REDNews Feb 2014 issuu by RE Journals

MarketView Houston Office OFFICE FOURTH QUARTER Houston Office

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All the net absorption this quarter occurred in suburban markets, MARKET STATiSTicS

2003

under 1 million sq. ft. of net absorption. The Woodlands was not ConstruCtion remains strong While rates Continue to Climb. MarketView OFFICE DEMAND Vacancy far behind with just over 700,000 sq. ft. of net absorption. Due to With strong net absorption over the quarter and year, leasing Overall Net Absorption TRADE VOLUME UNEMPLOYMENT JOB GROWTH VACANCY CONSTRUCTION DELIVERIES limited availability, none of the west Houston submarkets broke the Houston activity seems to be holding at a steady pace. However, the Q4 CBRE Global Research and Consulting Q42013 2013 Office | Marketview CBRE Global Research and Consulting 500,000 sq. ft. net absorption mark for the year. However, the

Quick Stats

11.8%

CBRE Global Research and Consulting Class A

especially in west Houston. The West Loop closed the year with just

Class B

Vacancy Overall

Source: CBRE Research, Q4 2013.

makeup of lease transactions has changed from previous years. 21 Trades 14,231,324Vacancy Sq. Ft. Rate 756,383 Sq. Ft. CBD stagnated, finishing the year with negative absorption in three and Net Absorption While the number of large lease transactions increased this year

6.0%

21%

79,600

6,000,000

19%

5,000,000 17%

Houston Office | MarketView

of the four quarters in 2013. This quarter, the negative absorption TRADE VOLUMETRADE VOLUME UNEMPLOYMENT UNEMPLOYMENT JOB GROWTH VACANCY CONSTRUCTION DELIVERIES compared to the past two years, the total number of transactions is CONSTRUCTION DELIVERIES Directional arrowsVACANCY based on change quarter. Data reflects market totals. is due primarily to Exxon vacating 78,000 sq. ft. at 1301 Fannin Q4 2013 QoQ from YoYthe previous down. While it is difficult to predict whether this trend will continue 17%79,600 6,000,000 21 Trades 6.0% 11.8% 14,231,324 Sq. Ft. 756,383 Sq. Ft. 11.8% 14,231,324 Sq. Ft.and METRO vacating 26,000 sq. ft. at 1900 Main. 756,383 Sq. Ft. 21 Trades 6.0%

JOB GROWTH 79,600

4,000,000 15% 3,000,000 13% 11% 2,000,000

and for how long, the predictions of continued job growth indicate 5,000,000 based on change Data that the Houston market will continue to experience strong demand reflects market totals. Lease Rates PerDirectional Sq. Ft./yr arrows$24.62  from  the previous quarter. The quarter closed with the overall vacancy rate decreasing to for office space. Directional arrows based on change from the previous quarter. Data reflects market totals. 11.8% from 12.1%. The Katy Freeway submarket has hit an all-time 4,000,000 low vacancy of 3.2%, while Class A vacancy has dropped to a All the net absorption this quarter occurred in suburban markets, Absorption 1,343,850 $ $ 3,000,000 historic low of 1.2%. Deals of note this quarter include: Subsea 7 especially in west Houston. The West Loop closed the year with just occupied 100,000 sq. ft. at Westgate I, GEICO occupied 135,000 under 1 million sq. ft. of net absorption. The Woodlands was not 2,000,000 sq. ft. at Mason Creek Office Center, and Alliant Group occupied far behind with just over 700,000 sq. ft. of net absorption. Due to 125,000 sq. ft. at 3009 Post Oak. Houstonlimited availability, none of the west Houston submarkets broke the experienced another record breaking year Hot Topics

9% 1,000,000 7%

16%

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Vacancy Overall

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MarketView Vacancy Rate and Net Absorption

14%

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Class B

ConstruCtion remains strong While rates Continue to Climb. Sq. Ft. Source: CBRE Research, Q4 2013.

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Class A

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15%

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(3,000,000)

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(2,000,000)

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Houston ConstruCtion remains strong Office While rates Continue to Climb. 5% (1,000,000)

2013

Q4 2013

2013

MarketView

2002

fice | MarketView Q4 2013

Directional arrows based on change from the previous quarter. Data reflects market totals. for office space.

Net Absorption ConstruCtion remains strong While rates Overall Continue to Climb. Lease Rates (Gross, Annual, Average Asking, Per Sq.Ft.) 1,000,000

• 5.4 million sq. ft. of new construction Quick Stats

Quick Stats broke ground this quarter in sixteen 2013 Q4Q42013 buildings; eleven of which began as

QoQ QoQ

YoYYoY

6,000,000 5,000,000 $35 4,000,000

Overall Net Absorption

CBRE Global Rese

12%

Hot Topics INDUSTRIAL FOURTH QUARTER ConstruCtion remains strong While rates 5.4 million sq. ft. of new construction Hot Topics MARKET STATISTICS broke ground this quarter in sixteen 5.4 million sq. ft. of new construction buildings; eleven of which began as Vacancy Rate and Net Absorption broke ground this quarter in sixteen Quick Stats speculative projects. buildings; eleven of which began as Q4 2013 QoQ YoY

Q4 20132013

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UNEMPLOYMENT 6.0%

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TRADE VOLUME 21 Trades

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DELIVERIES 756,383 Sq. Ft.

