Catholic Houston University Has a New Head Honcho He Moved to the Bayou City from Indiana
Catholic Houston university has a new head honcho He moved to the Bayou City from Indiana. BACK PAGE, 39 JUNE 30-JULY 6, 2017 • VOL. 48, NO. 8 • $6.00
LARGEST FOR-PROFIT, PRIVATE EMPLOYERS 19
COVER STORY
RAISING American City Business Journals - Not for commercial use THE BAR Houston apartment amenities have reached new heights of luxury. Here’s how they’ll revolutionize the industry. 16
One Herman Place includes a rooftop skylounge among its amenities.
COURTESY
DEAL OF THE WEEK TRANSPORTATION COMING SOON Linn Energy forms JV Trucking co. to with Oklahoma co. ramp up hiring The joint venture is targeting an initial The hires are related to a federal law public offering later this year. going into effect in December. OLIVIA PULSINELLI, 4 JACK WITTHAUS, 12
RESIDENTIAL STRATEGIES Howard Hughes to How to deal with After 47 years, launch community cyberattacks Kolache Shoppe in Conroe Recent and on-going cyberattacks against the energy sector have to expand UPTOWN Older Millennials and Baby Boomers challenged the oil and gas industry The retailer will open its second will be the target buyers. boardroom’s traditional perspective on location at a mixed-use project MEET THE LARGEST PAUL TAKAHASHI, 6 risk. 13 underway in the Heights. EMPLOYERS IN UPTOWN 20 RETAIL HUB, 11
Breaking news online r HoustonBusinessJournal.com On smartphones and tablets HoustonBusinessJournal.com/apps Daily email updates L HoustonBusinessJournal.com/email 2 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017 THE LOOP
R PEOPLE IN THE ISSUE R WHAT’S GOING ON
ABC MNO Brinsden, Jonathan.17 McLeroy, Shannon. 12 HOUSTONBUSINESSJOURNAL.COM Carman, Jim...... 6 Melton, Heath...... 6 Conover, Dave...... 10 Menendez, Manny.. 14 Copeland, Morgan.. 12 Merwin, Peter...... 17 The pool at Hotel ZaZa in Memorial City. The Newton, Jonathan. 14 R DEF RJuly 14: Largest community hotel will open Dec. 1. Damborsky, Matt..... 8 PQR banks Ebisu, Takeshi...... 14 Rice, Tracey...... 12 RRJuly 28: Largest commercial Finger, Marvy...... 16 Rydberg, Marcus.... 12 property owners Forbes, Paul...... 17 RRThink you belong on one of STU HBJ’s popular business lists? GHI Samora, Gwen...... 12 Contact Margaret Wagner, Griffin, Jim...... 14 Saunders, Neil...... 10 [email protected]. Hines, Lucy...... 11 Schick, Robert...... 12 Shailer, Matthew.... 14 JKL Johnson, Tommy.... 12 VWXYZ American City Business Journals - Not for commercial use Lawyer, Keith...... 3 Velamuri, Sarma.... 12 Ludwick, Richard... 39 Walton, Mark...... 12 Welbes, Tim...... 6 DIGITAL NEWS Ziegler, Scott...... 16 To see more renderings of the new Hotel Zaza, go to HoustonBusinessJournal.com RRMorning Edition: An " email digest of top COURTESY R COMPANIES IN THE ISSUE stories from local, regional and national sources. HOTEL ZAZA MEMORIAL CITY REVEALS ABC MNO RRAfternoon Edition: Alliance Residential Martin Fein Interests.. Afternoon roundup DESIGN DETAILS, OPENING DATE Co...... 17 16 of the day’s stories. Dallas-based Z Resorts LLC announced that Hotel ZaZa Memorial City, which was designed American Midstream MetroNational...... 2 RREnergy Inc. Texas Edition: with inspiration from Palm Springs, California, will open Dec. 1. Partners LP...... 10 Midway Cos...... 17 Monday email with all The 159-room hotel will have more than 13,000 square feet of meeting and event space, Apartment Data NewQuest Properties. of Texas’ top energy as well as a signature restaurant and lounge dubbed The Tipping Point, according to a Services...... 16 11 news. statement. The development will also include 133 luxury apartment units, featuring a separate ground level private pool experience and 17th-floor resident lounge, game and conference DEF STU RRDigital Edition: Print rooms. The Finger Cos...... 16 Sears Holdings Corp... subscribers can access a Z Resorts LLC partnered with Houston-based MetroNational in a third-party management 11 digital replica of the deal to build Houston’s second Hotel ZaZa. The 17-story hotel broke ground in October 2015 GHI weekly print edition. Q at 9787 Katy Freeway at the intersection of Interstate 10 and Bunker Hill. Gensler...... 17 Trammell Crow Hanover Co...... 17 Residential...... 17 Houston Independent VWXYZ R School District...... 6 The Woodlands CONTACT US JKL Development Co..... 6 JLL...... 11 University of St. Kinder Morgan Inc..10 Thomas...... 39 Luke’s Icehouse...... 3 Z Resorts LLC...... 2 MARKET PRESIDENT AND PUBLISHER: Bob Charlet 713-395-9604, [email protected]
EDITOR-IN-CHIEF: Giselle Rodriguez Greenwood 713-395-9628, [email protected]
MANAGING EDITOR: Emily Wilkinson 713-395-9629, [email protected] JOIN US FOR A SMART SERIES SEMINAR ON CREATIVE SERVICES DIRECTOR: George Wiltz 713-395-9624, [email protected] ADVERTISING DIRECTOR: Greg Cox THE ART OF NEGOTIATION 713-395-9618, [email protected]
Roger Kemper, Vice President, Sandler Training Houston, will challenge EVENTS MANAGER: Aubrey Stuart Entrepreneurs, CEO’s, Managers, Consultants, and Salespeople to 713-395-9613, [email protected] look at the deficiencies of typical negotiations. Attend and walk away with R CONTACT US a 3-step plan to increase margins and win more business. FOLLOW US WHEN: WHERE: TUESDAY, JULY 18 SHERATON HOUSTON BROOKHOLLOW Make sure you’re following @HouBizJournal 7:00AM – 9AM 3000 NORTH LOOP WEST, HOUSTON, TX on Twitter, LinkedIn and Facebook for all your local business news. 77092 Houston Business Journal is a publication of: GOT A NEWS TIP? REGISTER TODAY American City Business Journals, 120 W. Morehead St., Charlotte, N.C. 28202 Put away that press release and pick up Whitney Shaw, CEO; Ray Shaw, Chairman (1989-2009) the phone. Contact reporters directly, or http://bizj.us/1p7asr email Managing Editor Emily Wilkinson HOST: EVENT PARTNER: [email protected] HOUSTON BUSINESS JOURNAL (ISSN 0277-4976) publishes weekly by American City Business Journals Inc. at 5444 Westheimer, Suite 1700, Houston, Texas 77056. Copyright SUBSCRIBE 2017 Houston Business Journal with all rights reserved. Reproduction or use without permission of editorial or graphic Subscribe to HBJ’s print or digital content in any manner is prohibited. Periodicals postage paid at Houston, Texas. edition by calling 713-395-9603 or visit VENUE & CATERING PARTNER: HoustonBusinessJournal.com/subscribe. SUBSCRIPTION PRICES: 1 year, $140 • Single copies, $6.00 • Back issues, $9.00 Mailed copies, $13.00 ADVERTISE POSTMASTER: Send address changes to Houston Business Get in front of the most influential business Journal, 5444 Westheimer, Suite 1700, Houston, TX 77056. 713-688-8811 owners in Houston. Contact Greg Cox at [email protected] for rates. JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 3 THE LOOP
R PEOPLE ON THE MOVE EVENTS & NOMINATIONS
TWO WEEKS Best Places To Work LEFT TO NOMINATION DEADLINE: 07/14/2017 NOMINATE! 2017 EVENT DATE: 10/12/2017 WHERE: Marriott Marquis Hotel
Human Resources POWER EVENT DATE: 07/27/2017 BREAKFAST SERIES WHERE: Junior League of Houston
