Thursday, January 29, 2009

Chase closes 36 site of WAMU

JPMorgan Chase & Co. will close 36 Houston-area branches operated by Washington Mutual Inc. as part of a national consolidation.
A spokesman for Chase Bank said Wednesday that 36 of 111 WaMu branches in the region will close by the end of March.
Chase Bank began the process of identifying WaMu branch closures nationwide after its parent company, JPMorgan Chase, acquired WaMu in 2008 after the Seattle financial services giant filed for bankruptcy protection.
Chase already has 145 branch offices in the Houston region, meaning that after the consolidation the combined Chase-WaMu entity will have 220 branches, making it clearly the largest bank ranked by deposits in the market.
By mid-year, the remaining WaMu branches will be converted to Chase branches.
The combined Chase-WaMu financial giant has about 6,900 employees in the Houston region and 25,000 in Texas. Across the state, Chase intends to close a total of 88 WaMu branches and keep 169 open.
In addition, Chase intends to open five new branches in the Houston area by the end of 2009.
The spokesman said virtually all of the affected WaMu employees will be retained when the branches close. For more information on these site call or email ; or

Tuesday, January 27, 2009


HOUSTON — Hilton Hotels Corp. has held the grand opening for the new Homewood Suites by Hilton – Northwest/CY-Fair, a 123-suite hotel located at 13110 Wortham Center Dr. in Houston. The hotel comprises studio, one-bedroom and two-bedroom suites. It features an executive business center, a swimming pool, a sports court and 1,050 square feet of meeting space. The property is owned by Wortham Hospitality, Ltd. and will be managed by New Horizons Hospitality. This newest hotel marks the 260th location for Homewood Suites by Hilton. For more information see: or

Monday, January 26, 2009

City Buys WATERWALL in Galleria

City buys water wall
The popular Water Wall Park was purchased by the City of Houston to be preserved as a public park for generations to come.
The city paid $8.5 million to an affiliate of Houston-based Hines Interests LP for the Water Wall and the three-acre park in which it sits in the Galleria area. The 64-foot wall of cascading water has been one of the most recognizable and frequently visited landmarks in Houston for nearly a quarter of a century.
Hines and Transco Energy Co. originally developed the private Water Wall Park and adjacent Williams Tower in the 1980s. The skyscraper and park have changed hands over time, but went back under Hines-related ownership in 2008 when they were acquired by Hines Real Estate Investment Trust Inc.
HCSS breaks ground on new building
Ranked in the Houston Business Journal as one of city’s “Best Places to Work,” HCSS Inc. is now working on building an even better workplace.
The software development company broke ground in December on a 45,000-square-foot building in Sugar Land that is designed to be very employee-friendly.
The building will be constructed in the shape of a square that will enclose a 75-foot by 110-foot courtyard. The courtyard will be wired for electricity and have wireless Internet access so employees can work outside.
The new building will also have a gym with a half basketball court; exercise room; showers; a 600-meter crushed granite jogging trail; and a 200-meter running track surrounding a small soccer field.
In its new offices, the 112-person firm, leaving the space it leases at 6200 Savoy, will have room to accommodate 220 employees.
AETNA signs lease in Sugar Land
The Three Sugar Creek Center office building in Sugar Land that has stood vacant for more than a year has landed its first tenant.
Aetna Inc. signed a lease in December for roughly 52,000 square feet of space in the building, which was completed in 2007 on a speculative basis by Harry Green Interests Inc.
More than 350 employees are expected to move into two floors in the Class A office building at Three Sugar Creek Boulevard by April 2009. The Aetna professionals currently occupy about 45,000 square feet in Fluor Corp.’s building at U.S. Highway 59 and State Highway 6 in Sugar Land. Aetna needed a new home because Fluor wanted the sublease space back. For more information see : or

