Can the Boom Continue?

[Urbannizer]

http://www.bizjournals.com/houston/news/2016/04/20/houston-cre-exec-lenders-are-running-for-the-hills.html

 

There's another roadblock stopping Houston commercial deals from getting done in addition to the price of oil.

 

Investors and developers are faced with near-impossible demands from lenders, multiple executives from Houston-based NAI Partners said at an April 20 event.

 

"Debt financing is incredibly difficult to get," said Jon Silberman, managing partner at NAI Partners. "Lenders are running for the hills … they want no risk."

 

A noticeable chunk of national and international lenders are turning away from Houston for two major reasons. Either they have too much exposure in Houston and can't afford additional risk, or they have little-to-none Houston exposure. And in a strong national economy, where most investors are doing pretty well right now, Houston may not be attractive for someone with an otherwise robust balance sheet. There are too many negative, national headlines scaring away out-of-Houston capital, they said.

 

Even still, Pappas is working with a seed fund to build a roughly $200 million to $250 million investment portfolio for NAI, he said. He's looking at several properties in Dallas, a couple in Houston and some retail and office properties in San Antonio. Regarding the Houston acquisitions, the Galleria submarket is the biggest hotbed for investment activity, he said, because it's hit a dry spell but remains historically successful.

 

It's not as risky as the Energy Corridor, which is far from a turnaround, Silberman said. "It's not going to be a 12- to 24-month fix (in west Houston). There's no way," Silberman said. "It'll be a three- to five-year problem in west Houston."

 

[swtsig]

debt is definitely the main hurdle now - underwriting projects in houston has become incredibly difficult and practically impossible for office and multifamily. even projects which seemingly would have had debt secured a while back aren't immune... morgan's whole foods development in midtown comes to mind. not really surprising, though. why expose yourself to unnecessary risk?

[Triton]

The economic report from Bill Gilmer that everyone is talking about this week.... it's actually not that bad and pretty much reflects the data that we've been seeing all along in my office. He's right.. the Houston oil market got a historic shock but Houston has been remarkably resilient due mostly to the overall US's strength. There's certainly more pain ahead as we all know but even his data agrees... as long as the US economy stays together, we see an uptick in the Houston economy starting in 2018. It could also be the year we see a strong rebound in development projects, (edit) though it is now more likely to start in 2019.

 

As I've been saying for 2 years now, we'll still be seeing random projects pop up here and there, but nothing at the rate of 2014. We could see that growth again late 2018, especially 2019.

[brijonmang]

26 minutes ago, Triton said:

HOUSTON WILL BE BUILDING A NEW SUPERTALL IN 2019

 

Quoted this for future reference.  I'm excited!!

[Triton]

Houston now has among the slowest job growth in the US:

 

[Houston19514]

On August 19, 2016 at 1:10 PM, Triton said:

Houston now has among the slowest job growth in the US:

 

 

It would he news if that was not the case.

 

Do you have a link so we could see the rest of the data?

[Triton]

7 hours ago, Houston19514 said:

 

It would he news if that was not the case.

 

Do you have a link so we could see the rest of the data?

http://www.bloomberg.com/news/articles/2016-08-19/these-are-the-cities-with-the-fastest-and-slowest-job-growth-in-america

 

This is for major metros. Austin is in the top 10 at least.

 

[Urbannizer]

Houston’s retail market leads the Nation in construction activity

 

Quote

Houston’s retail market continues to expands with 3.9M SF under construction. According to our data provider, CoStar Property, Houston ranks first in construction activity when compared to other U.S. markets. Northern New Jersey was second with 3.7M SF and Dallas/Ft. Worth third with 3.5 M SF.

Approximately 82.6% of the 3.9M SF of retail space under construction at the close of Q2 2016 is pre-leased.  Despite the 1.8M SF of new inventory delivered in Q2 2016, Houston’s average retail vacancy rate remained under 6.0%, decreasing to 5.8% over the quarter from 5.9% in Q1 2016.

 

[BeerNut]

Unemployment Rates for Large Metropolitan Areas, Not Seasonally Adjusted

 

Better than Detroit 

[UtterlyUrban]

But not as good as Camden!

 

 

[Dustin]

As I always tell everyone.....if the unemployment rate is 5%, then the employment rate is 95%. Numbers don't lie and my glass is half full.

