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Apartments Single-Family Housing Permit Issuance Office Buildings Retail Centers Industrial Facilities Vacant Land Economic & Financial News Potpourri Click here for a PDF (printable) version of this report.

Apartments

According to www.oconnordata.com, June 2010 O’Connor & Associates data indicates that Greater Houston apartment market occupancy has increased 0.20 percentage points from the previous month and is currently 86.53% occupied, while overall rents stand at $0.883 per square foot. Class A and D rates registered an increase of $0.001 each, ending at $1.164 and $0.631, respectively, while Class B decreased by $0.001 to $0.832. Class C rates remained unchanged at $0.725 per square foot. Pre-leasing is currently underway in 11 communities (3,803 units) out of the 32 total properties (7,317 units) in the construction pipeline city-wide. Overall occupancy may experience a decline as these new communities are completed and delivered to the market.

Apartment Developments

• L & B Realty Advisors (214-989-0800) has completed construction on Palazzo at Cypresswood (17962), a 363-unit community located at 13801 Napoli Drive in the Champions West submarket (369C). The complex features one- and two-bedroom units with an average size of 969 square feet and average rental rates of $1.20 per square foot. The property is currently 78% occupied. Common area amenities include a 24-hour fitness facility, swimming pool, wi-fi café with gourmet coffees and clubhouse. Unit amenities include walk-in closets, vinyl wood plank flooring, oversized roman tubs with tile surround, and frost-free refrigerators with ice makers.
  
  
• Mark-Dana Corporation (281-363-4210) started construction earlier this year on Highland Manor Senior Housing (18045), a seven-building, 141-unit Tax Credit community for seniors located at 319 Newman Road in the Texas City/Dickinson submarket (736M). The complex will feature one- and two-bedroom units with an average size of 841 square feet and average rental rents of $0.65 per square foot. Build out is expected by the end of this year.
  
  
• MetroNational (713-468-4928) has completed construction on Fountains at Memorial City, The (18641), a 114-unit high-rise located at 9870 Gaylord Dr in the Spring Branch submarket (490B). The community features one-, two- and three-bedroom units with an average size of 1,518 square feet and average rental rates of $2.44 per square foot. The property is currently 7% occupied. Common area amenities include a fitness center, swimming pool, and concierge service. Unit amenities include hardwood floors, stainless steel appliances, refrigerators with ice makers, and a washer and dryer in each unit.
  
  
• Austin-based Realtex Development Corporation (512-306-9206) has started construction on Horizon Meadows (18425), a four-building, 96-unit Tax Credit community located on the southwest corner of Bayou Road and Main Street in the Texas City/Dickinson submarket (737T). The complex will feature one-, two- and three-bedroom units with an average size of 1,104 square feet and average rental rents of $0.58 per square foot.
  
  

The following chart illustrates historical apartment rental rates.

Source: O'ConnorData

Apartment Sales

• Behringer Harvard Briar Forest REIT LLC, an entity of Behringer Harvard (214-655-1600), has purchased Lofts at Briar Forest (17374), a 352-unit community located at 13202 Briar Forest Drive in the Far West submarket (488L), from The Guefen Companies (713-666-4333). The year-old, Class A complex is currently 85% occupied with average rents of $1.63 per square foot.
  
  
• A joint venture between Asset Plus Companies (713-782-5800) and a group of institutional investors advised by J.P. Morgan Asset Management has purchased Harbor View at Kings Harbor (17608), a 250-unit community located at 4855 Magnolia Cove Drive in Kingwood (337G), from Capital One NA (703-720-1000), the construction lender. The foreclosed property had previously been owned by Midway Kings Harbor Partners Ltd, an entity of Midway Companies (713-629-5200). The newly constructed, Class A complex is currently 4.2% occupied with rents ranging from $840 to $1570.
  
  

Apartment Financing

• The Houston and Dallas offices of Holliday Fenoglio Fowler (713-852-3500) have secured $6.5 million financing for Oaks of Wood Forest (2040), a 494-unit community located at 230-280 Uvalde Road in the Northshore/Woodforest submarket (457W), from Texas Capital Bank (713-439-5900). Kevin MacKenzie and Cameron Cureton of HFF arranged the three-year, adjustable-rate loan on behalf of Post Investment Group (323-653-9700), who acquired the 42-building property from Hubli LP, an entity of CNC Investments (281-444-1585). The 33-year-old, Class C complex, which originally had 536 units, is currently about 50% occupied with average rents of $0.74 per square foot. Several units, however, were destroyed in a fire.  Another 211 of the property’s units remain off-line due to damage incurred during Hurricane Ike. Post Investment Group has plans for a complete renovation of the property. Apartment Realty Advisors represented the seller.
  
  
• The Houston and Dallas offices of Holliday Fenoglio Fowler (713-852-3500) have secured financing for the purchase of Broadstone Walker Commons (17833), a 352-unit community located at 1751 West Walker Street in the Clear Lake/League City submarket (658M), from Freddie Mac (972-341-0644). Acquired from Alliance Residential Company (713-599-0280), the year-old, Class A complex is currently 91% occupied with average rents of $1.18 per square foot. John Brownlee and Matt Kafka of HFF arranged the financing for Vancouver-based Sunstone Realty Advisors (888-681-5959). Bank of America participated at the agent bank. Craig LaFollette, Todd Stewart, Todd Marix, Tre Banks and Chris Curry of Holliday Fenoglio Fowler worked together on behalf of both the buyer and the seller.
  
