Trends2015 150128082445-conversion-gate02

2015 Economic Outlook
Look out the Windshield …
K.C. Conway, MAI, CRE
Sr. VP | Economist | Counselor of Real Estate
Houston, TX
January 27, 2015

Disclaimer: Upfront and Not in fine print…
Neither Colliers International nor SunTrust Banks, Inc. make
any representations or warranties about the accuracy or
suitability of any information in this presentation. The
aforementioned do not guarantee, warrant, or endorse
the advice or services of K.C. Conway, MAI, CRE.
This presentation consists of materials prepared
exclusively by K.C. Conway, MAI, CRE, and is provided
during this Colliers-Houston program solely for informational
purposes of attendees. This presentation is not intended to
constitute legal, investment or financial advice or the
rendering of legal, consulting, or other professional services of
any kind.
Page 2

What you don’t know about K.C. Conway
3rd – Generation MAI / Briefed Bernanke / Futurist 
“K.C.” Conway is a 3-part Economist / “Futurist”
• 1 Part Clint Eastwood Economist
Man has to know his limits! – Know what you don’t know – like when oil will be >$70again
• 1 Part David Allen Coe Economist
I’ll Hang Around Just as Long as You will let me.
• 1 Part Billy Beane (Money Ball/Oakland A’s) Economist
Know Your Metrics – 3M approach to CRE management
3M = Measure … Monitor … Manage
3Page 3

“A” – Port of Houston will remain most
Irreplaceable - and America’s GDP port!
“B” – The BLS will incorrectly estimate
job growth 12 times again in 2014!
“C” – Colliers will be an MVP relationship &
advisor to you again in 2014!
“D” – Debt Capital will never be this good.
Don’t delay or “sit on the fence” in 2014!
4
What did K.C. forecast at Houston Trends 2014?
If you don’t know somethin’, what good are ya? – 75% Vs 100% in 2013

“A” – What is the value of TX Real Estate priced in Bitcoin?
Page 5
Trends K.C. won’t Forecast for 2015
“A man/economist has got to know his limits” - Clint Eastwood
http://bitcoincharts.com/charts/
Bitcoin all-time high
$1,126 Nov 30 2013
Bitcoin Q2 2014 rally:
$490 in April to $655 June
“B” – Anything about Cannabis Real Estate – Talk about HIGH Volatility CRE
I will not do Green Cannabis & Ham – Dr Seuss”
1. Cannabis is now legal for Medical Use in 23 states.
114th Congress is 1st that can Legislate Under the Influence
2. Cannabis does have R.E. impact.
Cannabis smoke permanently penetrates sheetrock (MF?)
3. What happens if other Western states legalize?
Will it be like Fireworks Sales – eventually all sell it!
Update:
Oregon, Alaska
& DC vote Yes …
FL misses by a
Cannabis Leaf
(57% yes, 60% rqd)
23 States now have
legal medical
Marijuana
Pay attn to the
FED and 10-Yr Tr.
10-Yr <2% Jan ‘15
… was
3% start of 2014

2014 is behind us. It will go down as a very good Vintage for TX.
2015 is ahead of you. Look through the Windshield.
Page # 6

The Rear-View is our reference point to move forward.
The Rear-View helps you establish by market and property type
where you are in the Real Estate Life Cycle.
Once we have our reference point, we can move forward.
Pat Duffy has the answers following me
Page # 7
Q. Where is HOU Eco
and R.E. in the
Market Cycle for
2015?
A.Hint … #1 MSA
ranking in job
growth is
indicative of
Expansion or
Oversupply?

