REDNews January 2015 - Southeast Cover January 2015 | Page 24

REDNews

WHAT’S AHEAD FOR 2015 IN HOUSTON COMMERCIAL MARKETS?
REDNews
BY RAY HANKAMER
Panelists: Will Holder, President, Trendmaker
Homes; Allen Crosswell, NewQuest Crosswell;
Jonathan Brinsden, Midway; Welcome Wilson, Jr,
Welcome Group
Will Holder:
•  e are moving full steam ahead with new
W
homes to meet demand
•  ven if job growth in Houston falls by 50%, that
E
is still a strong number for us
• here is only a 3.5 month used-home inventoT
ry, which offers a small selection by historical
standards
•  e have the most spec homes under construcW
tion in 4 years and our inventory of completed
spec homes is low
•  ince 2008, creation of new lots has lagged
S
home starts, so we still have a bottleneck with
lots, which takes about 18 months to develop
•  uilders are committing to lots years in advance,
B
to have something to build on
•  uilder costs are rising due to shortages of conB
crete, licensed plumbers, framers and trim carpenters, architects and engineers and surveyors,
site work contractors, and factory components
such as windows and cabinets
•  igher new home prices are resulting in some
H
market resistance, causing people to stay put
and remodel in some cases
•  enting becomes more attractive as new homes
R
become more expensive
24 | REDNews.com

BOYARMILLER BREAKFAST FORUM
•  ots of new builders from other states are setting
L
up shop in Houston
Allen Crosswell:
•  rocery-anchored shopping centers follow resG
idential rooftops and there is
a lot of growth in this niche
of the retail sector, which provides good developer returns
•  -commerce continues to grow
E
but it is not really impacting
brick-and-mortar stores, and
some brick-and-mortar retailers began with e-commerce
•  ince 2011 Houston has addS
ed 450,000 residents, and
this requires lots of new retail
• here is a finite amount of
T
available retail space in
Houston now, and finally
rents in this sector are rising,
with demand by national tenants pushing rents up 35% in
some cases
•
Improvement in rental rates
in retail has lagged behind
what multi-family and office
developers have been able
to achieve, but things are improving now

•  ap rates for investment sales in retail range
C
from 6.5 for credit deals to 8.5 to 9 for older
product
•  here is no pushback yet from tenants on rents
T
•  ewQuest Crosswell has $300 million in the
N
development pipeline

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