BoyarMiller Breakfast Forum: The Houston Commercial Real Estate Markets - What's Ahead for 2013

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BoyarMiller Breakfast Forum: The Houston Commercial Real Estate Markets - What's Ahead for 2013

  1. 1. www.boyarmiller.com The Houston Commercial Real Estate Markets: What’s Ahead for 2013 Breakfast Forum December 5, 2012
  2. 2. www.boyarmiller.com Land Development, Homebuildng & Multi-Family Markets Will Holder Trendmaker Homes
  3. 3. A National Real Estate Anomaly A Free Market Case Study
  4. 4. Out of control, sprawl crazed megalopolis? Human intuitive, naturally evolving Super City? OR
  5. 5. -35% -25% -15% -5% 5% 15% 25% 35% 45% 2Q90 2Q92 2Q94 2Q96 2Q98 2Q00 2Q02 2Q04 2Q06 2Q08 2Q10 2Q12 Las Vegas-Paradise, NV Fresno, CA Riverside-San Bernardino-Ontario, CA Cape Coral-Ft Myers, FL Houston-Sugar Land-Baytown, TX Source: FHFA
  6. 6. Houston MSA Residential Building Permits Number of Dwelling Units -- Thousands 81,500 Net New Jobs vs. 27,285 New Dwelling Units – 2.65 Jobs Per Unit
  7. 7. Houston Existing Home Prices Median Price Prior 12 Month Average Houston Association of REALTORS®
  8. 8. What Will the Next Five, Ten Years Look Like for Houston Real Estate?
  9. 9. Houston MSA Population Forecasts Scenario 2000-2007 Migration Texas State Data Center Millions
  10. 10. Location, Location, Location? No! Location, Jobs, Location, Jobs
  11. 11. Houston MSA Job Numbers Recession Millions of Jobs Seasonally-Adjusted More Jobs Than Ever In History
  12. 12. MSA Rank- Starts Last 12 Months
  13. 13. Conclusion: • Houston is a Stable Steady Market • Economy & Population is Going to Grow • Supply & Demand is Moving Toward a Sellers Market • Prices Almost Have to Increase
  14. 14. www.boyarmiller.com Retail Market Jay K. Sears NewQuest Properties
  15. 15. Annual Job Growth
  16. 16. U.S. Consumer Sentiment Index 75 100 125 75 100 125 Rolling 12-mo average U.S. Consumer Sentiment Index 50 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: University of Michigan Survey of Consumers
  17. 17. Retail Trade Sales Source: U.S. Census
  18. 18. Retail Trade Sales Source: State of Texas Comptroller 2008 Trend 2009 Trend 2010 Trend 2011 Trend Projected 2012 Trend U.S. 100.00% 92.64% 97.84% 105.57% 114.01% Texas 100.00% 88.06% 90.93% 98.89% 107.79% Houston MSA 100.00% 86.63% 89.05% 99.57% 108.54% Harris County 100.00% 85.54% 87.18% 98.69% 108.56% Montgomery County 100.00% 91.94% 99.33% 105.29% 111.61% Fort Bend County 100.00% 84.81% 91.94% 95.67% 110.03% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00% 105.00% 110.00% 115.00% 120.00% Retail Trade Sales By National, State, MSA, and County 2008 2009 2010 20122011
  19. 19. 2008 Trend 2009 Trend 2010 Trend 2011 Trend Projected 2012 Trend Katy 100.00% 92.59% 105.85% 121.72% 131.46% Pearland-Friendswood-League City 100.00% 98.96% 102.43% 115.74% 125.00% Conroe 100.00% 87.80% 94.60% 108.64% 117.34% Baytown 100.00% 87.93% 90.13% 101.49% 115.70% Sugarland-Rosenberg-Missouri City 100.00% 102.29% 97.87% 105.98% 115.52% Pasadena-Deer Park-La Porte 100.00% 104.12% 105.74% 117.79% 129.57% Houston 100.00% 85.00% 87.02% 99.06% 107.97% Humble 100.00% 87.95% 88.15% 95.22% 103.79% 80.00% 90.00% 100.00% 110.00% 120.00% 130.00% Retail Trade Sales By City Retail Trade Sales Source: State of Texas Comptroller 2008 2009 2010 20122011