SHERYL KOLASINSKI RAULI GARCIA Fort Bend Means Business COO of the Houston Zoo Inc. Chief administrative officer of the Houston POWER EVENT DATE: 08/11/2017 AmericanZoo Inc. City Business Journals - Not for commercial use The skinny: Kolasinski, who most recently BREAKFAST WHERE: Sugar Land Marriott Town Square served as the COO of the Menil Collection, The skinny: Garcia joins the zoo as chief SERIES was appointed COO of the Houston administrative officer from the Curtis Zoo. She oversaw several major projects Institute of Music in Philadelphia where after she took the role of COO at Menil, he served as CFO and senior vice The Future of Healthcare including the new parking lot on West president of administration. He’s the POWER EVENT DATE: 08/24/2017 Alabama and the construction of the Menil former CFO of the Houston Symphony and BREAKFAST Drawing Institute. Her position is effective the Houston Grand Opera. His position SERIES WHERE: Junior League of Houston mid-July and she replaces Chris Lyons. is effective July 5. The position is newly created for the Houston Zoo. C-Suite Awards Dinner EVENT DATE: 08/31/2017 R BY THE NUMBERS WHERE: Hotel ZaZa
2017 12 200 FAST Fast 100 Awards Luncheon Number of new car rental Number of jobs expected 100 EVENT DATE: 09/15/2017 locations St. Louis-based to be created from the new WHERE: Hilton Americas Enterprise Holdings Inc. plans to locations. open in the Houston area in 2017. SOURCE: ENTERPRISE HOLDINGS BizExpo 2017 R OVERHEARD EVENT DATE: 09/15/2017 WHERE: Hilton Americas “Thank you for your patronage throughout the years. Luke’s has CFO Panel POWER EVENT DATE: 09/21/2017 been sold. There will be some great BREAKFAST SERIES WHERE: Hotel Derek new things coming in the future. Stay tuned for details.” Corporate Philanthropy Awards LUKE’S ICEHOUSE, at 903 Durham Drive just south of Washington Avenue, post on its NOMINATION DEADLINE: 08/14/2017 Facebook page on June 26. Owner Keith Lawyer told the Houston Business Journal he plans to release a longer statement in the coming days. He added that the buyer is from Dallas Corporate EVENT DATE: 09/28/2017 and operates several chains, including some in Houston, but declined to elaborate further. WHERE: Hotel ZaZa Two other Luke’s locations — in Beaumont and Nederland — are still open. Corporate PhilanthropDiversityy in Business Awards R DONE DEAL NOMINATION DEADLINE: 08/25/2017 EVENT DATE: 11/09/2017 LOWE’S COMPLETES $512M PURCHASE OF HOUSTON CO. WHERE: Hilton Americas Hotel About a month and a half after announcing its intent to snap up a Houston-based company servicing the multifamily housing industry, Lowe’s Cos. Inc. (NYSE: LOW) has The Woodlands Means Business closed on the $512 million deal. POWER EVENT DATE: 10/06/2017 Maintenance Supply Headquarters now BREAKFAST WHERE: The Westin at the Woodlands falls under the umbrella of North Carolina- SERIES based Lowe’s — the nation’s second-largest home improvement retail chain behind rival The Home Depot Inc. (NYSE: HD), headquartered in Atlanta. For events related information, contact: For sponsorship or advertising information, contact: Founded in 2006, MSH boasts a Aubrey Stuart - Events Manager Greg Cox - Advertising Director portfolio of more than 5,300 products, COURTESY 713-395-9613 | [email protected] 713-395-9618 | [email protected] such as appliances, plumbing, lighting and Lowe’s closed its acquisition of hardware, as well as services like renovation Houston-based Maintenance Supply project support and custom fabrication Headquarters. for maintaining and renovating multifamily NOMINATE HERE: www.bizjournals.com/houston/nomination properties. As a result, the acquisition bolsters Lowe’s strategy to both “deepen centers supply maintenance and repair EVENT SIGN UP: www.bizjournals.com/houston/calendar and broaden its relationship with pro workers in the multifamily housing industry, customers and better serve their needs,” primarily serving western, southeastern and the company said in a news release. south central areas of the U.S. www.bizjournals.com/houston/event MSH’s 550 employees and 13 distribution 4 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
Senior Web Editor DEAL OF THE WEEK Olivia Pulsinelli
I [email protected] 713-395-9637 @HBJOLIVIA
DEAL OF THE WEEK LINN ENERGY AND OKLAHOMA CO. FORM JV FOCUSED ON SCOOP/STACK PLAY THE SKINNY net acres in the northwest STACK and THE SCOOP/STACK BACK STORY Mark Ellis, CEO and its Chisholm Trail midstream business, Houston-based Linn Energy Inc. (OTCQB: president of Linn including a 250 million-cubic-feet-per-day Some major asset sales over the past year or LNGG) and Tulsa, Oklahoma-based Citizen Energy Inc. capacity cryogenic plant currently under so have involved the SCOOP/STACK area. For Energy II LLC have agreed to form a joint construction. Linn expects to commission instance, Houston-based Marathon Oil Corp. venture called Roan Resources LLC. The deal the plant in the second quarter of 2018, and (NYSE: MRO) bought Oklahoma City-based is expected to close in the third quarter. the acreage Linn will contribute to Roan PayRock Energy Holdings LLC last year for remains dedicated to Chisholm Trail. $888 million to boost its footprint in the STACK. At the time, Marathon’s CEO called THE JV American City Business Journals - Not for commercial use the STACK “one of the best unconventional Roan is expected to be debt-free when the THE LINN BACK STORY oil plays in the U.S.” deal closes, and the JV will establish a new Linn Energy Inc. emerged from Chapter 11 In December 2015, Oklahoma City-based revolving credit facility secured by its own bankruptcy as the reorganized successor Devon Energy Corp. (NYSE: DVN) announced assets. The company will have independent to Linn Energy LLC in February. At the a $1.9 billion deal to buy 80,000 net acres ERIC KAYNE/HBJ management and a separate board of time, the company said it’s moving from an in the STACK, and The Woodlands-based directors comprised of four Linn-designated and each contribute about 70,000 net acres. upstream master limited partnership to a Newfield Exploration Co. (NYSE: NFX) directors, four Citizen-designated directors Roan will have unique, majority control of growth-oriented exploration and production announced a deal in May 2016 to acquire and a CEO, whom Linn and Citizen will more than 103,000 contiguous net acres in company. Since then, Linn has made several Oklahoma assets for $470 million. appoint. The JV is expected to pursue an the Merge and about 40,000 net acres in the deals to sell non-core assets. Most notably, More recently, Houston-based Vanguard initial public offering in early 2018, subject to core of the SCOOP and STACK, according the company recently exited California Natural Resources LLC (Nasdaq: VNR) sold market conditions. to a presentation about the deal. Roan’s through a few different deals and sold some some assets in the SCOOP/STACK for $280 acreage had combined production of more Wyoming assets in a $581.5 million deal. million, and Houston-based Cheniere Energy than 20,000 barrels of oil equivalent per The SCOOP/STACK/Merge has been a Inc. (NYSE MKT: LNG) is planning a pipeline THE ASSETS day in May, which is expected to increase major focus for the reemerged company. from the area to the Gulf Coast markets. Roan will focus on development in the to more than 40,000 BOE/d by December. About 57 percent of Linn’s total 2017 SCOOP/STACK/Merge play in the Anadarko The acreage has more than 1,500 net drilling budgeted capital was allocated to the Basin in Oklahoma. SCOOP stands for locations that represent more than 20 years Merge, according to a presentation from THE PLAYERS “South Central Oklahoma Oil Province,” of development, and its total net resource early June. With its concentrated acreage Jefferies LLC acted as sole financial adviser while STACK represents the “Sooner Trend potential is estimated to be more than 2 position, Roan will be able to increase capital to Linn, and Latham & Watkins LLP was (oil field), Anadarko (basin), Canadian and billion barrels of oil equivalent. and operational efficiency in the area while Linn’s legal adviser. Citigroup acted as sole Kingfisher (counties).” Meanwhile, Linn will retain its majority facilitating the formation of longer lateral financial adviser to Citizen, and Thompson & Linn and Citizen will own the JV 50-50 operated position of about 105,000 drilling units. Knight LLP was Citizen’s legal adviser.