2004

CONSTRUCTION 14,231,324 Sq. Ft.

2004

VACANCY 11.8%

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YoY

2002

QoQ

Vacancy Rate and Net Absorption

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(1,000,000)

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Q4 2013

•

Class B

13%

is due primarily to Exxon vacating 78,000 sq. ft. at 1301 Fannin 3,000,000 $30 17% 6,000,000 17% 6,000,000 $36.02 per sq. ft. in Q4 2013, from $35.03 in Q3 2013, for an 2,000,000 and METRO vacating 26,000 sq. ft. at 1900 Main. 11% increase of just over two dollars since the end of 2012. CBD Class lion square feet (sq. ft.) of net absorption. Demand for (2,000,000) speculative projects. $25 1,000,000 5,000,000 Lease Rates Per Sq. Ft./yr $24.62   16% A rates increased to $42.12 per sq. ft. in Q4 2013, from $40.66 in 5,000,000 0 The quarter closed with the overall vacancy rate decreasing to Lease Rates Per Sq. Ft./yr $24.62  (3,000,000)  space 17% 16% $20 10% office has6,000,000 not been this strong since 2006. With Q3 2013. The suburban markets saw rate increases as well. In the (1,000,000) 4,000,000 11.8% from 12.1%. The Katy Freeway submarket has hit an all-time The Katy Freeway submarket has 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Energy Corridor, overall rates jumped to $22.83 per sq. ft. in Q4 (2,000,000) 15% 4,000,000 low vacancy of 3.2%, while Class A vacancy has dropped to a $15 5,000,000 Absorption new construction 2013, from $22.07 in 3Q 2013. Katy Freeway Class A rates 3,000,000tenants continue (3,000,000)Rate Q2 to find Q4 Annual Net Absorption Vacancy Lease Rates Per Sq. Ft./yr 1,343,850 $24.62 $ $limited  supply, reached a historic low vacancy rate of 16% historic low of 1.2%. Deals of note this quarter include: Subsea 7 Directional arrows basedQ1 on change fromQ3the previous quarter. Data reflects market totals. 15% Sq. Ft. jumped by three dollars per sq. ft. to $38.81 per sq. ft. in Q4 $10 Absorption 1,343,850 $ $ occupied 100,000 sq. ft. at Westgate I, GEICO occupied 135,000 3,000,000 14% 3.2%. 4,000,000 2,000,000 Source: CBRE Research, Q4 2013. highly desirable. 2013, from $35.63 in Q3 2013. Along with the rising rental rates, sq. ft. at Mason Creek Office Center, and Alliant Group occupied Class A Class B Overall Net Absorption Source: CBRE Research, Q4 2013. owners are offering healthy tenant improvement allowances, Class A Class B Overall Avg. Asking Rates15% Hot Topics 14% Absorption 1,343,850 $ $ 125,000 sq. ft. at 3009 Post Oak. 1,000,000 2,000,000 13% 3,000,000 especially in the new construction projects. New construction Source: CBRE Research, Q4 2013. The Greater Houston Partnership Lease Rates (Gross, Annual, Average Asking, Per Sq.Ft.) • 5.4 million sq. ft. of new construction deliveries, changes in demand by tenant size, limited Class A Sq. Ft. RATES LEASE 0 Houston experienced another record cost. Even with the high amount of forecasts Houston to create just 14% Under Construction 12% availability, and operating expense increases will all be factors for 1,000,000 2,000,000 broke ground this quarter in sixteen $35 Overall asking rates increased slightly this quarter to $24.62 per 13% rental rate movement going forward. breaking year of net absorption, construction in our market, strong preover 69,000 new jobs in 2014. The (1,000,000) sq. ft., from $24.40 in Q3 2013. Overall CBD rates jumped to • buildings; eleven of which began as Sq. Ft. $30 14,000,000 1,000,000 0 $36.02 per sq. ft. in Q4 2013, from $35.03 in Q3 2013, for an 13% continuing the strong momentum of leasing means only a portion of that 11% professional and business services CONSTRUCTION (2,000,000) 12% increase of just over two dollars since the end of 2012. CBD Class 12,000,000 • speculative projects. $25 Industrial demand Sq. Ft. Currently, 14.2 million sq. ft. is underway in 41 buildings, and 67% recent years. The market closed the year space is coming to the market vacant. sector is expected to see some of the A rates increased to $42.12 per sq. ft. in Q4 2013, from $40.66 in 0 Market Availability (1,000,000) Quasar Navigation 10,000,000 (3,000,000) Ltd. acquired a 302,800 sq. ft. multi-tenant industrial 10% of it is pre-leased. Sixteen projects broke ground this quarter totaling $20 12% Q3 2013. The suburban markets saw rate increases as well. In the 500,000,000 warehouse building in Houston’s Downtown submarket. • The Katy Freeway submarket has with 4.9 million square feet (sq. ft.) of net 2002 2003 2004 Eastside 2005 Industrial 2006 2007 2008 2009 12% 2010 8,000,000 2011 2012 2013 greatest gains. 