptionally well. I can do anything (except fly, because of bad eyesight).

I'm going to shift this part of the conversation over to my unemployment thread.

[mkultra25]

I just finally clued in to your screen name. Now that's some crazy. I hope there's not a direct connection between mkultra and you??

No connection besides a longtime interest in its origins and history.

I'd have probably been disqualified as a test subject due to being fully informed and consenting.

[houston-development]

apartment rents dip

The cost of renting an apartment in Houston has fallen 2 percent over the last six months.

..

According to another data source, Houston-area apartment occupancies are at their lowest levels in at least 15 years.

[mattyt36]

Thought there was a generic downtown thread but I guess not.

 

Below are vacancy rates of most major office buildings downtown from HAR as printed in the HBJ.  Some notable exceptions like Wells Fargo Plaza.

 

Address/Bldg name/Total space/Avail space/Vacancy rate

 

800 Bell	Old Exxon	1,314,350	1,314,350	100%
Texas Tower	New Hines	1,106,581	705,774	64%
1001 Fannin	Old First City	1,365,801	586,811	43%
1600 Smith	Old CO	1,227,182	489,881	40%
600 Travis	Old Chase	1,916,394	456,600	24%
601 Travis	Old Chase garage	407,912	29,877	7%
1021 Main	One City Centre	554,953	424,260	76%
700 Louisiana	TC Energy Ctr	1,321,033	295,682	22%
1100 Louisiana	Enterprise Plaza	1,391,152	288,812	21%
1415 Louisiana	Wedge Int'l Tower	536,626	275,179	51%
811 Louisiana	Old Two Shell Plaza	577,735	236,380	41%
1201 Fannin	Greenstreet	656,994	230,532	35%
1000 Main	Reliant Energy Plaza	850,294	175,321	21%
808 Travis	Esperson	298,513	156,839	53%
1010 Lamar	Younan Sqaure	258,776	143,727	56%
910 Louisiana	One Shell Plaza	1,231,896	137,364	11%
712 Main	The Jones on Main	794,186	128,817	16%
800 Capital	Bank of America Tower	754,000	93,725	12%
919 Milam	Old Bank of the SW	723,130	89,550	12%
811 Main	BG Group Place	973,861	80,006	8%
1001 McKinney	Old City National Bank	378,101	78,997	21%
801 Travis		417,693	75,675	18%
601 Jefferson	KBR Tower	1,087,974	69,888	6%
1301 Fannin	Houston Data Center	766,950	65,000	8%
609 Main		1,057,658	64,109	6%
801 Louisiana	Goodrich Petroleum	105,145	38,670	37%
1801 Main	Amegy Bank	238,886	33,964	14%
917 Main		140,000	8,757	6%
711 Louisiana	Pennzoil Place South	712,081	308,153	43%
700 Milam	Pennzoil Place North	712,081	227,193	32%
	Total Pennzoil Place	1,424,162	535,346	38%
1221 McKinney	LyondellBasell Tower/1 HC	1,103,424	193,009	17%
909 Fannin St	2 Houston Center	1,102,279	276,353	25%
1301 McKinney	Fulbright Tower/3 HC	1,311,133	401,701	31%
1221 Lamar	4 Houston Center	1,526,323	404,282	26%
1401 McKinney	5 Houston Center	606,786	198,238	33%
	Total Houston Center	5,649,945	1,473,583	26%
500 Dallas	One Allen Center	930,730	140,781	15%
1200 Smith	Two Allen Center	1,075,210	361,621	34%
333 Clay	Three Allen Center	1,282,908	207,036	16%
	Total Allen Center	3,288,848	709,438	22%

Edited October 31, 2019 by mattyt36

[H-Town Man]

Couple of things that jump out:

 

Esperson at 53% vacant is getting murdered. Doesn't say much for our Class B office market if a building that beautiful can't succeed. Maybe if the hospitality market improves this will become a hotel.

 

Pennzoil at 38% is also doing terrible. Wasn't expecting that.

 

I remember a graphic on here back in 2013 or 2014 that showed a cross section of all the Class A buildings and only a few floors were vacant in all of downtown. What a gut punch we've taken since then.

 

[mattyt36]

It also does not include sublease space.