RealReal EstateEstate MarketMarket OverviewOverview HoustonHouston

Jennifer S. Cowley Assistant Research Scientist

Texas A&M University

July 2001 © 2001, Real Estate Center. All rights reserved. RealReal EstateEstate MarketMarket OverviewOverview HoustonHouston

Contents

2 Note Population

6 Employment 9 Job Market 10 Major Industries 11 Business Climate 13 Public Facilities 14 Transportation and Infrastructure Issues 16 Urban Growth Patterns Map 1. Growth Areas Education

18 Housing 23 Multifamily 25 Map 2. Multifamily Building Permits 26 Manufactured Housing Seniors Housing

27 Retail Market 29 Map 3. Retail Building Permits 30 Office Market Map 4. Office Building Permits

33 Industrial Market Map 5. Industrial Building Permits

35 Conclusion RealReal EstateEstate MarketMarket OverviewOverview HoustonHouston Jennifer S. Cowley Assistant Research Scientist

Aldine

Jersey Village US Hwy 59

US Hwy 290 Interstate 45 Sheldon US Hwy 90

Spring Valley Channelview Interstate 10 Piney Point Village Houston Galena Park

Bellaire US Hwy 59 Deer Park Loop 610 Pasadena US Hwy 90 Stafford Sugar Land

Beltway 8 Brookside Village

Area Cities and Towns Counties Land Area of Houston MSA Baytown La Porte Chambers 5,995 square miles Bellaire Missouri City Fort Bend Conroe Pasadena Harris Population Density (2000) Liberty Deer Park Richmond 697 people per square mile Galena Park Rosenberg Montgomery Houston Stafford Waller Humble Sugar Land Katy West University Place

ouston, a vibrant metropolitan City Business Journals. The city had a growing rapidly. In 2000, Houston was community, is Texas’ largest population of 44,633 in 1900, growing ranked the most popular U.S. city for Hcity. Houston was the fastest to almost two million in 2000. More employee relocations according to a growing city in the United States in the than four million people live in the study by Cendant Mobility. 20th century, according to American metropolitan area, and all sectors are

1 NOTE

he June 2001 flooding caused by damage, according to estimates made Some projects mentioned in this Tropical Storm Allison resulted by the Harris County Appraisal District report may have been affected by the T in $4.88 billion in damage in and Harris County Emergency Man- flooding, particularly those in the hard- Harris County, including nearly $2 agement. Flooding destroyed an hit downtown area. Some projected billion damage to Texas Medical estimated 2,744 homes and 696 start or completion dates may have Center facilities. mobile homes. County businesses been delayed. Apartments and residential proper- suffered an estimated $1.08 billion in ties sustained about $1.76 billion damages

POPULATION Kelly Air Force Base, San Antonio

Houston MSA Population Year Population 1990 3,342,247 1991 3,430,208 1992 3,515,193 1993 3,580,428 1994 3,641,385 1995 3,698,830 1996 3,767,278 1997 3,841,934 1998 3,926,837 1999 4,010,969 2000 4,177,646 Source: U.S. Census Bureau

County Population Growth Growth 1990–2000 County 2000 Population (in percent)

Chambers 26,031 29.6 Fort Bend 354,452 57.2 Harris 3,400,578 20.7 Liberty 70,154 33.1 Montgomery 293,768 61.2 Waller 32,663 39.6

Source: U.S. Census Bureau

2 Area Cities With 10,000 or More Residents Growth 1990–2000 City 2000 Population (in percent)

Houston 1,953,631 15.1 Pasadena 141,674 18.7 Baytown 66,430 3.4 Sugar Land 63,328 43.1 Missouri City 52,913 45.9 Conroe 36,811 27.0 La Porte 31,880 14.3 Deer Park 28,520 3.4 Rosenberg 24,043 16.1 South Houston 15,833 10.2 Stafford 15,681 94.1 Bellaire 15,642 13.7 Humble 14,579 19.6 West University Place 14,211 10.0 Katy 11,775 48.0 Richmond 11,081 9.4 Galena Park 10,592 5.5

Source: U.S. Census Bureau

he population of the Houston rate faster than the state in the 1990s. Texas State Data Center. The Texas MSA increased at an average Population projections forecast an Water Development Board predicts a T annual rate of 2.4 percent during average growth rate of 2.1 percent per growth rate of 2.3 percent per year the past decade. Houston grew at a year through 2020, according to the through 2020.

3 Texas Metropolitan Area Population Change, 1990–2000 (in percent)

McAllen-Edinburg-Mission 48.5 Galveston-Texas City 15.1 Austin-San Marcos 48.2 Tyler 15.5 Laredo 44.9 El Paso 14.9 Dallas 31.5 Corpus Christi 14.3 Brownsville-Harlingen-San Benito 28.9 Victoria 13.1 Brazoria County 26.1 Waco 12.9 Houston 25.8 Texarkana 9.4 Fort Worth-Arlington 25.1 Lubbock 9.0 Bryan-College Station 25.1 Wichita Falls 7.8 Texas 22.8 Longview-Marshall 7.7 Killeen-Temple 22.6 Beaumont-Port Arthur 6.6 San Antonio 20.2 Abilene 5.8 Sherman-Denison 16.4 San Angelo 5.6 Amarillo 16.2 Odessa-Midland 5.1

Source: U.S. Census Bureau

Houston MSA Projected Population Texas State Texas Water Year Data Center Development Board

2005 4,402,934 — 2010 4,806,857 4,910,029 2015 5,167,001 — 2020 5,615,482 5,932,219

Sources: Texas State Data Center and Texas Water Development Board

Projected Population Growth, 2000–2020 (in percent)

50

40

30 41.9 40.2 20

10

0

Houston MSA Texas

Source: Texas State Data Center

4 Household Composition Harris County Texas

Median household size (1990) 2.59 2.73 Population younger than 18 (1999, in percent) 28.5 28.5 Population 65 and older (1999, in percent) 7.7 10.1

Source: U.S. Census Bureau

Ethnic Distribution (in percent) Harris County Texas Ethnicity 1990 2000 1990 2000

White 54.3 42.1 60.8 52.4 Hispanic 21.8 32.9 25.3 32.0 Black 19.4 18.2 11.7 12.2 Asian 4.1 5.1 0.3 3.2 American Indian 0.3 0.2 1.8 0.3 Other 0.1 0.1 0.1 0.2 Two or more races* — 1.3 — 1.1

*For the 2000 Census, the Census Bureau changed the “race” options, allowing people to report their race as “other” or as two or more races. Source: U.S. Census Bureau

ousehold size in Harris County grown more ethnically diverse over the average. The Houston MSA had a is smaller than the state aver- past decade. The Hispanic population median per capita income of $32,386 H age. The county also has a has seen a large increase, as it has in in 1999. The state average was smaller percentage of population age the state as a whole. Asian population $26,834, according to the U.S. Bureau 65 and older. The Houston area has density is almost twice the state of Economic Analysis.

5 EMPLOYMENT

Houston MSA Employment 120,000 118,000 116,000 114,000 112,000 110,000 108,000 106,000 104,000 102,000 100,000 98,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Source: U.S. Bureau of Labor Statistics

Houston MSA Unemployment Rate (in percent) 7 6 5 4 3 2 1 0 May May May May May May Sept Sept Sept Sept Sept Sept January-95 January-96 January-97 January-98 January-99 January-00 January-01

Source: U.S. Bureau of Labor Statistics

6 Top Ten Employers Top Ten Private Employers

Houston IndependentBergstrom School District Air Force Base, Compaq Austin Computer Corporation Education Computer technology 32,600 employees 19,785 employees City of Houston Continental Airlines Government Airline 22,223 employees 17,010 employees Compaq Computer Corporation Administaff Computer technology Staffing services 19,785 employees 15,968 employees Continental Airlines Southwestern Bell Airline Telecommunications 17,010 employees 14,039 employees Administaff Halliburton Company Staffing services Energy services 15,968 employees 13,244 employees Southwestern Bell Memorial Hermann Healthcare System Telecommunications Health Care 14,039 employees 11,454 employees U.S. Postal Service Kroger Food Stores Mail Grocer 13,906 employees 9,635 employees Halliburton Company Wal-Mart Stores Energy services Retailer 13,244 employees 9,000 employees Harris County Reliant Energy Government Energy Services 12,700 employees 7,756 employees Memorial Hermann Healthcare System Shell Oil Company Health Care Energy services 11,454 employees 7,255 employees

Source: Houston Business Journal, 2000

7 Employment Growth by Industry Houston MSA Texas

Employment growth, 2000 (in percent) 2.6 3.2 Unemployment rate (in percent) 4.1 4.2 New jobs in 2000 52,400 288,900 Employment growth by sector (in percent) Services 3.5 4.7 Trade 2.1 3.1 Manufacturing 0.2 0.1 Mining 0.2 2.3 Finance, insurance and real estate 0.8 1.3 Construction 5.1 6.2 Government 2.4 1.7 Transportation, communications and public utilities 3.7 5.1

Source: Texas Workforce Commission

Texas Metropolitan Area Employment Change, 1990–2000 (in percent)

Austin-San Marcos 58.8 El Paso 15.4 Laredo 40.3 Waco 14.3 McAllen-Edinburg-Mission 35.8 Lubbock 14.0 Dallas 30.4 Sherman-Denison 12.5 Brownsville-Harlingen-San Benito 30.1 Longview-Marshall 12.2 Bryan-College Station 29.2 Abilene 11.4 Killeen-Temple 28.7 San Angelo 10.7 San Antonio 28.6 Corpus Christi 10.3 Fort Worth-Arlington 23.7 Galveston-Texas City 8.2 Texas 23.3 Wichita Falls 7.8 Tyler 22.9 Odessa-Midland 6.5 Victoria 22.4 Texarkana 4.5 Houston 22.1 Beaumont-Port Arthur 3.5 Amarillo 18.6 Brazoria County 2.3

Source: U.S. Bureau of Labor Statistics, February 2001

mployment increased 2.6 per- 2000, down from 4.5 percent in 1999, The Houston branch of the Federal cent in the Houston MSA during according to the Texas Workforce Reserve Bank of Dallas forecasts a 3.5 E 2000, compared with a 2 percent Commission. The U.S. Bureau of Labor to 4 percent growth rate in local increase during 1999. Employment Statistics reports total civilian employ- employment during 2001, which growth in the area is similar to employ- ment in the Houston MSA was translates to a gain of 70,000 to 80,000 ment growth across the state. Total 2,099,491 in 2000. Government, jobs. Houston will benefit from higher nonagricultural employment was health care, airlines, computer oil prices and the growing strength of 2,081,500 for 2000. Unemployment manufacturing and oil and gas services the international economy. has fallen slightly to 4.1 percent for are major employers in the area.