  

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Single-Family Housing

MLS home sales increased further in May as 4,864 existing homes were sold, compared to 4,526 homes sold last month, according to the Houston Association of Realtors (HAR).  Sales for May 2010 were also up 23% from May 2009.  The median price of an existing single-family home sold in May was $145,000, down 0.7% from the same time last year, while the average home price – $192,410 – was up 0.7% from the May 2009 level.
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Note: MLS sales include primarily existing home sales throughout the Houston region. Historical comparisons are offered solely for informational purposes and may not truly reflect growth in sales.

According to American MetroStudy, net sales of new homes decreased by 47.93% in May 2010 to 879 and are down 44.47% from May 2009. Realtor co-op sales represented nearly 65.2% of gross sales for the month, up 2.6% from May 2009 level. Traffic declined 25.89% from last year to 12,592 in May 2010. The inventory of completed speculative homes (1,128) is down 2.34% from May last year. There are 1,939 spec homes under construction, which is up 27.8% from May 2009. Overall, the 3,067 specs (both completed and under construction) are up over 14.7% from May 2009.
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Note: the 23 home builders in this survey account for approximately 55% of housing starts in Houston.

Nationwide sales of new single-family homes increased in May to a seasonally adjusted annual rate of 300,000 – 32.7% below the revised April sales rate of 446,000 and 18.3% below the May 2009 figure – according to a release by the US Department of Commerce.  The median sales price in May was $209,000. Privately owned housing starts were at a seasonally adjusted annual rate of 593,000 in May 2010, which is 10.0% below the revised April estimate but 7.8% above the revised May 2009 rate. Privately owned housing completions were at a seasonally adjusted annual rate of 687,000 in May, 7.4% below the revised April figure and 15.4% below the revised May 2009 figure.

The National Association of Home Builders/Wells Fargo Housing Market Index, a monthly measure of builder confidence, decreased to 17 in June 2010, on a scale where any number greater than 50 indicates that builders view sales as more good than poor. The index measuring current sales of new single-family homes decreased to 17, the index measuring sales expectations for the coming six months decreased to 23, and the index measuring the traffic of prospective buyers is currently at 14, two points down from the revised May 2010 figure.

According to the National Association of Realtors (NAR), 5,660,000 existing homes were sold in May 2010, down 2% from April sales and up 19.2% from the 4,750,000 homes sold in May 2009. The median sale price was $179,600, which represents 2.7% increase from sale prices last year.

According to the most recent report by RealtyTrac, 322,920 foreclosure filings – default notices, auction sale notices, and bank repossessions – were reported during the month of May 2010. This figure is down 3% from the previous month and up by around 1% from May 2009. Texas is among the nation’s 29 highest states in total foreclosure filings in May 2010.

The following chart illustrates historical existing home sales.

Source: Houston Association of Realtors

• Wallace Bajjali Development Partners LP (281-768-6700), in partnership with Atlanta-based Outer Marker Properties LLC (404-513-1012), is developing Hampton Pointe Manor (706-922-3575), a master-planned community for seniors. Part of the Hampton Pointe Mixed-Use Development, the community will be located on 21 acres at 3505 Murphy in Missouri City (609L), Fort Bend County. The community will comprise of 78-unit assisted living facility (including 23 for residents with memory care needs) and 70-unit independent living facility. It will also include about 50 “active-adult” patio homes ranging in size from 1,700 to 2,300 square feet and priced from $180s to $250s. Common amenities will include a beauty shop, full service 24-hour restaurant, ice cream bar with social activity area, 24-hour concierge service, fully laundry facility, fitness center, healthcare staff, and walking trails. Construction on the assisted living facility is scheduled to begin at the end of June, while construction on the independent living facility and patio homes can be expected before end of the year.
  
  

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Permit Issuance

The City of Houston issued permits to build 284 private single-family houses and eight private multifamily buildings in May. Demolition permits were issued for 224 private single-family houses and two multifamily structures. In addition, 173 permits were issued for privately owned non-residential construction totaling $32,977,894 and 46 permits were issued for public non-residential construction. Additions, alterations, and conversions totaled $180,044,204 for the private sector and $37,655,955 for the public sector.

Cost of Construction*
	2008	2009	2010
Month of May	$416,351,441	$321,469,446	$339,932,451
Year-to-Date	$2,668,781,710	$1,649,982,762	$1,339,829,673

*The figures in this section include all categories of buildings and non-building structures

*The figures in this section include all categories of buildings and non-building structures

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Office Buildings

According to the O’Connor & Associates Second Quarter 2010 Houston Office Data Program, citywide occupancy for Houston area multi-tenant office buildings is 83.28% (Class A = 83.59%; Class B = 82.13%; Class C = 84.73%; Class D = 86.17%).  The citywide quarterly multi-tenant office rental rate is $20.39 per square foot (Class A = $23.03; Class B = $18.73; Class C = $14.73; Class D = $12.57).
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Note: The office buildings listed herein are followed by their representative sector code and identification number as they appear in the O’Connor & Associates OfficeLink Online Data platform and are provided for subscriber cross-referencing. The property information contained within this database is updated on a monthly basis and accessible over the web. (Please contact us for more details.)