THE RICHARDS GROUP TRG JOB #: TXU-17-0017 CLIENT: It takes a lot of energy to run TXU TITLE: TXU 1/2 page Print a business. We can help. PUB: Dallas Business Journal Houston Business Journal No matter the type or size of your business, INSERTION DATE: 2016 TRIM: TXU Energy has an electricity plan to fit 10.25" x 6.5" LIVE: your needs. Plus, we’ll back it with our Total 9.75" x 6" BLEED: N/A Satisfaction Guarantee. COLOR: CMYK LINE SCREEN: SNAP 240 FOR QUESTIONS CALL: - - - Karen Newman Call 1 866 CALL TXU or visit TXU.com 214.891.5875 today and start saving.
Guarantee applies to new TXU Energy small/medium business customers under standard Terms of Service Agreement only. No fee to change products within TXU Energy or switch to another provider within the first 60 days. Customer remains responsible for any billed and unbilled charges. ©2017 TXU Energy. REP #10004 JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 5
American City Business Journals - Not for commercial use 6 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
RESIDENTIAL Reporter REAL ESTATE & EDUCATION HUB Paul Takahashi
I [email protected] 713-395-9635 @HBJPAUL
RRBY THE NUMBERS RESIDENTIAL INC. Howard Hughes Corp. to bring its big vision to a smaller community he Howard Hughes Corp. has made its 214,176 name in Houston developing Texas-sized The Woodlands Hills will Number of new apartment T master-planned American communities.City Business Journals - Not for commercial use include a resort-style units needed by 2030 to meet The Dallas-based developer’s flagship com- pool with a lazy river. Houston’s population demand. munity — The Woodlands — spans a whopping 28,000 acres. More than 115,000 residents live in the north Houston suburb, which is home to 15,300 a couple of Fortune 500 companies as well as five Number of new apartment units needed each year for the hospital systems. next decade to meet Houston’s The Woodlands’ sister community — Bridge- population demand. land — spans 11,400 acres northwest of Houston. Until recently, Bridgeland was Howard Hughes’ youngest master-planned community with just 35% a quarter of its residential development complet- Increase in the number of new ed. The Cypress-area community is so large, it is apartments needed to meet expected to have a lifespan of another 20 years, Houston’s population demand. according to Metrostudy, a national housing research firm. However, Howard Hughes’ latest mas- COURTESY 28% RR112 acres of green space including 20 Population growth expected in ter-planned community — The Woodlands Hills neighborhood parks. Houston by 2030. — spans about 2,000 acres. It’s the size of a typ- BY THE NUMBERS ical Houston-area master-planned community, RRExtensive hike and bike trails, including bike The Howard Hughes Corp.’s master- SOURCE: NATIONAL APARTMENT lanes on major roads. ASSOCIATION but is smaller than its sister communities around planned communities nationally R the nation. RA 17-acre “village park” that will feature a park span more than 80,000 acres, of model homes; a resort-style pool with a lazy house over 342,000 residents and Tim Welbes, co-president of The Woodlands river; a play area for children; a fitness center support more than 160,000 jobs. Development Co., a wholly owned subsidiary of and lap pool for adults; several tennis courts; Here are the developer’s single- Howard Hughes Corp., said it’s unlikely Hous- and an events lawn with a stage for outdoor family residential master-planned fitness classes, such as yoga. ton-area developers will build gargantuan mas- communities, by order of acreage. RRFuture retail development. ter-planned communities in the future. 1. THE WOODLANDS “The Woodlands Hills is right-sized for this As Houston’s suburban population contin- Metro: Houston market,” Welbes said. “We’ll see more and more ues to grow, residential developers are building Age: 43 years of these moderately sized properties. You prob- master-planned communities farther into the $2.1B ably won’t see another Woodlands-sized com- exurbs. Prolific developers — such as The Howard Size: 28,000 acres Houston Independent School munity again.” Hughes Corp. as well as Houston-based John- Population: 115,000 residents District’s general fund budget Developers are shying away from developing son Development Corp. — have staked the next 2. SUMMERLIN for the 2017-2018 school year, 10,000-plus acre communities as large contig- chapter of its north Houston development with- Metro: Las Vegas passed on June 23. uous parcels of land become harder to find and in Conroe — the fastest-growing city in America, Age: 27 years assemble. Investors are also more skittish about according to the U.S. Census. Size: 22,500 acres massive master-planned communities’ “car- The Woodlands Hills is expected to break Population: 100,000 residents 2% - 4% ry cost” — the decades it typically takes to hold, ground on the first five sections in September Range of teacher and principal 3. DOWNTOWN COLUMBIA salary increases within the develop and reap a return on investment, Wel- and will feature a couple hundred home sites. A Metro: Columbia, Maryland 2017-2018 HISD budget. bes said. grand opening is planned for spring 2018. Despite its relatively smaller size, The Wood- Several miles south of The Woodlands Hills, Age: 50 — one of the first MPCs nationally lands Hills will retain the high-quality homes Johnson Development is underway on Grand $2.2M and amenities of its larger counterparts, said Central Park, a 2,046-acre master-planned com- Size: 14,000 acres Funding for special education Heath Melton, Howard Hughes’ vice president munity on the former Boy Scouts’ Camp Strake Population: 103,000 residents within the 2017-2018 HISD of master-planned communities, residential property. 4. BRIDGELAND budget. development. The Woodlands Hills may be smaller than The Metro: Houston “We wanted to capture and extend The Wood- Woodlands or Bridgeland, but Howard Hughes Age: 10 years $268M lands vision,” Melton said. Corp. officials say they have big, bold plans for Size: 11,400 acres “Recapture” funding that HISD The Woodlands Hills — named after the the community similar to its larger brethren. Population: 8,600 residents; has set aside to pay the state pine-forested hills of the land — will feature “It’s smaller, but big enough for us,” said Jim projected to grow to 65,000 to be redistributed to property- more than 4,500 single-family homes, includ- Carman, Howard Hughes’ vice president of mas- residents poor districts. ing homes at a more affordable price point that ter-planned communities, commercial develop- 5. THE WOODLANDS HILLS will likely attract older Millennials starting fami- ment. “We wanted to take our experience devel- Metro: Houston lies as well as Baby Boomers looking to downsize oping master-planned communities and parlay Age: Just announced $69M as their children leave the nest. that into a community that will have the same Size: 2,000 acres Budget deficit carried over into As a result, The Woodlands Hills will feature look and feel as our bigger communities.” the 2018-2019 HISD budget. Population: 0, expected to have a bevy of amenities, including: 4,500 homes upon buildout SOURCE: HOUSTON INDEPENDENT SCHOOL DISTRICT Q To see more pictures of The Woodlands Hills, go to HoustonBusinessJournal.com SOURCE: HOWARD HUGHES CORP. JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 7
