July 19, 2017
The Houston real estate sector can be summed up as follows: Office, flat. Industrial and retail, improving. That, at least was the big picture according to speakers at NAI Partners’ Q2 Press Breakfast on July 18.
Following opening remarks by Managing Partner Jon Silberman, NAI Partners’ Office Tenant Rep Leader Dan Boyles indicated that the office market is still treading water. The downtown submarket, especially, continues to see a great deal of sublet space. Because corporations checking out space want amenities, it means landlords either need to “not compete at the higher level, or plan to reinvest significant capital in their assets,” Boyles said.
Travis Land, Partner, Industrial Services, was somewhat more upbeat, pointing out that demand for industrial space is strong, with local and regional businesses choosing to own their own space, versus leasing. On the other hand, not a whole lot of speculative space is going north. “Lenders seem more open to end-users, than they are to speculative developers,” he said.
And, when it came to retail, Senior Vice President, Retail Services, Jason Gaines said not to let the “retail is dying” panic fool anyone, especially in conjunction with the recent news of Amazon’s Whole Foods purchase. “Service retailers aren’t pulling out their white flags, saying ‘Amazon is coming, let’s shut down,’” he said. There hasn’t been much impact, panic or concern among retailers such as fitness centers or restaurants.
Gaines also explained that, while the internet offers convenience to shoppers, they also want that value. “Americans will do anything to get a bargain,” he remarked, pointing out that stores such as T.J. Maxx and Marshall’s continue to thrive on the brick-and-mortar end.
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