mattyt36

Well aware of the above.

I’m probably suffering from “this time is different”-ism.

But, in any case, H-Town Man apparently votes BACKFILL (energy industry?) in the potential outcomes described above.

Thanks everyone for their thoughts.

In re Downtown Houston being at a "trough" in occupancy as far as historical trends go, I agree.  That said, we're probably somewhere near the peak in the national business cycle and it is the national business cycle that's propping the economy up, kind of like in the 1990s, which was a recovery decade for the oil industry.

So if people agree with that (actually you don't have to agree with that, just consider it hypothetically), wouldn't that mean it's going to get worse before it gets better?  Or, at best, stable?

I think the other things worth considering are the exogenous trends, in particular the increasing prevalence of working from home in the "new economy," which has to result in lower demand for office space versus historical trends.

So we've got a whole host of things going on that could change the fundamentals . . . (historically) weak local demand for office space, weak national demand for office space, more space coming online.

How does the old space get backfilled?  Or does it at all?  Conversions?  Expansions?  Relocations from other Houston business districts (I'm not sure how this is good, in the long run)?  Relocations from outside of Houston (it's been awhile on that one, sadly)?  New businesses?  Demolitions?

I do think Downtown Dallas is the best corollary . . . that office market never recovered from the glut of space in the 1980s.  It's kind of an interesting space to walk around . . . they do have signature skyscrapers but they have a lot of older ho-hum buildings still standing . . . took a long time but a lot of them have gotten converted and it's a pretty lively place now on the main axes.  I think we may be heading in that direction.  Hope it doesn't take 30 years as it did there.

Apologies, I’m not trying to short-change the conversions that have happened.

An underlying trend in what I’ve been reading is that we’re probably at an inflection point with a significant chunk of real estate probably not being competitive anymore and way beyond any sort of economical conversion to be competitive ... hence why new generation Class A+ buildings are being delivered (and financed! An important sign!) despite the historic (in a generation) vacancy.

There aren’t many prewar buildings left for conversion out there but there’s a good amount of square footage built in the 1960s and 1970s that probably won’t be competitive in the long term ... we’re talking about 50+-year old buildings here. 

So what becomes of them? Do people really think that there’s going to be a demand for office space (as the downtown market thinks about it now) that could fill these buildings in the next peak of the business cycle (which we’re admittedly probably already in)? Does a whole new class of tenant come in? Do they stand vacant for a long time like the Le Meridien? Do they get demolished to become a parking lot? Or do they get converted?

There is a heck of a lot of vacancy still in downtown now (many in buildings that no on here thinks of much) ... props to Brookfield for getting some major relos (although net zero from other parts of the City) ... do people really think that gets filled organically?

I fear unless there are several repurposing projects we’re destined for another generation of demolition and parking lots.

800 Bell is probably the biggest symbol in my mind ... I love that building and don’t think it needs any sort of facelift. It could be a signature conversion.

Anyway, thanks for the feedback.

I guess silence implies no one thinks it's possible!

So from the recent HBJ Office Leasing Guide, here are downtown buildings with vacancy in the neighborhood of 50%:

800 Bell (Exxon) / 1,314,350 sq ft / 100% vacant

1600 Smith (Continental) / 1,098,399 sq ft / 46% vacant

GreenStreet (just NRG or also retail?) / 656,994 sq ft / 47% vacant

811 Louisiana (Two Shell Plaza) / 577,735 sq ft / 47% vacant

4 Houston Center (above The Park) / 674,246 sq ft / 40% vacant

1415 Louisiana St (Wedge) / 536,626 sq ft / 57% vacant

Esperson / 298,513 sq ft / 60% vacant

1010 Lamar (Younan) / 258,776 sq ft / 46% vacant

Anyone have comparables for square footage of Le Meridien and JW Marriott?

On 2/4/2019 at 8:14 AM, LBC2HTX said:

What's prompting the question on Skyhouse? The fact that there were 3 built here (whereas every other city they've built in only has one) would indicate they did well. 

Dallas has 2, Atlanta has at least 4 (not to mention plenty of other developments, but that's where they're based).