Thursday, January 22, 2009

Big Industrial Deal for La Porte

DISTRIBUTOR SIGNS 103,184-SQUARE-FOOT INDUSTRIAL LEASELA PORTE, TEXAS — Overland Distribution has signed a lease for 103,184 square feet of industrial space at Port Crossing Corporate Center in La Porte. The building is located at 1701 S. 16th St.; it features 30-foot clear ceiling heights, 60 exterior docks, significant trailer storage and rail access. Bill Gold and Jeff Everist of CB Richard Ellis represented the landlord, a joint venture between National Property Holdings and ML Realty Partners. Greg Egan of represented Overland Distribution. For more information see

Friday, January 16, 2009

New name for old Airport

The Houston City Council has approved changing the name of Ellington Field to Ellington Airport, according to the Houston Airport System.
The name change is intended to help grow the airport as a “greater economic generator,” HAS said.
“We’ve known for some time that our runways at Ellington are primed to serve as a reliever airport for both Hobby and Bush Intercontinental,” Houston Airport System director Rick Vacar said in a statement. “The name change will enhance our efforts to market this aviation asset to general aviation and commercial developers who want to operate at an airport with unlimited possibilities.”
Ellington Airport, located on the southeast side of Houston, currently has three active runways, a 24-hour Federal Aviation Administration Air Traffic Control Tower and two fixed based operators.
The airport also has more than 300 acres available for development, Vacar said.
Existing tenants have the option of continuing to use the Ellington Field name. For more information see : www.houstonrealtyadvisors,com or www,houstonrealtyadvisors,net

Wednesday, January 14, 2009

Houston, Tx. ends year with Postive Net Absorption

The Houston office market ended 2008 with positive net absorption, but it was the lowest annual absorption total since 2004, according to the Office Market Trends Houston report by Grubb & Ellis Co.
The quarterly report shows 470,678 square feet of positive net absorption during fourth-quarter 2008, resulting in 776,487 square feet of net absorption for the year.
In comparison, Houston posted more than 6 million square feet of positive absorption in the office market in 2007.
Class A office buildings were responsible for most of the 2008 net absorption, or net change in the amount of occupied space. A total of 165,184 square feet of Class A space was absorbed during the fourth quarter, resulting in 1.1 million square feet of positive net absorption for the year, according to the report.
The nicest office buildings also had the lowest vacancy rate among all classes of office space. Class A vacancy increased by 120 basis points to 11.3 percent for the quarter, the Grubb & Ellis report shows.
Houston’s sublease space rose by 116,261 square feet in the fourth quarter to nearly 2.6 million square feet. Despite the quarterly increase, Houston’s sublease space is only 1.6 percent of the overall inventory, which is lower than the national average of 2.3 percent.
The asking rent rate was higher at the end of 2008 than it was at the end of 2007, but Grubb & Ellis reports that rent increases have slowed and landlords are offering more concessions to tenants. For more information see: or

Tuesday, January 13, 2009

Aetna Takes 45,000 sq ft in Houston/Sugarland Area

Aetna Inc. will be the first tenant in a speculative Sugar Land office building that has stood vacant for more than a year.