8 JOB MARKET

adeco Industries opened a Industries Corporation added 43 Twister Communications of Conroe coffee processing plant employees to its research lab. Conti- closed in May 2000, laying off 250. C employing 50 in Houston in nental Polybags will relocate to Sugar Telxon Corporation merged with 2000. North American Galvanizing Land Business Park. The company Symbol Technologies. The Houston opened in Houston, employing 125. manufactures plastic bags for the retail office was closed in late 2000, and 500 Waste Management added 450 industry and will have 32 employees. employees were let go. employees in the Houston area in Applied Optoelectronics is building a Compaq Computers moved its 2000. Nationwide Credit added 200 manufacturing and research facility in Houston call center to Colorado, jobs to its back office operations. Sugar Land. laying off 100 employees during Anadarko merged with Union Pacific In Rosenberg, MKM Engineers summer 2000. The ebaseOne Corpo- Resources, adding 300 jobs in Hous- opened an engineering services firm ration closed, laying off 87 employees. ton. HCA-Healthcare opened a back employing 46. Bison Building Materi- Compaq Computers laid off 900 in office center and will add 380 employ- als expanded and added 50 employ- April 2000. Minute Maid laid off 94 ees over two years. ees. Western Brick added 30 employees. employees in May 2000. Service Noble Affiliates is moving its In New Caney, Wal-Mart plans to Corporation, a funeral home operator, corporate headquarters from Ardmore, open a distribution center. When the cut 33 employees in January 2000. Oklahoma, to Houston and will center opens in spring 2003, 350 Humana laid off 47 employees at employ 174. Blue Cross Blue Shield is people will be hired; employment will Memorial Sisters of Charity Health expanding its service center, adding eventually grow to 600. Network in December 2000. 125 employees. Novo Industries is In Baytown, Home Depot will Texas Instruments cut 125 jobs in adding 500 employees, according to complete a distribution center at the Stafford in spring 2001. Radisys closed the Texas Department of Economic end of 2001. The center will employ its Houston manufacturing plant in Development. 300. June 2001, laying off 132 employees. In Jacinto City, Longhorn Glass will In Stafford, General Technologies is E-Docs.MD closed in April 2001, open a longneck glass factory in adding 60 employees. In Deer Park, laying off 65 employees. Eagle Global summer 2001, employing 150. Schwan’s Ales, an Asian food manu- Logistics cut 400 jobs in Houston in Anheuser-Busch Companies is facturer, expanded in early 2001, 2001. Cingular Wireless will close its expanding its Jacinto City bottle plant, adding 120 employees. In Freeport, Houston call center during summer adding 120 employees. Associated Metals opened in 2000, 2001, laying off 250 employees. In Sugar Land, Cable and Wireless employing 125. opened, employing 72. Saudi Basic

9 MAJOR INDUSTRIES

he services sector added the The large concentration of govern- employment gained 400 jobs in 2000 most jobs to the Houston ment workers in the area is attributable while transportation, communications T economy and accounts for the to the school district, city and county and public utilities added 5,500 jobs. largest share of Houston’s workforce at governments and the Port of Houston. The finance, insurance and real estate 30 percent. Trade follows closely at 24 A total of 6,300 government jobs were sector added 900 jobs in 2000. percent of area employment, and added during 2000. Houston’s diversi- In Chambers County, rice represents government, the third largest sector, fied manufacturing sector, which 40 percent of agricultural receipts, represents 15 percent of area employ- accounts for 10 percent of local em- according to the Texas Agricultural ment. The services sector added ployment, is divided among industrial Extension Service. In Fort Bend and 21,800 jobs during 2000; trade added machinery, oil and gas, fabricated Harris counties, more than 60 percent 9,900 jobs. metal and other manufacturing. of receipts are from nursery products. Mining employment was the fastest Houston’s highly regarded medical Beef is also produced in the counties. growing industry in the area during industry includes many hospitals and a In Montgomery and Waller counties, 1999, despite low oil prices. Industry medical school. The medical industry, timber is a major product, representing employment grew as a result of con- a component of the services sector, 27 and 33 percent of receipts, respec- solidation within the oil and gas grew by 2.1 percent in 1999. tively. Nursery products also are sector. A number of major firms closed Construction employment grew by produced in these counties. In Liberty branch offices, bringing employment 7,500 jobs during 2000, primarily due County, timber represents 39 percent to their Houston headquarters. The to major office construction projects of agricultural receipts. mining sector added 100 jobs during throughout the city. Manufacturing 2000.

Total Agricultural Receipts, Projected 2001

County Total Receipts

Chambers $14,377,000 Fort Bend 160,160,600 Harris 254,346,000 Liberty 50,145,000 Montgomery 90,787,400 Waller 37,117,000

Source: Texas Agricultural Extension Service

10 BUSINESS CLIMATE

Tax Rates, 2000 Tax Rate per Taxing Entity $100 Valuation

City of Houston $0.65 Houston ISD 1.52 Community College 0.08 Hospital District 0.20 Harris County 0.36 Total $2.82

Source: Harris County Appraisal District

Houston MSA Retail Sales

Year Total Sales Sales per Capita

1990 $30,960,007,313 $9,263 1991 29,756,765,485 8,675 1992 30,960,007,313 8,807 1993 32,915,247,241 9,193 1994 36,341,345,551 9,980 1995 38,910,856,792 10,520 1996 43,128,300,464 11,448 1997 52,042,620,313 13,546 1998 53,206,789,517 13,550 1999 52,686,724,106 13,136 2000 55,410,473,362 13,636 State Average 2000 $12,612

Source: Texas Comptroller's Office

11 Exports to Selected Destinations – Houston MSA (in thousands) Market 1997 1998 1999 Percent of Trade Canada $2,548,380 $2,699,020 $2,746,764 14.5 Mexico 2,179,931 2,414,792 2,593,081 13.6 Caribbean, Central America 1,071,573 954,158 850,326 4.5 South America 3,320,260 3,083,696 3,034,906 16.0 Europe 3,187,893 3,747,321 3,652,447 19.2 Asia 3,442,797 3,159,837 3,614,180 19.1 Africa 1,222,992 1,263,507 977,794 5.2 Near East 1,342,786 1,531,790 1,202,029 6.3 Australia 279,237 264,666 296,043 1.6 Total all Countries $18,595,875 $19,118,959 $18,967,586 100.0

Source: Office of Trade and Economic Analysis, International Trade Administration

Houston MSA Top Exports, 1999 (in thousands)

Product Export Value Percent

Industrial machinery and computers $6,488,128 34.2 Chemical products 5,644,639 29.8 Refined petroleum products 1,647,676 8.7 Transportation equipment 952,064 5.0 Electric and electronic equipment 792,382 4.2 Nonmanufactured commodities 733,797 3.9 Scientific and measuring instruments 659,390 3.5 Fabricated metal products 619,570 3.3 Food products 423,286 2.2 Primary metals 401,069 2.1

Source: Office of Trade and Economic Analysis, International Trade Administration

xports were up 54.4 percent Houston offers a variety of incen- The hotel-motel tax rate varies from 10 between 1993 and 1999. Since tives to new and expanding busi- to 13.25 percent. Houston assesses a E NAFTA was put in place in nesses, including property tax abate- 13 percent hotel-motel tax. January of 1994, exports to Canada ments, franchise tax refunds and job The area has a variety of tourist and Mexico have increased 126 training funds. Site Selection magazine attractions including the Houston percent and 131 percent, respectively. ranked Houston fourth among the top Astros baseball team, which started the Canada is the country to which 100 U.S. cities for foreign investment 2000 season in the recently completed Houston exports the most products. in 1999. Enron Field. Six Flags Houston, Space Exports to Belgium were up the most The sales tax rate in the area varies Center Houston, the Houston Rockets during the 1993 to 1999 period, rising from 7.25 percent to 8.25 percent. basketball team and numerous 203 percent from $141 million to $428 Houston and most of the major area museums attract visitors to the area. million. cities assess a sales tax of 8.25 percent.