 

That's the way I see it.

[UtterlyUrban]

5 hours ago, Dustin said:

As I always tell everyone.....if the unemployment rate is 5%, then the employment rate is 95%. Numbers don't lie and my glass is half full.

 

That's the way I see it.

All your two sentences show is that you have no idea what the "unemployment rate" actually measures.

 

 

[Dustin]

Then please explain. Is it something along these lines perhaps? http://www.bls.gov/cps/cps_htgm.htm

 

It's a simple equation really, and my point was that there are many more.......MANY more.......people who are employed than not. A side to that point that many people don't see is that no one is going to lower the unemployment rate by focusing on that rate. If that were going to happen, it would have already. Focus on the people who are working......those sectors.....those industries.......and use all that as a template for success for the people who are not working and want to. If we have to re-train or cross train people to fill those voids, that's a viable option.

 

We come to conclusions like this by focusing on what can be done, not so much on what hasn't been done. Like getting those people back in the workforce. I've been alive for over 50 years,and during that time there has never been a 0% unemployment rate. Ever. And there never will be. Why do you think that is? 

 

 

[UtterlyUrban]

Is it a simple equation?

 

if I want to work 40 hours per week in my field.... say petroleum engineer.... but I can only find work as a waiter...... am I employed or unemployed according the "simple" formula?

 

if I am a petroleum engineer and want to work 40 hours per week but can only find engineering work for 10 hours per week, and nothing else, am I employed or unemployed according to the "simple" formula?

 

if I am a petroleum engineer who wants to work but have given up even looking for employment because there is nothing in my field and I am discouraged, am I employed or unemployed based on that "simple" formula?  (You might want to look this one up).

 

the formula is quite flawed.  I believe that your first post tells me that you don't know what it is really saying and your second post does not convince me otherwise.  

[samagon]

On 11/16/2016 at 6:59 PM, UtterlyUrban said:

Is it a simple equation?

 

if I want to work 40 hours per week in my field.... say petroleum engineer.... but I can only find work as a waiter...... am I employed or unemployed according the "simple" formula?

 

if I am a petroleum engineer and want to work 40 hours per week but can only find engineering work for 10 hours per week, and nothing else, am I employed or unemployed according to the "simple" formula?

 

if I am a petroleum engineer who wants to work but have given up even looking for employment because there is nothing in my field and I am discouraged, am I employed or unemployed based on that "simple" formula?  (You might want to look this one up).

 

the formula is quite flawed.  I believe that your first post tells me that you don't know what it is really saying and your second post does not convince me otherwise.  

 

it is simple!

 

A:

under-employed, but not unemployed

B:

under-employed, but not unemployed

C:

out of the workforce, but not unemployed

 

but we can't use metrics like that because how do you decide when a person is under-employed, or out of the workforce/unemployed?

 

Maybe the life of a petroleum engineer was too taxing, waiting tables is frantic, but you don't have the same level of stress going in, waiting tables, and going home. As a petroleum engineer you had to take work home with you, there were crazy deadlines that kept you up at night.

 

Maybe the petroleum engineer had a kid and appreciate the schedule of working 10 hours a week so they can be at home with their newborn.

 

maybe the petroleum engineer had a kid and rather than working even 10 hours, decides that the workforce isn't for them, so they don't even need to work.

 

you can't quantify this stuff easily at all. a jobs number is far from perfect, but is a simple metric that is easy to use.

 

more to the point of my bumping this thread...

 

Most so called experts have said oil has hit bottom. It's predicted to hold steady for the year at or around $50. The future holds some uncertainty, and President Trump is doing what he promised in that he's shaking the tree really hard. Through the course of this current oil downturn, home prices have continued to rise in Houston, at least in my neighborhood flippers are moving faster than ever. So should the question be now...

 

when will the boom continue?

[The Pragmatist]

I met a mechanical engineer while shopping at Dillard's a few weeks ago. According to him, he was recently laid off by HP. He seemed a bit despondent about the fact that he had to resort to working retail sales in the men's department, but he had to obtain an instant source of income due to the fact that his daughter was about to head to medical school and his son was an engineering undergrad at Texas Tech. He said he was hoping to get positive news back from Schlumberger regarding employment. Technically he was employed, but it was a definite case of underemployment. You'd certainly need context for determining each case though.