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Houston 1Q2013 Land Market Presentation

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Presentation given at the O'Connor & Associates Land Forecast Luncheon on May 28, 2013.

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Houston 1Q2013 Land Market Presentation

  1. 1. Land Forecast LunchScott DavisCASE Commercial Real Estate PartnersMay 29, 2013
  2. 2. Total Land Sales Volume Remains Steady in Q1$0$100$200$300$400$500$600$700$8002005-…2005-…2005-…2005-…2006-…2006-…2006-…2006-…2007-…2007-…2007-…2007-…2008-…2008-…2008-…2008-…2009-…2009-…2009-…2009-…2010-…2010-…2010-…2010-…2011-…2011-…2011-…2011-…2012-…2012-…2012-…2012-…2013-…MillionsSource: CoStar, CASE Commercial
  3. 3. 4Q12 – Most Acres Sold Since Peak02,0004,0006,0008,00010,00012,00014,00016,0002005-…2005-…2005-…2005-…2006-…2006-…2006-…2006-…2007-…2007-…2007-…2007-…2008-…2008-…2008-…2008-…2009-…2009-…2009-…2009-…2010-…2010-…2010-…2010-…2011-…2011-…2011-…2011-…2012-…2012-…2012-…2012-…2013-…Source: CoStar, CASE Commercial
  4. 4. Almost 85% of acreage sold outside Beltway01,0002,0003,0004,0005,0006,0007,0008,0002009- Q12009- Q22009- Q32009- Q42010- Q12010- Q22010- Q32010- Q42011- Q12011- Q22011- Q32011- Q42012- Q12012- Q22012- Q32012- Q42013- Q1Total Outside 610 Outside Beltway Inside Beltway Inside 610Source: CoStar, CASE Commercial
  5. 5. Still Huge Interest in Inner Loop Properties0204060801001201401601802009- Q12009- Q22009- Q32009- Q42010- Q12010- Q22010- Q32010- Q42011- Q12011- Q22011- Q32011- Q42012- Q12012- Q22012- Q32012- Q42013- Q1Source: CoStar, CASE Commercial
  6. 6. Sales to List Spread Narrows to 2010-2011 LevelsSource: CoStar, CASE Commercial8.2%-49.2%-22.9%-50.0%-40.0%-30.0%-20.0%-10.0%0.0%10.0%2006-Q32006-Q42007-Q12007-Q22007-Q32007-Q42008-Q12008-Q22008-Q32008-Q42009-Q12009-Q22009-Q32009-Q42010-Q12010-Q22010-Q32010-Q42011-Q12011-Q22011-Q32011-Q42012-Q12012-Q22012-Q32012-Q4
  7. 7. Median Days on Market Decreased in Q1/13Source: CoStar, CASE Commercial-1002003004005006007008002005-Q12005-Q22005-Q32005-Q42006-Q12006-Q22006-Q32006-Q42007-Q12007-Q22007-Q32007-Q42008-Q12008-Q22008-Q32008-Q42009-Q12009-Q22009-Q32009-Q42010-Q12010-Q22010-Q32010-Q42011-Q12011-Q22011-Q32011-Q42012-Q12012-Q22012-Q32012-Q42013-Q1
  8. 8. What Does the Future Hold?
  9. 9. 2.23.13.74.75.97.08.19.20.91.6 1.82.3 2.63.23.74.11970 1980 1990 2000 2010 2020 2030 2040PeopleJobsRegion will grow by 3.3 MillionSource: HGAC Demographic ModelIn Millions
  10. 10. Gen Y: Millions of 22YO By Year3,400,0003,500,0003,600,0003,700,0003,800,0003,900,0004,000,0004,100,0004,200,000Age 22 Age 25Peak Rental Demand Peak Owner DemandSource: US Centers for Disease Control and Prevention