Novare has at least 4 residential high-rise developments in Nashville, 3 in Charlotte, and 2 in Austin (including a 44-story building).  They may not be called "Skyhouses" but I'm not sure what that has to do with anything.

1 hour ago, htownbro said:

This should spur more development along 288 south of 610

Really?!

I think this is the appropriate forum to post this question is ...

When I was in Dallas several months ago I was surprised to see how many former office buildings had been converted to residential or hotels. Republic Center, The Drever, The Merc, One Dallas Center—I’m sure there are several more.

Is there any speculation that this could happen in Downtown Houston as well as the market sorts itself out with all of the vacant space and new Class A+ towers? 

800 Bell seems like such a distinctive tower for this sort of redevelopment, but there are several other examples ... 4 Houston Center also comes to mind.

8 hours ago, cspwal said:

If there's no more grass pathway up to the green roof, how are they going to mow it?

Astroturf.

Wow, have stayed at a Moxy once before in Minneapolis ... was very unique. I posted in another thread around that time that it’d fit in perfectly in Montrose or the East End but of course I’ll take this.

I thought Marlowe was DLI as well.

I don’t think The Hamilton was.

On 3/20/2019 at 12:57 PM, Houston19514 said:

Here is the language from the DLI Design Guidelines:

 

A Streets. Ground floors facing A streets should contain active uses. For sites adjacent to Main Street, Main Street is the priority A street for ground floor uses. While retail is the preferred ground floor use, other acceptable uses include public building spaces such as lobbies, common building amenities, fitness facilities, open office space, live/work space, day care centers, etc. (see Figure 5). Regardless of initial use, all ground floors facing A streets should be configured such that they may accommodate retail in the future.2.

 

B Streets. While ground floors facing B streets should also contain active uses to the greatest extent possible, they may contain other uses, such as residential and office. Uses such as building services, storage, and structured parking should be avoided to the greatest extent possible along B streets.

 

(A Streets are Primary pedestrian streets.  B Streets are Secondary pedestrian streets (pedestrian-oriented streets with some potential building services).

Thanks! So it requires that they at least be able to accommodate retail in the future ... I guess that’s what we all were remembering.

Anyone know when the closed tunnel sections will reopen?

(BTW the Downtown District’s website on this is useless ... the map still shows 609 Main as under construction.)

On 3/19/2019 at 9:02 AM, Timoric said:

I like it how it balances the skyline by having 4 new buildings past Chase now and the skyline will look longer too instead of the end being an abrupt 1,002 footer, who else has that number memorized by the way?

I find it to be such a strange looking building but shall reserve judgment!

2 hours ago, cspwal said:

Block 334 and the Alexan don't have GFR, and I don't think the one on Caroline does.  The one on San Jacinto next to the Co-Cathedral has spots that could be retail spots, but I've only seen one business in there, and it lasted about a week.  They don't advertise them being retail spots for sure.

Maybe it was just Phase 2?

25 minutes ago, phillip_white said:

From their website:

http://www.meekspartners.com/high-rise/block-387

 

7 over 3 Metal with Retail

291 unit count

Status: In Design

Don't they have to have retail to qualify for the DLI?

Anyone been in the Cabochon Bldg? Doesn’t look bad.

How common is it for these new apartments to charge monthly amenity fees?

Nice to read his glowing comments about the City.

On 3/13/2019 at 8:31 PM, ekdrm2d1 said:

Mom driving.

 

EK you’re such a great addition to the Board. I wish I had your enthusiasm because it’s so apparent in every post!

1 hour ago, MikeRichardson said:

 

Why should HCTRA have any business making investments when they themselves owe over $2 billion on bonds. These are investments specifically allocated to HCTRA.

 

HCTRA would not need to issue so much debt if they weren't buying debt from freaking New York and New Jersey! That in and of it's self is a form of manipulation - so that the debt service is never paid off. It's also why HCTRA is so aggressive about pursuing new toll roads that nobody even asked for. There's dozens of projects that HCTRA has attempted to start or get it's hands into, fortunately most of these have failed.