  20. 20. Holiday Sales  “35 million consumers visited stores and Web sites on Thursday, up from 29 million last year.”  “Average consumer spent $423 – roughly $25 more than they did last year.”  “Total spending increased nearly 13% to an estimated $59.1 billion, according to the NRF.”  “89 million consumers, up from 86 million in 2011 shopped on Black Friday.”  “Holiday sales are expected to increase 4.1% from 2011, said NRF.” Thanksgiving Weekend Sale Source: www.washingtonpost.com “Thanksgiving weekend sales better than last year”  “Online shopping on Black Friday rose 26% to exceed $1 billion for the first time.”  “Online sales advanced 16% in the first 23 days of November to $13.7 billion, with sales on Thanksgiving Day increasing 32% to $633 million.”  “Total spending increased nearly 13% to an estimated $59.1 billion, according to the NRF.” Online Shopping  “Traffic to retail sites on Black Friday rose to 24% from 14.3%, and the mobile share of sales hit 16%, up from 9.8% a year ago.”  “Nielsen in September reported 55.5% of U.S. mobile subscribers had smartphones as of July, up from 41% a year earlier.”  “The data all points to a larger addressable market for mobile sales and promotions during the holiday season.” Mobile Shopping Source: www.bloomberg.com “Retailers Keep Deals Flowing on 13% Holiday-Sales Jump” Source: www.mediapost.com “Mobile Becomes Major Shopping Player”
  21. 21. Best Buy Annual Sales Source: Business Insider Same Store Sales at Source: www.investors.Best Buy.com
  22. 22. Kroger 3rd Quarter Highlights  Kroger's adjusted earnings per diluted share was a record $0.46 for the quarter.  Identical supermarket sales growth, without fuel, was 3.2% in the third quarter.  Achieved 36(th) consecutive quarter of positive identical supermarket sales Reports Record Third Quarter Earnings Per Share Source: PRNewswire
  23. 23. Population Growth 5,946,800 6,127,645 6,280,138 6,435,268 6,593,498 6,754,896 5,400,000 5,600,000 5,800,000 6,000,000 6,200,000 6,400,000 6,600,000 6,800,000 7,000,000 2010 2011 2012 2013 2014 2015 Houston MSA Population Growth Source: State of Texas Years Population
  24. 24. -5,000 5,000 15,000 25,000 35,000 45,000 55,000 65,000 75,000 85,000 95,000 105,000 115,000 School Enrollment 2008-2009 2009-2010 2010-2011 2011-2012 School Enrollment Growth Source: Texas Education Agency Districts Students Enrollment Increases District 2008-2012 Houston ISD 1.4% Katy ISD 9.8% Fort Bend ISD 1.1% Spring ISD 9.9% Cypress-Fairbanks ISD 6.9% Humble ISD 7.9% Klein ISD 5.2% Conroe ISD 8.4% Aldine ISD 3.9% Clear Lake ISD 5.0% Alvin ISD 12.6% 198,500 199,000 199,500 200,000 200,500 201,000 201,500 202,000 202,500 203,000 203,500 204,000 Houston ISD
  25. 25. Houston’s Retail Market
  26. 26.  in Texas City  in the Heights  at Hwy 249 & Smiling Wood  in Sienna Plantation  in Fairfield Market  & in Cinco Ranch New Shopping Centers in 2012
  27. 27. Grocery Anchored Developments Openings 2012 25.0% market share 24.8% market share 22.2 % market share Houston – area Market Leaders Source: The Shelby Report of the Southwest; October 2012 2012 Store Openings
  28. 28. Planned Grocery Anchored Developments 2013 & Future 25.0% market share 24.8% market share 22.2 % market share Houston – area Market Leaders Source: The Shelby Report of the Southwest; October 2012 2013 & Beyond Store Openings
  29. 29. New Shopping Centers Projects Planned Project / Anchor Developer Location Projected Opening Grand Lakes Marketplace Fry & Grand Pkwy Jan. 2013 Village at Northpark Northpark & US 59 2nd Qtr 2013 Spring Marketplace Rayford & Kuykendahl 1st Qtr 2014 Spring Town Center Kuykendahl & FM 2920 Summer 2013 Blvd. Place Post Oak & San Felipe Spring 2014 Vintage Marketplace Louetta & Cutten Rd Summer 2014 Fountainview & San Felipe 2014 Development Loop 306 & Hwy 105 2013