Office Developments

• The Regus Group (713-821-1400) has opened its 11th business center in the Greater Houston area in 14,000-square-feet of the 60,000-square-feet of office space within Pearland Town Center (2439), a 718,000-square-foot regional lifestyle center located at 11200 Broadway Street in the Southeast sector (614K). The office space is now 54% occupied with average rental rates of $19.00 per square foot.
  
  

The following chart illustrates historical office rental rates.

Source: O'ConnorData.com

Office Sales

• The Wells Real Estate Investment Trust II (770-243-8199) has purchased Energy Center I (968), a 331,000-square-foot Class A office building located at 585 N Dairy Ashford Road in the Katy Freeway West sector (488R), from a joint venture of Principal Real Estate Investors, an entity of the Iowa-based Principal Financial Group (515-247-6582) and Trammell Crow Co (713-963-1000). Fully leased to Foster Wheeler USA Corporation, the building was completed in 2008 and is situated on 5.1 acres. Keith Willby represented the buyer in-house, while Todd Casper and Russell Ingram of CB Richard Ellis represented the seller.
  


• Boxer Property(713-777-7368) has purchased The Ranchester Bldg (2021), a 147,000-square-foot, Class B office building located at 10333 Harwin Drive in the Southwest Freeway sector (520Z), from LNR Property Corporation (305-695-5500). LNR was the special servicer assigned for the disposition of this property previously owned by Maryland-based & Reiner Inc (301-945-4300). The 27-year-old, six-story building is 48% occupied with average rents at $13.00 per square-foot. Boxer Property was represented in-house, while Dan Miller and Robert Williamson of Holliday Fenoglio Fowler represented the seller.
  
  
• Boxer Property (713-777-7368) has purchased Park Centre I (1969), a 110,000-square-foot, Class B office building located at 9950 Westpark Drive in the Westchase sector (530A), from LNR Property Corporation (305-695-5500). LNR was the special servicer assigned for the disposition of this property previously owned by Maryland-based Bresler & Reiner Inc(301-945-4300). The 28-year-old, six-story building is over 72% occupied with average rents at $14.00 per square-foot. Boxer Property was represented in-house, while Dan Miller and Robert Williamson of Holliday Fenoglio Fowler represented the seller.
  
  
• Houston Community College (713-718-2000) has purchased 3601 Fannin (1019), a 12,500-square-foot, Class C office building located on the southeast corner of Fannin and Holman in the Midtown/Allen Parkway sector (493T), from Planned Parenthood (713-923-1777). The 40-year-old, three-story building was acquired as part of Houston Community College’s consolidation plans. Phillip Thompson of Thompson Commerical Real Estate represented the seller.
  
  

Office Leases

• The US General Services Administration (713-339-5380) has leased 132,539 square feet in Wells Fargo Plaza (88), a 1,721,000-square-foot, Class A office building located at 1000 Louisiana Street in the Central Business District sector (493L), from MetLife (972-246-1800). The 28-year-old, 71-story building is 86% occupied with average rents at $28.00 per square-foot. David Bale, Bruce Rutherford, Anna Schinas and Louie Crapitto of the Houston office of Jones Lang LaSalle represented the tenant in association with Brian Weiss from the company’s Chicago based Jones Lang LaSalle Public Institutions group, while Bonnie Kelly and Dave Hanusa of CB Richard Ellis represented the landlord.
  
  
• GDF SUEZ Energy North America (713-636-0000) has renewed its lease of 127,673 square feet in Post Oak Central-III (475), a 420,000-square-foot Class A office building located at 1990 Post Oak Blvd in the Galleria sector (491U), from Crescent Real Estate (817-321-2100). The 29-year-old, 24-story building is 73% occupied with average rents at $24.00 per square-foot. Harry Holmes II of Newmark Knight Frank represented the tenant, while Capstar Commercial Real Estate and Eric Siegrist of Crescent Real Estaterepresented the landlord.
  
  
• Money Management International Inc(866-889-9347) has leased 87,000 square feet in The Lake Corporate Center (1481), a 515,000-square-foot, Class A office building located at 14141 Southwest Freeway in the Sugar Land/First Colony sector (568R), from Phoenix-based The Ellman Companies (602-840-3000). The 28-year-old, 10-story building is 17% occupied with average rents of $17.00 per square foot. Ed Prejean of Jones Lang LaSalle represented the tenant, while Ronnie Martin of Colvill Office Properties represented the landlord.
  
  
• Sutherland Asbill & Brennan LLP (713-470-6100) has leased 41,410 square feet in First City Tower (54), a 1,333,000-square-foot, Class A office building located at 1001 Fannin Street in the Central Business District sector (493Q), from FC Tower Property Partners, LP, an affiliate of the Chicago-based JMB Realty Corporation (312-440-4800). With this lease, the 30-year-old, 49-story building is 92% occupied with average rents at $25.00 per square foot. Major tenants include Vinson & Elkins, EnerVest Management Partners, RBC Wealth Management, and Whitney Bank. Kevin Snodgrass of Cushman & Wakefield represented the tenant, while Chip Colvill and Michael Anderson of Colvill Office Property represented the landlord.
  