Houston Business Journal - by Jennifer Dawson

The health care insurer will occupy two floors in Three Sugar Creek Center, a 154,000-square-foot Class A building that was completed in 2007 by Harry Green Interests Inc. Aetna employees will move into the six-story office building at Three Sugar Creek Boulevard by April.
Aetna was shopping for a new home because it currently subleases space in Sugar Land from Fluor Corp., and the Fortune 500 engineering company now needs the square footage. Aetna currently occupies about 45,000 square feet in Fluor’s building at U.S. Highway 59 and State Highway 6.
Joe Esch, executive director of business and intergovernmental relations for the City of Sugar Land, says the deal shows that the city needs speculative office space on hand when a leasing opportunity arises. He believes that the availability of the Three Sugar Creek Center building kept Aetna from moving out of Sugar Land.
“It proves that when companies start looking for space, they look for existing buildings,” Esch says.
Bruce Rutherford of Jones Lang LaSalle Inc., who represented Aetna in lease negotiations, says the firm wanted to stay in the Sugar Land area in an effort to retain the current employees, as well as attract future workers.
Aetna could have stayed at the Fluor site for three more years, Rutherford says, but decided to go ahead and relocate now. Fluor, which had more than 4,200 local employees as of late August, needs the extra space to accommodate its growing work force.
Jeff Bernhard, a market head for Aetna in Houston, says several factors were involved in the insurance company’s decision not to exercise options to extend the expired lease with Fluor. Aetna wants to be in a building with better parking, have its own cafeteria and have the ability to build technology into the space, he says.
Employees are on board with the new space, Bernhard says, because it comes with covered garage parking that’s connected to the building. As it stands now, he says, many employees have to walk quite a distance in the elements to get inside the Fluor office.
“It was not convenient for employees,” Bernhard says.
Aetna signed a lease in December for roughly 52,000 square feet of space in the new location, which will give employees a little bit more elbow room. Approximately 360 Aetna employees will report to the new office, though some work from home and on the road.
The Sugar Land office, which is Aetna’s headquarters for Texas and the surrounding states, will also get a technology upgrade as part of the move.
“There’s going to be a greater use of technology in this office than in prior offices,” Rutherford says. “This will become the poster child for advanced technology in Aetna’s offices.”For more information see: www.houstonrealtyadvisors,com or

Monday, January 12, 2009

Houston Pavilions gets 1st Office Tenant

The law firm of Sheehy, Serpe & Ware P.C. will be the first tenant in the recently constructed Houston Pavilions office building in the Central Business District.
The firm signed a long-term lease for 28,000 square feet of space, taking the top one and a half floors of the nine-story, 200,000-square-foot facility located at 1201 Fannin. The office is part of the four-block Houston Pavilions project bounded by Dallas, Polk, Main, Caroline that includes 360,000 square feet of retail space.
Ed Perkins of Sheehy, Serpe & Ware says the firm leased space at Houston Pavilions because it could gain access to good restaurants and other amenities; secure the top space in the office building; and locate close to Discovery Green park.
The law firm that specializes in a wide variety of areas currently leases space downtown in Two Houston Center at 909 Fannin. The firm is expected to move into Houston Pavilions in December 2009. For more infromation on why this is a great building check out: or

Saturday, January 10, 2009

Despite downturn Kroger Expands n Houston

At a time when other retailers are scaling back expansion plans and closing their doors, Kroger Co. is set to open its largest location in Fort Bend County on Jan. 16.
The new 100,000-square-foot Kroger Signature Store will be located at 10250 State Highway 6 in Missouri City.
The store, which will be Cincinnati-based Kroger’s (NYSE: KR) second store in Missouri City, will offer a “Chef Shoppe” with a chef on hand to prepare meals for customers and an extensive wine selection complete with an on-site wine steward to assist shoppers in making their selection.
The store will also feature a “Kitchen Place” offering an assortment of kitchenware, a “Nature’s Market” offering natural food and organic selections, and a drive-thru pharmacy that will offer $4 generics. For more information see: and

Thursday, January 8, 2009

This Year, Pain To Replace Gain

Nary a Bright Spot in CoStar Group’s First-Ever State of the Market/Industry Outlook