5.4 million sq. ft., eleven of which are spec. New starts include 11%450,000,000 Energy Corridor, overall rates jumped to $22.83 per sq. ft. in Q4 (1,000,000) The facility, situated on 21.5 acres at 6501 Navigation, made the news last (2,000,000) $15 Westchase Park II, West Memorial Place, Four Oaks Place and 609 absorption. Demand for office space has Record setting construction starts Q1 Q2 Q3 Q4 Annual Net Absorption Vacancy Rate reached a historic low vacancy rate of 10% 6,000,000 2013, from $22.07 in 3Q 2013. Katy Freeway Class A rates 400,000,000 summer when Crane Worldwide Logistics signed an expansion lease for 6,000,000 Main, which are all over 300,000 sq. ft. 609 Main is the first 11% The Houston market closed 2013 with 350,000,000 150,000 jumped by three dollars per sq. ft. to $38.81 per sq. ft. in Q4 sq. ft. At the time, the local media reported occurred this quarter, with sixteen that the property itself $10 not been this strong since 2006. With 3.2%. (2,000,000) 8% 4,000,000 Source: CBRE Research, Q4 2013. building under construction in the CBD since Hess Tower began (3,000,000) 10% 3 undergoing 300,000,000 2013, from $35.63 in Q3 2013. Along with the rising rental rates, was a major redevelopment, which included demolishing some of 4.9 million sq. ft. of positive absorption, 2,000,000 5,000,000 • construction in Q1 2008. Speculative starts have increased from 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 limited supply, tenants continue to find buildings breaking ground. Of the 6% 250,000,000 the buildings on site and owners are offering healthy tenant improvement allowances, Lease Rates Per(3,000,000) Sq.selling Ft./yr 10 acres.$24.62   Class A Class B Overall Avg. Asking Rates10% two groundbreakings last quarter, to eleven groundbreakings this • The Greater Houston Partnership new construction highly desirable. 0 200,000,000 the most since 2006, and the second especially in the new construction projects. New construction Source: CBRE Research, Q4 2013. forty-one buildings currently under • 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Annual Net Absorption Vacancy Rate 4% quarter. New spec projects include The Reserve at Sierra Pines II, 4,000,000 150,000,000 Monmouth Real Estate Investment Corporation acquired an114, 923 sq. deliveries, changes in demand by tenant size, limited Class A Houston experienced another record cost. Even with the high amount of forecasts Houston to create just highest absorption totals the market Beltway Lakes III, Town Center I and Park 10 Center I. Three construction, thirty are multi-tenant 100,000,000 ft. industrial building located at 21200 Spring Plaza Drive inQ1 Spring. The Under Annual Construction Q2 Q3 Net Absorption Vacancy Rate availability, and operating expense increases will all be factors for 2% Q4 Under Construction Deliveries Source: CBRE Research, Q4 2013. Absorption 1,343,850 $ $ breaking year of net absorption, construction in our market, strong preSource: CBRE Research, Q4 2013. 50,000,000 buildings, all in the Energy Corridor, totaling 756,000 sq. ft. over 69,000 new jobs in 2014. The property is net leased for 10 years to FedEx Ground Package System, Inc. 3,000,000 has seen since 1997. rental rate movement going forward. Rates are rising with less space available, buildings with 4.7 million sq. ft. available 0% 0 Sq. Ft. delivered this quarter and were 81% pre-leased. The building is situated approximately 17 acres and is expandable by continuing the strong momentum of leasing means only a portion of that Source:on CBRE Research, Q4 2013.