  
• ENGlobal Corporate Services (281-878-1000) has renewed its lease of 33,759 square feet in Bridgewood I (623), a 134,000-square-foot, Class A office building located at 654 Sam Houston Parkway N in the Greenspoint/Northbelt sector (373T), from Younan Properties (281-442-2350). The 31-year-old, four-story building situated on 4.59 acres is 78.5% occupied with average rents ranging from $15.58 per square foot. Scott Fikes and Robert Bantly of Grubb & Ellis represented the tenant, while Marci Phillips and Livy Romo of PM Realty Group represented the landlord.
  
  
• Ensco Offshore Company (214-397-3000) has leased 20,717 square feet in Two Park Ten Place (1436), a 57,000-square-foot, Class B office building located at 16300 Katy Freeway in the Park 10 sector (487C), from KBS Realty Advisors (214-575-9179). The 27-year-old, three-story building is 71% occupied with average rents at $18.50 per square foot. Lance McCarthy, Damon Thames, and Kyle Kelley of Studley represented the tenant, while Doug Little of PM Realty Group represented the landlord.
  
  
• American Homestar Corporation (713-941-6800) has renewed its 13,894 square feet lease in Marina Plaza (243), a 109,000-square-foot, Class B office building located at 2450 South Shore Boulevard in the Clearlake sector (619Y), from Galveston-based American National Insurance Company (409-763-466). The 19-year-old, five-story building is 86% occupied with average rents at $22.50 per square foot. Kevin Saxe of Cushman & Wakefield represented the tenant, while Dena Wren of CB Richard Ellis represented the landlord.
  
  
• Afren USA Inc (DBA Afren Resources USA Inc) (281-363-8600) has leased 12,067 square feet in Waterway Plaza Two (1876), a 143,000-square foot, Class A office building located at 10001 Woodloch Forest in The Woodlands/Conroe sector (251H), from Grubb & Ellis Realty Investors LLC, an entity of Grubb & Ellis Company (713-626-8888). The 10-year-old, six-story building is 95% occupied with average rents at $33.25 per square foot. John B Richardson of Office Space Advisors represented the tenant, while Ace Schlameus and Laura Schlameus of Grubb & Ellis represented the landlord
  
  
• Duane Morris LLP (713-402-3900) has leased 11,455 square feet in Four Oaks Place - Central Tower (470) AKA Aon Tower, a 588,000-square-foot, Class A office building located at 1330 Post Oak Blvd. in the Galleria sector (491Q), from T-C Four Oaks Place LLC, an entity of TIAA-CREF (212-490-9000). The tenant relocated from its former offices in the Greenway Plaza. The 27-year-old, 30-story building is part of a four-building complex and is nearly 95% occupied with average rents at $20.50 per square foot. Paul Wittorf of Transwestern represented the tenant.
  
  

Office Financing

• The Houston office of Holliday Fenoglio Fowler (713-852-3500), has secured financing for Atrium at Park Ten (1444), a 140,000-square-foot, Class B office building located at 16340 Park Ten Place in the Park 10 sector (447Y). Susan Hill of Holliday Fenoglio Fowler arranged the fixed-rate financing on behalf of BRI 1831 Atrium LP, an entity of Beacon Realty Investments (954-454-4665), which has acquired the building from KBS Realty Advisors (949-417-6500). The 30-year-old, three-story building, which has undergone close to $2 million in improvements over the last eight years, is 93% occupied with average rents at $20.00 per square-foot. Beacon Realty Investments was represented in-house, while Dan Miller and Martin Hogan of Holliday Fenoglio Fowler represented the seller.
  
  
• NorthMarq Capital (952-356-0100), has secured $7.2 million for the refinancing of Sharpstown Mall Anchor (1718) AKA: Jewelry Exchange Building, a 116,000-square-foot, Class C office building located at 7500 Bellaire Boulevard in the Southwest Freeway sector (530G), from Ladder Capital Finance LLC, an entity of Ladder Capital (212-715-3170). The 48-year-old, 10-story building, originally developed for Sharpstown State Bank, has over the decades become completely occupied by jewelers and is anchored by the Jewelry Exchange Center (713-772-2600) on the top floor. Jim Adams of NorthMarq negotiated the loan.
  
  

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Retail Centers

According to the O’Connor & Associates Second Quarter 2010 Houston Retail Data Program, citywide occupancy for Houston area multi-tenant retail buildings is 83.14% ((Regional = 84.70%; Community = 85.82%; Neighborhood = 81.85%; Strip = 79.16%).  Occupancy is down 1.46 points over the last quarter and down 1.44 points over the second quarter 2009. The citywide quarterly multi-tenant retail rental rate is $1.62 per square foot (Regional = $2.80; Community = $1.64; Neighborhood = $1.27; Strip = $1.27).
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Note: The retail centers listed herein are followed by their representative identification number as they appear in the new O’Connor & Associates RetailLink Online Data platform and are provided for subscriber cross-referencing. The property information contained within this database is updated on a monthly basis and accessible over the web. (Please contact us for more details.)

Retail Developments

• No retail developments were recorded for the month of June.
  

The following chart illustrates historical retail rental rates.