Visualizing the Reference Points: Where are we starting from?
Congratulations 2014!
• Fewest Job cuts since 1997
• Most Job creation since 1999 (+2.952 million – BLS Jan 9th)
• Maybe 1st year with 3 consecutive quarters of 3.5%+ GDP since 2004 (Q2: 4.6% /
Q3: 5.0% / Q4:?)
• TX & Houston #1 in Job Growth in 2014: 450,000 / 125,000 jobs
Page # 8

• Historic High 1950 was +17% in 1950)
• Long-Term annual avg. is +3.25%
• 2014 Trend:
Q1: -2.1% / Q2: +4.6% / Q3: +5%
• Note: In order for 2014 to turn in a +3%
overall GDP, Q4 GDP will need to be
+4.5%. Won’t know until March. Get 1st
GUESS on Friday (3.5% consensus)
• KC’s Forecast: +3% (Q1 weak again)
• Energy CapEx decline coming all 2014
Learn the term “Redetermination”
• West-coast ports impact on Exports to
show up in Q4 GDP (Q4 ≠ 4% to 5%)
Gross Domestic
Product (GDP)
The 2015
Windshield
Economic Forecast
Page # 9

Let’s Look out the Windshield toward 2015 …
• Energy Impact: 30%+ of 2014 Capex was ENERGY
How do you think about all “shale” states?
Like CO, PA and Ohio
• West-coast Ports impact on GDP
How do you think about SoCAL and Pacific NW Vs Gulf?
• Job Growth choppy: Shed holiday hires in Jan and then
annual Feb “Benchmark” revisions.
Focus on ADP, Challenger Job Cuts & Revisions
• The sequel to Frozenomics 2014 is Frozenomics 2015
What was Q1 ‘14 GDP with Frozenomics? (-2.1%)
• Fundamentals are still good!
GDP should remain +2.5% to 3% range (Autos, Housing)
Jobs – expect monthly avg of 225k
What to expect in 2015?
Page # 10

Oilpro.com:
2 Global Majors Slash Their US Shale
Operations As Prices Fall
• BHP Management Comments On US
Shale“In Petroleum, we have moved quickly
in response to lower prices and will reduce
the number of rigs we operate in our
Onshore US business by approximately
40% by the end of 2015 financial year.
• Total Scales Back US Shale Operations On
the same day that BHP Billiton announced
the scaling back of its US shale operations,
French major Total revealed a similar move
• Dallas Fed estimates that Texas will lose
140,000 jobs because of the oil price drop
Energy & GDP Impact
The 2015
Windshield
Economic Forecast
Page # 11
2 Global Majors Slash Their US
Shale Operations As Prices Fall
(Jan 21 news from World Economic
Summit in Davos)

What does 140k job loss mean from past history?
You knew it couldn’t last …
Houston Annual Job Growth in
Perspective:
• -38k jobs: CY 1982
• <+5k jobs/yr: CY 1983-1985
• -82k jobs: CY 1986
• -17.5k job loss/yr 1982-1986
Some more Historic Perspective:
• CY 1990: +125k
• CY 2006: + 82k (pre-Shale)
• CY 2009: - 17k (Fin-Crisis)
• CY 2010-2014: +80k/yr
Source: Moody’s Vs BLS
Moody’s Vs BLS use different MSA boundary definitions; and BLS revisions cause
distortions. For Nov 2013-Nov 2014, BLS has Houston producing 125k jobs. That
preliminary estimate will get heavily revised with “Benchmark” revisions in Q1 2015.

Job Growth State & MSA View: TX & HOU #1 in 2014
State & MSA Job Growth ( Nov ‘13 to Nov ‘14)
Top 10 States Job Gr Nov ‘13 – Nov ‘14
Top 10 MSAs & Phoenix
Rank MSA Tr-12 Jobs
1 HOU 125,000
2 DFW 111,000
3 NY/NJ/LI 108,000
4 LA 92,000
5 Miami/FL 81,000
6 San Fran 69,000
7 Seattle 60,000
8 Atlanta 59,000
9 Phoenix 55,000
10 Boston 53,000
TX Surpassed CA, but don’t expect a repeat of 450k jobs in 2015.
HOU Top MSA for job growth Nov 2013-Nov 2014 – latest BLS data
NC Breaks into Top-5. 1 of only 4 states with > 100k job growth.
Rank State Tr-12 Jobs % Gr
1 TX 448,000 +3.9%
2 CA 351,000 +2.3
3 FL 223,000 +2.9
4 NC 105,000 +2.5
5 GA 99,000 +2.4
6 NY 89,000 +1.0
7 AZ 66,900 +2.6%
8 OH 59,000 +1.1
9 MA 60,000 +1.8
10 TN 55,000 +2.0
11 SC, CO, MN 51,000 +2.6 SC
Page 13