  30. 30. FOR LEASING: CALL 281-477-4300 Spring Town Center Brazos Town Center Sam Houston Town Center NEC & SEC of FM 2920 & Kuykendahl Houston, Texas Project Size: Anchors: 354,559 SF Retail: 153,845 SF Pad Sites: 27 Total; 7 Available Tenants: NWC & SWC of US 59 & FM 762 Rosenberg, Texas Project Size: 550.00 acres (1.8 million SF of retail) Tenants: NWC of I-45 & FM 1097 Willis, Texas Project Size: Kroger Market Place: 123,000 SF Retail: 27,407 SF Pad Sites: 6 Available Tenants: OPENING MAY 2013 12 SCREEN NOW OPEN COMING SOON
  31. 31. New to Houston’s Market • California base specialty Grocery • 3 new stores • Limited assortment grocery with over 1,000 stores nationwide • 9 new stores in Houston out of 30 planned • Phoenix based healthy foods/ organic grocery store • 3 new stores • North Carolina based gourmet grocery store • 4 new stores taking over Rice Epicurean locations • 2 sites under contract Hwy 59 & University Grand Pkwy & I-10 • Same company as Bed Bath & Beyond • 1st store in Webster, TX • Discount soft goods • Family-owned, family- oriented company • New pet store concept • Looking for 7,000 – 9,000 sq. ft. • 5,000 sq. ft. Petco store • Grocery anchored & urban markets • No live animals • Organic foods • 1st store Baybrook Mall 20,500 sq. ft. • 2nd store Willowbrook Mall 25,000 sq. ft. • California-based clothing company • 6,000 sq. ft. at First Colony Mall • New store coming soon in Texas City • New concept 30,000 sq. ft. • New size 40,000 sq. ft. • 1st location located in downtown Houston
  32. 32. Rent Growth Rate & Forecast
  33. 33. Construction / Absorption and Vacancy
  34. 34. Houston Sales Comps 2012
  35. 35. www.boyarmiller.com Office Market Robert S. Parsley Colliers International
  36. 36. Houston’s Most Active Office Submarkets RobustEconomy
  37. 37. Central Business District OpportunityorConcern
  38. 38. GalleriaCompanyExpansions
  39. 39. West HoustonEnergy&Construction
  40. 40. Woodlands/Greenspoint ATaleofTwoCities
  41. 41. What to expect in 2013 • Houston’s economy is a magnet for business! • Even with concerns over the U.S. economy of the “Fiscal Cliff”, expect that office leasing activity will continue to be robust! • Continued growth in the suburban markets - Woodlands and Energy Corridor. • Greenspoint will be active, but due to exodus of companies relocating to other submarkets. • 1M SF available in Allen Center (CBD) will attract a large tenant or tenants - it is an Opportunity! • Thankful to be in Houston! Continued Growth
  42. 42. www.boyarmiller.com Industrial Market Welcome W. Wilson, Jr. GSL Welcome Group
  43. 43. December 5, 2012 2013 INDUSTRIAL FORECAST WelcomeWilson,Jr.
  44. 44. Houston…A force to be reckoned with
  45. 45. 2011  507.9 million SF  1.977 million SF under construction 2012  843 million SF  2.156 million SF under construction HOUSTON INDUSTRIAL MARKET TOTALS
  46. 46. VACANCY RATES BY BUILDING TYPE 5.3% HOUSTON AVERAGE
  47. 47. Vacancy Rates U.S. - VS - HOUSTON Rental Rates
  48. 48. INVESTMENT SALES
  49. 49. Ameriport 2 - Update
  50. 50. DiMare Fresh, Inc. - Update
  51. 51. JOB GROWTH
  52. 52. Fuels ENERGY The Economy
  53. 53. ExxonMobil - Update
  54. 54. Trade and the Panama Canal
  55. 55. HOUSTON SHIP CHANNEL
  56. 56. Exxon/Qatar Proposal Exxon Mobil Corp. and Qatar Petroleum International are teaming up on a proposal to export liquid natural gas from Golden Pass terminal near the Houston ship channel.
  57. 57. Driving Energy & Producing Jobs Eagle Ford Shale
  58. 58. GAME ON!

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