Source: O'ConnorData.com

Retail Sales

• Moore & Sons Realty LLC an entity of J P Moore Properties Inc (281-370-5986) purchased Tropik Shopping Center (54925), a 29,000-square-foot building located at 11300 West Road in the Far Northwest sector (409A), from US National Bank, a trustee of the Lehman Brother’s Small Balance Commercial Pass-Through Certificates 2007-3. James Lee of Gulf South Investments represented the buyer, while Mike Chance of Coldwell Banker Commercial United Realtors represented the seller.
  
  
• Khan Development Inc (713-643-3800) purchased 6526 FM 2920 (54924), a three-year-old, 16,000-square-foot building located in the Far North sector (290Q), from >Whitney National Bank (713-951-7330). Subsequent to the sale, the building was leased to Bouncin' Bears LLC (281-257-9696), provider of inflatable play land for parties. John S Wall Jr. and Will Moss of The Situs Companies brokered the sale. In the lease transaction, Khan Development was represented by Situs, while the tenant was represented by Janet Lucy of Carswell Real Estate Company.
  
  

Retail Leases

• Ross Dress For Less (281-859-3996) renewed its lease of 33,600 square feet at The Village at West Oaks (1796), a 282,000 -square-foot building located at 2306-2480 Highway 6 South in the Far West sector (488S), from Weingart Foundation (213-688-7799). The 15-year-old community center, situated on 26 acres, is 79% occupied with average rents at $1.38 per square-foot. Jazz Hamilton, Alex Makris, and Matt Keener of CB Richard Ellis represented the landlord.
  
  
• Staples (508-253-5000) leased 20,388 square feet in The Shops at Stone Park (14732), a 250,000-square-foot building located at 5858-6022 E Sam Houston Parkway North near Wallisville Road in the Northeast sector (457V), from NewQuest Properties (281-477-4300). The recently completed community center is 93% occupied and anchored by JC Penney. Scott Shillings of Riverway Retail represented the tenant, while H Dean Lane Jr and Robert Bailey represented the landlord in-house.
  
  
• Goodwill Industries of Houston (713-692-6221) leased 19,000 square feet in Fairmont Parkway Shopping Center (2832), a 144,000-square-foot building located at 5950 Fairmont Parkway in the Far Southeast sector (577H), from NewQuest Properties (281-477-4300). The neighborhood community center is situated on 22 acres with average rents of $1.25 per square foot. J Barkley Wedemeyer of Barkley Wedemeyer represented the tenant, while Bob Conwell represented the landlord in-house.
  
  
• Goodwill Industries of Houston (713-692-6221) leased 18,000 square feet in Victory Lakes Town Center (3509), a 416,000-square-foot community center located at 1820 FM 646 in the Far Southeast sector (699A), from NewQuest Properties (281-477-4300). The center, completed in 2008, is anchored by JC Penney. J Barkley Wedemeyer of Barkley Wedemeyer represented the tenant, while Heather Nguyen represented the landlord in-house.
  
  
• Elite Emergency Care (713-527-4400) leased 13,000 square feet at Victory Lakes Town Center (3509), a 416,000-square-foot community center located at 1820 FM 646 in the Far Southeast sector (699A), from NewQuest Properties (281-477-4300). The two-year-old center is over 85% occupied with average rents at $2.08 per square-foot. Heather Nguyen represented the landlord in-house
  
  
• Jump On In (978-692-0961) leased 10,220 square feet at Lakewood Forest Shopping Center (1207), a 97,000-square-foot neighborhood center located at 21115-21147 Tomball Parkway in the Far Northwest sector (329T), from Pacific Star Capital LLC (310-444-7770). The 25-year-old neighborhood shopping center, situated on 11 acres, is over 89% occupied with average rents at $1.00 per square-foot. Josh LaRocca of Mohr Partners represented the tenant, while Kristen Barker and Wes Miller of Wulfe & Co represented the landlord
  
  

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Industrial Facilities

According to the O’Connor & Associates Second Quarter 2010 Houston Industrial Data Program, citywide occupancy for Houston area operating multi-tenant industrial facilities is 84.28% (Flex = 83.30%; Bulk = 83.85%; Manufacturing = 90.38%, Service = 83.70%, Distribution = 74.28%, R&D = 87.98%).  Occupancy is up 0.32 points over the last quarter but down 0.35 points over the second quarter 2009.  The overall quarterly rental rates is $0.40 per square foot (Flex = $0.52; Bulk = $0.30; Manufacturing = $0.31, Service = $0.48, Distribution = $0.34, R&D = $0.95).
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Note: The industrial facilities listed herein are followed by their representative identification number as they appear in the O’Connor & Associates IndustrialLink Online Data platform and are provided for subscriber cross-referencing. The property information contained within this database is updated on a quarterly basis and accessible over the web. (Please contact us for more details.)

The following chart illustrates historical industrial rental rates.

Source: O'ConnorData.com

Industrial Developments

• DGM USA Houston (281-821-0500) is building a 68,000-square-foot warehouse facility to be located at 1813 Greens Road in North Houston (374Q). The company is part of a global network of providers of solutions in packaging, documentation and training. The facility is being constructed by Urban Construction Southwest Inc (713-339-5380) on a 6.5 acre tract of land, which was purchased by TIOBI LLC, an entity of DGM, from CarGreen Acres LP, an affiliate of InSite Realty Partners (713-339-1300) for an undisclosed amount. The sale was negotiated by CB Richard Ellis representative, Glynn Mireles. Build-out of the warehouse is expected in September 2010.
  