Quick Stats

•

500,000 sq. ft. net absorption mark for the year. However, the

LEASE RATES of net0 absorption, continuing strong momentum of CBD stagnated, finishing the year with negative absorption in three Vacancy Rate and Netthe Absorption Overall asking rates increased slightly this quarter to $24.62 per of the four quarters in 2013. This quarter, the negative absorption Q4 2013 sq. ft., from $24.40 in Q3 2013. Overall CBD rates jumped to recent years. The market closed the year with 4.9 mil-

Sq. Ft.

Class A

Source: CBRE Research, Q4 2013.

Continu

3.2%. professional and business services

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Houston Industrial Houston Industrial Houston Industrial INDUSTRIAL FOURTH QUARTER MarketView MarketView MARKET STATISTICS

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Houston Industrial | MarketView Q4 2013

speculative projects.

The Katy Freeway submarket has The Katy Freeway submarket has reached a historic low vacancy rate of 3.2%.reached a historic low vacancy rate of

2003

Q4 2013

•

Net Absorption

Total Market RBA*

Vacancy

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new construction highly desirable. forty-one buildings currently under the most since 2006, and the second CONTRIBUTE A U.S. SURGE U.S.CHEMICAL CHEMICAL EXPORT CONTRIBUTE TO TO A IN SURGE ININ U.S. EXPORTNUMBERS. NUMBERS. new construction highly desirable. forty-one buildings currently under Source: CBRE Research, Q4 2013. CONTRIBUTE TO A SURGE CHEMICAL EXPORT NUMBERS. Industrial International Incorporated (IDI) purchased three • Developments The Greater Houston Partnership highest absorption totals the market

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Houston Industrial | MarketView

approximately 80,000 additional sq. ft. the most since 2006, and the second Tanner Business Park from John English.