IT Job Growth Driven by Logistics Industry
CA not #1 in IT Job Growth any longer? Think TX – then FL & NC!
Page 14

Texas, Florida, North Carolina lead IT job
growth in first half of 2014, study finds
http://www.pcworld.com/article/2464280/texas-florida-north-carolina-lead-it-job-growth-in-first-half-of-2014-study-finds.html
PC World – Aug 14, 2014 By: Fred O'Connor , IDG News Service
U.S. technology professionals searching for jobs may want to look in states not normally considered IT hot spots.
The three states with the highest percentage of IT job growth for the first half of 2014 were Texas at 5.99
percent, Florida at 5.64 percent and North Carolina at 3.8 percent, according to a report from IT job site Dice.
State governments realize the value of IT jobs, said Goli, and are attempting to bolster technology employment.
“They are creating incentives and programs to not only attract companies but also create a pipeline of technology
professionals,” he said. For instance, some state universities in Florida have developed technology camps to
train teachers how to teach the subject to students.“Florida [is] investing early by getting sort of coding
camps and other types of training programs into middle school and high school,” said Goli. “They are
thinking ahead.”
Florida added 4,100 IT jobs in the first half of the year, nearly matching the 4,500 IT positions it created in
2013.
IT Job Growth Driven by Logistics Industry
CA not #1 in IT Job Growth any longer? Think TX, FL & NC!
21
TX had +6% IT
Job Gr in
1H2014
Page 15
IT Job growth
a real
opportunity
for TX

ADP: Private Payrolls Vs. BLS: A
Government Survey
ADP: 241k for Dec
• 211k avg for 2014
• Q4 avg = 233k
• 5 mos had <200k
BLS: +252k for Dec 2014
• + 84k for Dec 2013
• +246k avg for 2014
• +194k avg for 2013 Vs.
+289k avg for Q4 ’14
• U-3: 5.6% Dec ‘14 (5.8%)
• U-6: 11.2% Dec ‘14 Vs 13.0% Dec ’13
• Why might unemployment rise?
• Why is Labor Part Rate falling (62.7%)
Job Growth – Macro View
The 2015
Windshield
Economic Forecast
Page # 16
Opt industry
over Gov data!

Challenger-Gray
• Fewest cuts in 2014 since 1997 (483k)
• 32,640 cuts in Dec(down 9% from Nov)
• Average >50k cuts Q1 ’14
• Average <40k cuts Q4 ‘14
Stratification of Cuts:
By State:
• California & New York still #1 & 2
• Texas & Colorado energy cuts showing up
By Industry:
• Computer, Retail, Health Care (Tops in cuts:
#1,2,3)
• Construction, Real Estate and Legal (Fewest
cuts <1k in 2014)
Labor Cost risk to R.E. constr. in 2015
easing. Why? Oil-field workers can shift to
construction industry (and not just in TX).
Job Cuts – A good LEIThe 2015
Windshield
Economic Forecast
Page # 17
A good Leading
Economic Indicator to
Monitor…

Housing
(Single Family & Multi-Family)
Let’s look ahead
for 2015 at
Housing…
• Total Units 1.0 to1.1 million
• SF: 700k to 750k (not 1.0mm+)
1. Millennials not buyers yet
Reverse mortgages trigger Euthanasia
2. 225k.mo jobs = 1.0mm demand
• MF: 350k +/- 25k Why?
• Land hard to get and entitle
• Urban infill slower & harder to Dev.
• Metrics to Monitor re Housing
• HPA: Forget C-Shiller look at
Housing Opportunity Index (HOI)
(% of Homes affordable to Median $)
AZ MSAs rank well (68%-76%)
SF, LA NY, DC, MIA worst (10% <45%)
• Ratio of Jobs to MF permits (8:1 test)
• Watch Unit Mix (90%+ vacancy in 1 Bdrm)
• Early run-off (<35% leased selling at Full $)
Page 18

