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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

Apartment Developements

• No apartment developments were noted during the month of May.

The following chart illustrates historical apartment occupancy.

Apartment Sales

• Marquette Cos. (847-289-3758) has purchased Club of the Isle (1733), a 248-unit Class-A apartment complex located at 3433 Cove View Blvd. in Galveston (807F), from La Salle Bank. The 4-year-old complex is 86% occupied with average rents of $1.03 per square foot. Darren Sloniger of Marguette Cos. represented the buyer.

• Erax Enterprises Inc (713-885-3085) purchased Central Apartments (2002), an 80-unit Class B complex located at 4411 Fulton in the Houston Heights area (453Y), from California-based PONO Corporation. The 46-year-old complex is 60% occupied with average rents at $0.73 per square foot. Chuy Terrazas of Lifestyles Unlimited represented the buyer, while Lester Langdon of Coldwell Banker Commercial United Realtors represented the seller.

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Single-Family Housing

MLS home sales declined in April as 3,519 existing homes were sold, compared to 3,624 homes sold last month, according to the Houston Association of Realtors (HAR). Sales for April 2009 were down 21.8% from April 2008. The median price of an existing single-family home sold in April was $139,000, unchanged from the same time last year, while the average home price – $178,141 – was down 5.2% from the April 2008 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 increased 2% in April to 1,427 from 1,396 in March, but are down 14% from April 2008. Realtor co-op sales represented 64.6% of gross sales for the month, up 0.6% from April 2008. Traffic decreased 24% from last year to 15,776 in April 2009. The inventory of completed speculative homes (1,371) is down 15% from April last year. There are 1,300 spec homes under construction, which is down 41% from April 2008. Overall, the 2,671 specs (both completed and under construction) are down 35.5% from April 2008
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Note: the 23 homebuilders in this survey account for approximately 55% of housing starts in Houston.

Nationwide sales of new single-family homes increased in April to a seasonally adjusted annual rate of 352,000, 0.3% above the revised March sales rate of 351,000 but 34.0% below the April 2008 figure, according to a release by the U.S. Department of Commerce. The median sales price in April was $209,700. Privately owned housing starts were at a seasonally adjusted annual rate of 458,000 in April 2009, which is 12.8% below the revised March estimate and 54.2% below the revised April 2008 rate. Privately owned housing completions were at a seasonally adjusted annual rate of 874,000 in April, 4.9% above the revised March figure, but 15.0% below the revised April 2008 figure.

The National Association of Home Builders/Wells Fargo Housing Market Index, a monthly measure of builder confidence, increased to 16 in May, 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 increased by two points to 14, the index measuring sales expectations for the coming six months rose from 24 to 27, and the index measuring the traffic of prospective buyers is currently at 13, unchanged from the revised April figure.

According to the National Association of Realtors (NAR), 4,680,000 existing homes were sold in April 2009, up 2.9% from March sales but down 3.5% from the 4,850,000 homes sold in April 2008. The median sale price was $ 170,200, which represents a 15.4% decrease from sale prices last year.

According to the most recent report by RealtyTrac, 342,038 foreclosure filings — default notices, auction sale notices, and bank repossessions — were reported during the month of April. While this figure is just 0.25% up from the previous month, it is up 32% from April 2008. Texas remains among the nation’s 27 highest states in total foreclosure filings in April 2009.

The following chart illustrates historical existing home sales.

Source: Houston Association of Realtors

• Caldwell Companies (713-690-0000) has obtained the acquisition rights for Bridgeland master-planned community, an 11,400-acre residential project site located near Fry Road and U.S. 290, Cypress in northwest Houston (366H), and is in the process of purchasing it for approximately $90 to $100 million from its Chicago-based owner, General Growth Properties Inc. (312-960-5000). This site is comprised of nearly 2,000 finished homes with over 600 occupied homes, 20,000 vacant developed lots, and almost 10,000 acres of vacant land. Bridgeland ranked number 9 on the 2008 Houston Business Journal list of Most Active Residential Communities in the Houston Area. Japanese conglomerate Sumitomo Corp. (713-653-8400) is going to be the financial partner of Caldwell in acquiring this vast project site, which is expected to be built out in the next 20 years.