12 PUBLIC FACILITIES

new downtown arena is The Hobby Center for the Perform- tion. The project is expected to be planned to house basketball ing Arts, an $88 million project, is completed during 2001. A and hockey. The project was expected to be completed in 2002. Missouri City and Sugar Land are approved by voters in November 2000 Construction on an 800-car garage for seeking land on both sides of a nine- and is expected to be completed in the facility began in April 2001. mile corridor for the Brazos River 2003. Bayou Place is an entertainment shoreline. A total of 420 acres adjacent Ground broke in March 2001 on the complex downtown that has been to the proposed University of Houston- new Reliant Stadium. The $400 million open for three years. The West Hall of Fort Bend campus will be developed project is for the Houston Texans, an the former Albert Thomas Convention for recreational purposes. NFL football team. The stadium is Center is phase two of the project. The In Sugar Land, a $34.5 million bond expected to be completed in fall 2002. site will feature a mix of entertainment, package was approved in January The George R. Brown Convention retail and restaurant tenants. The 1999. The funds will be used for Center is planning an expansion to be development will expand Bayou Place design and construction of a multipur- completed in 2003. The $100 million from Bagby Street to the Buffalo Bayou pose recreation center. The city is project will add 500,000 square feet of waterfront. Former fire station number currently determining what types of exhibit and meeting space. one is being redeveloped into a facilities to include in the recreation In March 2000, the $265 million Landry’s Seafood restaurant and center. In 2000, the $1.8 million Enron Field, home of the Houston aquarium. Oyster Creek Park, which includes an Astros major league baseball team was Buffalo Bayou Waterfront is pursu- amphitheater, picnic area and hiking completed. ing a $2.7 million refurbishment of trails, opened. A new Houston Area Women’s Allen’s Landing Park and a $4 million A new fire station at Commonwealth Center facility is planned. The pathway link to Sesquicentennial Park. and Elkins will be built in Sugar Land. $500,000 project will provide a 125- The project is expected to be com- The station is expected to open in July bed shelter for women and children. pleted in 2001. Jones Plaza is undergo- 2001 and will be the fifth station in the The center is scheduled for completion ing a $5 million reconstruction. city. by December 2001. Completion of the urban plaza and Sugar Land is planning a full-service In January 2001, ground broke on outdoor entertainment venue is hotel and conference center. The the Houston Emergency Center. The expected to be completed in 2001. center will be located at U.S. Highway center on North Shepherd will house Harris County is planning the $119 59 and State Highway 6. No construc- emergency dispatchers for the Hous- million Civil Justice Center at Caroline tion date has been set. ton fire and police departments and and Franklin. Construction of the In Houston, $13.2 million will be 911 emergency network. The 128,000- parking garage begins in 2001. The spent to renovate the six-story building square-foot, $35 million building is Juvenile Detention and Administration at Preston and LaBranch; the DeGeorge expected to be completed in March Center is a $35 million project. A at Union Station will house homeless 2002. rehabilitation of the old Criminal veterans. The Smith Branch of the Houston Courts Building is scheduled to be Public Library reopened in December completed in 2003. 2000. The library closed in May 1998 In Pasadena, the Red Bluff Terrace for renovation. Community Center is under construc-

13 TRANSPORTATION AND INFRASTRUCTURE ISSUES

Houston Airline Boardings 1997 1998 1999 2000

Ellington Field 58,501 53,446 49,776 39,809 Houston Hobby 4,142,536 4,377,233 4,422,032 4,552,487 George Bush Intercontinental 14,227,089 15,492,571 16,464,987 17,521,731

Source: Houston Airport System

Houston Cargo (in millions of pounds)

1999 2000

Ellington 119 130 George Bush Intercontinental 566.4 604.3

Source: Houston Airport System

Port Statistics

Port of Houston Activity 1998 1999

Total calls 7,093 6,516 Total tonnage (in millions) 169.1 169.0

Source: Port of Galveston and Texas City

he Houston metropolitan area is just south of the Missouri City city total passengers. The Houston airport served by many major roads limits. The project began in summer system is the fourth largest multi- Tincluding I-610, I-10, I-45 and 1999 but stopped in June 2000 airport system in the nation and the U.S. Highways 59, 90 and 290. State because of wetland violations. Con- sixth largest in the world. Interconti- highways servicing Houston are 6, 99, struction will resume in August 2001. nental provides service to most 288, 225, Hardy Toll Road and In 2000, voters approved bonds for the destinations within the United States Beltway 8. Fort Bend Parkway Toll Road. on 20 air carriers and 16 cargo carriers A $17 million transfer station is Houston has three airports — and was the 11th busiest U.S. airport in planned for the 1900 block of Main in Ellington Field, Houston Hobby and passenger volume for 2000, according downtown. The facility will handle George Bush Intercontinental — and to the Airport Council International. bus and light rail transfers. ranks eighth in the world in interna- Hobby is the 40th busiest U.S. airport in In Missouri City, State Highway 6 is tional passenger volume and 14th in passenger volume. being widened from Knights Court to

14 Ellington primarily provides cargo a $78 million central concourse. The A light rail system is proposed in service; United Parcel Service uses it 20-gate concourse will take three years Houston with a 7.5-mile rail line as its cargo station. The number of to complete. running down Main Street between flights out of Ellington has declined in A permit to expand the City of downtown and the Astrodome. recent years as Continental Express has Houston’s Westside Airport Property Construction on the project is ex- reduced the number of flights from the in Waller County has been issued. The pected to begin in 2001, with comple- airport. property will be used to mitigate the tion set for 2004. Air Jamaica began offering service environmental impact at the Bush The City of Houston owns water between Houston and the Caribbean Airport. rights from Lake Houston and Lake in June 2001. Continental Airlines In Sugar Land, a general aviation Livingston and also gets water from the added service to Sacramento, Califor- reliever airport serves southwest Trinity River and Sabine River basins. nia, in May 2000. LanChile Cargo Houston and is the only public airport The city provides treated water to added cargo flights from Intercontinen- in Fort Bend County. A 27,000-square- surrounding areas. Houston increas- tal to Buenos Aires, Argentina, and Sao foot hangar-office was constructed by ingly will use the Sabine River basin Paulo, Brazil, in 2000. Western Airways to consolidate its for water. Water supplies are expected Intercontinental is undergoing a operation to the Sugar Land Airport. A to be sufficient through 2030. $1.7 billion expansion. A $193 million 15,400-square-foot hangar and office The City of Houston has been runway on the north side of the airport are under construction. The Texas upgrading its existing wastewater is expected to be completed in 2003. Department of Transportation ap- treatment system, including the A $591 million International proved $500,000 towards the con- rehabilitation of its Sims Bayou Services Expansion Program began in struction of an air traffic control tower facilities. Houston operates 47 2000 at Intercontinental. The project in December 2000. wastewater treatment plants, three includes construction of a new The Port of Houston is the busiest sludge processing plants and 325 lift international terminal, a new Federal port in the nation based on volume of stations. The city completed three new Inspection Services building, a parking foreign trade, according to the U.S. buildings at the Southwest Water garage, renovations to the current Census Bureau. Based on the value of Plant, an $11.8 million project, in international terminal and other foreign trade, it is the fourth busiest February 2000. improvements. port. The Houston Ship Channel A $150 million water treatment plant The new international terminal will handles more than 65 percent of is under design. The plant will be be used exclusively by Continental container traffic in the Gulf of Mexico. located near Lake Houston. Airlines and will add 15 gates at a cost During 1999, the port handled 169 A sanitary sewer system is planned of $235 million. The 685,000-square- million short tons, the same amount it for Braeburn Gardens. The neighbor- foot Federal Inspection Services handled in 1998. The port had 6,516 hood is currently on individual septic Building will house the Immigration ships call during 1999. Petroleum and systems. The design portion of the and Naturalization Service; U.S. petroleum products are Houston’s project is expected to be completed by Customs Service; Department of leading import and export commodities. March 2002 with construction Agriculture; Fish and Wildlife Service Two major railroads and 150 beginning in summer 2002. and other federal agencies. The $190 trucking lines connect to the port. A Harris County is moving the million building is scheduled for $387 million bond issue to build a county’s water distribution system completion in 2004. container and cruise ship terminal was from groundwater to surface water. A total of $85 million will be spent to recently passed by voters. A $500 The switch will be made by 2003 at a expand cargo facilities. The northeast million project to dredge the Houston cost of $1 billion. cargo area will provide more than Ship Channel has begun. The channel In Pasadena, several water and 500,000 square feet of cargo terminal will be widened from 400 to 530 feet sewer projects are under way. Davis space. A consolidated rental car and deepened from 40 to 45 feet. The sanitary sewer and the West Ellaine lift facility is under construction. The project is expected to be completed in station are 90 percent complete. $131.5 million project will be com- 2002. An expansion of the Barbours Golden Acres drainage and Houston pleted in 2002. Cut Container Terminal began in Avenue drainage projects are under A new $8.3 million air traffic control March 2001. The project will cost $40 way. tower opened in December 2000 at million and take five years to complete. Hobby. Ground broke in June 2000 on

15 URBAN GROWTH PATTERNS

Single Family Multifamily

FM 1960 SH 249 Single Family

Office Industrial US 290 FM 1960 Retail SH 8 I 45 US 59

Industrial SH 6 Industrial I 10 Office I 10 SH 8 Mixed I 610 Retail Multifamily Use Office Retail I 610 SH 225 I 45 Industrial Map 1. Growth Areas Multifamily US 59 SH 8 Houston, Texas Census Place Water Area SH 6 Highway SH 288 Interstate Highway Single Family Retail Source: Real Estate Center at Texas A&M University

ap 1 shows the major growth and in The Woodlands area, north of development is spread across the city. corridors within Houston. Houston. Apartment growth is concen- Significant retail and office develop- M Strong residential growth has trated downtown and in north Hous- ment has been occurring along the been occurring in Fort Bend County ton. Retail, office and industrial Katy Freeway.