THE DESTINATION BOULEVARD ONLY HOUSTON CAN BUILD
American City Business Journals - Not for commercial use
theboulevardproject.com 8 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
Reporter COMMERCIAL REAL ESTATE HUB Cara Smith
I [email protected] 713-395-9607 @HBJCARA
MAKING MOVES HBJ Heavy Hitter: My energy clients are taking advantage of Houston’s office market
Rob Neblett, a longtime Among your clients, have you witnessed & commercial real estate any sort of trend this past year that Q broker with nearly 40 American City Business Journals - Not for commercial use stands out against your career? I’ve years of experience in “2016 was a good year. seen something in the past few months A the industry, said 2016 Based on the way the that I haven’t seen in a while. (Some was a year of robust of my clients) are looking down the business and deal making. oil and gas market road and taking advantage of acquiring And that’s saying something, looked, I certainly facilities that they aren’t quite ready considering that many of Neblett’s to grow into. … It shows foresight, and clients are in an industry that was didn’t see that coming.” they’ve been able to match that with brought to its knees last year. ROB NEBLETT, a very, very favorable office market. Throughout his career in Senior vice president at CBRE Companies fundamentally operating in commercial real estate, Neblett has more space than they need, but they’re represented several high-profile taking full advantage of the market, and Houston energy companies, including they’re hopefully positioned to make Kinder Morgan, Halcon Resources, acquisitions and have the facilities to Mariner Energy and others. accommodate those acquisitions. Neblett, who’s spent the past six For one reason or another, I work with years at Avison Young, is joining CBRE clients that have had enough dry powder COURTESY as a senior vice president in the firm’s to make really good moves in down mar- advisory and transaction services and became a very attractive option for me a couple years ago be very successful kets. So, 2016 was a very good year. Based occupier team in Houston. He chatted to take my career to another level. in organizing their businesses and on the way the oil and gas market looked, I with the Houston Business Journal evolving into new organizations and certainly didn’t see that coming. But, that about his ambitions at CBRE and What do you hope to accomplish in the going forward in a more streamlined showed where the really good operators what kinds of moves his global energy new role? I’ve had clients from out- manner. More interestingly, I’ve seen were patient in waiting to acquire assets tenants are making. of-state that are very excited about me some really good clients be intentional when there wasn’t as much money chas- joining CBRE. So, it’s been very exciting about watching for acquisition ing them. What motivated the move to CBRE? for them, and it’s nice to know that opportunities in the upstream business. There’s always a focus on taking advan- I’ve been in the business a long time. people like that are paying attention. In the past 12 months, as Wall Street tage of down markets to upgrade your I’m a native Houstonian, and … in (money) diminished, and the banks got facilities for the benefit of your employ- my opinion, (CBRE) has evolved into You’ve worked with a lot of energy quiet, some of my clients have been able ees and recruiting and retention at a very the best platform on the planet. They tenants in the past – what’s their to make moves on assets in places like discounted price. have incredible global connectivity, approach to real estate this year? It’s the Permian Basin. They’re positioned to and they’ve got great people that I’ve been an interesting year. I’ve seen some gear up and take these initial acquisitions This interview has been edited for known for a long time. The whole thing clients that got hit by the downturn forward. clarity and length.
RRIT’S OFFICIAL RRBY THE NUMBERS BANK OF AMERICA SECURES NAMING RECENT INDUSTRIAL DEALS RIGHTS AT CAPITOL TOWER INKED IN HOUSTON Naming rights for Skanska’s Capitol Tower Several major industrial deals were signed in June in Houston. development were secured by Charlotte, North Park 8Ninety, a 127-acre industrial park southwest of Houston in Missouri Carolina-based Bank of America Corp.(NYSE: City, signed its first tenants. McCord Development’s Lockwood Business Park, BAC). a 25-acre industrial development in Generation Park, nabbed an anchor tenant. The downtown office tower officially broke And a Brazilian petrochemical conglomerate announced plans to build a major ground on June 22 and will stand at 750,000 petrochemical project in Houston. square feet upon its completion. Bank of Here are the stats on some of the biggest industrial deals to close this America preleased 210,000 square feet in the month. building and will announce the building’s name upon its completion in 2019. The building is at 811 Rusk St., which is 125,251 $675M where the former Houston Club building was, Number of square feet that VWR Amount that Brazil-based Braskem which was demolished in October 2014. COURTESY International (NYSE: VWR) will (NYSE: BAK) will commit to So far, no other tenants have been A view of the open-air, two-floor atrium occupy in Park 8Ninety. Delta, which will be the largest announced for the tower, but leasing activity and lobby inside Skanska’s Capitol Tower polypropylene production line in the is strong, said Matt Damborsky, executive development. Americas. vice president of Skanska’s Houston office. The company is in discussions with law firms, related companies that are interested in financial services companies and energy- leasing space. 10 Number of acres that Houston- based GHX Industrial LLC will 96,983 To see new renderings of Capitol Tower, visit HoustonBusinessJournal.com occupy in Lockwood Business Number of square feet that Rexel Inc. " Park, which is in Generation Park. will occupy in Park 8Ninety. JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 9
ELIMINATING BREAST CANCER WHILE MAKING YOU FEEL WHOLE. THAT’S THE DIFFERENCE
American City Business JournalsBETWEEN - Not for commercial PRACTICING use MEDICINE AND LEADING IT.