The pain felt throughout the U.S. housing market over the past two years is going to catch up with commercial real estate in 2009 when the country will begin to see spikes in office vacancy rates climbing as much as 300 to 400 basis points with many markets expected to experience severe negative net absorption. That was the assessment of Andrew Florance, founder and CEO of CoStar Group Inc., as presented in the company’s first-ever 2009 State of the Office Market review and outlook delivered this afternoon from its Bethesda, MD, headquarters and webcast to CoStar clients across the country. Florance’s presentation laid out the economics and fundamentals detailing the impact of the financial meltdown on commercial real estate, finding little upside to report with all indicators projecting continued:
Constraint in the credit markets,
Dearth of investment and construction activity,
Corporate space contraction, and
Falling property values.The outlook is now for the current recession to take a higher toll, for a longer time, on commercial real estate than did the bubble burst of 2001-2002. Rather than try to reproduce the entire presentation or beat the dead horse that is the economy, here is recap of just some of the highlights.
ContractionUnlike in previous recessions in which the commercial real estate industry participated in its own demise through gross overbuilding, the current downturn was precipitated by an unparalleled run up in housing values and the subsequent burst of that bubble. Housing values continue to fall precipitously. Overlaying commercial office values with housing values, Florance showed that, while commercial values also experienced a rapid ascent, those values peaked at substantially lower levels than the housing peak. Also based on historical norms, it appears housing values still have a ways to fall, while commercial office space values have already returned to much closer what are their norms. That doesn’t mean that office values could hold at the level because clearly the market dynamics are working against them. The S&P 500 Index is down 40% from its highest levels and lower than what is has been in five years. The index is important to commercial real estate because without increasing stock prices, corporations will be less likely to expand. The lack of expansion is major drag on office space absorption, Florance said. In addition to stock price declines, initial public stock offerings that fuel the growth of newer firms have dried up completely this year. Corporate borrowing outside of federal government-assisted bailouts also has fallen to record lows - less than $25 billion/month in the most recent quarter compared to more than $400 billion just 18 months ago. The commercial mortgage backed securities (CMBS) markets also dried up completely in the fourth quarter and thus banks - were they even making loans - have nowhere to market or sell those loans to the secondary markets to make room to do more lending. The employment picture is also dismal. The U.S. economy already lost more jobs (1.9 million) in 2008 than during the bubble burst in 2001-2002. is forecasting as many as 3.1 million job losses in 2009.
Inventory BuildupOne small bright spot to current commercial real estate conditions is that there was very little surge of new supply leading up the recessionary environment starting in December 2007. Commercial office space is entering the downcycle from a position of relative strength. Nor is CoStar forecasting much additional in the way of new supply coming onto the market through 2012. However, the office supply inventory is going to increase. In fact, the supply of available and vacant office space is beginning to increase as there is currently virtually no absorption of excess space occurring. Vacancy rates have begun to tick up as projects already under construction are being completed. Combining the forecasts for job losses in 2009 and a dwindling supply of newly delivered space, CoStar is predicting that U.S. office vacancy rates could climb from a base of 11.1% at the start of last year to 15.1% in 2010. Some U.S. markets will be hit harder than others but all are projected to grow to double-digit vacancy rates in 2009 and 2010. CoStar is projecting that the Phoenix and Detroit vacancy rates could exceed 20%. Job losses are also projected to be heavy in South Florida, the New York Tri-State area and San Francisco and those markets will likely see fairly steep increases in their vacancy rates over the next two years. There won’t be any clarity to when the markets can return to normal until the peaks in vacancies and the valleys in prices and rents hit top and bottom. In the two previous recessionary periods of early 1990s and 2001, office inventors did not return to the market until it was clear that the deterioration in conditions had stopped. And right now, the volume of investment activity is at or near its historical norms. So while the outlook for 2009 is grim, it is likely that the market for office building investments will remain flat through 2009. "The market needs to establish a new bottom before a recovery can take hold," Florance cautioned. "The sooner we reach it, the better off we'll be. If property values need to fall to X, it's better to get there in 18 months not five years." Faced with the grim outlook for 2009, a member of the audience asked Florance if he would advise the broker to give up his real estate practice and work on his golf game for the next 12 months. "Where do you golf?" Florance responded half jokingly before addressing the issue. "We adjust. As we've all seen the industry do in past down cycles, we focus on leasing rather than sales and on property management rather than on new development. And we become advisors. Your clients are going to need your expert advice."
More Distressed PropertiesFrequent readers of CoStar news are probably familiar with our coverage of distressed properties and delinquent loans. In preparation for its first market outlook, CoStar also undertook its first-ever complete analysis of delinquent and distressed properties in the CMBS market. CoStar identified nearly 1,200 commercial real estate loans that were either delinquent in loan repayments or had reached maturity without pay off of the loan. The principal and interest outstanding on those loans as of mid December totaled nearly $8.2 billion. CoStar also compiled a list of nearly 6,100 additional loans that servicers for the various securities have flagged as having potential credit concerns. The current scheduled ending balance of those loans totaled $57.8 billion. In addition, CoStar identified more than 160 properties that had been repossessed by various CMBS trusts. The properties had a loan value at the time they were taken over of more than $1 billion. Based on the properties most recent valuations, the bondholders were likely to take a loss of more than $300 million.
Go GreenNot wishing to end on a dour note, CoStar’s Florance concluded the U.S. portion of the forecast with a look at so-called green properties, which continue to enjoy a premium in the marketplace in terms of higher occupancy levels, rental rates and sale prices compared with "non-green" peer buildings. Currently in the U.S. only 1 in 15,000 properties are LEED or Energy Star certified. In fact, a new federal mandate that is set to go into effect in 2010 is that federal agencies will have to occupy green certified offices. According to Florance, the total federal requirement for green space outstrips the total available supply of green-certified buildings. In analysis of 9.8 billion square feet of office inventory in CoStar’s database, CoStar found that the national occupancy rate of green-certified buildings was 300 to 588 basis points higher than non-certified buildings and commanded rents that were anywhere from $3 to $18 more per square foot per year than the average rent. Green buildings also sold at prices that were up to 64% than the average. Written by Mark Heschmeyer COSTAR