Wells Fargo Economics – Jan 20, 2014:
The oil and gas industry has sizable spillover effects
in Texas and elsewhere. Some of these are patently
obvious, such as refineries and petrochemical plants.
Some are more subtle, however, including
technology firms and financial services firms that
raise capital to fund the industry. As the epicenter
of the world’s energy industry, Houston is home to
the headquarters or major operations to all of these
industries, which has been one of the driving forces
behind the building boom there. Engineering
services are a big export industry for Houston, as
projects around the world are often planned,
designed and financed from there. As the industry
downsizes and consolidates, even some of the pre-
leased office space currently being built may be
tougher to fill, causing vacancy rates to march back
up.
Questions:
1. Where are the features on Colo, OH and PA?
2. Where are the features on Financial Industry
Impact? Who are #1, 2, 3 banks in Energy?
Bipolar Energy Views:
The Glass Half EmptyThe 2015
Windshield
Economic Forecast
Page # 19
View from Top 10 US bank
who also ranks among top-3
in Energy exposure – Jan 20
(Does the Bi-polar view worry you?)

Wells Fargo Economics – Jan 20, 2014:
We believe Texas has enough momentum in place
to weather the recent slide in energy prices. We do
not know how much further prices will fall, but
expect them to significantly overshoot to the
downside over the next few weeks. Real GDP and
nonfarm employment growth will likely slow to
about half of last year’s pace.
Texas will clearly see slower economic growth this
year. After averaging roughly 6 percent growth
during the past three years, we are looking for
Texas real GDP growth to slow to 4.2 percent in
2015 and 2.8 percent in 2016. Nonfarm
employment should also remain solidly in positive
territory over the next couple of years but will slow
to a pace below the nation by the second half of this
year
Questions:
1. Where the features on Colo, OH and PA?
2. Where the features on Financial Industry
Impact? Who are #1, 2, 3 banks in Energy?
Where are they HQ? (CA, NY, NC)
Bipolar Energy Views:
The Glass Half FullThe 2015
Windshield
Economic Forecast
Page # 20
View from Top 10 US bank
who also ranks among top-3
in Energy exposure – Jan 20
(Does the Bi-polar view worry you?)

The 2015
Windshield
Economic Forecast
Page # 21
Ask yourself the following
questions:
1. How are TX Public Homebuilders
doing? Anyone look at Q4 earnings?
2. How is the Houston Port doing? It
handles more than oil!
3. How is Houston medical Center
performing? Hiring less healthcare
professionals?
4. How many CA companies are
changing plans to move or expand to
TX? Toyota reversing move to TX?
Time to get Economic Development folks
to create a new Marketing Plan for TX –
“Yeah TX has the world’s top energy
industry, but TX also has North America’s
top homebuilders, port, & healthcare
industries. TX is still open!
KC Meds to the rescue:
… TX will survive …
TX is still Open; &
doing just fine!

America’s
4th Coast
28% of GDP
Who will be
East-coast’s
LA & LB?
The Gulf-coast:
Houston &
Mobile
70% of Population
East of MS
Where is the RR, Intermodal, e-
Commerce fulfillment
infrastructure in the West?
Why do you think the KeyStone
Pipeline is such a big-deal?
“FREIGHTWAYS” Define the 2015-2020 Outlook
They are the CORRIDORS by which our economy grows - via sea-land-air.
Page # 22

Manufacturing, Trade, Jobs, CRE construction will follow the Class 1
RRs & Intermodal Facilities?
The 7- Class I RRs (Note CN (red) & KCS (brown)
“All that happens on the ports, doesn’t
stay on the ports.” – Rail, Intermodal!
http://www.intermodal.org/
Mexico wage rate is now competitive with China – a big deal!
KCS & CN Railroads – Follow the Containers
Page # 23

The 3D
Windshield
3D Print
Manufacturing will
Revolutionize Real
Estate! Global Influencers
“3D printing will be bigger
than the internet.” - Chris
Anderson, Former Managing
Editor, WIRED Magazine
Page # 24

Source: DaVinci Institute
http://www.thefiscaltimes.com/Articles/2014/02/17/These-Shoes-Were-Made-3-D-Printing#sthash.7rJwHKQQ.dpuf
3D Printers: Small enough to be a kitchen appliance
3D Shoe Printer 3D Organ PrinterGeneric 3D Printer
Page # 25