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Permit Issuance

The City of Houston issued permits to build 228 private single-family houses and one private multifamily building in April. Demolition permits were issued for 129 private single-family houses and 12 multifamily structures. In addition, 215 permits were issued for privately owned non-residential construction totaling $40,315,774 and four permits were issued for public non-residential construction. Additions, alterations, and conversions totaled $88,767,337 for the private sector and $7,013,000 for the public sector.

*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 First Quarter 2009 Houston Office Data Program, citywide occupancy for Houston area multi-tenant office buildings is 84.79% (Class A = 88.82%; Class B = 82.37%; Class C = 79.47%; Class D = 77.08%).  The citywide quartely multi-tenant office rental rate is $21.13 per square foot (Class A = $25.04; Class B = $18.72; Class C = $15.07; Class D = $12.36).
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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

• Jacob White Construction Co (281-286-6666) is developing 700 E Medical Center Blvd (17828), a 30,000 square-foot building on 2.23 acres of land located in Webster TX (618U). This office medical building will be built to Gold LEED Standard with an extensive green roof.

The following chart illustrates historical office occupancy.

Office Sales

• The Woodlands-based Lone Star College System – LSCS (832-813-6500) has purchased Compaq Campus North (2452), a 19-year-old, two-million-square-foot class B campus of buildings, parking garages, and over 10 acres of vacant land, from Hewlett-Packard - HP (650-857-1501). Located at 20555 Tomball Pkwy (near State Highway 249 and Louetta Road) in the Technology Corridor (329X), the purchase price of this former HP-Compaq world headquarters is nearly $42.15 million. Primary plans of LSCS for this new site include relocation of its 50,000-square-foot Willow Chase Center on Grant Road to here; development of a new multi-college University Center for the northern Harris County area, a centralized Corporate College Conference and Training facility, and an instructional satellite campus; and setting up of administrative offices for LSC staff, system administration, and support infrastructure. Ken Gilbert of CB Richard Ellis and Stewart Robinson of Hines Interests brokered this transaction.

• A joint venture of Duke Realty Corp. (713-353-2501) and CB Richard Ellis (713-881-0900) has purchased Det Norske Veritas (2475), a 90,000-square-foot, two-story Class-A office building located at 22535 Colonial Pkwy in Katy (445Z), from the proprietary Duke Realty Corp. The newly built building is 100% leased to Norway-based Det Norske Veritas (281-396-1000). Each side used in-house representation. The building is part of the three newly constructed build-to-suit, single-tenant properties, totaling nearly 327,000 square feet, purchased by the joint venture for about $41.1 million. The other two properties, also previously owned by the proprietary Duke Realty Corp, are in Florida.

Office Leases

• Bohler Welding Group USA, Inc. (281-499-1212) has renewed its lease of 33,776 square feet at Greenbriar V (1490), a 45,000-square-foot, Class C office building located at 10401 Greenbough Drive in Stafford, TX (569Q), from Green, Harry M Interests (713-953-9800). The 27-year-old building is fully leased. Larry Indermuehle and Lang Motes of Indermuehle & Co. represented the tenant, while Tom Brummett of Brummett & Co represented the landlord in the lease negotiation.

• Macquarie Group (713-986-3604) has leased 28,163 square feet at One Allen Center (45), a 990,000-square-foot, Class A office building located at 500 Dallas Street in west Houston (493Q), from Cullen Allen Holdings LPP (212-417-7000). The 37-year-old building is 98.5% leased with asking rents at $28.00 per square foot. Craig Beyer, Peter Livaditis, Jim Silberfein and Lesa Nickelson of CB Richard Ellis represented the tenant, while Paul Frazier and John Morton of Brookfield Properties represented the landlord.