At Houston Methodist, our breast cancer surgeons and plastic surgeons work together to bring peace of mind to women facing a mastectomy. Using a sophisticated mastectomy procedure, our physicians skillfully remove cancer in the breast while sparing the patient’s nipple. During the same operation, we reconstruct the breast using the patient’s own tissue through an innovative microsurgery procedure. This approach, pioneered at Houston Methodist, allows for results that appear more natural and dramatically improves nerve sensation in the skin. By applying advanced techniques with personalized care, we’re healing the body while keeping it whole.
Learn about all the ways we are Leading Medicine at houstonmethodist.org/leadingmedicine, or call 713.790.3333 for a physician referral. 10 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
Reporter ENERGY HUB Joshua Mann
I [email protected] 713-395-9632 @HBJ_JOSH
DRILLING DOWN SUBSEA CEO REMAINS CAUTIOUSLY OPTIMISTIC OF 2018 GULF IMPROVEMENT he oil downturn hasn’t been kind This new shape for service agreement to offshore activity in the U.S. Gulf includes things like variable rates that ad- T of Mexico, but at least one sub- just with the downtime of the assets GE sea executive is starting to see signs that American City Business Journals - Not for commercial use offers and even some financing, Saunders things may improve soon. said. Neil Saunders, CEO of GE Oil & Gas “You have to realize that “If you want me to take some risk on subsea systems and drilling, said he’s the performance of my equipment and ul- starting to see more companies making market now is nothing like timately maybe the performance of your request-for-quotations, a good sign that what we had in 2013.” project, then obviously I need to learn activity may pick up next year. more about the application of my equip- “Is it coming back at record levels? No,” NEIL SAUNDERS, ment and your project before I’m prepare Saunders said. “I’m not telling anybody CEO, GE Oil & Gas, Subsea to enter into something,” Saunders said. Systems and Drilling anything they don’t already know. Activ- “If we’re going to bring financing to a ity is down.” project, then the viability of the customer If a rig has been mothballed — as many certainly becomes very important to us.” have been during the downturn — it’s Roughly half of all the work Saunders’ probably going to take some work to re- company is quoting these days falls into mobilize, Saunders said. That’s where the one of these unusual structures, he said. RFQs come in. “It’s almost inevitable that you’re going COURTESY HEADCOUNT RECOVERY (OR NOT) to have to refresh that rig with some new Like many others in the oil and gas busi- parts. You may even look to upgrade that That means a lot of the traditional ef- done to improve its equipment designs. ness over the last several years, Saunders’ rig to make it more marketable,” Saunders forts that companies might make in lean All of these efforts have certainly been business line has had to reduce headcount said. “If you’re going to do that, you’re times — the segment has found cost defla- paying off, Saunders said. His business to protect its returns. But that doesn’t nec- going to go out and get pricing for spare tion in material purchasing and reduction line has managed to offer solutions for essarily mean employment in the space parts and for upgrades.” in headcount, he said. But there have been about half the price they would have be- will snap back to where it was once the Saunders said that seeing more of these some unusual tactics as well that come fore the downturn, he said. market stabilizes, Saunders said. is an indicator that some of the rigs may from being a part of as widespread an or- “Does that mean you suddenly start He pointed out that he can only really be looking to return to the market toward ganization as GE. winning a bunch of business?” Saunders give insight in the narrow band of subsea the end of 2017 or into 2018. The subsea business has kept its manu- said. “Well, you have to realize that market services he operates in, but he said the GE Oil & Gas is a subsidiary of Bos- facturing capacity utilization up by turn- now is nothing like what we had in 2013. cost structures just aren’t built around a ton-based General Electric Co. (NYSE: ing its capabilities toward machining It’s much tighter.” linear relationship between the volume of GE). The subsidiary company is in the wind turbine and aviation parts for other work and the headcount needed to per- midst of a high-profile megamerger with sections of the GE family of companies. NEW SERVICE MODELS form it anymore. Houston-based Baker Hughes Inc. (NYSE: “Those are things that are great to do,” Cost deflation and activity reduction ar- “It feels like there’s not really room BHI). Saunders said. “They allow you to protect en’t the only ways the downturn has made for this kind of people-heavy approach But all of the above is still in the future. your capability and obviously help out its mark on the market, though. Service that we take to these big offshore and big Saunders said that in the recent past and other members of the team.” companies are having to bind themselves subsea developments,” he said. “I think for the time being, his segment of GE Oil It can also use this time to tap into the more closely to the success for failure of you want to end up with something that’s & Gas has been “working pretty tirelessly research capabilities of its parent compa- the equipment and their customers’ proj- much more productive, optimized and on our cost point.” ny. Saunders said a lot of analysis has been ects and take on more risk. leaner.”
RRNEWS BRIEF RRBY THE NUMBERS HOUSTON PIPELINE CO. LOOKS FOR CUSTOMERS KINDER MORGAN SECURES CREDIT TO FUND FOR PROPOSED DAKOTA ACCESS CONNECTION CANADIAN EXPANSION
Houston-based pipeline company American Midstream Partners LP (NYSE: AMID) is looking for customers for a proposed connection from its own system into the Dakota Access $4.15 billion The total credit Kinder Morgan Inc. (NYSE: KMI) got a hold of in a Pipeline. deal with a syndicate of four banks in order to move forward with The connection would draw the expansion of its Trans Mountain pipeline in Western Canada. crude from existing inputs on American Midstream’s Bakken pipeline system on the western edge of North Dakota and run up to 20,000 barrels per day into the $4.68 billion Dakota Access Pipeline. The Bakken The remaining capital spend needed to complete the project. system has capacity for 40,000 The source for the remaining $530 million or so has yet to be CRAIG HARTLEY/HBJ Lynn Bourdon barrels per day, which could be determined, and could come from any of several financing tools, Steven J. Kean, president and CEO of expanded in the course of the depending on what makes the most sense, said Kinder Morgan project. American Midstream, led spokesman Dave Conover. Kinder Morgan Inc. by CEO Lynn Bourdon, has started a binding open season to gauge shipper interest that will last until July 17. JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 11
RETAIL HUB The latest in Houston’s hot retail sector.