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14,000,000 approximately 80,000 additional sq. ft. causing tenants to begin their search for for pre-lease. 2,000,000 CONSTRUCTION EXCERPTS FROM FOURTH QUARTER MARKETVIEW 12,000,000 recent years. The market closed the year space is coming to the market vacant. © 2013, CBRE, Inc. Total Market RBA* Vacancy Availability Currently, 14.2 million sq. ft. is underway in 41 buildings, and 67% space earlier than ever before in order Industrial Developments International Incorporated (IDI) purchased three Hotwith 4.9 million square feet (sq. ft.) of net Topics • The Greater Houston Partnership 10,000,000 Source: CBRE Research, Q4 2013. of it is pre-leased. Sixteen projects broke ground this quarter totaling Houston experienced another record cost. Even with the high amount of greatest gains. 1,000,000 forecasts Houston to create just properties in town as part of an 11-property industrial portfolio. The local to find the right space at a manageable 5.4 million sq. ft., eleven of which are spec. New starts include 8,000,000 Q4forecasts Houston to create just 2013 CBRE Global Research and Consulting Houston experienced another record cost. Even with the high amount of Industrial demand properties purchased are Greenspoint Business Center D at 101 Esplanade • absorption. Demand for office space has 5.4 million sq. ft. of new construction Record setting construction starts Absorption Sq. Ft. and Vacancy breaking year of net absorption, construction in our market, strong preSq. Ft.Market Availability Westchase Park II, West Memorial Place, Four Oaks Place and 609 over 69,000 new jobs in 2014. The 0 6,000,000 Road, spanning 244,557 sq. ft., the 106,700sq. sq.ft.ft.multi-tenant Greenspointindustrial Business Quasar Navigation Ltd. acquired a 302,800 Industrial | Marketview Q4Houston 2013 CBRE Global Research Consulting • The Houston market closed 2013 with Q4 2013 CBRE Globaland Research and Consulting not been this strong since 2006. With occurred this quarter, with sixteen breaking year of net absorption, construction in our market, strong preMain, which are all over 300,000 sq. ft. 609 Main is the first 8,000,000 9% over 69,000 new jobs in 2014. The broke ground this quarter in sixteen Center B at building 51 Esplanade Road.; Downtown and the 54,818 sq.Industrial ft. Greenspoint 12% 500,000,000 warehouse in Houston’s Eastside submarket. 4,000,000 continuing the strong momentum of leasing means only a portion of that professional and business services 8% building under construction in the CBD since Hess Tower began 4.9 million sq. ft. of positive absorption, 7,000,000 Business Center A aton 11710 Freeway. Park Underwood, LLC purchased 3CONSTRUCTION 450,000,000 facility, situated 21.5 North acres at 6501DELIVERED Navigation, made the news last limited supply, tenants continue to find buildings breaking ground. Of the (1,000,000) VACANCY JOB GROWTH UNDERThe CONSTRUCTION UNEMPLOYMENT RATE continuing the strong momentum of leasing means only a portion of that professional and business services 10% 2,000,000 buildings; eleven of which began as 7% construction in Q1 2008. Speculative starts have increased from approximately 90 acres at Bayport North Industrial II in Pasadena. 400,000,000 6,000,000 summer when Crane Worldwide Logistics signed anPark expansion lease for The recent years. The market closed the year space is coming to the market vacant. the most since 2006, and the second VACANCY JOB GROWTH VACANCY JOB GROWTH sector is expected to see some of the UNDER CONSTRUCTION DELIVERED CONSTRUCTION UNEMPLOYMENT RATE UNDER CONSTRUCTION DELIVERED CONSTRUCTION UNEMPLOYMENT RATE new construction highly desirable. forty-one buildings currently under 6% two groundbreakings last quarter, to eleven groundbreakings this industrial land will be developed into finished lots for sale or build-to-suits. 5.3% 79,600 YoY 350,000,000 0 150,000 sq. ft. the time, the local media reported that the 7,779,183 Sq. Ft.Atrecent years. The market closed the year 3,442,144 Sq.property Ft. itself (2,000,000) 5.9% 5,000,000 space is coming to the market vacant. 8% sector is expected to see some of the speculative projects. 5% quarter. New spec projects include The Reserve at Sierra Pines II, highest absorption totals the market 300,000,000 5.3% 79,600 YoY was undergoing aFt. major redevelopment, which included demolishing some of Sq. 3,442,144 Sq. Ft. 5.9% 5.3% 79,600 YoY construction, thirty are multi-tenant with 4.9 million square feet (sq. ft.) of net 7,779,183 Sq. Ft. 7,779,183 3,442,144 Sq. Ft. 5.9% 4,000,000 greatest gains. 4% Enerflex Energy Systems purchased 31 acres in Telge Industrial Park from Beltway Lakes III, Town Center I and Park 10 Center I. Three 6% 250,000,000 with 4.9 million square feet (sq. ft.) of net buildings on site and selling 10 reflects acres. greatest gains. Under Construction Deliveries Directional arrows based on change fromthe the previous quarter. Data market totals. has seen since 1997. 3,000,000 (3,000,000) Source: CBRE Research, Q4 2013. Rates are rising with less space available, buildings with 4.7 million sq. ft. available Wyman-Gordon Forgings. 3% buildings, all in the Energy Corridor, totaling 756,000 sq. ft. 200,000,000 absorption. Demand for office space has Record setting construction starts Directional arrows based changequarter. from• theData previous quarter. Data reflects market totals. Directional arrows based on change from the on previous reflects market totals. The Katy Freeway submarket has 2,000,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 4% absorption. Demand for office space has Record setting construction starts 2% 150,000,000 delivered this quarter and were 81% pre-leased. Monmouth Real Estate Investment Corporation acquired an114, 923 sq. causing tenants to begin their search for for pre-lease. • The Houston market closed 2013 with 1,000,000 MWH closedbuilding three purchases: a21200 15-acre unimproved landintract on Highway 6 1% 100,000,000 not been this strong since 2006. With occurred this quarter, with sixteen ft. industrial located at Spring Plaza Drive Spring. The • The Houston market closed 2013 with 2% Q1 Q2 Q3 Q4 Annual Net Absorptio reached a historic low vacancy rate of Sq. Ft. not been this strong since 2006. With occurred this quarter, with sixteen N from NW Copper; a 28,000 sq. ft. office/warehouse at 10851 Train Court 0% 0 50,000,000 property is net leased for 10 years to FedEx Ground Package System, Inc. CBRE, Inc. 4.9 million sq. ft. of positive absorption, CHEMICAL EXPANSIONS INspace earlier than ever before in order HOUSTON’S $15 BILLION PETROCHEMICAL COMPLEX in Brittmoore-Tanner Business Park from Deepwater Corrosion Services; CHEMICAL EXPANSIONS IN HOUSTON’S $15 BILLION PETROCHEMICAL COMPLEX WILL WILL © 2013, buildings breaking ground. Of the 0% 0 Sq. Ft. 4.9 million sq. ft. of positive absorption, The building islimited supply, tenants continue to find situated on approximately 17 acres and is expandable byand aSource: CBRE 3.2%. to find the right space at a manageable CHEMICAL EXPANSIONS IN HOUSTON’S $15 BILLION PETROCHEMICAL COMPLEX WILL limited supply, tenants continue to find buildings breaking ground. Of the Research, Q4 2013. 15,000 sq. ft. office/warehouse at 12029 Brittmoore Park Drive in Brittmoore-