  

Industrial Sales

• Arizona-based Cole Real Estate Investments (602-778-8700) has purchased Igloo Corporate Headquarters (6055), a 914,000-square-foot manufacturing facility located at 777 Igloo Road in the Far West sector (442Z), from Igloo Products Co (713-584-6800) for $38.1 million. The four-year-old facility also served as Igloos’s corporate headquarters and is situated on 105 acres. The buyer was represented in-house, while Jack Fraker of CB Richard Ellis represented the seller.
  
  
• Iron Guard Self Storage (281-332-9949) has purchased Iron Guard Storage (37730), an 11-year-old, 107,000-square-foot warehouse located at 410 Old Galveston Rd in the Far Southeast sector (618Y), from AAA Self Storage (979-865-5989). Steve Burpee of Prudential Northwest Real Estate represented the buyer, while Joe Linsalata of Linsalata Realty Services represented the seller.
  
  
• GTG Holdings LLC has purchased 13202 Murphy Road (26403), a 67,000-square-foot manufacturing facility located at 13202 Murphy Road in the Far Southwest sector (569L), from BDI Murphy 10.6 Ltd. The 40-year-old building is situated on 3.6 acres and was vacant at the time of sale. The asking price was $1.7 million. Bo Pettit and Clay Peeples, SIOR of Boyd Commercial represented the seller while Jack Baber of Lexington Associates represented the buyer.
  
  
• Cooling Tower Resources Inc (281-452-1510) has purchased 7400 Thompson Road (1115), a 27-year-old, 50,000-square-foot office/warehouse building located in the Far Northeast sector (460X), from Plas-Tex Container Inc (281-428-8039). The 27-year-old building is situated on 5.7 acres. Claire Sinclair of Claire Sinclair Properties brokered the deal
  
  
• Wholesale Roofing Supply (972-263-8190) has purchased 1310 Richey (589), a 40,000-square foot warehouse located at 1310 E Richey Road in the Far North sector (333X), from Bowie-Sims-Prange Inc (972-446-1150). The 29-year-old facility is situated on eight acres. Glynn Mireles of CB Richard Ellis represented the buyer, while the seller was represented in-house
  
  
• HTShop Realty LLC has purchased 5148 Lotus (3674), a 37,000-square-foot warehouse located at 5148 Lotus Street in the Near South sector (571L) from Suncoast Realty Inc. The 36-year-old building is situated on three acres. Corey Ferguson of Pacific Financial represented the buyer, while Chris Kugle, Dustin Gillioz and John Ferruzzo of NAI Houston represented the seller
  
  

Industrial Leases

• Federal Express Corp (281-873-1750) has leased 147,000 square feet in Ellington Trade Center Ph I (6591), a 514,000-square-foot office/warehouse building located at 12552 Highway 3 in the Far Southeast sector (577W), from Koll Development Co (214-696-1700). The recently completed building is situated on 50 acres and located across from the Ellington airport. Kirk Bittel of Fischer & Co represented the tenant, while Griff Bandy, Jon Michael, and John Ferruzzo of NAI Houston represented the landlord.
  
  
• CVS Pharmacy (281-257-4320) has renewed its lease in CVS Distribution Center (5875), a 12-year-old, 113,000-square-foot warehouse facility located at 301 S Trade Center Parkway in the Far North Sector (218P), from Bourguignon Family LP (714-396-7319). Jeff Peden, Graham Horton and David L Cook of Cushman & Wakefield represented the tenant.
  
  
• Hermann Services Southwest (713-674-8331) has extended its lease to 80,000 square feet in Underwood Distribution Center I (5870), a three-year-old, 907,000-square-foot distribution center located at 359 Old Underwood Road in the Far Southeast sector (539K), from Clay Development & Construction (713-789-2529). John Littman, Coe Parker, and Kelley Parker of Cushman & Wakefield represented the tenant, while Charlie Christ represented the landlord in-house.
  
  
• North East Trade Center Ltd(713-686-3030), has leased 60,000 square feet in Northeast Trade Center 2 (874), a 29-year-old, 110,000-square-foot warehouse located at 5411 Mesa Road in the Near Northeast sector (455U), from Canal Warehousing LLC, an entity of Canal Cartage Company (713-672-1779). Rob Stillwell of Grubb & Ellis represented both parties.
  
  
• Wave Electronics (713-532-1714) has leased 50,686 square feet in Glenmont Business Park 2 (5720), an 11-year-old, 212,000-square-foot office/warehouse located at 8648 Glenmont Drive in the Near Southwest sector (530C), from Eastgroup Properties (281-987-7200).  Eric Lestin and Carter Malone of Lestin Partners represented the tenant, while Rives Nolen and Hunter Brown of InSite Realty Partners represented the landlord.
  
  
• American Paper Recycling Corp (508-339-5551) has leased 6819 Willowbrook Park (16508), a three-year-old, 26,000-square-foot warehouse facility in Willowbrook Industrial Park located near SH 249 and Sam Houston Tollway in the Far Northwest sector (370L), from Capital Commercial Investments Inc (512-472-6990). John Ferruzzo and Travis Land of NAI Houston represented the landlord.
  