WHAT’S BAKING? LONGTIME KOLACHE SHOP TO OPEN SECOND LOCATION IN NEW HEIGHTS MIXED-USE BY OLIVIA PULSINELLI tomers already know and love, we plan [email protected] to serve a wide variety of espresso-based Lucy Hines (left) and drinks as well as cold-brew coffee.” Randy Hines, co-owners he Kolache Shoppe, a 47-year-old Houston-based MFT Interests is devel- of Kolache Shoppe business in the Greenway Plaza oping Heights Central Station at 1050 T area, plans to open its second loca- AmericanYale St. The two-story City Business mixed-use Journalsproject - Not for commercial use tion in a new mixed-use development is along 11th Street, on the site of a post underway in the Heights. office that closed at the beginning of 2016. The new 1,200-square-foot location Heights Central Station will consist will open in Heights Central Station next of three buildings. The Kolache Shoppe summer. It will serve as a bakery and cof- is taking a one-story, 1,200-square-foot fee shop and will offer new services, such standalone building on the site. Dish as a drive-thru option. Society recently leased 3,800 square feet “Having a much larger space in the on the first floor of the 9,130-square-foot Heights will allow us to expand our offer- West Building. The East Building is 11,680 ings in many different, exciting ways,” square feet. shop co-owner Lucy Hines said in a press The project is expected to be complete release. “Most importantly, we plan to in the second quarter of 2018, according increase our partnerships with local food to a brochure from NewQuest Properties, purveyors to offer new, unique kolache which is handling leasing. Kirksey is the flavors. Also, our Boomtown Coffee pro- architect, and Gallant Builders will be the gram will grow immensely – in addition general contractor. to their drip coffee that our current cus- COURTESY
FOCUSED ON FITNESS RETAIL REDUCTION BOUTIQUE FITNESS STUDIO TO OPEN FIRST TEXAS SEARS TO CLOSE 2 HOUSTON-AREA STORES LOCATION IN NEW MONTROSE PROJECT AS PART OF NATIONWIDE CONTRACTION
Spenga, a boutique fitness studio, has leased 4,011 square feet on the Sears plans to close another 20 stores nationwide, including its second floor of 307 Westheimer Road, a retail development expected Baybrook Mall location and its store at 9570 Southwest Freeway in to deliver later this year. Houston.
COURTESY FILE PHOTO
Spenga, a Chicago-based boutique fitness that’s expected to deliver later this year, Sears Holdings Corp. (Nasdaq: SHLD) plans January. Before this latest round, Sears studio, is entering the Texas market with according to JLL. According to LoopNet, to close another 20 stores nationwide, had announced a combined total of 245 its first location in Montrose. 2,000 square feet is available for lease on which include two Houston locations. closings. Those previously announced The company leased 4,011 square feet the first floor. Sears’ Baybrook Mall location and its closures included Texas stores in a variety at 307 Westheimer Road, and it’s planning Owners of longtime Italian restaurant store at 9570 Southwest Freeway, formerly of cities, but none in Houston. However, a additional Houston locations, according to Michelangelo’s sold the property in March, the Westwood Mall, are on the list of 97,000-square-foot Sears in Lake Jackson’s JLL. Spenga’s name is an amalgam of spin, according to Swamplot. closures announced June 22. No other Brazos Mall closed a year ago. As of late last strength and yoga, and it combines cardio, The location is near the border between Texas store was on the list. The stores’ year, that location was being renovated to strength and flexibility in 60-minute, high- Montrose and Midtown, and it’s also 404 liquidation sales will begin by June 30, make room for four tenants. intensity interval training sessions. yards from the future home of a Whole and they’re expected to close by mid- Sears still operates dozens of locations JLL’s Matt Parsons is representing Foods Market, according to LoopNet. September. in the greater Houston area — including Spenga in its Houston expansion, and Construction of that project, which The aggregate annual base rent at the its hardware stores, appliance outlet Chris Dray of NewQuest Properties is expected to be the first mixed-use 20 stores is approximately $11.2 million, stores, Hometown Dealers locations, Sears represented the landlord, Lower residential-grocery midrise in Houston, New York-based Seritage Growth Properties PartsDirect locations, Sears Parts and Westheimer Center LP, in the Montrose began earlier this year. A Pearl-branded (NYSE: SRG) said in a June 23 filing with the Repair Centers and Sears Auto Centers lease. apartment complex with 264 residential U.S. Securities and Exchange Commission. — according to the store locator on the The Montrose location is on the second units will sit atop the 40,000-square-foot This is the latest in a series of closures company’s website. floor of a new two-story retail development Whole Foods. Illinois-based Sears has announced since 12 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
Reporter MONEY & INNOVATION HUB Jack Witthaus
I [email protected] 713-395-9608 @HBJ_JACK
ROLLING, ROLLING, ROLLING HOUSTON-AREA TRUCKING TECH CO. RAMPS UP HIRING, TO DOUBLE IN 2018 Spring-based trucking technology company is hauling — well, they’re A growing fast. American City Business Journals“We - haveNot for commercialto have theuse Gorilla Safety, which offers cloud-based technology for fleet and safety manage- resources to not only ment, is planning to hire about 35 people by the end of this year, up from its rough- onboard, but also to be ly 20 current employees, co-founder Mark Walton said. The company is planning to able to support (new double its number of employees again in 2018. growth).” The hiring spree is related to a federal MARK WALTON, rule going into effect in December, which co-founder of Gorilla Safety requires truckers to dump paper logs and use electronic logging devices. In the U.S. alone, trucking revenue is valued at more than $700 billion, according to the Amer- ican Trucking Associations. “We have to have the resources to not only onboard, but also to be able to sup- port (new growth),” Walton said. With the hiring, the company expects its revenue to hover between $10 million to $12 million in 2017 before growing to about $50 million in 2018. Gorilla Safety has been self-funded so far after Walton GETTY IMAGES and fellow co-founder Tommy Johnson Doubling the size of the company has a bigger office, between 10,000 to 12,000 cent of the freight bill in the U.S., accord- created the company in November 2013. created some office space challenges, square feet soon. ing to the most recent data from the The company’s growth has led to the though. Last year, Gorilla Safety signed “We’ll have to make sure we can stay American Trucking Associations. Trucks creation of its first COO, Shannon McLe- a lease for a roughly 2,600-square-foot awhile in the next one,” McLeroy said. carried 10.49 billion tons of freight in roy. He was promoted to the position in space at 20008 Champion Forest Drive in In 2015, trucking accounted for $726.4 2015, which is about 70 percent of the May from director of sales. Spring, but the company expects to need billion in gross freight revenues, or 81 per- nation’s freight tonnage.