• Cima Energy (713-209-1112) has leased 20,254 square feet at SCI Building (1048), a 120,000-square-foot, Class-D office building located at 100 Waugh Drive in near west Houston (492M), from LUI2 Houston Waugh GP LLC (713-533-5860). The 36-year-old building is 83% leased with asking rents of $12.50 per square foot. Jason Whittington and Jon Sibermen of NAI Houston represented the tenant, while Greg Tilton of Transwestern Commercial Services represented the landlord.
  
  
• Frost National Bank (713-388-7600) has renewed its lease of 18,816 square feet at Pin Oak Office Park - Frost Bank (16), a 200,000-square-foot, Class B office building located at 6750 West Loop S in West Bellaire (531G), from McCord Development (713-860-3000). The 32-year-old building is 72% leased with asking rents at $21.50 per square foot. Bill Boyer and Charles Gordon of CB Richards Ellis represented the tenant, while Brian Strait of Navisys Group represented the landlord.
  
  
• Hexion Specialty Chemicals (614-225-4127) has renewed its lease of 17,884 square feet at Continental Center I (107), a 1,000,000-square-foot, Class A building located at 1600 Smith Street in Central Business District (493Q), from Cullen Allen Holdings LPP (212-417-7000). The 25-year-old building is 94% leased with asking rents at $28.00 per square foot. John Simons, Michael Palmer and Steve Hesse of CB Richard Ellis represented the tenant, while Paul Frazier and John Morton of Brookfield Properties represented the landlord.
  
  
• Land Tejas Companies (713-783-6702) has renewed its lease of 12,246 square feet at Piney Point II (415), a 78,000-square-foot, Class B office building located at 2450 Fondren Road in the Fountainview/Gessner area (490U), from Karbach Limited Partnership (713-975-0292). The 27-year-old building is 95.6% leased with asking rents at $17.00 per square foot. Jon Lee and Rich Pancioli of CB Richard Ellis represented the tenant, while Mark Stringer of Noex Management represented the landlord.
  
  
• Zeno Imaging (713-722-8778) has leased 12,190 square feet at 1080 W Sam Hstn Pkwy N (941), a 43,500-square-foot, Class C office building located in west Houston (449Y), from China National Petroleum Corp. (713-782-7765). The 26-year-old building is 74% leased with asking rents at $13.00 per square foot. John Olson of Olson Advisors represented the tenant, while Mark Ray and Jerry Ray of Office Buildings of Houston represented the landlord.

• Feldman & Rogers LLP (713-960-6000) has renewed its lease of 10,037 square feet at Capital One Plaza (517), a 491,000-square-foot Class A office building located at 5718 Westheimer Road in Houston Galleria (491T), from 5718 Westheimer Investors LP (972-458-3300). The 28-year-old building is 96% leased with asking rents at $20.00 per square foot. Stewart Robinson of Hines Interests represented the tenant, while Cody Armbrister of CB Richard Ellis represented the landlord.

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Retail Centers

According to the O’Connor & Associates First Quarter 2009 Houston Retail Data Program, citywide occupancy for Houston area multi-tenant retail buildings is 83.62% (Regional = 86.72%; Community = 86.55%; Neighborhood = 81.90%; Strip = 79.16%). Occupancy is down 0.12 points over the last quarter and down 0.62 points over the first quarter 2008. The citywide quarterly multi-tenant retail rental rate is $1.62 per square foot (Regional = $2.87; Community = $1.66; Neighborhood = $1.22; Strip = $1.24).
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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

• Wulfe & Co. (713-621-1700) has completed development and opened the first phase of the mixed-use development Blvd Place I (1652), a 70,000-square-foot building consisting of retail and office space, located at Post Oak Boulevard at San Felipe (491Q). The completed project is anticipated to be 500,000 square feet, complete with retail shops, restaurants, entertainment venues, and boutique offices. Phase two is estimated to come on line in 2010.

The following chart illustrates historical retail occupancy.

Retail Sales

• Chelsea Commons LLC (713-466-8224) has purchased Chelsea Square I (1084), a 27-year-old, 73,000-square-foot shopping center located at 4950 FM 1960 W. in far Northwest Houston (370D), from Chelsea GP LC (281-873-4444). Larry Marks of Betz Commercial Brokerage represented the seller, while Manouchehr Malekan of Houston Office Warehouse Co. represented the buyer.
  