EDUCATION

Educational Level, Persons Age 25 and Older (in percent)

Level of Education Harris County Texas

High school graduate 23.3 25.6 Some college, no degree 21.3 21.1 Associate’s degree 4.9 5.2 Bachelor’s degree 17.3 13.9 Graduate or professional degree 8.1 6.5

Source: U.S. Census Bureau, 1990

16 Local College and University Enrollment Spring 2005 2010 School 2000 (estimated) (estimated)

University of Houston 32,123 35,513 37,881 North Harris Montgomery Community College 26,426 27,646 30,279 Houston Community College 49,520 40,203 43,655 San Jacinto College 21,991 25,441 27,187 University of Houston-Downtown 8,951 9,833 10,870 University of Houston-Clear Lake 7,580 8,213 8,677 Texas Southern University 6,886 7,478 8,075 Prairie View A&M University 6,609 7,197 7,787 Lee College 6,225 6,608 6,987 Wharton County Junior College 4,571 5,009 5,186 University of Texas Health Science Center 3,143 N/A N/A Houston Baptist University 2,519 N/A N/A Baylor College of Medicine 4,514 N/A N/A Rice University 4,202 N/A N/A University of St. Thomas 2,744 N/A N/A South Texas College of Law 1,231 N/A N/A Texas Woman’s University 847 N/A N/A

Sources: Educational institutions and Texas Higher Education Coordinating Board, January 2001

he University of Houston at Fort At Prairie View A&M University, a library within the existing law school Bend will have a new $11 million new science building and University building will double the size of the T facility for fall 2002. Construc- College housing complex were current library. Construction was tion began in October 2000 and will dedicated in November 2000. The $28 completed in spring 2001. be completed in March 2002. Enroll- million science building has four Baylor College of Medicine com- ment at the campus is expected to be stories and 166,000 square feet of lab pleted a Center for Comparative 2,000 when the campus opens. and auditorium space. The University Medicine in 2000. The Denton A. The University of Houston is College complex provides housing for Cooley Building is scheduled for spending $6 million to renovate freshman. completion in 2001. The M.D. Robertson Stadium, increasing seating Lee College is located in Baytown. Anderson Cancer Center Faculty by 10,000. The University added a Lee Drive is undergoing phase two of a Center is currently under construction. master’s degree in social work that will construction project. The Texas Children’s Hospital project be offered in Corpus Christi. The University of Texas Health is scheduled for completion in 2002. North Harris Montgomery Commu- Science Center has plans for a new Rice University has the fourth-largest nity College District is the fifth-largest Nursing and Biomedical Sciences endowment per student among private community college district in Texas. building. The $40 million building will American universities. Rice University Tomball College is under phase three be completed by 2003. The eight- completed renovations on Keck Hall in of construction and is projected to be story, 190,000-square-foot building fall 2000. The $14 million renovation completed by May 2001. A new will be on the site of the current added new research and teaching community college will be built in the Graduate School of Biomedical laboratories. The second phase Cy-Fair area and will open in fall 2003. Sciences, which will be razed. The included a 13,740-square-foot The district has acquired 200 acres for center has plans for a $16 million addition. The new Humanities the college at Barker-Cypress and Mental Sciences Institute. No con- Building was dedicated in October West roads. The campus will have at struction date has been set. 2000. The Jones Graduate School of least five buildings. South Texas College of Law broke Management Building is scheduled for At San Jacinto College North, a new ground in October 1999 on the Fred completion in summer 2002. The campus technology training center Parks Law Library. The five-story Fondren Library will be expanded. opened in January 2000. Texas Southern University has two new construction projects and several renovation projects underway.

17 HOUSING

Housing Affordability – First Quarter 2001

Percent of Households THAI for That Can Afford First-time Median-priced Home THAI* Homebuyers

Fort Bend 80 2.05 1.54 Houston 62 1.35 1.15 Montgomery County 66 1.49 1.19

*The THAI is the ratio of median household income to the income required to buy the median-priced home using currently available mortgage financing. Standard financing is a 30-year loan covering 80 percent of the cost of the home. A THAI of 1.00 indicates that the median household income is just enough to qualify for a loan sufficient to purchase the median-priced home. Source: Real Estate Center at Texas A&M University

Houston MSA Single-family Permits (in units) 30,000

25,000

20,000

15,000

10,000

5,000

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: U.S. Census Bureau

18 Average Sales Price of Single-family Home, Houston Area $170,000

$140,000

$110,000

$80,000

$50,000 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

Houston Fort Bend Co. Montgomery Co.

Source: Real Estate Center at Texas A&M University

Single-family Home Sales Volume, Houston Area, 2000 (Number of Units) 6,000

5,000

4,000

3,000

2,000

1,000

0 May July April June March August January October February December November September

Houston Fort Bend Co. Montgomery Co.

Source: Real Estate Center at Texas A&M University

19 Price Distribution of MLS Homes Sold, Houston Area (in percent) Houston Fort Bend Montgomery

Less than $60,000 11.1 3.1 8.8 60,000–79,999 15.6 12.3 10.1 80,000–99,999 16.0 14.8 12.4 100,000–119,999 10.6 11.4 11.9 120,000–139,999 10.3 12.4 12.1 140,000–159,999 7.3 9.4 8.0 160,000–179,999 5.9 9.0 6.1 180,000–199,999 4.1 6.0 5.6 200,000–249,999 6.3 9.0 8.2 250,000–299,999 4.2 4.9 5.8 300,000 or more 8.6 7.7 11.1

Source: Real Estate Center at Texas A&M University

Houston Final Plats, 2000 Number of Number of Subdivision Lots Created Subdivision Lots Created

Inside City Limits Outside City Limits Woodlands Village of Alden Bridge 1,253 Oak Place Court 472 Driscoll Place 674 Summerwood 471 Woodlands Village of Indian Springs 284 Asbury Rose Subdivision 455 Villages of Silverado 267 Eagle Springs 345 Highland Timbers 246 Gleannlock Farms 344 Memorial Heights 228 Woodbridge of Fort Bend County 294 Coles Crossing 227 Westfield 265 Candlelight Place 214 Greens at Willow Fork 206 Woodlands Village of Sterling Ridge 175 Rose Place 203 Cinco Ranch West 171 Park at Mission Glen 194 Malone Gardens 167 Alana Park 185 Eaglewood 165 Woodlands Village of Grogan’s Mill 176 Flores Ranch Estates 150 Oak Grove Garden Homes 175 Newman Street Garden Homes 131 Savoy Two 175 Langham Crossing 128 Millennium Homes on Rodrigo 173 Grand Lakes 121 Alavarez Dickson Subdivision 172 Old Farm Crossing 119 JS Holman Outlot 172 Pine Oak Estates 119 Saddlebrook Gromley Addition 172 Taghi Subdivision 119 Park at Hartman 171 Falcon Point 116 Premier Communities at Shaver 171 Royal Oaks Country Club 110 Rodrigo Court 168 Alfalah 106 New Forest 166 Lakes of Parkway 160 Maco Estates 160 Lakes of Eldridge North 158 Woodlands Carlton Woods at Village of Sterling Ridge 157

20 Houston Final Plats, 2000 (continued) Number of Number of Subdivision Lots Created Subdivision Lots Created

Townhomes Inside City Limits Outside City Limits (con't) Sutton Gillette Townhomes 749 Northridge Park 155 Drew Street Townhomes 168 Bridgegate 152 Lakeside Townhomes 100 Augusta Pines 150 McIlhenny Street Townhomes 52 Community Chapel/Liberty Road Manor 150 Champion Village Townhomes 51 Cypresswood Crescent 150 Rose Court Townhomes 31 Fuqua Gardens 145 Gray Avenue Townhomes 23 Gramercy Place 144 West Court Townhomes 22 Villages of Northpointe 144 Feagan Street Townhomes 20 Katy Prairie Estates 137 Gillette-Oneil Townhomes 13 Oak Park Trails 137 Dolores Street Townhomes 12 Wortham Landing 135 Gibson Street Townhomes 12 Waterside Estates 131 Sandman Townhomes 12 Park Forest 130 Four Eleven West Pierce Townhomes 11 Woodlands Village of Carlton Woods 128 Park Street Townhomes 11 Parkside at Perry 125 McVaugh McGowan Townhouses 10 Dorrington Manor 124 Drake Place 124 Townhomes Outside City Limits Grand Oaks 124 Detering II Townhomes 574 Lindsey Acres 121 Miramar Street Townhomes 244 Devonshire Woods 120 Southampton-Live Work Townhomes 213 Feagan Street Courtyard Homes 120 Lillian Court Townhomes 156 Woodspring Forest 120 SEIMA Town and Patio Homes 144 John A. McGowan House Subdivision 119 Windfern Townhomes 140 Lillian Courtyard Gardens 119 Bremond Street Townhomes 131 Peckham Street Garden Homes 119 O’Neil-Gillette Townhomes 112 South University Place 119 Dorrington Townhomes 106 Lakes of Sterling Gate 117 Floyd Townhomes 106 Louetta Lakes 114 Michigan Street Townhomes 102 Lakewood Grove 113 Minola Avenue Townhomes 96 Meadows of Northwest Park 113 Oak Place Townhomes 93 Villages of Bear Creek 113 McDuffie Street Townhomes 84 Glenhaven Estates Subdivision 111 LaBranch Street Townhomes 80 McClendon/Pinnacle Addition 110 Reinerman Townhomes 68 Hutchinson Subdivision 106 Standford Place Townhomes 60 Mellon Addition 106 Mason Street Townhomes 32 Liang Dott Subdivision 105 French Village Townhomes 28 West Oaks Mews 105 Big Creek Luxury Townhomes 26 Darien Street Cove 104 Meadows of Clear Creek 104 Northwood Pines 104 NEC Southmore and Jackson 103 Postwood Green 102 Stone Forest 102 Northlake Forest 102 Waterside Village 101 Briarhurst Park 101