3D Food Printers
Will Dominos & PaPa Johns even exist in 10 years
when we can 3D-Print a pizza at home?
Page # 26

3D Printing is not Science-Fiction.
It has evolved from trinkets to cosmetics – and more…
For those of you that have heardme speakin1H2014, youknow my thoughtsandprognosticationson
3-D printing. It is not a fad and it will revolutionize howwe manufacture, warehouse and shop in
ways that we couldneverhave imagined. Whenwe start to absorb all the ways3-D printing
technologyisbeingappliedtodaybyreal-worldbusinesses,we starttorealize thistechnologyisvery
real and applicable toeveryindustrysectorandfar beyondplastictrinketssoldinaDollar-Discount
store.
Feetz– a companyinsouthernCalifornia–is makingcustomorthoticsusing3-D printing
technology. AnotherCaliforniacompanyismanufacturingAK-47automaticweaponsusing
graphite. Leadingmedical researchuniversityafteruniversityisdevelopingthe technologyfurtherto
syntheticallymanufacturemedicinesandpharmacyitemsandhumantissue rangingfromskingraftsto
evenorgans. But this may be the “disbeliever’s”breakthrough– MINK.
MINK is the geniusof a Harvard BusinessSchool graduate that has figure out how to 3-D print any
shade of lipstick a woman could desire from home at a cost of $300. Imagine a 3-D Lipstick printeras
a bathroom accessory for about the cost of the 3-D color printer in your office.It is realityby the end
of this year!
3-D printing is goingto turn upside down how we manufacture, warehouse and retail. It is another
accelerant to the e-commerce revolutionalreadyunderwayin retail. How doesa drug-store look
withouta cosmeticssectionbecauseitall canbe 3-D printedfromhome?
Skin
&
Micro-Skin
Sensors
Lipstick &
Cosmetics
too!
Page # 27

3D Printing – It is so much more!
Think about 3D and new Home Construction.
Affordable
housing &
rebuilding post
natural disasters?
Page # 28

3D Printing – From trinkets to Aviation …
Who will get these 3D Mfg Plants?
Page # 29

What will Texas’s
next chess move be?
Page # 30
Don’t let the media tell
you otherwise.
TX still has lots of GAS to
propel its economy!

Confidential – Colliers International 2014
JOBS

2012 – Dr. Ray Perryman, the Perryman Group:
“For every oilfield job created – two jobs are created in Houston”
-100,000
-50,000
0
50,000
100,000
150,000
2009 2010 2011 2012 2013 2014
Houston-Sugar Land-Baytown
Annual Job Growth
JOBS

$50
SHALE PLAY BREAKEVEN

OPEC “BREAK EVEN”

Average
Class A
Vacancy:
9.5%
HOUSTON OFFICE
Class A Submarket Vacancy

Average
Class B
Vacancy:
13.4%
HOUSTON OFFICE
Class B Submarket Vacancy

MARKET INDICATORS
YE 2013 YE 2014
CITYWIDE NET ABSORPTION (SF) 2.9M 6.8M
CITYWIDE AVERAGE VACANCY 12.0% 11.5%
CITYWIDE AVERAGE RENTAL
RATE
$25.97 $26.79
CLASS A RENTAL RATE
CBD $38.16 $42.01
SUBURBAN $30.80 $31.61
CLASS A VACANCY
CBD 10.7% 8.6%
SUBURBAN 9.2% 9.8%
At the close of Q4,
17.0M SF of new office
development was under
construction, more than
any other U.S. metro.
Market Metro U/C
Houston, TX 17,134,157
San Jose - Silicon Valley 8,086,492
Dallas, TX 6,873,662
Washington DC 6,168,610
Seattle/Puget Sound, WA 5,983,892
San Francisco, CA 5,161,899
Toronto, ON 5,088,689
Calgary, AB 4,950,500
Boston, MA 4,558,156
New York, NY - Midtown South
Manhattan 4,170,000
HOUSTON OFFICE – 212.9M SF

10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
16.0%
$16.00
$18.00
$20.00
$22.00
$24.00
$26.00
$28.00
Houston Average Rent Houston Average Vacancy