RRNEW NAME, NEW PARTNER RRLIGHTNING ROUND HOUSTON BOUTIQUE LAW FIRM CHANGES HOUSTON BIOTECH COMPANY INJECTED NAME AFTER PARTNER LEAVES WITH FIRST CAPITAL RAISE A Houston-based boutique law firm, A Houston-based biotech company received which was formed by two former Robert its first capital raise ahead of rolling out its Vinson & Elkins LLP senior litigation Schick technology to hospitals. partners, has changed its name Luminare Inc. — which creates a system after one of its founders rejoined his for early detection for sepsis — raised about previous employer. $497,491 in seed round funding, according Schick & Copeland LLP is now to a filing with the Securities and Exchange Copeland & Rice after Robert Schick Commission. The company has the option to was hired back at Vinson & Elkins raise another half-million dollars, said co-founder as a partner in the firm’s Houston Dr. Sarma Velamuri. office. Schick and Morgan Copeland Luminare plans to use the money to launch Sarma Jr. formed Schick & Copeland in pilot tests in hospitals, Velamuri said. The Velamuri early 2014 after joining Vinson & COURTESY company was founded in fall 2014 and is Elkins straight out of law school. June 19. Samora was a former currently based in Station Houston. It has three COURTESY The boutique law firm’s name colleague of Morgan Copeland Jr. at employees. in Sweden in fall 2014. Velamuri’s wife, who change occurred June 16. Tracey Vinson & Elkins. Sepsis, a life-threatening blood disease, kills is Swedish, had a longtime friend who was Rice is a partner at Copeland & Rice. Vinson & Elkins is the largest about 258,000 people in the nation each year, marrying Rydberg. At the time, Velamuri was “The Copeland & Rice team law firm in Houston with 261 local according to disease advocacy group Sepsis looking to start a company to stop patients from will continue to offer our unique lawyers, according to HBJ’s List. It Alliance. Hospitals spend about $24 billion dying from undetected sepsis. combination of deep experience is also one of the of the busiest law annually to fight the disease, one of the most A few weeks after the meeting, Rydberg and and low overhead to help our clients firms in Texas, completing more expensive conditions to treat in U.S. health care. his wife moved to Houston so Rydberg could achieve their business goals,” than 400 deals between 2010 and “It’s an enormous cost to society,” Velamuri launch the company with Velamuri. Luminare is Copeland Jr. said in an email. “It will 2016. said. from the Latin lumen which means “light.” be business as usual as we continue Luminare is pre-revenue, Velamuri said. He “This is what we’re supposed to be doing,” to serve our clients.” declined to disclose the run rate for the funding. Velamuri said. “We’re here because we know we Schick & Copeland also hired Velamuri met fellow co-founder, Marcus can fix this.” Gwen Samora as partner effective Rydberg, a few days before Rydberg’s wedding JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 13
STRATEGIES For fast-growing companies and careers
TECHNOLOGY Protect your energy company from cyberattacks BY STEVEN PAUL everyone’s attention and industry risk and gas industry to respond in kind with sidering this, there are many opportuni- ROMERO portfolios are increasingly balanced to- sound engineering practice and corre- ties for those willing to push themselves Guest Contributor ward mitigating them. Still, local firms sponding controls to reduce likelihood, by committing to learning, understanding see signs of persistent gaps. consequence and impact. A growing list and participating in a growing field. Recent and on-go- of security incidents Concerned organizations must help by ing cyberattacks NOT JUST AN IT affecting ICS getting past relying on vendors and tech- against the energy PROBLEM point to height- nical gadgetry to solve security woes. In- sector have chal- Most oil and gas industry ened need for stead, they must dedicate portions of their lenged the oil and Americanprofessionals’ City attention Business are Journals - Not for commercialthe oil anduse gas budget to training employees whose in- gas industry boardroom’s traditional per- on attacks targeting In- industry to simi- terest and aptitude in solving challenging spective on risk. A handful of industry dustrial Control Systems larly focus on clos- technical and business problems. players are now paying serious attention (ICS). Attacks against these ing gaps that have Cyberattacks against the energy sector to cybersecurity risk, and have respond- types of systems have been the potential to lay business aren’t going away. For those that turn a ed beyond considering an ever-changing downplayed due to their di- and community stakehold- blind eye to the risks, it is not a matter of landscape as what was once “the IT guy’s versity and separation from ers bare to serious reliability, if they will fall victim, but when. Creating problem.” traditional business net- financial, reputational, envi- a pipeline of skilled cybersecurity talent is Despite the devastating effect of low works. However, increasing ronmental, and safety-relat- an investment Houston energy companies oil prices on the Houston economy since technology convergence, ed risks. need to consider to help ensure safe and early 2015, a few organizations continue legitimate business drivers, secure operations. to focus on resilient operations and ad- production uptime requirements and BUILDING THE PROFESSION dressing cyber risk. As one oil and gas ability for ICS to affect the physical IS A REQUIREMENT Steven Paul Romero is an energy major board-level executive has been ru- realm are putting asset owners and op- Amidst a deluge of information from professional at Chevron, previously mored to say, “Hackers don’t care about erators under greater risk. a variety of media sources, conflicting serving as risk manager, responsible for the price of oil.” According to ICS experts, historical opinions and a growing list of security identifying gaps and improving security The likelihood of cybersecurity in- examples of the catastrophic effects of vendors, one issue remains unchanged – posture in Chevron’s Process Control cidents affecting bottom lines now has safety incidents have prompted the oil a lack of skills compatible with ICS. Con- Network infrastructure.
Wednesday, July 12 | 6-9 PM GOING PRO Registration: 6 - 6:30 PM Learn what it takes to become a professional athlete. Panel Discussion: 6:30-8 PM VIP Reception: 8- 9 PM
The Woodlands Country Club | Legacy Ballroom 100 Grand Fairway Drive | The Woodlands, TX 77381
Do you dream of becoming a professional athlete? CHI St. Luke’s Health is hosting a FREE event featuring panel conversation with world-class athletes and health care providers who will share their experiences, give advice, and answer your questions to help you get recruited to play college sports— and ultimately play professionally. Panelists include:* • Brandon Marshall of the New York Giants and Sinorice Moss, a former New York Giants player • Santana Moss, a former Washington Redskins player • Ran Carthon, former running back of the Indianapolis Colts and current Director of Pro Personnel for the San Francisco 49ers • Thomas R. Hunt III, MD, D.Sc., Professor and Chairman Joseph Barnhart Department of Orthopedic Surgery, Baylor College of Medicine • Moran Norris, former All American fullback for the New Orleans Saints • Derrick Jonkins, a local all sports training coach and owner of DJONKINS SPORTS • Matthew Hammit, MD, Sports Medicine Medical Director for CHI St. Luke’s Health–The Woodlands Hospital • Joe Briggs, Public Policy Counsel of the NFL Players Association Moderated by David Argueta, President of CHI St. Luke’s Health–The Woodlands, Lakeside, and Springwoods Village Hospitals. RSVP: GoingProfessional.Eventbrite.com Register: [email protected] Brandon Marshall New York Giants Player *Panelists are subject to change 14 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017 PANEL RECAP PANEL RECAP International business remains a powerhouse of city’s economic engine BY JACK WITTHAUS Menendez said. [email protected] “Go slow to finish first,” Menendez said on entering new markets internationally. ore than 100 business leaders It’s also important to remember the attended the 2017 Houston Busi- customs of another country once a busi- Mness Journal Power Breakfast on ness starts looking internationally, pan- International Business, which covered elists said. If an international partner acts the importance of establishing business differently than you’d expect, it might be relationships outside the U.S. because business is handled differently in The June 20 panel at the Junior League American City Business Journals - Not for commercial use other parts of the world. of Houston featured five panelists — from “The biggest part of conducting inter- local officials to company leaders — who national business is establishing trust,” all had experience in international deal- Newton said. ings. They were Manny Menendez, found- Sometimes, companies may feel er of MCM Group Holdings Ltd.; Jim Grif- Panelists from left: Manny Menendez, founder of MCM Group Holdings; apprehensive to conduct international fin, chairman of the Economic Alliance Jim Griffin, chairman of the Economic Alliance Houston Port Region; business if a political climate is deemed Houston Port Region; Matthew Shailer, Matthew Shailer, director of trade and international affairs at the unstable. But political volatility is just director of trade and international affairs Houston mayor’s office; Jonathan Newton, managing partner at Baker part of doing international business, at Mayor Sylvester Turner’s office; Jona- McKenzie Houston; and Takeshi Ebisu, CEO of Goodman Group Inc. Newton said. than Newton, managing partner at Bak- DANIEL ORTIZ/HBJ Another piece of advice: Learn a little er McKenzie Houston; and Takeshi Ebisu, bit about the country before you leave. CEO of Goodman Global Inc. about 80 percent of the global economy But it’s important to take your time That will help impress a future business The panel covered topics ranging from is outside the U.S., Shailer said. Hous- when expanding your business abroad, partner if you attempt to understand why international business is important ton is well positioned as a city for inter- panelists said. Panelists discussed find- their country before talking with them. and how companies can start to establish national business, and there are various ing reliable partners for forming inter- “Travel humbly and respectfully,” these foreign relationships. tools the city and other groups provide to national relations. There could be nega- Menendez said. “You’re a guest in other Panelists agreed that businesses often local businesses interested in expanding tive implications if a company moves too countries.” look to the international market since their reach. fast with finding good partners abroad,
DO YOU KNOW THE BEST PLACE TO LOOK FOR SALES LEADS? FINANCIAL TERM TRANSLATION YOUR INBOX. ‘‘international investing in companies investing ‘‘ outside of your country Invest in the World, Without Leaving Texas. Regardless of your investment goals, Commonwealth Funds strives to offer what we believe to be unique investment opportunities that will help you save for retirement, children’s education costs, or other expenses, as well as diversify your portfolio. Our five mutual funds managed by our Houston-based advisor help you bring it home.