Source: City of Houston Planning Department

21 n the first quarter of 2001, 6,242 Sienna Plantation, a 10,500-acre West Lake Houston Parkway. The first new homes were permitted in the master-planned community in Mis- homes will be completed in 2001 and IMSA. In 2000, 23,917 single-family souri City in Fort Bend County, had range in price from $140,000 to home permits were issued in the 279 homes started with prices from $300,000. Fall creek is nearby with Houston MSA at an average value of $136,000 to $1 million. The project is 1,260 acres under development. Fall $136,500. In 1999, 22,248 single- at Highway 6 and Fort Bend Parkway. Creek will have 1,550 new single- family homes were permitted at an When built out, the development will family homes at Dusty and Beltway 8. average value of $130,500. have 20,000 homes. The first of the Home prices will range from $160,000 In Houston, the number of existing golf courses that are part of the to $750,000. Summerwood developed homes reported sold during 2000 was development opened during spring 300 home lots during 2000 in the same up 1.4 percent from 1999. A total of 2000. area. 51,433 homes sold through the MLS Coles Crossing had 327 homes In far northwest Houston, an 8,000- during 1999 at an average price of started in 2000 with prices ranging acre, master-planned community is $137,200, compared with 2000, when from $126,000 to $325,000. The planned at Katy-Hockley Road on U.S. 52,147 homes sold at an average price community is at U.S. 290 and Barker- 290. Home sales are expected to begin of $153,500. During 2000 there was Cypress Road. Canyon Gate at in 2003. an average of 4.2 months of inventory Stonegate, at U.S. Highway 290 and On Westheimer, one mile west of on the market. Barker-Cypress Road, had 288 homes the tollway, 500 acres are under In Fort Bend County, 6,924 homes started with prices from $140,000 to development for an upscale residential sold in 1999, compared with 7,240 $292,000. community that includes an 18-hole homes in 2000. The average price rose Gleannlock Farms had 297 homes golf course. Home prices will average from $149,100 in 1999 to $161,300 in started with prices from $172,000 to $500,000. The first homeowners 2000. There was an average 4.3- $750,000. The community is off FM moved in during 2000. month inventory of homes for sale. 249 and Spring Cypress Road and Stonemill Courts will have 64 homes In Montgomery County, a total of includes an equestrian center and 27- priced below $126,000. The first 4,512 homes were reported sold hole golf course. homes will be completed in spring through the MLS during 2000, up from New Territory started 271 homes 2001. 4,247 in 1999. The average home in priced from $138,000 to $800,000. At Richmond and Wilcrest, the 2000 sold for $164,900, compared The community is located in Fort Bend Royal Oaks Country Club is under with $151,600 in 1999, and the County and includes 40 neighbor- construction. The club is part of the average inventory in 2000 was 6.4 hoods. $500 million Royal Oaks neighbor- months. Greatwood, at U.S. 59 and Crabb hood that will include 900 homes The Woodlands was the most active River Road in Sugar Land, had 267 priced from $275,000 to $1 million. residential community during 2000, homes started in 2000 priced from In Katy, two master-planned with more than 1,500 new homes $142,000 to $1 million. communities are under way. Grayson started. Builders in the development Black Horse Ranch will have 550 Lakes broke ground in 2001 on 325 include Lennar, Life Forms, Emerald, homes and is located at House Hahl acres at Katy-Flewellen and Katy- Plantation, Ryland, Newmark, Road and Old Hempstead Highway. Gaston. The project will have 500 Morrison, David Weekley, Village, Stablegate is a planned 220-home homes with the first lots available in Ashton Woods and Darling. development at Telge Road and the second quarter of 2001. Homes In the Woodlands, Ryland homes Stablegate Drive. will be priced from $175,000 to started construction in late 2000 on Beazer Homes is building 120 $350,000. Seven Meadows will have homes priced from $90,000 to the low homes at Buffalo Speedway and West 2,500 homes around the Meadow- $100,000s. The homes have 1,100 to Fuqua. The 1,000- to 1,800-square- brook Farms golf course at Grand 1,400 square feet with three or four foot homes will be priced from Parkway and FM 1093. bedrooms. Carlton Woods has started $70,000 to $100,000. Near Katy, a 265-acre community is construction on phase one with 159 In Fort Bend County, at U.S. 59 and planned with homes priced from lots. The homes will have an average Grand Parkway, a 545-acre expansion $120,000 to $250,000. The 800-home price of $318,000. When completed of the Riverpark project is under way K&S Falcon Ranch is located on the subdivision will have 520 lots and and will add 1,200 new homes to the Westheimer Parkway west of the a golf course. Phase two began in May area. Waterside Estates is a new 600- Grand Parkway. 2001. acre development on the Grand Dominion Estates will include 39 Cinco Ranch was the second most Parkway. Grand Mission is at FM 1093 single-family homes and 44 town- active community started in 2000. The and Harlem Road. The 2,000 home homes. The townhomes will range development will have 710 homes development will have lots available from 1,400 to 1,900 square feet and priced from $127,000 to $1 million at in January 2002. Orchard Lakes is at will sell for $45,000 to $60,000. The Westheimer Parkway and Peek Road. FM 1464 and Oyster Creek. Homes project broke ground in October 1999. Kingwood had 445 home starts in will sell from $170,000 to more than Plans include 500 to 700 homes over 2000 with prices from $87,000 to $1 $500,000. the next ten years. million. The community is just east of Eagle Springs is a 4,000 home The Mews is a 400-home develop- U.S. 59 and north of Humble. development at Atascocita Road and ment in Kingwood targeted to couples

22 without children. Homes will be In Memorial Heights, the Park at Bissonnet and Buffalo Speedway. The priced from $240,000 to $320,000. Memorial Heights will have 150 three-story homes are priced from The project is surrounded by the back single-family and townhomes priced $309,000 to $359,000. A 16-townhome nine holes of the Lake Course at from $300,000 to $650,000. Occu- development is planned at South Kingwood Country Club. The first pancy is under way. Boulevard and Kirby. residents will take occupancy in 2001 Doubletree Glen will have 364 At Commerce Street near U.S. 59, with construction expected to be homes. Construction began in spring 120 townhomes will be built starting in completed by the end of 2001. 2001. The project is located at Impe- fall 2001. The metal-skinned homes Augusta Pines will have 600 upscale rial Valley Drive and Humble- will begin at $150,000. homes and an 18-hole golf course. Westfield Road in north Houston. Washington Brownstones began Homebuilding started in early 2001 on Clayton Oaks at Highway 6 and construction in June 2001, with this project in far north Harris County Westheimer Road will have 176 homes completion set for early 2002. The 20 south of The Woodlands. A total of 161 priced in the $120,000s. To date, about units are priced from $209,000 to homes will be included in the first phase 600 homes have been built in Clayton $239,000. with prices starting at $350,000. The Oaks. development also will include garden Southampton Townhomes is a 28- homes priced at $225,000 and more. unit project under construction at

MULTIFAMILY

Houston MSA Multifamily Building Permits

45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: U.S. Census Bureau

23 Houston Apartment Statistics, March 2001 Texas Metro Houston Average

Average rent per square foot $0.73 $0.69 Average rent for units built since 1990 $0.99 $0.95 Average occupancy (in percent) 95.2 94.7 Average occupancy for units built since 1990 (in percent) 95.8 92.3

Source: Apartment MarketData Research

uring 1999, 9,525 multifamily A 264-unit, four-story upscale project will open in late 2001 with units were permitted; during complex is planned on Memorial rents at $1.06 per square foot. D 2000 this figure fell to 6,765. Drive east of Shepherd Drive. Con- The Hanover Company is planning a In the first quarter of 2001, 1,587 new struction was expected to begin in the 33-story apartment tower in the Galleria units were permitted. first quarter of 2001 after a Houston area. The 356-unit project will be Between January 2000 and March Community College System adminis- called 1200 Post Oak. Construction 2001, occupancy rates rose 1.4 tration building on the site was began in April 2001 and is expected to percentage points overall and 7.1 demolished. The project is expected to be completed in fall 2002. percentage points for apartments built be completed by mid-2002. The rental A 19-story residential tower is since 1990. Rents rose by ten cents rates will average $1.23 per square planned on Montrose Boulevard at overall and one cent for units built foot. Bissonet. The project's 288 units will since 1990. The Lofts at Ballpark is under rent for $1,200 to $2,500 per month. A total of 42 apartment projects with construction next to Enron Field. The Buckhead Investment Partners has 10,982 units were completed in 2000. project has 374 units. Sabine Street three apartment projects under Twenty-six projects with 7,579 units Lofts, a 198-unit apartment complex at construction. The projects, located at were under construction at the end of Sabine Road and Memorial Drive, will Bammel-North Houston Road near FM 2000, according to O’Connor and be completed by early summer 2001. 1960, Watkins Way in Friendswood Associates. During 1999, 16,888 units Ballpark Place was expected to and at FM 529 and Highway 6 in were completed. Seventeen projects break ground in 2001. The 34-story Copperfield, are expected to be with 4,285 units were proposed at the development overlooking Enron Field completed by spring 2001. end of 2000. Map 2 shows the loca- will include 255 apartments. AMLI at Kings Harbor in Kingwood tions of multifamily housing permits The Humble building at the corner is under construction. The 300-unit issued. of Main and Dallas is being converted complex is located on the waterfront of A 704-unit apartment complex was into 82 apartments and two hotels. The Lake Houston. Construction is ex- scheduled to break ground in the first project will open in fourth quarter pected to be completed in the fourth quarter of 2001 in west Houston. The 2001. quarter of 2001. Royal Luxor Court will rent for an Post Midtown Square Phase II is a Washington Courtyards opened in average of 88 cents per square foot. 13-story, 200-unit complex under October 2000. The 74-unit apartment The first phase, with 352 units, is construction. Units will rent from $800 complex has some units set aside for expected to have units available in to $2,500 per month. A 282-unit low-income residents. Tidwell Estates October 2001. The complex is at complex is planned in Midtown at is a 132-unit apartment complex in Richmond Avenue and Eldridge Fannin and San Jacinto. Rental rates northeast Houston. The mixed-income Parkway. will be $1.35 per square foot. complex opened in October 2000. Gables Meyer Park II broke ground The former Tennison Hotel will be on 296 apartments. The $27 million converted into lofts. One Bayou Place Condominiums project will rent units for $1.09 per will have 27 units in the seven-story Villa d’Este opened in summer 2000 square foot. building. The former Gulf Publishing in the Galleria area. The 100-unit The Estates at Memorial Heights is a Building has been demolished to make project had an average sales price of planned 432-unit apartment project way for a 32-story apartment building. $800,000. The project has been such a located at Memorial Parkway and In Southwest Houston, Gables success that several other projects are Studemont Street near downtown Residential Trust is building a 296-unit planned in the area. A 30-story Houston. Construction began in early apartment project at Loop 610 and condominium building with 170 to 2001. South Post Oak. The $27 million 200 units is planned just north of the

24

SH 249 FM 1960

US 290 FM 1960 SH 8 I 45 US 59

SH 6

I 10 I 10 SH 8 I 610 I 610 SH 225 I 45 Map 2. Multifamily Building Permits, 2000 Houston, Texas Census Place US 59 SH 8 Water Area Highway Interstate Highway SH 6 SH 288 Multifamily Source: Houston Building Permit Office