  
• Wrist USA (281-817-2060) has leased 24,000 square feet in East Belt Business Park Bldg 4 (6365), a three-year-old, 118,000-square-foot office/warehouse facility located at 1485 E Sam Houston Parkway S in the Near Southeast sector (537R), from Trammell Crow Co (713-963-1000). Wrist USA now occupies a total of 69,000 square feet within East Belt Industrial Park. Bob Berry and Ryan Fuselier of Holt Lunsford represented the tenant, while Faron Wiley of CB Richard Ellis represented the landlord.
  
  
• G&L Installations (713-884-8284) has leased 13,000 square feet in N Shepherd Business Park (5385), a 142,000-square-foot warehouse facility located at 7801 North Shepherd Drive in the Near Northwest sector (412U), from Cobalt Industrial REIT II, a private REIT managed by Cobalt Capital Partners(972-893-7000). The 28-year-old facility is situated on 8.5 acres off the I-45. Kent Willis of Newmark Knight Frank represented the tenant, while Jon Michael of NAI Houston represented the landlord.
  
  
• Eastin Wells Inc (562-435-1088) has leased 300 N Hwy 146 (2185), a 12,112-square-foot warehouse facility located at 300 N Hwy 146 in the Far Southeast (540X), from Penton Investment LLC (562-808-2299). The 28-year-old building is situated on 1.5 acres. Jay Jenckes of The National Real Estate Group represented both the tenant and landlord
  
  
• NuValTech Recycling (713-983-4186) has leased 11,050 square feet in Bondesen North Business Park (Bldgs 1-4) (6286), a 155,000-square-foot building located at 10642-10648 W Little York Road in the Far Northwest sector (409V), from DCT Bondesen North LP, an entity of DCT Industrial Trust (972-982-8550). Jay Koetter of Heritage Texas represented the tenant, while Walter Menuet of Vantex Commercial Property Group represented the landlord
  
  
• Schweitzer Engineering Laboratories Inc (509-332-1890) has leased 10,708 square feet in Beltway 8 Business Park I Bldg 1 (6), a 10-year-old, 25,000-square-foot office/warehouse facility located at 10110 W Sam Houston Pkwy S in the Far Southwest sector (529U), from DCT Industrial Trust (972-982-8550). Schweitzer was represented in-house, while Chris Caudill, Jon Michael, and Joel Michael of NAI Houston represented the landlord
  
  

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Vacant Land

• Baltzar Guerra has purchased 11.6 acres, located at 11117 North Houston Rosslyn (411E), from United Fabricating Company (281-447-7661). Travis Land and Michael Keegan of NAI Houston represented the seller.
  
  
• Turtle Creek Interests LLC has purchased 9.7 acres, located at 4904 Fuqua Street (574S), from ABP Enterprises LLC. Turtle Creek plans on developing a commercial warehouse on the site. Coldwell Banker Commercial United, REALTORS brokered the sale with Andre Harden representing the buyer and Mike Chance and Randall Martin representing the seller.
  
  
• Momentum Project Controls, an entity of Momentum Contractors Inc (713-856-9977), has purchased 8.3 acres, located along the south side of FM 529, east of Paddock Bend (407N), from Lowery Heirs. Momentum plans on developing an industrial project on the site. Alan Parker Associates represented the seller.
  
  

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Economic & Financial News

The total number of nonagricultural wage and salary jobs in the ten-county Houston area increased by about 20,200 jobs to 2,527,100 in May 2010, according to the U.S. Department of Labor.  This month’s total is 22,900 fewer jobs than the 2,549,100 jobs at this time last year. Of nonagricultural employers, the Leisure and Hospitality sector posted the largest gain over the month at 4,400 jobs, while the largest year over year increase occurred in the Education and Health Services sector, which added 11,200 jobs.

The following chart illustrates total non-agricultural employment in the Houston MSA.

Source:  U.S. Bureau of Labor Statistics (BLS)

Advance estimates reported by the U.S. Department of Commerce show that seasonally adjusted national retail and food services sales for May were $362.5 billion, a decrease of 1.2% from April but 6.9% above May 2009. Retail trade sales in May were down 1.4% from April but 7.4% above last year’s level.

Personal income increased $53.7 billion, or 0.4%, and Disposable Personal Income (DPI) increased $49.0 billion, or 0.4%, in May 2010, according to the Bureau of Economic Analysis.  Personal Consumption Expenditures (PCE) increased $24.4 billion, or 0.2%, in May. Meanwhile, the U.S. Department of Labor reports that the seasonally adjusted Consumer Price Index (CPI) for urban consumers decreased 0.2% in May and is 2.0% higher than May 2009.

The latest Conference Board Survey indicates that the Consumer Confidence Index decreased to 52.9 in June 2010, up 10.4 points from May. The index is an indicator of consumers’ overall assessment of current conditions, relative to a figure of 100 in 1985, the base year. The Index of Leading Economic Indicators increased 0.4 percent in May, decreased 0.1% in April, and decreased 1.4% in March. The index is an indicator of direction the economy is expected to take in coming months, relative to a figure of 100 in 1996, the base year.