  
• 5920 Telephone LLC has purchased Family Dollar (2583), a 49-year-old, 13,500-square-foot freestanding building located at 5920 Telephone Rd in Southeast Houston (535S), from Grocers Supply Co. (713-747-5000). Gus Lagos of Grubb & Ellis represented both the buyer and seller in the deal.

Retail Leases

• KCM Superstore (281-391-5261) leased 36,280 square feet at the Point West Shopping Center (1845), a 168,000-square-foot shopping center located at 300 S. Mason Rd. in Katy (485D), from United Equities (713-772-6262). This eight-year-old building is now fully leased. Branda Campble of Re/Max Fry Road represented the tenant, while Douge Freeman of United Equities represented the landlord.
  
  
• Simply Fashions (713-741-4604) has leased 11,449 square feet and opened its new store at Huntington Village (2155), a 27,500-square-foot shopping center located at 12605 Bissonnet Street in far southwest Houston (528V), from Centro Properties Group (713-660-4300). This 29-year-old center is 65% leased with asking rents of $0.83 per square foot. Braxton Brockenbrough of Weitzman Group represented the tenant, while Mike Parker of Centro Properties Group represented the landlord in-house.
  
  
• Source Refrigeration & HVAC (281-356-6993) has leased 10,500 square feet at 23235 Tomball Parkway (53825), a 15,000-square-foot strip center and storage facility located at 23235 SH 249 in Tomball (329J), from 23235 Tomball Parkway Ltd. The six-year-old building is fully leased. Jarrett Venghaus of Jones Lang La Salle represented the tenant, while Joe MacDougall of MacDougall & Co represented the landlord.
  
  

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Industrial Facilities

According to the O’Connor & Associates First Quarter 2009 Houston Industrial Data Program, citywide occupancy for Houston area operating multi-tenant industrial facilities is 84.26% (Flex = 85.68%; Bulk = 84.10%; Manufacturing = 78.51%, Service = 87.20%, Distribution = 72.97%, R&D = 51.97%). Occupancy is down 0.09 points over the last quarter, while up 0.28 points over the first quarter 2008. The overall quarterly rental rates decreased $0.02 ending at $0.44 per square foot (Flex = $0.48; Bulk = $0.38; Manufacturing = $0.36, Service = $0.52, Distribution = $0.38, R&D = $0.78).
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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 occupancy.

Industrial Developments

• The Houston office of Cadence McShane Construction (713-681-8500) has completed DHL (6600), a 184,000-square-foot build-to-suit distribution center, located at 19120 Kenswick Dr in Humble (335W). The facility includes 32-foot clear ceiling heights, 45 exterior docks, three drive-in doors, a two-story office component, and a 30,000-square-foot mezzanine. It will also have direct access to the future master-planned international air cargo terminal at the Houston/George Bush Intercontinental Airport. The facility was developed by Boston-based AMB Property Corp. (617-531-9000) with architectural services by Seeberger & Associates LP (713-977-5400).

Industrial Sales

• CTS Venture Fund 09 Ltd. (713-722-1250) has purchased Total Safety (37006), a nine-year-old 40,000-square-foot office/warehouse building located at 11111 State Highway 225 in La Porte (539Q), from MRTS 225 Ltd. (713-271-5900). Amy Silvey of Clay & Co. represented the buyer, while Chris Dray and Derek Hargrove of Moody Rambin Investment Services represented the seller.

• Donald A. Sanberg (936-588-1800) has purchased 21019 Spring Towne (37011), an 11-year-old 30,450-square-foot warehouse facility located at 21019 Spring Towne Drive in Spring (292S), from Ronald E. Farrell & Trust (949-497-2310). Mike Spears and Thomas Leger of The National Realty Group represented the buyer, while Clay Peeples of Boyd Commercial represented the seller.