 

The difference between driving on a state toll road vs a HCTRA road, is that you are not supporting the HCTRA entity, which I am no big fan of.

Suspicions confirmed.

3 minutes ago, MikeRichardson said:

Every HCTRA financial statement going back as far as I have found, contains a variation of the following statement:

 

 

It is important to note that it does NOT say that the roads will be made free. However, I would rather drive on a state toll road than a HCTRA toll road.

 

I think it's also extremely obvious that HCTRA has been manipulating their financials to ensure that the debt service is NEVER paid off. HCTRA has over $1 billion in "Total Cash & Investments". They even have investments made in school faclities in Arizona, a water authority in Georgia. Why is HCTRA not using this massive war chest to pay off their bonds instead?

 

It also pisses me off that they continue to deny having printed the above pamphlet and even deny the statement in their own financial documents. I am currently looking for a high quality scan of the pamphlet. I am also curious as to what TV news may have reported back in the 80's.

 

Source: https://hctra.co/financials/ (HCTRA has removed older financial reports, I have made them available again at hctra.co).

The "investments" you refer to are common to many local government cash pools.

And please extrapolate on "manipulating their financials."  HCTRA has issued debt regularly since the Hardy Toll Road was opened to build new tollways and expand and improve existing ones.  That shouldn't come as a surprise.  NTTA is no different, and the DNT was built in the 1960s.

Finally can you explain the difference between driving on a state-owned toll road and a County-owned one?

I don't think you know what you're talking about.

6 hours ago, Triton said:

Wish we got a canoe, kayak, and SUP landing. That would be cool. Something similar to Zilker Park in Austin.

I’d go for the Swimming Hole as part of the development first.

The Bayou has water quality issues ... not sure why people would want to kayak in it.

2 hours ago, Houston19514 said:

 

In 2008, Atlanta was Beta+, Dallas and Boston were Beta and Houston was Beta-  https://www.lboro.ac.uk/gawc/images/world2008t.jpg

 

FWIW, in 2004, Atlanta was Beta and Dallas, Boston and Houston were all Beta-

In 2010, Boston, Dallas and Atlanta were Alpha-, Houston was Beta+alpha

In 2012, Boston and Atlanta were Alpha-,  Dallas and Houston were Beta+

In 2016 and 2017, all 4 were Beta+

 

Since the list is not alphabetical or organized by geography, I can only assume it is a relative ranking.  Houston ranked below all 3 in every year I can find.

https://www.lboro.ac.uk/gawc/gawcworlds.html

Yes it’s true, Dallas, Atlanta, and Boston all previously had Alpha- ranking in 2008 but have since been downgraded. Would love to know how Houston somehow came to outrank Dallas and Boston (Atlanta I get) given their own superior economic statistics since then. Maybe the data lag by 2 (or more) years.

It also seems to be the case that the list as shown are relative rankings. And Houston has been behind Dallas and Atlanta (sometimes way behind both) in every year except this one. Seems like they must have changed their criteria. (Of course I’m biased so I think this new criteria is more representative!)

On 3/1/2019 at 12:35 AM, j_cuevas713 said:

Wow we finally moved up! I can’t believe we’re an alpha city 😮

Not sure how I missed this ... this IS news.

Wow!

It’s been a while since I looked at the list but it does seem rather skewed for European cities. Prague, Budapest, Dublin, Stockholm, Lisbon, and (especially) Luxembourg seem way overrated, all rated the same as Amsterdam. You must score points for being a national capital.

Likewise, Warsaw and Milan as Alpha cities seems to be a bit of an overstatement.

I seem to recall a couple of years ago Houston was one notch below Dallas.

Anyone know what the monthly maintenance fees are like in a high rise condo building? I just don’t think the math works out in Houston. Have been reading profiles such as these for 2 decades and it’s always people in their mid-50s after kids leave. And they also seem to always be realtors.

The only high rise that seemed to make no brainer economic sense to me based on numbers presented was that one in EaDo with the micro units. 

Otherwise high rise rentals here seemed to be price (relatively) affordably. Do the developers assume the building flipping to a condo down the road? Are there any examples of high rise rentals flipping to condos here?