IRR-Houston Mid-Year Viewpoint 2015 Local Market Report - Industrial
The outlook for industrial property in Houston in 2015 remains highly contingent on energy pricing, as does most other sectors of commercial real estate. With the price of oil down, the possibility of mergers and acquisitions is very high. Mergers and acquisitions lead to layoffs as seen with the 9,000 job layoff announced on April 20, 2015 by Halliburton. Halliburton is continuing to move forward with the acquisition of Baker Hughes. Manufacturing has been dependent on oilfield equipment and the construction sector, both of which are likely to slow for a net loss of manufacturing jobs. However, direct impact on huge warehouse/distribution market would not likely be great.
The largest lease signings occurring in 2015 thus far are in the North and the Northwest markets. Franklin Valve signed a lease at Prologis Park Northpark-Building 12 for 132,600 square feet. A 107,000 square foot deal was signed by CEVA Logistics at World Houston Business Center-Building 10. Finally, Spitzer Industries, Inc. signed a 92,521 square foot lease at 11250 Tanner Road.
The world’s fifth-largest industrial park, Cedar Crossing sold within the last six months. Cedar Crossing LP sold this 11,000 acre park to TGS Cedar Port Partners LP. The park is located southeast of Baytown in Chambers County. Approximately 65% of the park remains undeveloped and is available for future expansion.
Though most people may be focusing on the oil prices, other forms of energy and the port are two factors that will play a significant role in the Houston industrial market. The outlook for port activity, to be augmented by post-Panamax shipping, seems more positive for the near term.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.