• WBM Properties (281-342-2684) has purchased 2510 McAllister Rd. (4222), a 44-year-old, 22,300-square-foot warehouse facility located in west Houston (451Q), from MTHM Inc. (713-270-1616). Joe Benes of ERA Benes Realty represented the buyer and Marc Drumwright and Nick Miller of Southwest Realty Advisors represented the seller.

• A. Migl Investments LLC has purchased Airport Industrial Center II Bldgs A & B (36750), totaling 20,000 square feet, part of the year-old 28,000-square-foot office/warehouse facility located at 16518 Aldine Westfield Dr in far North Houston (373M), from TNRG Development (713-956-1000). Mike Spears, Robert McGee, and Thomas Leger of The National Realty Group brokered the sale.

• Karsten Holdings LLC (713-290-1154) has purchased Polycess Corporation (3802), a 34-year-old, 16,000-square-foot manufacturing facility located at 1711 Townhurst Drive near west Houston (449V), from Jesse Chie. Jeff Everist of CB Richard Ellis represented the seller, while Travis Land and Michael Keegan of NAI Houston represented the buyer.

• Batterson Truck Equipment LLC (713-694-7220) has purchased 5430 Killough (5334), a 41-year-old 12,744 -square-foot warehouse facility located in northwest Houston (411G), from Supreme Corp. Texas (281-999-0901). Chris Caudill and Joe Michael represented the buyer, while John Ferruzzo, Michael Keegan, and Travis Land represented the seller – all five with NAI Houston.

• Richards Property Management LLC (713-522-0868) has purchased Schulz USA Inc (4352), a 23-year-old 12,488 square-foot warehouse building located at 1006 W 34th Street in North Houston (452Q), from OFI Testing Equipment Inc. (713-880-9885). Mike Boyd and Greg Barra of Boyd Commercial represented the buyer, while Barrett Gibson of Gibson & Granello represented the seller.

• El Dorado Insurance Agency Inc. (713-521-9251) has purchased 3673 Westcenter Dr (5850), a 28-year-old, 10,960-square-foot service center located in southwest Houston (489Z), from National Lending Corp. (713-974-0748) for use as its headquarters. J. Peter Creasey of Crehan Co. represented the buyer, while Del Fullen of Commonwealth Land Title handle the closing. 

Industrial Leases

• Ozburn Hessey Logistics (281-470-0401) has leased 300,000 square feet at Bayport North Distribution Center (6062), a 565,000-square-foot office/warehouse building located at 4331 Underwood in League City (579E), from Billingsley Co. (972-820-0544). The 31-year-old building is 87% leased with asking rents of $0.37 per square foot. James E. Foreman, William “Cape” Bell, and Louis “Beau” Kaleel of Cushman & Wakefield represented the tenant, while Steve L. Hazel of InSite Commercial Realty represented the landlord in the negotiation.                 

• Geodis Wilson Project USA (281-260-8001) has leased 61,790 square feet at Point North Cargo Park (6237), a 159,000-square-foot distribution center located at 8210 Humble-Westfield in far north Houston (335S), from Duke Realty (713-353-2501). The newly built building is 38% leased with asking rents of $0.44 per square foot. Patrick Rollins of CB Richard Ellis represented the tenants, while Cory Driskill of Duke Realty represented the landlord.

• Hexion Specialty Chemicals (614-225-4127) has renewed its lease of 44,882 square feet at Corporate Business Center (6179), an 88,000-square-foot research facility located at 12650 Directors Drive in Stafford (569J). The eight-year-old facility is 90% leased with market rents of $0.75 per square foot. John Simons and Michael Palmer of CB Richard Ellis represented the tenant, while Jay Kyle of Colliers International represented landlord.

• Excalibur Minerals (281-864-9550) has leased 39,150 square feet and Flowline (713-643-9400) has renewed its leas of 16,800 square feet at Wallisville Industrial Park (4318), a 128,000-square-foot office/warehouse facility located at 8811 Wallisville Rd. in near east Houston (495B), from Granite Properties (713-781-8000).  The 28-year-old building is 90% leased with asking rents of $0.30 per square foot. Patrick Rollins with CB Richard Ellis represented the Excalibur Minerals, Jim Vann of Moody Rambin Interests represented Flowline, and the landlord was represented in-house by Steve Carter.