• The Greater Houston Partnership sector is expected to see some of the

Availability

Source: CBRE © Research, 2013.Inc. asking rates 2013, Q4 CBRE, highest absorption totals the market construction, thirty are multi-tenant construction, thirty are multi-tenant properties in town as part IndustrIal of an 11-property industrial Is portfolio. The local Asking actIVIty BooMIng tHetHe Texas,Rates wherewhere there isthere an advantage from bothfrom lower Tight market conditionsIndustrIal are favoring annual rent increases and minimal near freenear actIVIty Is BooMIng isboth an advantage both lower Houston experienced another record cost. Even with the hig INDUSTRIAL ACTIVITY IScomes BOOMING NEAR forecasts Houston to create just properties purchased actIVIty are Greenspoint Business Center D at 101 Esplanade IndustrIal Isproduct BooMIng near tHe Texas, where there isTexas, an advantage from lower to attract Absorption Sq. Ft. and Vacancy rent periods. Rates are rising with less space available, UntilRates are rising with less space available, deliveryPort of more to market, we do not buildings with 4.7 million sq. ft. available of Houston taxes and operational costs, continuing buildings with 4.7 million sq. ft. available Road, spanning 244,557 sq. ft.,of the Houston 106,700 sq. ft. Greenspoint Business Port taxes and operational costs, continuing to attract Quick Stats Port of Houston taxes and operational costs, continuing to attract expect thisover 69,000 new jobs in 2014. The trend to change course in the Houston market area. Houston’s breaking year of net absorption, construction in our m 9% THE PORT OF HOUSTON The Houston Business Journal released its “Deals 8,000,000 build-to-suit businesses going forward. at 51 Esplanade Road.; and the 54,818rental sq. ft.rate Greenspoint Q4 2013Center YoY causing tenants to begin their search for citywideBQoQ average quoted gross monthly industrial forreleased all productits “Deals for pre-lease. causing tenants to begin their search for for pre-lease. The Houston Business Journal build-to-suit businesses going forward. The Houston Business Journal released its “Deals build-to-suit businesses going forward. Q4 2013 QoQ YoY 8% 7,000,000 Center from A at 11710 North Freeway. Park Underwood, Q4 2013 QoQ YoY Business of to the Year” winners InLLC thepurchased Commercial continuing the strong momentum of leasing means only a types increased $6.48 $7.58 per sq.released ft. infor the2013. fourth quarter. By professional and business services The Houston Business Journal its “Deals 7% Vacancy 5.3%   of the Year” winners for 2013. In the Commercial approximately 90 acres at Bayport North Industrial Park II in Pasadena. The 6,000,000 of the Year” winners forEstate 2013. In the rental Commercial space earlier than ever before in order property type, the space earlier than ever before in order average quoted gross monthly rates are as follows: Real category, Frontier Logistics signed the A recent visit by Vice President Joe Biden to the Port Vacancy  Estate  category, 6% Vacancy 5.3%  5.3%industrial land will be developed into finished lots for sale or build-to-suits. recent years. The market closed the year space is coming to th $0.45 per sq. ft. for warehouse/distribution space; $0.79 per sq. ft. for flex/ 5,000,000 sector is expected to see some of the Real Estate category, Frontier Logistics signed the A recent visit by Vice President Joe Biden to the Port Real Frontier Logistics signed the A recent visit by Vice President Joe Biden to the Port of the Year” winners for 2013. In the Commercial largest industrial prelease. The La Porte based of Houston encouraged seaport facilities to handle Net Absorption 1,768,753 service Sq. Ft. space;  to find the right space at a manageable  $0.45 per sq. ft. for manufacturing space. 5% andto find the right space at a manageable 4,000,000 largest industrial prelease. The La Porte based of Houston encouraged seaport facilities to handle largest industrial prelease. The La Porte based of Houston encouraged seaport facilities to handle with 4.9 million square feet (sq. ft.) of net FrontierFrontier Logistics Logistics LP signed signed a 600,000 4% 1,768,753  Realgreatest gains. Estate category, Net AbsorptionNet Absorption1,768,753 Sq. Ft.  Sq. Ft.Enerflex Energy Systems purchased 31 acres in Telge Industrial Park from the square larg- feet 3,000,000expanded ship traffic generated from the widening Under Construction 7.8 million Wyman-Gordon Sq. Ft.   Forgings. 3% construction Frontier LogisticsFrontier LP(sq. signed a 600,000 squarea feet ft.)Logistics lease in build-to-suit construction near the feet of theexpanded ship traffic generated from the widening Panama Canal and help ignite job creation. LP signed 600,000 expanded ship traffic generated from the widening square absorption. Demand for office space has Record setting constru 2,000,000 2% Under Construction 7.8 million Sq. Ft.   During Q4 2013, 32 buildings totaling 7.8 million sq. ft. were completed in Under Construction 7.8 million Sq. Ft.   est industrial prelease. The La Porte based Frontier Lo-Houston Port of Houston situated on 46 acres. The The Panama Canal project will double the shipping (sq. ft.) lease in build-to-suit construction near the of the Panama Canal and help ignite job creation. (sq. ft.) lease in build-to-suit construction near the of the Panama Canal and help ignite job creation. Delivered Construction 3.4 million MWH Sq. Ft.  1,000,000 closed three This purchases: a 15-acre unimproved land2.5 tract on Highway 1% the Houston area. compares to 34 buildings totaling million sq. ft. 6 • The Houston market closed 2013 with not been this strong since 2006. With occurred this quarter, Business Journal reports that Frontier plans to utilize capacity of a canal system that has been limited by Sq. Ft. Port of Houston situated on 46 acres. The Houston The Panama Canal project will double the shipping N from NW Copper; a 28,000 sq. ft. office/warehouse at 10851 Train Court the of third quarter The top completion Katy-based Igloo © 2013,Canal CBRE, Inc.project will double the shipping0% Port aof2013. Houston situated on is46 acres. The Houston 0 The Panama Delivered Construction million Sq.ft./mth Ft.  