For more information see: or

Monday, January 5, 2009

HBJ Article tells the story NOW!!!

Date: March 14, 2008
Headline: ‘Downtown office towers jump off starting block in tandem’
Ground-breaking events were held in the spring for three new Class A office buildings proposed for downtown Houston.
All of the events were held within one week by three separate developers. The trio were among a handful of real estate companies that had been mulling over new downtown projects for a year in an effort to meet demand for office space.
Crescent Real Estate Equities LLC, Hines Interests LP and Trammell Crow Co. all announced plans to develop buildings, even though none of them as yet had any tenants.
The three buildings shared another similarity in that the developers all hoped they could obtain LEED Gold certification as sustainable green buildings.
In that busy week for real estate, Dallas-based Trammell Crow and financial partner Principal Real Estate Investors on Feb. 29 started construction of Discovery Tower — a 30-story, 871,000-square-foot office building at 1501 McKinney St. by Discovery Green park.
Houston-based Hines began construction three days later on a 1 million-square-foot office at 811 Main called MainPlace.
The Hines CalPERS Green Development Fund, a Hines venture with the California Public Employees’ Retirement System, is the developer of the 46-story building.
And Crescent held a VIP ground-breaking event on March 6 to launch the proposed 585,000-square-foot 6 Houston Center, which was set to begin construction by May in the block bounded by Rusk, Walker, Caroline and San Jacinto.
Crescent’s building never got off the ground.
Fort Worth-based Crescent was bought by Morgan Stanley Real Estate in a deal that closed in August — a transaction that changed it from a public company to a private one.
Information about Crescent’s deals became more difficult to obtain after the company was taken private. A Crescent representative was unavailable for comment on the status of 6 Houston Center.
Although Crescent’s building didn’t materialize, the other two projects are moving forward as planned.
Hines announced in May that KPMG LLP would become the building’s first tenant. The company will occupy nearly 109,000 square feet on the top four floors of MainPlace when the new tower is finished in 2011.
KPMG decided to relocate from downtown’s Bank of America Center building, where it now offices, in order to attract future employees with a showcase location.
Trammell Crow has not yet announced a tenant for the 30-story Discovery Tower, but real estate insiders predict that the space will be filled.
New York-based Hess Corp. has been mentioned as a likely candidate for the building.
The energy firm is said to be in the market for 800,000 square feet of space in a downtown building where it would be the sole tenant.
Discovery Tower, which will be finished around the fourth quarter of 2011, is likely to be the only office space that will fill the bill.
Jennifer Dawson HBJ

For more information see: or www.houston