  11. 11. Houston #2 Destination For MillennialsRank Metro AreaWage Change forGen YMedian Pay for GenYCommuteTime forGen Y % Gen YGen Y MetroScore1 Seattle 4.4% $ 44,000 24.3 0.22 1.612 Houston 4.3% $ 44,000 24.8 0.22 1.523 Minneapolis 3.3% $ 42,800 20.4 0.23 1.464 Washington, DC 3.2% $ 49,500 30 0.26 1.255 Boston 3.3% $ 46,200 29.9 0.25 1.166 Dallas 2.9% $ 41,200 20.6 0.21 1.117 New York 2.9% $ 46,900 30.6 0.26 1.048 Tampa 2.7% $ 36,600 20.7 0.19 0.839 - Tie Philadelphia 2.6% $ 42,000 28.7 0.23 0.819 - Tie San Francisco 2.2% $ 51,300 29.3 0.22 0.81Source: Best Cities for Gen Y, www.payscale.com, 2012
  12. 12. Where People Want to Live, byGeneration14% 15% 14% 18%31%39% 38% 38%47%42%46% 47% 47%34%25%0%20%40%60%80%100%60+ (Silent + GI) 50-59 (Boomer) 40-49 (Boomer &Gen X)30-39 (Gen X &Gen Y)18-29 (Gen Y)City Suburban Small TownSource: 2011 National Community Preference Survey, NAR, March 2011
  13. 13. Where Do They Actually Live?0%10%20%30%40%50%Core Municipalities Suburbs Outside Major Metropolitan Areas2000% of Age 20-29 2010% of Age 20-29Source: Wendell Cox, www.newgeography.com
  14. 14. Gen Y Still Want Single FamilyFall 2007 “HomeType Likely toChoose”Summer 2010“AnticipatedHousing in 2015”March 2011“Home TypePreference”Apartment/Condo 12% 25% 15%Rowhouse/Townhouse 12% 6% 6%Single-Family 70% 64% 74%Other 5% 5% n/aSource: RCLCO Survey, 207, ULI/Lachman Survey 2010, NAR ConsumerPreference Study 2011
  15. 15. Gen X & Gen Y Favor LifestyleFactors – Close to Work, Shopping71%55%52%42%51%62%46%43%49% 47%0%20%40%60%80%Small Lot, Walk toWorkSmall Lot, Walk toShopLess than IdealHome, Close toShopLess than IdealHome, Close toWorkUrban SettingGen Y Gen X15Source: Robert Charles Lesser Co.
  16. 16. 16Job Growth in Suburban CentersMarket 2013 2020 GrowthInside LoopBellaire 34,438 38,320 11.3%Greenway 63,143 68,148 7.9%CBD 148,117 153,970 4.0%TMC 107,344 116,272 8.3%Galleria 134,162 136,999 2.1%Inside BeltwayGreenspoint 91,343 100,042 9.5%Brookhollow 25,526 26,271 2.9%Northwest Crossing 53,149 56,065 5.5%Sharpstown 39,327 40,360 2.6%Westchase 96,223 100,183 4.1%Outside BeltwayClear lake 48,897 50,628 3.5%Katy 18,707 21,591 15.4%The Woodlands 48,805 55,398 13.5%West Houston 102,795 108,760 5.8%Sugar Land 86,934 101,129 16.3%Total Market 2,959,033 3,275,509 10.7%Source: HGAC, 2035 Regional Transportation Plan
  17. 17. Houston #1 in Self-Employment GrowthRank Region Growth in Self-employed, 2008-20111 Houston-Sugar Land-Baytown, TX 12.20%2 Riverside-San Bernardino-Ontario, CA 11.80%3 Phoenix-Mesa-Glendale, AZ 11.50%4 Seattle-Tacoma-Bellevue, WA 10.00%5 Baltimore-Towson, MD 8.60%6 San Antonio-New Braunfels, TX 8.10%7 Tampa-St. Petersburg-Clearwater, FL 6.50%8 Dallas-Fort Worth-Arlington, TX 6.30%9 Boston-Cambridge-Quincy, MA-NH 5.60%10 Miami-Fort Lauderdale-Pompano Beach, FL 4.90%
  18. 18. Land Growth Trends• Houston will grow dramatically over the nexttwo decades• Gen Y will drive some inner-city interest butstill has overwhelming suburban preference• Real preference by Gen X and Gen Y is for ashorter commute and close to shopping• Most job growth will be in the suburbs

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