Sq. Ft.at$0.63 gistics LP signed 600,000 square feet (sq. ft.) lease Delivered Construction 3.4 million end the Lease3.4Rates per sq.   4.9 million sq. ft. of positive absorption, in Brittmoore-Tanner Business Park from Deepwater Corrosion Services; and a Products new 420,000 sq. ft. distribution facility in West Ten Business Park at the building as a logistics facility serving clients in the the locks’ inability to accommodate ships wider than Business JournalBusiness reports that Frontier plansthat to utilize capacity of a canalcapacity system that has beensystem limitedthat by has been limited supply, tenants continue to find buildings breaking gr Journal reports plans to utilize of a canal limited by 15,000 sq. ft. office/warehouse at 12029 Brittmoore Park Drive in Brittmoore28501in Hwy The new 120-dock distribution center will help build-to-suit construction near thebuilding, Port of Frontier Houston Lease Rates perLease sq. ft./mth plastics industry. The called 225the RailPort, 110average feetasking andrates longer 1,050 feet. Trade Net Absorption Vacancyarriving Monthly gross per sq. ft.than the building asfrom athe logistics facility clients in the the locks’ inability to ships wider than Rates sq. ft./mth$0.63  $0.63Tanner  company Boulevard. the most since 2006, and the second cooler keep up with itsEnglish. growing of products. The company Business Park John building asline aserving logistics facility serving clients in theCBRE theaccommodate locks’ inability to accommodate ships wider than new construction highly desirable. forty-one buildings cu HotperTopics Source: Research, Q4 2013. will include 20,000 linear of new through the Port of Houston accounts for more than Source: longer CBRE Research, Q4 2013. manufactures about products, totaling between 17 and 20feet million units situated on 300 46 acres. Thenearly Houston Business Journal plastics industry. The building, called RailPort, 110rail. feetThe and than 1,050 feet. Trade arriving plastics industry. The225 building, called 225 RailPort, 110 feet and longer than 1,050 feet.billion Trade arriving highest absorption totals the market Houston is one of the most dynamicasking industrial annually. The new building, combined with about the existing facilities, will increase construction, thirty are project will cost $50-to-$70 million to develop. one million jobs in Texas, an estimated $179 rates Construction and Absorption Hot Topics Hot Topics willreports include nearly 20,000 linear feet ofsq. new rail. isThe through theAsking Port of Rates Houston accounts for more than that Frontier plans to utilize the as a the rate company’s footprint inThe the area to 1.8 million ft. building Igloo among the markets in the U.S. with a low vacancy of 5.3%, will include nearly 20,000 linear feet of new rail. The through the Port of Houston accounts for more than Tight market conditions are favoring annual rent increases andcompletion minimal free building has an anticipated by the in economic activity and $4.5 billion in tax revenue has seen since 1997. Houston is one of the most dynamic industrial buildings with 4.7 mil project will cost about $50-to-$70 million to million jobs in Texas, an estimated $179 billion top 10 employers inof themore region and will employ an develop. estimated rent periods. Until delivery product comes to market, we do 1,100 notoneRates are rising with less space available, $0.90 Houston 1.8 is one of the dynamic industrial million sq. most ft. of net absorption and 7.8largest million project will cost about $50-to-$70 million to develop. oneand million in Texas, $179 billion third quarter 2014. for state local jobs authorities. Thean portestimated is the busiest markets in the U.S. with a low vacancy rate of 5.3%, expect logistics facility serving in the plastics industry. workers by the end of 2013. this trend to change course inclients the Houston market area. Houston’s $0.80activity and $4.5 billion in tax revenue The building has an anticipated completion by the in economic sq.the ft. under construction as of Q4rate 2013. markets in U.S. with a low vacancy of 5.3%, causing tenants to begin their search for seaport in the nationactivity in terms of foreign tonnage The building has an anticipated completion by the in economic and $4.5 billion infor pre-lease. tax revenue citywide average quoted gross monthly industrial rental rate for all product 1.8 million sq. ft. of net absorption and 7.8 million $0.70 third 2014. forft.state and local authorities. The port is the busiest Thequarter building, called 225per RailPort, will include nearly There are currently 95 buildings under construction totaling 7.8 million sq. 1.8 million sq. ft. of net absorption and 7.8 million types increased from $6.48 toquarter $7.58 sq. ft. in distribution the fourth quarter. Bythat The Frontier Logistics center, will be second busiest in United States for overall $0.60 and the third 2014. for state and local authorities. The port is the busiest space earlier than ever before in order sq. ft. under constructionHouston-Sugar as of Q4 2013. in the greater Houston industrial market. The largest project is the 600,750 seaport in the nation in terms of foreign tonnage property type, the average quoted gross monthly rental rates are as follows: ranked eighth • construction Land-Baytown $0.50 shipping tonnage. Biden’s visit to Houston is part built specifically near the Houston Ship Channel, will sq. ft. under as of Q4 2013. 20,000 linear Crossing feet of new rail. The project will cost sq. ft. building at Greens 1 in the 971-acre Pinto Business Park seaportUnited in theStates nationforinoverall terms of foreign tonnage $0.45 per sq. ft. for warehouse/distribution space; $0.79 per sq. ft. for flex/ to find the right space at a manageable The Frontier Logistics distribution center, that will bebuilding and the second 4 for job among the top 25 U.S. cities creation $0.40 provide packaging, transportation ofbusiest a widerinadministration effort to expand seaport located in north Houston, nearsq. Interstate 45 andwarehousing Beltway 8. Theand is service space; and $0.45 per ft. for manufacturing space. The Frontier Logistics distribution center, that will be and the visit secondHouston busiestisinpart United States for overall Houston-Sugar Land-Baytown ranked eighth • $0.30 about $50-to-$70 million toaplastics develop. The has built specifically near the Houston Ship Channel, will tonnage. Biden’s and retention, according to the Milken Institute’s already 83% preleased and has secured major tenant, HD building Supply thatshipping has © 2013, CBRE,for Inc. services to the industry. Near the northwest operations across to the United States that account

