Download - Houston Office Submarket Update 12-2012
Houston’s Most Active Office Submarkets R
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HOUSTON OFFICE MARKET STATISTICS FOR ALL CLASS198M SF3.2M SF YTD Net Absorption14.2% Vacancy Rate$23.61/SF Average Rental Rate4.1M SF Under Construction8.6 M SF Proposed
• 93MSFofInventory• 2.8MSFYTDNetAbsorption• 11.6%VacancyRate• $29.96/SFAverageRentalRate• 4.1MSFUnderConstruction• 4.1MSFProposed
Class A Submarket Statistics Economic IndicatorsJobGrowth&Unemployment(NotSeasonallyAdjusted)
UNEMPLOYMENT 10/11 10/12
Houston 7.7% 6.2%
Texas 7.6% 6.3%
U.S. 8.5% 7.5%
JOBGROWTHANNUALCHANGE
#OFJOBSADDED
Houston 3.6% 96K
Texas 2.6% 276K
U.S. 1.4% 1.9M
Houston led the state in annual job growth adding
96,000 jobs between October 2011 and
October 2012!
• 85MSFofInventory• 363,000SFYTDNetAbsorption• 16.7%VacancyRate• $19.29/SFAverageRentalRate
Class B Submarket Statistics
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• 26MSFofInventory• 617,000SFYTDNetAbsorption• 10.9%VacancyRate• $36.85/SFAverageRentalRate• 0SFUnderConstruction• 0SFProposed
Class A Submarket Statistics
• DEVON ENERGY CORPORATION-880ksforiginallyin1999;550ksfnow.SomesubleasedtoENIandCopano,but425ksfwillbevacatedin1Q2013,themajorityofwhichisin2AllenCenter(1200Smith).
• HESS CORPORATION-HessCorpleasedallofthe845ksfnewlyconstructed(2011)officetowerat1501McKinneySt.
• KBR/HALLIBURTON-Occupies900,000SFinthe1MSFKBRTowerwhichwasjustpurchasedfor$174.6M(or$167/SF)byanontradedREITaffiliateofNewYorkbasedW.P.CareyInc.ThesellerwasajointventurebetweenKBRandBrookfield.KBR’sleasedoesn’texpireuntil2030.
• UNITED AIRLINES-Merged/AcquiredContinentalAirlines4Q2011.141,990SFofvacantspacecurrentlyavailablein1600Smith
• BG GROUP-Leasedfloors22-34inthenewestCBDtower(972ksf)builtbyHinesin2011.Eightfullfloors(216ksf)ofthe46-storytowerarestillavailableforlease.
HIGHLIGHTS
• 9.8MSFofInventory• 85,800SFYTDNetAbsorption• 18.0%VacancyRate• $24.00/SFAverageRentalRate• 0SFUnderConstruction• 0SFProposed
Class B Submarket Statistics
CBD OFFICE SUBMARKET - 8M SF
• BGGroup• CalpineCorporation• CenterPointEnergy• ChaseBank• ChevronCorporation• Deloitte• DevonEnergyCorporation• Dynegy
Major Tenants• ElPasoCorporation• EnterpriseProductsPartners• Ernst&Young• ExxonMobilCorporation• HessCorporation• KBR• KPMG• LyondellBasellIndustries
• PricewaterhouseCoopers• ReliantEnergy,NRG• ShellOilCompany• UnitedAirlines• WasteManagement,Inc.• WellsFargo
ALLEN CENTER COMPLEX• Hess relocated to Discovery Green• Kinder Morgan acquired El Paso• Continental merger with United• Devon moving to OKC
Over 1M SF available for leaseOpportunity or Concern?
Galleria C
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• 15MSFofInventory• 146,000SFYTDNetAbsorption• 10.7%VacancyRate• $30.13/SFAverageRentalRate• 609,000SFUnderConstruction• 420,900to(?,Apache)SFProposed
Class A Submarket Statistics
• ApacheCorporation-Purchased6.4acresofthe20-acremixed-useBlvdPlacedevelopmentfora33-storyofficetower,approx.497,000SF,withenoughdirtleftoverforanadditionofficebuildingforfuturegrowth.Currentlyinplanningstage.
• BBVACompass-306,000SFunderconstructiondelivering4/2013and59%pre-leasedtoBBVACompass.AdevelopmentorRedstoneandStreamRealty.