Galleria. Units will range in price from than $1 million. Completion is The Westheimer is a seven-story $300,000 to $3 million. No construc- expected in spring 2002. luxury condominium project on tion date has been set. Montebello is a Memorial Cove Lofts is a four-story, Westheimer near Dunlavy. The project planned 30-story condominium tower 20-unit condominium loft building will have 47 units priced from in the Galleria area on Uptown Park under construction at Memorial Drive $190,000 to $500,000. Construction Boulevard. The 112-unit tower is and Glen Cove. Units will be priced will be completed in summer 2001. expected to start construction by the from $274,900 to $700,000. The Tanglewood is a six-story, 62- end of 2001 with completion in 2003. A $30 million, 80-unit, eight-story unit condominium tower that started At Texas and Bastrop, The Stanford condominium project is under construction in May 2001. The is a planned 40-unit condominium construction on Memorial Drive and condominiums on Fountainview near project. Construction is expected to Houston Avenue. Construction began San Felipe are priced from $200,000 to start in early 2002. Units will be priced in spring 2001 with completion in fall more than $1 million. from $235,000 to $496,000. 2002. The units will sell from At Buffalo Speedway and Bissonnet, At Travis and Walker downtown, the $150,000 to $500,000. South Boulevard Place is an 11-story Commerce Towers is being converted An 89-unit condominium tower is condominium tower under construc- into 132 condominium units priced under construction in the Rice Village tion. The 64 units are scheduled to be from $220,000 to $2 million. Con- area. 2520 Robinhood at Kirby is the ready in late 2001 and will be priced struction is under way. name of the 17-story tower. Prices will from $360,000 to $1 million. The old Wadell Furniture warehouse range from $271,000 to more than $1 Pine Hollow tower at Woodway and will become Sampson Lofts, an 86-unit million. Post Oak is being converted from project. The project is located at The Mark is a 30-story, 300-unit rentals to condominiums and has been Sampson and McKinney. Construction project under construction at Sag Road renamed Campton at Post Oak. Prices is expected to be completed by the end and Richmond. The project is sched- begin at $289,000. of 2001. The units will be priced less uled for completion in July 2001 and The Gables River Oaks is being than $100,000. has units priced from $150,000 to converted into condominiums. The The Colonnade at Memorial is a $390,000. 228-unit complex at Welch and San planned high-rise condominium On Kirby Drive in the Southampton Felipe is being renamed The Renais- project north of the Galleria near North area, an 11-story, $24 million condo- sance at River Oaks. Units will be Post Oak Lane and Memorial Drive. minium tower is planned. The units priced from $130,000. The 13-story building will have 64 will be priced from $350,000 to more units priced from $300,000 to more than $1 million.

25 MANUFACTURED HOUSING

Houston MSA Manufactured Home Sales Proportion of New Manufactured Single-family Homes Homes Sold (in percent)

1997 4,860 21.3 1998 5,704 20.8 1999 5,577 20.0 2000* 3,908 17.6

*Through third quarter 2000 Source: Texas Manufactured Housing Association

akewood Village Mobile Home Subdivision platted 93 lots in LHouston in May of 2000. Imperial Valley Manufactured Hous- ing Community had 57 lots platted in August 2000. Gaylord Mobile Home Park platted 13 lots in January 2000.

SENIORS HOUSING

ccording to the Texas Depart- Grand Court Sugar Land-Greatwood ment of Social Services, there and Grand Court South Shore Harbor A are more than 4,800 assisted- opened in late 2000 with both inde- living units in Houston. The Bucking- pendent- and assisted-living units. ham, an $87 million retirement The Concierge, an 89,000-square- community, is planned at Westheimer foot, long-term care facility opened in and Fondren. The project will have 2000. 206 independent-living apartments. Construction is scheduled to be completed in 2002.

26 RETAIL MARKET

Retail Construction Statistics, Year End 2000 Square Feet Square Feet Completed Under Construction

Inner Loop 140,000 138,405 Northeast 264,900 0 Far North 500,000 0 Near Northwest 267,322 270,000 Far Northwest 82,322 93,000 Near West 828,291 88,000 Far West 432,151 0 Far Southwest 170,000 652,487 Far Southeast 336,780 696,000 Near Southeast 0 700,000 Totals 3,021,766 2,637,892

Source: CB Richard Ellis

Hotel Occupancy and Rental Rates

1999 2000* Houston Texas Houston Texas

Occupancy rate (in percent) 62.5 63.7 65.9 67.2 Average daily rental rate $85.42 $85.11 $87.14 $86.75

*Through November 2000 Source: PKF Consulting

27 Hotel Occupancy and Rental Rates in Houston Submarkets, 2000*

Occupancy Average Location (in percent) Daily Rate

Central business district 71.9 $151.83 Galleria-Post Oak 72.9 122.38 Texas Medical Center 79.5 82.14 Intercontinental 69.7 79.53 Hobby Airport 68.2 68.11 Clear Lake 61.0 78.09 Southwest Houston 59.2 71.08 Stafford-Sugar Land 51.5 59.75 Westchase 63.7 79.22 Katy Freeway 63.7 71.77 Northwest 62.7 65.74 Astrodome-South Main 48.7 64.21 East-Baytown 60.1 49.93

*Through November 2000 Source: PKF Consulting

ental rates increased in all Houston store will be located at one. This sector will account for 18 property types to an average of Champion Forest at Spring Cypress percent of new retail space in 2001, R$18.40 per square foot in 2000. and will open in fall 2001. The store at according to Wulfe and Company. Regional malls averaged $38 per Beechnut and Kirkwood in west Kohl’s plans to open 15 department square foot, community centers $17, Houston will open in late fall. A store stores in the Houston area. The stores neighborhood centers $18 and existing at Kempwood and Gessner will open will have between 90,000 and strip centers $16. Houston’s overall in summer 2001, as will a location at 100,000 square feet. shopping center occupancy rates are at Highway 6 and Rippling Water. A Restaurant sales are projected to 89 percent, according to CB Richard location at Grant at Eldridge in increase 7.5 percent during 2001 to Ellis. The Inner Loop had a vacancy northwest Houston will open in early $5.6 billion, according to the Texas rate of 7 percent, Near North, 2 2002. In addition, the company plans Restaurant Association. percent and Far Southwest, 14.7 to open seven new 200,000-square- Stage stores closed six stores in percent. Map 3 shows Houston retail foot-plus supercenter stores and at Houston. Montgomery Ward will be building permit locations. least three new Sam’s Clubs. One closing in the Houston area in 2001. Construction of 6.37 million square Sam’s Club will be located at Highway Two Sears stores closed in the first feet of retail space will be completed 6 and U.S. 90A in Fort Bend County. quarter of 2001. in the greater Houston area in 2001, The store is scheduled for completion according to Wulfe and Company. is spring 2002. Hotels-Motels This represents a 65 percent increase Target has three new SuperTargets The Stafford Sugar Land area over 2000 when more than three under construction and Kmart will experienced the largest increase in million square feet of space became open two new stores. Costco is daily rental rates for hotel rooms — available. Ninety percent of the new entering the Houston market and plans 10.4 percent. The next largest growth construction is expected to be for to open two wholesale club stores. rate was the Central Business District chain store retailers. Twenty new One will be located near Willowbrook at 4.9 percent. supermarkets will be constructed and Mall and the second at the Katy Occupancy rates were up for almost opened, including nine for H-E-B, five Freeway and Bunker Hill. all of the subareas. The Texas Medical for Albertsons, three for Kroger and Lowe’s plans six new home centers Center area had the largest increase, three for Randalls. during 2001. Home Depot plans four 5.8 percent, followed by the central Wal-Mart is planning to open five new stores. Great Indoors plans to business district at 4.7 percent, neighborhood markets. One north open two stores and Garden Ridge according to PKF Consulting.

28 The 259-room Crowne Plaza Down- Hilton Gardens hotel will open in opened at Fountainview and town in Cullen Center opened in April winter 2001. Westheimer. A store is planned for 2001. The building underwent a $25 Shoney’s Inn opened at Interconti- 2001 on Gulfgate. A location at million renovation. Several other nental Airport with 71 rooms in spring Highwand Knolls and Mason Road hotels are under construction in the 2000. The Jesse H. Jones Rotary House opened in early 2001, as did a location downtown area including a 114-room International in Houston is expected to at Fry Road and I-10. A location in far Holiday Inn Express, a 76-room Best add 125 rooms at a cost of $13.6 northeast Houston in Atascocita will Western, a 171-room Residence Inn million. The 12-story addition is open in 2001. Austin Parkway at and a 191-room Courtyard by Marriott. expected to open in 2001. Highway 6 will see a new store in Starwood Hotels and Resorts opened A 55-room Microtel opened in 2001. A store at Beechnut and Beltway the 252-room St. Regis Hotel in 2000. January 2000 in Clear Lake. A 59-unit 8 is planned for 2002. A 143,000- A number of other hotels are Hawthorne Suites is under construc- square-foot shopping center is planned proposed in the downtown area. One tion at Will Clayton Parkway in on Westheimer between Kirkwood would be at Texas Avenue at the Houston and will open in fall 2001. and Royal Oaks Blvd. The center will World Trade Center and another in the Hilton Homewood opened a nine- be anchored by H-E-B. former Sam Houston Hotel. The room hotel in 2001 at I-45 near the Albertsons will be part of the Tennison Hotel at Washington Avenue Woodlands Mall. Roanoke Crossroads at Texas Highway and Bagby Street may be turned into a 114 and U.S. 377. Auchan opened a boutique hotel. Retail Development second store in southeast Houston in A 1,200-room Hilton hotel is At Memorial Drive and Washington September 2000. The store has planned at Crawford and Polk near the Avenue Walgreens plans a store. A 235,000 square feet. Randalls Food George R. Brown Convention Center. 20,000-square-foot retail center is Market will open a store in midtown in The convention hotel is scheduled to being developed and will open in fall spring 2002. Fry’s is planning to open open in October 2003. 2001 at the same intersection. a 100,000-square-foot electronics At U.S. 59 and Franklin near Enron The General Cinema theater at store at I-45 and West Road in early Field, the 314-room Magnolia Hotel Meyerland Plaza closed in October 2001. will open in fall 2002 in the former 2000 but will be reopened by Enter- River Oaks Dodge plans a new Post-Dispatch Building. tainment Film Works. dealership at Silber Road and the Katy Chateau Court will include a six- H-E-B plans to open nine large Freeway. The Bank of Memorial story hotel and retail village just north grocery stores by 2002. In 2000 a store opened a branch in March 2001 on of the Compaq headquarters at FM opened at Fairmont and Jana in Memorial Drive in Town and Country 1960 and Highway 249. The 171-room southeast Houston. A second location Village. In Highland Village a 39,000-