has seen since 1997. Quick Stats has seen since 1997. Quick Stats

$0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20

2013

2012

2011

2012

Manufacturing

2011

2010 2010

2009 2009

Flex/Service

2008 2008

2007

2006

Warehouse/Distribution

2006

2005

2004

$0.00

2004

$0.10

Rental Rates Overall

11,000,000 9,000,000 7,000,000 5,000,000 3,000,000 1,000,000

2004 Q1 2007 Q2 2007 Q3 2007 2005 Q4 2007 Q1 2008 Q2 2008 2006 Q3 2008 Q4 2008 Q1 2009 2007 Q2 2009 Q3 2009 Q4 2009 2008 Q1 2010 Q2 2010 2009 Q3 2010 Q4 2010 Q1 2011 2010 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012 Q3 2012 2012 Q4 2012 Q1 2013 Q2 2013 2013 Q3 2013 Q4 2013

Houston-Sugar ranked leased eighth $0.20 • top among the 25 U.S. cities Land-Baytown for job creation 500,000 sq. ft. built specifically near the Houston Ship Channel, will in thewarehousing cross dock facility. HD Supply, which distributes shipping tonnage. Biden’s visit©to Houston is part “Best-Performing Cities” report. The report said provide packaging, transportation of a wider(1,000,000) administration expand seaport 2013, CBRE, Inc. construction corner of products, Beltway 8said and Texas 225, the nearly 80% effort of the to volume of U.S. international trade, an anticipated completion byand the third quarter 2014. $0.10 maintenance, repair and operations it plans to move to tilt-wall the new among the top 25Milken U.S. cities for job creation Sq. Ft. and retention, according to the Institute’s During Q4 2013, 32 buildings totaling 7.8 million sq. ft. were completed in provide packaging, warehousing and transportation of aUnited wider administration effort to expand seaport some cities in the top tier “reflect how the surging services to the plastics industry. Near the northwest operations across the States thatmillion account for building will about feet deep by 1,250 feet supporting more than 13 U.S. jobs. distribution facility at Pinto Business Parkbe because it450 needs more space. $0.00 the Houston area. This compares to 34 buildings totaling 2.5 million sq. ft. and retention, according the Milken Institute’s “Best-Performing Cities” The report said U.S.report. energy sector istolighting up local economies. services to athe plastics industry. northwest operations across the United States that account for corner 8long and Texas 225, the nearly 80% of the volume of U.S. international trade, with rail yard bigtilt-wall enough toNear housethe about at the end ofof theBeltway third quarter 2013. The top completion is Katy-based Igloo Under Construction Deliveries Net Absorption “Best-Performing report. report said some cities in the top tier “reflect how the surging The shale Cities” oil and gas boomThe thrust nine metros intobe about Products new 420,000 sq.200 ft. distribution facility in Ten Business Park at which more corner of Beltway 820,000 and Texas the tilt-wall nearly 80% ofFlex/Service thethe volume of Ship U.S. Channel international trade, building will 450 feetwith deep byWest 1,250 feet supporting 13 million U.S. jobs. rail cars feet of225, rail access, It isthan understandable why Houston Warehouse/Distribution Manufacturing Rental Rates Overall Source: CBRE Research, Q4 2013. 28501 Hwy Boulevard. The new enough 120-dockto distribution center will help the the top 25, including Houston, San Antonio and U.S. energy sector is lighting up local economies. some cities in the top tier “reflect how the surging is big enough to contain 10 football fields, said the is one ofasking its key economic drivers. The Greater long with a rail yard big house about building will be about 450 feet deep by 1,250 feet supporting more 13 million U.S. jobs. Monthly gross average rates per sq. ft. than © 2013, CBRE, Inc. cooler company keep up with its growing line of products. The company EXCERPTS FROM FOURTH QUARTER Christi. and gas boom thrust nine metros into economies. RThe E Dshale N eoilw s .energy c oCorpus msector Source: CBRE Research, Q4the 2013. U.S. is lighting up local developer, Avera Cos. At17 the site, will Houston Bureau reported that shipMARKETVIEW channel 200 rail about cars with 20,000 feet ofyard rail access, which It isdeliver understandable whyPort Houston Ship Channel long with a rail big enough to house about manufactures 300 products, totaling between and 20 trains million units the top 25, including San Antonio and nine plastic that will be vacuumed from cars, through 2015 are create Ship Channel annually. The new building, combined the existing facilities, increase The shaleHouston, oil and gas boom thrust metros into and Absorption is big enough to contain 10 football fields, said the israil one of itsConstruction keyinvestments economic drivers. The Greater 200 rail pellets cars with with 20,000 feet of will rail access, which It is understandable whylikely the toHouston The recently released C2ER Cost the of Living Index company’s the area toand ft. Igloo is among thefor use in Corpus Christi. packaged sent tosq. customers 111,700 direct and indirect jobs with tax the top• 25, including Houston, San Antonio and footprint developer, Avera inCos. At the 1.8 site,million trains will deliverworldwide Houston Port Bureau reported that154,100 ship channel

11,000,000 is big enough to contain 10 football fields, said the is one of its key economic drivers. The Greater top 10 largest employers in the region and will employ an estimated 1,100 shows that Houston’s overall after-taxes living costs making everyday products, such as sunglasses, cups, through contributions are likely projected at $800 million. Most of plasticthe pellets that will be vacuumed fromAtrail 2015 are to create Corpus Christi. workers 9,000,000 developer, Avera Cos. thecars, site, trainsinvestments will deliver Houston Port Bureau reported that ship channel are 5.3% below the average for all 306 by urbanend of 2013.

The recently released C2ER Cost of Living Index

cell phones and car parts. Many of the pellets will be

the ship channel’s activity is driven by Houston’s $15