• Mud King Products (281-590-8989) has leased 5390 Greens Rd (36927), a 17-year-old, 37,590-square-foot warehouse facility located in Houston Central Business sector (374Q), from the landlord group of Toombs & Company Inc. (830-376-4409). Caleb Lawson of the Lawson Group represented the tenant, while Glynn Mireles of CB Richards Ellis represented the landlord.

• Nippon Express USA (281-987-2300) has renewed its lease of 34,800 square feet at Interwood Business Center (5882), a 191,000-square-foot office/warehouse facility located at 14430 JFK Boulevard in far north Houston (374X), from KTR Capital Houston LP (484-530-1800). The 10-year-old building is 94% leased and rents are negotiable. Brad Marnitz of NAI Houston represented the tenant, while Patrick Rollins of CB Richard Ellis represented the landlord.

• CFC Canadoil Inc. (713-676-0077) has leased an additional 28,800 square feet at Market-McCarty Dist Ctr (1635), 335,000-square-foot warehouse facility located at 8000 Market Street in southeast Houston (495E), from Teachers Insurance and Annuity Association of America (832-681-7400). CFC now occupies a total of 82,050 square feet. The 31-year-old facility is 81% leased, Caleb Lawson of Lawson Group represented the tenant, while Edward Bane and John Kruse of Holt Lunsford Commercial represented the landlord.

• Fugro (713-346-4050) has leased 10831 Train Ct (6275), a five-year-old, 22,800-square-foot office/warehouse facility located in far northwest Houston (449C), from Palmer Interests LLC (713-466-8395). Steven O’Connor, Nick Miller and Marc Drumwright of Southwest Realty Advisors represented the landlord and tenant in this transaction.

• Ariel of France (713-460-4100) has leased 16,271 square feet at the Pine Forest Business Center 17 (5933), an 83,000-square-foot warehouse facility located at 400 Garden Oaks Boulevard near North Houston (452W), from ProLogis (713-682-2292). This 30-year-old is 80% leased. Kevin Wittler represented the landlord in-house, while Joe MacDougall of MacDougall & Co. represented the tenant.

• Texas Bolt & Nut Co., LLC (713-869-7111) has leased 15,844 square feet at Pine Forest Bus Center 5 (4318), a 54,500-square-foot office/warehouse facility located at 421 Blueberry St. in North Houston (452M), from Billingsley Co. (972-820-0544). The 31-year-old building is 21% leased with asking rents of $0.37 per square foot. James E. Foreman, William “Cape” Bell, and Louis “Beau” Kaleel of Cushman & Wakefield represented the tenant, while Steve L. Hazel of InSite Commercial Realty represented the landlord in the negotiation.

• SMI (281-449-6749) has leased 15,187 square feet at Kempwood Tech Center Bldg 1 (3892), a 38,200-square-foot office/warehouse building located at 2772 Bingle Road in West Houston (451N), from Colette Farms, Inc. (806-655-3775). The 33-year-old building is fully leased with market rents of $0.36 per square foot. Mike Collins of Collins Realty Corp. represented the tenant, while Kris Lilly and Peggy Rougeou of Tarantino Properties represented the landlord.

• OEMic (281-440-5555) has leased 14,000 square feet at Brittmoore-Clay Industrial Park (36983), a 237,000-square-foot office/warehouse building located at 4525 Brittmoore in northwest Houston (449G), from Brittmoore Investments (713-660-6000). The four-year-old building is 36% leased with asking rents of $7.20 per square foot. The representative of the tenant was undisclosed, while Andrew Sowell and Clay Peeple of Boyd Commercial represented the landlord.

• Realrona (281-442-8282) has leased the Interbelt North Bus Center (6440), a 16-year-old, 12,600-square-foot warehouse facility located at 14100 Interdrive E. in north Houston (374W), from Midway Companies (713-629-5200). Glynn Mireles of CB Richard Ellis represented the tenant, while Mike Spears and Robert McGee of The National Realty Group represented the landlord.