• BlvdPlace-Underconstruction-Largestnewmixed-useprojectintheareawithover1.8MSF.205,000SFofRetail;1.4MSFofoffice;275luxuryhotelroom;1,000high-riseresidentialunits.
Highlights
• 7.3MSFofInventory• 88,000SFYTDNetAbsorption• 16.9%VacancyRate• $23.47/SFAverageRentalRate• 0SFUnderConstruction• 0SFProposed
Class B Submarket Statistics
GALLERIA OFFICE SUBMARKET38M SF
• AirLiquide• AonInternationalEnergy• ApacheCorporation• BBVACompass• BechtelCorporation• BHP• BlueCrossBlueShieldofTexas• CameronInternationalCorporation• ChristusHealth• ClearChannelCommunications• ColliersInternational• GEEnergy• GDFSUEZEnergyNorthAmerica• Landry’sRestaurants,Inc.• MarathonOilCorporation• NetIQCorporation• PanhandleEnergy• SpectraEnergyCorporation• StewartTitleCompany• SymantecCorporation• WeatherfordInternationalLtd.• Williams
Major Tenants
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• 10.2MSFofInventory• 595,000SFYTDNetAbsorption• 4.2%VacancyRate• $28.14/SFAverageRentalRate• 1.5MSFUnderConstruction• 1.7MSFProposed
Class A Submarket Statistics
• MASON CREEK-MyersCrow&Saviers,Ltd.andMoodyRambinInterestsarecurrentlydevelopingatwo-story,136,000SFofficebuilding.Thebuildingiscurrently0%pre-leasedandwilldeliver5/2013.
• GREENHOUSE-StreamRealtyPartnershasproposedbuildinga200,000SFofficebuilding.• WESTGATE-Transwesternhasthefirstofthreeplannedbuildingsunderconstruction.182,000SFunderconstruction,70%pre-
leasedtoSubsea7andWoodGroupMustang.Deliveryisscheduledfor12/2013.Thetwoproposedbuildingsare242,000SFeach.
• ENERGY CROSSING-LincolnPropertycompanyhasEnergyCrossingIIunderconstruction.The322,000SFbuildingis63%pre-leasedtoModecInternationalandAtwoodOceanics.Thebuildingisscheduledforcompletion8/2013.
• ENERGY CENTER THREE-CBREplanstobreakground12/2012ona551,000SFClassA,20-storyofficetower.Thebuildingis0%pre-leased.
• WOODBRANCH-PMRealtyGroupplanstobreakground1/2013ona168,000SFClassA,7-storyofficetower.Thebuildingis0%pre-leased.
• ENERGY TOWER-MacHaikRealtyLLCcurrentlyhasthethirdEnergyTowerbuildingunderconstruction.The429,000SFClassA,17-storyofficetoweris0%pre-leasedandscheduledtodeliver1/2014.
• 8 WEST CENTRE-CBREhasa228,000SF4-storyofficebuildingunderconstruction.Thebuildingis53%pre-leasedbyHelixEnergySolutionsandisscheduledtodeliver7/2013.
• MURPHY OIL-MetroNational’s332,000SFClassAofficetoweriscurrentlyunderconstruction.MurphyExplorationhaspre-leased120,000SFandplantomoveinwhencompletedinQ32013.
• NEXEN-MetroNationalcompletedthis332,000SFClassA,14-storyofficetower10/2012.Thebuildingis79%pre-leasedbyNexenInc.
• CITYCENTRE-ThefourthbuildingintheMidwayCompaniesnewcomplexiscurrentlyunderconstructionandis53%pre-leased.The120,000SFbuildingdelivers6/2013.
HIGHLIGHTS
• 7.8MSFofInventory• 114,000SFYTDNetAbsorption• 17.3%VacancyRate• $19.53/SFAverageRentalRate• 0SFUnderConstruction• 0SFProposed
Class B Submarket Statistics
KATY FREEWAY OFFICE SUBMARKET - 20M SF• AllianceEngineering• BPNorthAmerica• CobaltInternationalEnergy,Inc.• ConocoPhillipsCompany• DetNorskeVeritas• DiamondOffshore• ExproAmericas• ExxonMobilChemical• FosterWheeler• GulfInterstateEngineering• J.RayMcDermott,Inc.• KBR• MustangEngineering/WoodGroup• Nexen,Inc.