According to the Federal Reserve, industrial production increased 1.2% in May 2010 from previous month and is up 7.6% from the May 2009 level. Output in the manufacturing sector increased 0.9%, output at mines decreased 0.2%, while output of utilities increased 4.8% in May. The rate of industrial capacity utilization was 74.7% in May, which is up 1.0% from April’s revised level but down 1.3 points compared to the previous year’s level.

Freddie Mac reports that the 30-year fixed-rate mortgage (FRM) averaged 4.74% in June 2010, down 0.05 points from May 2010 and down 0.68 points from one year ago. The average for the 15-year FRM averaged 4.18% in June 2010, down 0.10 points from May 2010 but down 0.72 points from June 2009.

The Bureau of Economic Analysis (U.S. Department of Commerce) reports that third estimate of the real GDP, the output of goods and services produced by labor and property in the United States, increased at an annual rate of 2.7% in the first quarter of 2010. This increase in GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, and nonresidential fixed investment.

The U.S. Department of Commerce reports that construction spending during May 2010 was estimated at a seasonally adjusted annual rate of $841.9 billion, which is 0.2% below the revised April estimate ($843.3 billion). The current figure is 8.0% below the May 2009 estimate of $915.4 billion. Private residential construction was at a seasonally adjusted annual rate of $260.8 billion in May, 0.4% below the revised April estimate of $261.7 billion.

The Baker Hughes count of active domestic rotary rigs stands at 1,531 for June 2010. The current rig count is up 71.1% from last year’s figure of 895 rigs. The rotary rig count is a census of the number of drilling rigs actually exploring for or developing oil or natural gas in the United States.

The National Restaurant Association’s Restaurant Performance Index (RPI) stood at 99.7 in May, down 0.4 percent from the previous month. The index is a monthly composite index that tracks the health and outlook for the U.S. restaurant industry. This is the first time in three months in which the RPI posted below 100.

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Potpourri

According to the monthly Monster Worldwide Inc Employment Index, online job demand increased by seven points in the month of June 2010. The index currently stands at 141 and is 24 points above June 2009, an increase of 20.51%. Online demand for workers increased in all of the 28 major U.S. metro markets.

According to the May 2010 Architecture Billings Index, developed by the American Institute of Architects, May reported an index of 45.8, up 2.6 points from the previous month (any score above 50 indicates an increase in billings). Both the project inquiries index and the inquiries for new projects score was 55.5.

Four Chasewood (2214), a 113,000-square-foot, Class A office building located at 20329 Tomball Parkway in the Technology Corridor/FM 1960 sector (329Y), has been awarded the BOMA 360 Performance Building designation. The two-year-old, five-story property was developed by GenCap Partners (972-671-9120) as part of the Chasewood Technology Park. The building is 90% occupied with leasing and management being handled by Transwestern (713-270-7700). The BOMA 360 Performance Program, designed by the Building Owners and Managers Association (BOMA) International, validates and recognizes commercial properties that demonstrate best practices in all major areas of building operations and management.

Beltway Lakes II (17227), a 164,000-square-foot, Class A office building located at 5875 N Sam Houston Parkway W in the Greenspoint Northbelt sector (370V), has been awarded the LEED ™ C&S Gold certification. With this, Beltway Lakes becomes the first multi-building campus in Houston to earn LEED™ Gold. Beltway Lakes I (17918) had been awarded LEED™ Gold in September 2009. Beltway Lakes II saves 20% of energy compared to baseline (non-LEED) buildings and has very efficient 27,000-square-foot floor plates that allow tenants to cut their square foot usage. The garage is activated by EZ TAG, reducing emissions produced during engine-idling. Beltway Lakes was designed by Morris Architects (713-622-1180) and structural engineer Ingenium (713-339-9160), and built by Pepper-Lawson Construction LP (281-371-3100). Landscaping for the properties was done by Clark Condon Associates (713-871-1414).

Itex Partners, the real estate investment subsidiary of Itex Developers LLC (409-727-0338) purchased the former Jean LaFitte Hotel for purpose of redevelopment into a mixed-income and mixed use apartment complex. The building constructed in 1927 and located at 2101 Church Street in Galveston had been vacant at the time of the sale. The seller, Cathay Bank (713-278-9599), was represented by Moody Rambin Investment Services in the transaction.

The month of June recorded the following appointments and promotions to executive positions in real estate firms based in Houston:

Todd A Carlson, formerly with Marcus & Millichap, joined Hunington Properties Inc (713-623-6944) as lead investment sales associate with a portfolio to expand the firm’s build-to-suit programs. Mr. Carlson’s other responsibilities will include management of retail transactions involving both single- and multi- tenant facilities. John R Ray III, formerly with TransTeq Environmental Solutions, joined The Richland Companies (713-682-5707) as property manager for the company’s 30-property portfolio. Reed Johnson, previously with Marcus & Millichap, joined Stan Johnson Company (832-476-3440) as Associate Director.

Jon Lee, awarded the National Association of Industrial Properties’ (NAIOP) "Rising Star" in 2009, was named Vice President of brokerage services at CB Richard Ellis (713-881-0900). Jerry Lea and Mark Pojar were named Executive Vice President and Vice President, respectively of Conceptual Construction at Hines (713-237-5657).

Please direct any questions regarding content in the Houston Real Estate Trends to Holly Kelch at 713-686-9955 or hkelch@poconnor.com.

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