• Larpen Metallurgical Services (817-654-9181) has leased 11,200 square feet at 601 McFarland (1537), a 232,000-square-foot manufacturing facility located in southeast Houston (494Q), from M. Hatch Texas Properties (713-926-9772). The 59-year-old building is fully leased with market rents of $0.25 per square foot.  Doug Nicholson and John Nicholson of Grubb & Ellis represented both the tenant and landlord in the transaction.

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Vacant Land

• Cole-Malone Living Trust has purchased 70.85 acres, located at Wolf Creek Road near SH 224 and Lake Livingston in San Jacinto County, from Kerr-McGee Oil & Gas Onshore LP (832-636-1000). B. Kelley Parker, John F. Littman, and Coe Parker of Cushman & Wakefield represented the seller, while the representative of the buyer was undisclosed.

• John Lawrie Inc. (281-456-7100) purchased Houston Farms, 17-acres of land located at Miller Road #1 near U.S. 90 in eastern Harris County (457M), from Guadalupe Ramirez. The land will be utilized for expansion of the company’s oilfield pipe operations in the region. Andrew W. Sowell and J. Michael Boyd of Boyd Commercial brokered the sale.

• Barnier Building Systems, Inc. (281-931-8666) has purchased 12.4 acres of land near Lone Star Parkway and Texas 105 West in Montgomery (123U), from Chris Cheatham of Cheatham Management (936-449-5400), for the proposed Heather Glen, a 100-bed living facility. Both parties were represented in-house.

• The City of Deer Park (281-478-7201) has purchased 8.72 acres of land, located at 6406 Highway 225, near the intersection of Luella Avenue and Pasadena Freeway (538L), from Monarca Corp. of Seabrook Texas. The city paid $1.5 million for the land that is going to be used for expanding the adjacent fire department training facilities. Bobby Grisham of Grisham Associates represented the buyer, while Doug Bates and Joel Hill of Henry S. Miller Brokerage LLC represented the seller.

• Philip Donisi Trustee has purchased 7 acres of land located at the southwest corner of FM 529 and Greenhouse Road in west Houston (406Q), from the Shirley Akpha Estate.  Richard Pevey of Realquest, Inc. represented the buyer in the transaction, while the seller representative information was undisclosed.

• Van Pham purchased 5 acres of land located at 6918 Flintlock Road in Northwest Houston (410U), from Robert Holmes. Keith Edwards and Keith Grothaus of Caldwell Companies represented the buyer and seller, respectively.

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Economic & Financial News

The total number of nonagricultural wage and salary jobs in the ten-county Houston area decreased by 8,800 jobs to 2,565,100 in April 2009, according to the U.S. Department of Labor. This month’s total is 32,200 fewer jobs than the 2,597,300 jobs at this time last year. Of nonagricultural employers, the Leisure and Hospitality sector posted the largest gain over the month at 1,500 jobs, while the largest year over year increase occurred equally in the Mining & Logging sector and Education & Health Services, which added 2,900 jobs each.

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

Source:  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 April 2009 were $337.7 billion, a decrease of 0.4% from March and 10.1% from April 2008. Retail trade sales in April were down 0.4% from March, and were 11.4% below last year’s level.

Personal income increased $58.2 billion, or 0.5%, and Disposable Personal Income (DPI) increased $121.8 billion, or 1.1%, in April 2009, according to the Bureau of Economic Analysis. Personal Consumption Expenditures (PCE) decreased $5.4 billion or 0.1% in April 2009. Meanwhile, the U.S. Department of Labor reports that the seasonally adjusted Consumer Price Index (CPI) for urban consumers was unchanged in April after decreasing 0.1% in March, while it is 0.7% lower than April 2008. The year-over-year declines in March and April 2009 are the first since 1955.

The latest Conference Board Survey indicates that the Consumer Confidence Index increased significantly to 54.9 in May 2009, up 14.1 points from April. 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 1.0% in April. 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 decreased 0.5% in April 2009 from March 2009 and is down 12.5% from the April 2008 level. Output in the manufacturing sector decreased 0.3% and output at mines decreased another 3.2% in April, while output of utilities increased 0.4% from last month. The rate of industrial capacity utilization was 69.1% in April, which is down 0.3% from the previous month’s level and is 0.3 points lower compared to the previous year’s level.

