Houston-Clear Lake Office Market Update 2 q-2010


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  • Houston-Clear Lake Office Market Update 2 q-2010

    1. 1. NASA / Clear Lake Office Market Report<br />2Q, 2010<br />Accelerating success.<br />
    2. 2. Market Area<br />NASA / Clear Lake Office Submarket<br />
    3. 3. Market Snapshot<br />NASA / Clear Lake Office Submarket<br />
    4. 4. Market Snapshot<br />Asking Rental Rates<br />
    5. 5. Market Snapshot<br />Occupancy Rates<br />
    6. 6. Vacancy<br />NASA / Clear Lake Office Submarket<br />
    7. 7. Vacancy<br />Available Square Feet by Class<br />
    8. 8. Vacancy<br />Largest Contiguous Blocks of Available Space<br />
    9. 9. The Impact of Johnson Space Center<br />
    10. 10. The NASA Equation<br /><ul><li> NASA Related tenants occupy over 2.2 million square feet
    11. 11. 39% of the total office inventory is NASA related tenants
    12. 12. 47% of the currently leased space is occupied by NASA related tenants</li></li></ul><li>The NASA Equation<br />Congress is now considering the controversial new plan for Human Space Exploration which the Obama Administration proposed last February. Thus far, the new program has been vigorously opposed by representatives in the states most affected by the cancellation of Constellation -- Alabama, Texas, and Utah. The Constellation Program was the replacement for the Space Shuttle program which is scheduled to end in 2011. The President’s plan is not considered to positive for Johnson Space Center and the Clear Lake Area, and it has been estimated as many as 5,000-7,000 jobs could be lost in the Clear Lake area if the President’s plan is implemented. Some are fighting to save Constellation, and a few are seeking additional shuttle flights. Both of these outcomes are highly unlikely since they would take a lot more money than is likely to be approved.<br />The conventional wisdom or maybe even optimistic hope among Texas congressional leaders and business leaders in Houston is for a compromise plans that will mitigate job losses at Johnson Space Center and among the many aerospace contractors. The only thing that is clear at this point is that there is a lot uncertainty around what the new vision of NASA will look like and its impact on the Clear Lake area.<br />
    13. 13. Market Outlook<br />The NASA / Clear Lake office market has yet to feel the uncertainty swirling around NASA in a significant way, but changes could be on the horizon. Boeing has placed 135,000 square feet of space on the market in corporately owned office properties, and USA Space Alliance the primary contractor for the Space Shuttle contract has over 800,000 SF of leases expiring in 2010 and 2011. USA recently announced layoffs of 300-400 jobs in the Houston area to align the company’s workforce with NASA’s requirements to fly out the remaining assembly and supply missions to the International Space Station.<br />With both the National and Houston economy only showing modest signs of recovery, there is likely not an economic driver to replace any significant job losses related to NASA in the Clear Lake area in the short term. I expect vacancy rates to rise and a shift in market conditions to the tenant’s favor. This means lower rental rates, and more concessions. The degree to which this happens really depends on what happens with NASA. At present the NASA / Clear Lake Office Market is one big question mark.<br />
    14. 14. Coy Davidson<br />Coy Davidson<br />Senior Vice President<br />Office Services Group<br />Direct: 713.830.2128<br />coy.davidson@colliers.com<br />www.coy.davidson.com<br />www.colliers.com<br />
    15. 15. Accelerating success.<br />