SH 249 FM 1960 US 290 FM 1960 SH 8 I 45 US 59

SH 6 I 10 I 10 SH 8 I 610 SH 225 I 610 Map 3. Retail Building Permits, 2000 Houston, Texas US 59 I 45 SH 8 Census Place Water Area Highway SH 6 Interstate Highway SH 288 Retail Source: Houston Building Permit Office

29 square-foot Crate and Barrel is being rial City Mall in 2002. Saks Fifth Loop 610 and Post Oak, a new added. Avenue closed its Town and Country European-style shopping center At Westheimer and Voss an Albert- store in January 2000. Foley’s broke opened with specialty retail stores. The sons store is planned, as is a Michael’s ground on a 300,000-square-foot store Shops at Village Walk at Westheimer Arts and Crafts store and a 13,000- at the Memorial City Mall. The store is and Weslayan opened in fall 2000. square-foot strip center. Construction expected to open in late 2001. A Lord In the Woodlands, the Waterway on the center began in February 2001. & Taylor store is expected to open in Promenade is under construction near The Gulfgate Center is being spring 2002. The Galleria is undergo- I-45. The center will be located along a redeveloped. H-E-B and Lowe’s Home ing a $25 million renovation that will 1.25-mile-long waterway and will Improvement Warehouse have both be completed in June 2002. include home furnishing stores, broken ground on the site. The Near Enron Field, e-Square at restaurants and entertainment. remainder of the 700,000-square-foot Walker street will have more than 20 Construction on the waterway began site will be filled with smaller tenants. restaurants and retail shops occupying in spring 2000. The Marq’E Entertainment Center 100,000 square feet. The first phase A $30 million Sports Lodge will continues to add new retailers. The opened in September 2000 and break ground in August 2001. The 275,000-square-foot center on the included three clubs and a restaurant. center will include NHL-size ice Katy Freeway has a 22-screen movie Downtown, a new Landry’s Seafood skating facilities and an olympic theater, Imax theater, restaurants and Restaurant, aquarium and entertain- training center for gymnastics. The other retailers. A 30,000-square-foot ment facility will be built on the banks center will be located at Beltway 8 and skateboarding facility, comedy club of Buffalo Bayou. The $21 million Clay Road. and bowling alley opened in late 2000. project will be completed in 2002. Dillard’s plans to move from the On Kirby, a new Borders Books and Town and Country Mall to the Memo- Music Café opened in fall 2000. At

OFFICE MARKET

SH 249 FM 1960

US 290 FM 1960 SH 8 I 45 US 59

SH 6 I 10 I 10 SH 8 I 610 I 610 SH 225

Map 4. Office Building Permits, 2000 Houston, Texas US 59 I 45 SH 8 Census Place Water Area Highway SH 6 Interstate Highway SH 288 Office Source: Houston Building Permit Office

3030 Office Property Statistics, First Quarter 2001

Central business district Kingwood-East-Northeast Total space (in square feet) 32,972,151 Total space (in square feet) 1,262,331 Under construction (in square feet) 1,367,964 Under construction (in square feet) 0 Occupancy (in percent) 91.5 Occupancy (in percent) 89.9 1960 Area Medical-South Main Total space (in square feet) 4,176,109 Total space (in square feet) 1,619,938 Under construction (in square feet) 77,000 Under construction (in square feet) 0 Occupancy (in percent) 89.1 Occupancy (in percent) 85.5 Allen Parkway-Montrose NASA-Clear Lake Total space (in square feet) 4,624,003 Total space (in square feet) 3,896,109 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 89.7 Occupancy (in percent) 82.1 Near Southwest Conroe/Montgomery County Total space (in square feet) 464,243 Total space (in square feet) 3,905,026 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 84.0 Occupancy (in percent) 81.2 Northwest Freeway Far Southwest Total space (in square feet) 7,821,966 Total space (in square feet) 5,776,962 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 88.7 Occupancy (in percent) 76.4 Fort Bend County Sugar Land Total space (in square feet) 849,431 Total space (in square feet) 3,088,881 Under construction (in square feet) 0 Under construction (in square feet) 70,896 Occupancy (in percent) 89.2 Occupancy (in percent) 88.1 Greenspoint-North Belt Uptown-Galleria Total space (in square feet) 10,119,544 Total space (in square feet) 28,037,576 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 85.9 Occupancy (in percent) 84.5 Greenway Westchase Total space (in square feet) 10,535,528 Total space (in square feet) 8,822,595 Under construction (in square feet) 0 Under construction (in square feet) 173,400 Occupancy (in percent) 90.6 Occupancy (in percent) 81.3 Gulf Freeway-Pasadena Woodlands-Conroe Total space (in square feet) 1,200,134 Total space (in square feet) 1,805,944 Under construction (in square feet) 0 Under construction (in square feet) 275,706 Occupancy (in percent) 83.4 Occupancy (in percent) 86.3 Katy Freeway Totals Total space (in square feet) 15,479,460 Total space (in square feet) 146,458,255 Under construction (in square feet) 102.500 Under construction (in square feet) 2,076,466 Occupancy (in percent) 85.8 Occupancy (in percent) 86.8

Source: Grubb & Ellis

ap 4 shows Houston’s office Rental rates have remained stable in The average rent in the suburbs was building permit locations. the Houston market, according to $22.46 for Class A and $17.32 for M The Houston office market Grubb and Ellis. The average rental Class B space. has more than 146 million square feet rate during 2000 was $23.79 per During 2000, approximately 1.5 of space and an overall vacancy rate of square foot for Class A space and million square feet of office space was 13.2 percent. The vacancy rate in the $17.68 for Class B space. In the completed, compared with 4.5 million suburbs was 14.6 percent in the first Central Business District the average in 1999. However, with a boom in quarter of 2001, according to Grubb rental rate for Class A space was office construction in the central and Ellis. $25.96; Class B space was $20.07. business district, 2001 will exceed

31 2000 construction figures. In addition opened during 2000 at Fallbrook and Center II, is at Greens Parkway and to the two million square feet of space FM 1960. The hospital is planning a Greens Crossing Boulevard. in speculative and build-to-suit for $44 million professional building and At I-45 and Beltway 8 the Infomart lease projects, there is 19.8 million parking garage at the Memorial City Technology Park is planned. The park square feet of space under construc- Hospital. Christus St. Joseph Hospital will have as much as one million tion in owner-occupied development is planning a $4.2 million renovation square feet in ten buildings. The first in the first quarter of 2001. to increase beds available. building, with 108,000 square feet, is expected to be completed in August Medical Offices Office Construction 2001. The Texas Medical Center is A number of new office towers are A one-million-square-foot, 33-story completing major projects. A new under construction in the central office tower is planned on the South- nine-story, $137.2 million basic business district. Enron is building a west Freeway near Buffalo Speedway science research building will be built. 1.2-million-square-foot building on in Greenway Plaza. The new building Hermann Pavilion, a 12-story, Louisiana Street. The building will be is expected to be completed in late 800,000-square-foot building, opened completed in 2001. 2003. in spring 2000 at a cost of $200 Five Houston Center is a 577,000- The Westchase area has more than million. The Baylor Center for Com- square-foot, 27-story office building 12 million square feet of space. In parative Medicine, built underground, under construction in downtown 2000, 113 new companies leased opened in February 2000 and cost $40 Houston. The building is expected to more than one million square feet in million. The M.D. Anderson Faculty be completed in third quarter 2002. the area. A 173,000-square-foot Center is under construction with Ernst and Young will be a major tenant. building is planned in the Oak Park at 325,000 square feet of office space at a Six Houston Center is under consider- Westchase business park. cost of $49 million. ation. At Westheimer and Beltway 8 an A 17-story medical professional Reliant Energy plans to occupy office development is planned on a building will be built on Main Street 500,000 square feet in the planned 100-acre tract. BMC Software will near the Texas Medical Center. The 1000 Main building. The 36-story construct two buildings totaling project will have 220,000 square feet tower will provide 1.3 million square 850,000 square feet in the Westchase of medical office space on top of eight feet. The building is expected to be area. Briar Forest Crossing began a $4 levels of parking and 32,000 square completed in early 2003. million renovation project in Novem- feet of street-level retail. The building Hines is planning a 32-story tower at ber 2000. The renovation was sched- is expected to be completed in spring Texas and Milam. Calpine Corp. will uled to be completed in April 2001. 2002. be the main tenant in the tower that is At Beltway 8 and Clay, the West Belt The Nabisco bakery located at expected to be completed in fourth business park broke ground in the Holcombe Boulevard and Almeda quarter 2003. Century Development is second quarter of 2001. The 120-acre Road has been sold to the Texas planning a 38-story tower at Main and park will have more than a dozen low- Medical Center. The 627,000-square- Travis. Renaissance Tower on Main rise office and office-technology foot property will be converted into Street reopened in 2001. buildings. The project will total more office and lab space. At the Texas Medical Center, the than 1.2 million square feet of space. Texas Children’s Hospital will build Southeast Texas BioTechnology Park By winter 2001, a 102,500-square-foot a pediatric emergency center in The will be developed on 64 acres. The building and a 75,000-square-foot Woodlands. St. Luke’s Episcopal project is expected to have 15 build- building will be completed. Health System will build a 263,000- ings with two million square feet of At Sam Houston Parkway and Clay square-foot, 82-bed medical center. space at Old Spanish Trail and Knight Road, a 215,000-square-foot office Construction began in February 2001 Road. The first building will break building broke ground in January for with completion scheduled for 2003. ground in summer 2001 and be Cameron, an oil and gas equipment Columbia Women’s Hospital of completed in 2003. services firm. The nine-story building Texas remodeled and added to its The Woodlands has more than five will be adjacent to a parking garage. existing hospital on Fannin. The $13 million square feet of office space that In the Northwest Crossing business million expansion added 91,000 is 98 percent occupied. Anadarko park at Hollister and West Little York square feet and was completed in Petroleum is completing an 800,000- along the Highway 290 corridor, a February 2000. Houston’s Northwest square-foot building in The Wood- 115,000-square-foot office-flex center Medical Center underwent a $13 lands. Town Center Professional Plaza, is planned. Phase one will include a million, 13,900-square-foot expansion a 31,000-square-foot building, was 62,000-square-foot building followed and renovation project, which was completed in The Woodlands in early by a 53,000-square-foot expansion. completed in early 2001. 2001. Chevron Phillips Chemical At West Little York and Hollister Memorial Hermann Healthcare plans a 200,000-square-foot office Road, a 61,800-square-foot office- Systems built a new office and health building. service center is under construction. club building on Southwest Freeway. A 123,000-square-foot office The project is expected to be com- The $8 million project has 73,330 building broke ground in April 2001 in pleted in June 2001. square feet. HealthCare Village, a the Greenspoint area. The two-story In October 2000, a new 218,600- 350,000-square-foot complex for building, called North Belt Office square-foot office complex opened on surgery, with offices and a pharmacy,