Freddie Mac reports that the 30-year fixed-rate mortgage (FRM) averaged 4.86% in May 2009, up 0.05 points from April but down 1.18 points from one year ago. The average for the 15-year FRM averaged 4.52% in May 2009, up 0.02 points from April but down 1.08 points from May 2008.

The Bureau of Economic Analysis (U.S. Department of Commerce) reports that advance estimates of the real GDP, the output of goods and services produced by labor and property in the United States, decreased at an annual rate of 5.7% in the first quarter of 2009. This decrease is due to negative contributions from exports, private inventory management, nonresidential structures, equipment and software, and residential fixed investment.

The U.S. Department of Commerce reports that construction spending during April 2009 was estimated at a seasonally adjusted annual rate of $968.7 billion, which is 0.8% above the revised March 2009 estimate. However, the current figure is 10.7% below the April 2008 estimate of $1,085.2 billion. Private residential construction was at a seasonally adjusted annual rate of $249.2 billion in April, 0.7% above the revised March estimate of $247.4 billion.

The Baker Hughes count of active domestic rotary rigs stands at 918 for May 2009. The current rig count is down 50.7% from last year’s figure of 1,863 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) improved a little more in April, increasing by 0.8 over the previous month. The April figure stood at 98.6, its highest level in 11 months signifying expansion but still well below the 100. The index is a monthly composite index that tracks the health and outlook for the U.S. restaurant industry. This is the 18th consecutive month below 100.

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Potpourri

According to the monthly Monster Worldwide, Inc. employment index, online job demand decreased by 2 points in the month of May, erasing the gains from the previous month and clearly indicating the volatility of the job market. The index currently stands at 118 and is 48 points below May 2008, a decrease of nearly 29%.  Online demand for workers decreased in 19 of the 28 major U.S. metro markets.

According to the April 2009 Architecture Billings Index, developed by the American Institute of Architects, April reported an index of 42.8, down 0.9 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 56.8.

Houston witnessed several new appointments to executive-level positions of its commercial real estate firms, during the month of May. Scott Myers, formerly Associate Director of Cushman & Wakefield, has joined Grubb & Ellis Co. (713-626-8888) as Vice President, Institutional Capital Markets team; Claude B. Anello, formerly Counsel and Shareholder in the Real Estate Development & Investments Practice team of Winstead PC, has joined the Adams and Reese LLP (713-652-5151) as Special Counsel, Transactions Practice team; and Michael Cash, Wade Howard, and Robert Montoya have joined as Commercial Litigation Partners in Gardere Wynne Sewell LLP (713-276-5500); and Kristine Byers, partner in Studio Red Architects (713-622-5333), will fill a new position as director of sustainability.

Norris Conference Centers (713-590-0950) has opened its second new Houston location, a 30,000-square-foot facility within CityCentre (1912), the $500 million, 1.8 million-square-foot mixed-use development of  Midway Companies (713-629-5200), located at 800 W Sam Houston Pkwy in far west Houston (489D). This facility, marking Norris’s fifth facility in Central Texas, meets International Association of Conference Centers (IACC) standards and is currently available for booking business. It is comprised of eight meeting rooms, ranging from 1,700 to 7,700 square feet, with soundproofing, ergonomic seating, individual room thermostat controls, and full-spectrum lighting.

First City Tower, a one-million-square-foot, 49-story office building, has recently become the first existing building in Texas to be awarded LEED™ Gold certification for an Existing Building from the U.S. Green Building Council. Located at 1001 Fannin Street in Houston Downtown, the building is owned by FC Tower Property Partners LP, an affiliate of Chicago-based JMB Realty Corp. (312-440-4800) and managed by CB Richard Ellis.

Please direct any questions regarding content in the Houston Real Estate Trends to Scott Sherrill at 713-375-4264 or ssherrill@poconnor.com.

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