• NorthernOffshoreLtd.• Paradigm• PegasusInternational• PetroleumGeo-Services• Phillips66Company• Schlumberger• ShellExploration• SyscoCorporation• TheShawGroup• TransoceanLtd.• UnionCarbideCorporation• WorleyParsons
Major Tenants
WESTCHASE OFFICE SUBMARKET13.2M SF
• 6.8MSFofInventory• 383,000SFYTDNetAbsorption• 7.8%VacancyRate• $29.98/SFAverageRentalRate• 300,000SFUnderConstruction• 2.6SFProposed
Class A Submarket Statistics• ABB• AffiliatedComputerServices• AkerSolutions• ApacheOilCorporation• BMCSoftware• Brown&Gay• CalDiveInternational• CameronInternational• Chevron• Dresser-Rand• Halliburton• Honeywell• JacobsEngineering• LandmarkGraphics• NationalOilwellVarco• Phillips66• UnitedRecoverySystems• SamsungEngineeringAmerica,Inc.• Schlumberger• UnitedRecoverySystems• WesternGeco• WoodGroupPressureControl
Major Tenants
• TwoBriarLake -332,000 rentable square feet in 12 storiesof officespace,with half recently pre-leased to Samsung Engineering as North Americanheadquarters.Constructiontobegin4Q2012anddelivering1Q2014.
• Phillips66-Purchaseda14.2acretractonthewestsideofBeltway8,justnorthofWestheimertobuildfutureglobalheadquartersaftersplitwithConoco.
• GraniteBriarparkGreen-300,000SFspecofficebuildingunderconstructiondelivering7/2013.
• TwoOakPark - 300,000SFOakPark complex features26-storyClassAbuildings.OneOakParkiscompletedandtheentirebuildingisavailable.TwoOakParkisproposed.
• CityWestPlace-30acresitewithfourexistingbuildingsandanadditional1.5millionsquarefeetoffirst-classofficespacewillbedevelopedatCityWestPlace,including a 640,000 square foot, 22-level office tower; a 465,000 squarefoot, 16-levelofficetower;a387,000square foot, 16-levelofficetower;anda307,000squarefoot,12-levelofficetower.EachbuildingwillhaveitsownstructuredparkingandwillofferCityWestPlace-Classamenitiesandservices.
• Westchase Park - Two (2) “Class A” office buildings totaling approximately540,000rentablesquarefeet.Bldg1isexistingandBldg2isproposed.
Highlights
Woodlands/Greenspoint
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WOODLANDS OFFICE SUBMARKET7M SF
• 3.2MSFofInventory• 62,000SFYTDNetAbsorption• 2.1%VacancyRate• $34.82/SFAverageRentalRate• 1.1MSFUnderConstruction• 3.4MSFProposed
Class A Submarket Statistics
Woodlands Major Tenants• AnadarkoPetroleum• AonHewitt• BakerHughes• ChevronPhillipsChemicalCo.,LLP• CB&I• EnergyAlloys,LLC• EntergyServices• FoxNetworksGroup• Halliburton• HuntsmanInternational• LexiconGenetics• MaerskSealand• NewfieldExplorationCompany• NexeoSolutions• PraxairTechnology,Inc.• RepsolServiceCompany• RigakuCorp.• TalismanEnergyUSAInc.• TETRATechnologies,Inc.• USOncology• WasteConnections
• 3WaterwaySquarePlace-234,000SFunderconstruction,90%pre-leaseddelivering6/2013
• AnadarkoTower2-550,000SFunderconstructiondelivering4/2014
• ResearchForestLakeside -Planned,ten-buildingdevelopmenton77-acres.1bldgcompleted(Talisman);1underconstruction(Talismanpre-leased150KSF).
• One Hughes Landing - 8-story, 197,000 SF spec office building underconstruction.
Woodlands Highlights
Greenspoint/North Belt Highlights• ExxonMobilCampus-385-acrecampus,10kemployeesmovingby2015
• SouthwestEnergy-Developing10-storyofficebuildinginSpringwoodsVillagenearExxonMobilcampus.
• HalliburtonNorthBeltCampus-100,000SFofficebuildingonMilnerRddelivering4Q2012
• GreenspointPlaza-ExxonMobilwillmoveoutof1.6MSFbetween2014and2015