32 Sam Houston Parkway at Bellaire. One square-foot headquarters building in feet of office and industrial space when Briarlake Plaza, a 20-story office tower spring 2001. completed in two years. is under construction along the Sam Fort Bend County is seeing a TRTON Ltd. plans to build a Houston Tollway in the Westchase significant amount of office construc- 150,000-square-foot headquarters and area. Oak Park at Westchase is adding tion. Sugar Creek Place II is a proposed manufacturing facility in the Freeport another building. Jacobs Engineering 70,000-square-foot office building at Business Park in Stafford. completed a 300,000-square-foot U.S. 59 and Commerce Green Boule- In Montgomery County a three- building in early 2001. vard. Healix Ltd. Is planning to story, 150,000-square-foot office Phase II of the Reserve at Greens relocate its headquarters into the building is expected to begin construc- Crossing was completed in the first building. The Beltway 8 Business Park tion in summer 2001 on I-45. This will quarter of 2001, adding 157,788 at U.S. 59 and Beltway 8 has broken be followed by an eight-story, square feet of space. ground and will have 400,000 square 200,000-square-foot building. At Loop 610 and Post Oak, Landry’s completed an eight-story, 115,000-

INDUSTRIAL MARKET

SH 249 FM 1960

US 290 FM 1960 SH 8 I 45 US 59

SH 6 I 10 I 10 SH 8 I 610 I 610 SH 225 Map 5. Industrial Building Permits, 2000 Houston, Texas US 59 I 45 SH 8 Census Place Water Area Highway SH 6 Interstate Highway SH 288 Industrial Source: Houston Building Permit Office

33 Industrial Property Statistics

Central business district Northwest near Total space (in square feet) 4,290,696 Total space (in square feet) 35,279,929 Under construction (in square feet) 0 Under construction (in square feet) 204,100 Occupancy (in percent) 96.9 Occupancy (in percent) 92.6 East southeast far South far Total space (in square feet) 10,731,735 Total space (in square feet) 10,730,237 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 95.8 Occupancy (in percent) 89.8 Fort Bend South near Total space (in square feet) 7,971,524 Total space (in square feet) 32,660,678 Under construction (in square feet) 0 Under construction (in square feet) 0 Occupancy (in percent) 86.6 Occupancy (in percent) 92.0 North far Southeast middle Total space (in square feet) 22,023,555 Total space (in square feet) 11,802,701 Under construction (in square feet) 1,774,000 Under construction (in square feet) 24,000 Occupancy (in percent) 91.6 Occupancy (in percent) 95.9 North middle Southeast near Total space (in square feet) 5,765,759 Total space (in square feet) 37,939,265 Under construction (in square feet) 0 Under construction (in square feet) 37,000 Occupancy (in percent) 95.0 Occupancy (in percent) 92.0 North near Southwest far Total space (in square feet) 8,508,370 Total space (in square feet) 21,560,610 Under construction (in square feet) 0 Under construction (in square feet) 229,578 Occupancy (in percent) 93.6 Occupancy (in percent) 92.6 Northeast far Southwest near Total space (in square feet) 7,864,992 Total space (in square feet) 17,870,402 Under construction (in square feet) 0 Under construction (in square feet) 200,000 Occupancy (in percent) 98.3 Occupancy (in percent) 93.9 Northeast near West far Total space (in square feet) 19,683,986 Total space (in square feet) 18,870,402 Under construction (in square feet) 60,000 Under construction (in square feet) 200,000 Occupancy (in percent) 90.5 Occupancy (in percent) 92.6 Northwest far Totals Total space (in square feet) 58,638,463 Total space (in square feet) 337,133,047 Under construction (in square feet) 2,401,669 Under construction (in square feet) 5,082,147 Occupancy (in percent) 92.2 Occupancy (in percent) 92.6

Source: Grubb & Ellis

ouston has more than 337 the first quarter of 2000 more than five foot. Map 5 shows the location of million square feet of indus- million square feet of space was under industrial building permits issued in Htrial space. Of that total, 249 construction, according to Grubb and Houston. million is in warehouse and distribu- Ellis. During 2000, industrial absorp- The northwest industrial corridor tion space, 25 million in R&D and flex tion was almost four million square near Compaq Computer Corporation space and 62 million in general indus- feet. had major industrial expansion. The trial space. During 2000, more than Overall the industrial vacancy rate Legacy Center on Fallbrook Drive two million square feet of industrial fell to 7.4 percent for first quarter 2000. came online during the first quarter of space was completed, compared with The average rental rate for warehouse 2001, adding 461,000 square feet of 5.8 million in 1999. and distribution space was 35 cents warehouse space. In 2001, 5.1 million square feet of per square foot while R&D and flex Granite Properties is developing a space is expected to be completed. In space rented for 55 cents per square 300,000-square-foot warehouse in

34 northwest Houston for Victory Milner and Morales roads. In March In the Northpoint East Business Park, Packaging. The building is at West 2001, ground broke on an expansion a $3 million, 100,000-square-foot Little York Road and Fairbanks North in the North Texas commercial distribution facility was completed. A Houston Road. development park. The JA Green Air 278,460-square-foot warehouse and Alamo Crossing Commerce Center Cargo Distribution Center has three distribution center was built on Market was located at U.S. 290 and Flintlock buildings with 350,000 square feet Street. Road. The park will have more than under construction. Twelve 12,000-square-foot ware- one million square feet of speculative On Old Katy Road, the West Port houses are planned on Almeda Road industrial space. Ground broke on four Industrial Park has begun construction south of Loop 610. The first building of the five buildings, which are on a 66,752-square-foot second phase. has been completed and two addi- expected to be completed by the end When completed the park will have tional buildings are under construction. of summer 2001. 500,000 square feet of warehouse Novo Blinds is building a large Bondensen Business Park will have space. warehouse office building in northwest 365,000 square feet of office and Federal Express is building a Houston. The project is located on distribution space. The park will 108,900-square-foot distribution Railhead and will have a 40,000- include a 140,000-square-foot center at the Sam Houston Tollway square-foot office building and a warehouse and six smaller buildings. and West Little York Road. 352,000-square-foot warehouse. The park is located at the Sam Houston The Beltway 8 Business Park at the The Business Center at Blalock will Tollway and West Little York. Sam Houston Tollway and U.S. 59 is have a 198,000-square-foot building In the Legacy Park business park in under construction. The first phase completed in October 2001. Town and northwest Houston, Betz Realty includes four buildings with 260,000 Country Business Park has a 206,000- Investors will build four office- square feet. square-foot building under construc- warehouse buildings with 167,000 Greens Crossing Business Park tion. The building is one of seven square feet of space. The project, added 450,000-square-foot and planned for the park. located at the Sam Houston Tollway 90,000-square-foot warehouses. As The Anchor Hocking Glass Plant in and Fallbrook, broke ground in May much as one million square feet of Jacinto City is undergoing an $80 2001 and will be completed in fall warehouse space could be completed million renovation. The plant will 2001. in the park over the next five years. reopen in summer 2002 as Longhorn A number of industrial construction A new business park is under Glass Corporation. projects are under way around Inter- development in northwest Houston. Near Baytown, Home Depot is continental Airport. Two 350,000- Cole Creek Business Park, on U.S. 290 constructing a 755,000-square-foot square-foot buildings are under con- at the Tollway, will have five to seven warehouse in the Cedar Crossing struction in the Intercontinental Cargo warehouses with one million square Industrial Park. The building will be Center on Greens Road between feet of space when completed. completed in late 2001.

CONCLUSION

ouston’s economy has ben- construction activity. With the strength retail. There is significant interest in efited from reorganization of of oil prices and a strong export downtown redevelopment, with loft Hthe oil industry that brought economy, Houston’s economy is and condominium projects throughout jobs to the area. While other areas of expected to remain strong in 2001. the inner loop. The downtown office the state are expecting to see a Construction activity in all sectors is market is booming, with three major slowdown in real estate activity, expected to continue. Fort Bend and office construction projects under way. Houston is expected to have a stable Montgomery counties are seeing The state’s largest city is expected to economy and see an increase in tremendous growth in housing and continue to see growth in 2001.

701-50-1487

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