Average Cap Rate (Yield)Average Price ($) Per SF
Sales by Total $ (mil)
0
1,000
2,000
3,000
4,000
5,000
6,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
Rolling 12-mo. Total Quarterly Vol.
0
50
100
150
200
250
300
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
Houston United States
4%
5%
6%
7%
8%
9%
10%
11%
12%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
Data Source:

Average Industrial
Vacancy:
4.9%
HOUSTON INDUSTRIAL
Submarket Vacancy

HOUSTON INDUSTRIAL MARKET INDICATORS
YE 2013 YE 2014
CITYWIDE AVERAGE VACANCY (%) 5.3% 4.8%
CITYWIDE AVERAGE RENTAL RATE ($) $5.96 $6.20
NEW SUPPLY DELIVERED (SF) 8.0M 8.7M
4Q UNDER CONSTRUCTION (SF) 4.4M 8.0M
8.7M SF of
new inventory
delivered in
2014, 6.2M SF
was spec
construction!
HOUSTON INDUSTRIAL – 496.1M SF

0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
$5.00
$5.20
$5.40
$5.60
$5.80
$6.00
$6.20
$6.40
$6.60

Data Source:
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
$0
$10
$20
$30
$40
$50
$60
$70
$80
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
2%
4%
6%
8%
10%
12%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14

HOUSTON RETAIL MARKET INDICATORS
YE 2013 YE 2014
CITYWIDE AVERAGE RENTAL RATE ($) Statistically Irrelevant
NEW SUPPLY DELIVERED (SF) 1.9M 1.9M
4Q UNDER CONSTRUCTION (SF) 1.0M 2.2M
Houston’s Strong
Economy Helps
Push Retail
Vacancy Rate to
Historic Low
HOUSTON RETAIL – 269.9M SF

0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Houston Average Vacancy

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
0
50
100
150
200
250
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
4%
5%
6%
7%
8%
9%
10%
11%
12%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
Data Source:

Current Multi-Family Projects
Under Construction

HOUSTON MULTI-FAMILY MARKET INDICATORS
YE 2013 YE 2014
UNITS ABSORBED 16,248 16,432
CITYWIDE AVERAGE RENTAL RATE ($) $857 $923
UNITS DELIVERED 12,186 18,305
4Q UNDER CONSTRUCTION 20,479 27,787
The average
monthly rent
increased 8.1% in
2014.
HOUSTON MULTI-FAMILY –
588.8K Units

6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
$600
$700
$800
$900
$1,000
588.8K Units

Data Source:
Average Cap Rate (Yield)Average Price ($) Per Unit
0
1,000
2,000
3,000
4,000
5,000
6,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
4%
5%
6%
7%
8%
9%
10%
11%
12%
Q4 '09 Q4 '10 Q4 '11 Q4 '12 Q4 '13 Q4 '14
588.8K Units

• Starts up 9.4% over
2013 (29,905)
• Closings (New) 27,647
• Months Supply – 7.3%
Near historic lows.
• “Lot supply constraints
are stopping builders
from ramping up more
quickly”
Source:
Metrostudy / Hanley Wood
Median Home Prices
SINGLE FAMILY

• Consultants continue to struggle to keep up with demand. The duration
of design and construction documentation on projects has not
improved.
• Work under contract/construction by General Contractors continues to
drive a demand for skilled personnel. However a number of new
projects HAVE been put on hold we see real concern on backlog.
• The Subcontractor community has little or no excess capacity to
accommodate present workloads causing construction schedules to
lengthen.
• Labor and material costs continue to escalate but there are some signs
of leveling off of price increases.
• Long lead delivery times for critical path material and equipment
continues to drive completion dates.
CONSTRUCTION COMMENTS

Office
Retail
Hotel
Industrial
Apartment
Phase I
Recovery
Phase II
Expansion
Phase IV
Recession
Phase III
Oversupply
Rent
Increasing
Rents
Decreasing
Above Long-Term
Avg. Occupancy
Below Long-Term
Avg. Occupancy
Houston
Q4 2014
SELL
HOLD
BUY
U.S. Commercial Real Estate
Market Cycle

Trends2015 150128082445-conversion-gate02

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