Order our Sales Leads in the market of your choice and get them delivered directly to your inbox—two weeks before they are available here. Our leads are collected by AFRICA FUND AUSTRALIA/ GLOBAL JAPAN REAL ESTATE (CAFRX) NEW ZEALAND (CNGLX) (CNJFX) SECURITIES Business Journal researchers and can be customized to fi t your needs. Get exactly (CNZLX) (CNREX) what you need to grow your business, sent right to your inbox. Get Started Today. Learn more about our funds and our investment philosophy. 888.345.1898 | commonwealthfunds.com CALL .. TO ORDER
FCA Corp, a Houston-based company, is the advisor to Commonwealth Funds. BizJournals.com/Commerce You should consider the Fund’s investment objectives, risks, charges, and expenses carefully before investing. For a prospectus that contains this and other information about the Fund, call 888.345.1898 or visit our website at commonwealthfunds.com. please read the prospectus carefully before investing. Business The Commonwealth Funds are distributed by Unified Financial Securities, LLC. Leads A division of American City Business Journals Investing involves risk, including loss of principal. Investments in international markets present special risks, including JOURNAL BUSINESS currency fluctuation, the potential for diplomatic and political instability, regulatory and liquidity risks, foreign taxation, 120 West Morehead Street, Suite 100 and differences in auditing and other financial standards. Risks of foreign investing are generally intensified for Charlotte, NC 28202 investments in emerging markets. There is no guarantee that this, or any, investing strategy will achieve its objectives. Diversification and asset allocation do not ensure a profit or guarantee against loss. JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 15
Tips for Success in Foreign Markets
American City Business Journals - Not for commercial use 1
Know Your Markets Political events, natural disasters and changes in commodity prices can Today’s Economy Is Global. impact currency values. Are You Managing The Associated Risks? Whether your company is entering the international marketplace for the first time, 2 expanding into new markets, or purchasing goods or services from foreign suppliers, operating your business internationally can present an array of challenges and opportunities. Hedge Currencies Fluctuations in currency values can Today, more than ever, our economy is global. When operating your business internationally, negatively impact your profit margins. you have to stay on your toes. You need to know the intricate challenges associated with Proactively manage your risk by hedging. your markets. Minimizing risks associated with foreign currency transactions can play a key role in your company’s success in foreign markets.
At Bank of Texas, our International Services team provides robust Foreign Exchange Services and can assist you in navigating the ins-and-outs of the global marketplace.
Let us help you make the most of your business abroad. 3 Price Locally Make it easier for foreign customers Bodil Boest | 346.307.9383 to purchase from you. Price goods and www.bankoftexas.com services in their currency.
© Bank of Texas. Services provided by BOKF, NA. Member FDIC. Bank of Texas executes foreign exchange trades and receives spread revenue with respect to such transactions. Where Bank of Texas does not support the local market, non-affiliated brokers will be utilized. Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. Investments and insurance products and services offered through Bank of Texas and its various affiliates and subsidiaries are not insured by the FDIC; are not deposits or other obligations of, and are not guaranteed by, any bank or bank affiliate and may be subject to investment risks, including the possible loss of principal. 16 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017
COVER STORY AMENITIES ARMS RACE HOW HOUSTON MULTIFAMILY DEVELOPERS ARE UPPING AmericanTHE ANTE City Business ON LUXURY Journals - AMENITIESNot for commercial AND use ENVISIONING THE FUTURE OF CLASS A APARTMENTS
BY PAUL TAKAHASHI | [email protected] | 713-395-9635 | @HBJPAUL
hen Marvy Finger developed Modern Houston apartments boast his first Houston apartment a bevy of high-end amenities, such as project in 1960, it offered a resort-style pools with cabanas, high-end few basic amenities. fitness centers and high-tech conference WColony Oaks, a two-story, 317-unit gar- rooms. den-style apartment complex near the Some Houston apartments feature Galleria, featured landscaping, courtyards amenities geared toward Millennials and and a swimming pool. young professionals working in energy, Six decades later, the founder and CEO law and medicine. These youth-oriented of The Finger Cos. infuses a bevy of luxury apartments offer video arcade rooms, pool amenities into his Class A apartments. One CHRIS CURRY/HBJ tables, bocce ball pits, bowling lanes and of the prolific Houston multifamily devel- “The amenities in these resort-style pools with cabanas, outdoor oper’s most recent projects — 1900 York- grills and even full-service bars. town — is located just three miles from apartments of today are StreetLights Residential offers a full-ser- Colony Oaks. The eight-story, 262-unit outrageous compared to vice bar — complete with a bartender mix- apartment complex features a resort-style ing drinks — at its three Houston apart- pool with cabanas, a state-of-the-art fit- what was available on the ment projects: The Ivy, The James and The ness center and a clubroom with bars and market when I started.” Carter. Residents can stop by during happy kitchen that can be rented out for private hour, and pay for a bottle of beer, a glass parties. MARVY FINGER, of wine or a mixed cocktail. The James, CEO, founder, Finger Cos. “The amenities in these apartments of located near the River Oaks District, is an today are outrageous compared to what eight-story midrise featuring 344 high- was available on the market when I start- Amenities galore end units. Rents are about $2.60 per square ed,” Finger said. Several years ago, Scott Ziegler began foot, or $2,210 per month for an average Houston’s Class A apartment develop- keeping a “menu list” of amenities for cli- 850-square-foot unit. ers and architects are increasingly engaged ents looking to devel- Other apartments feature amenities in an amenities arms race — upping the op a luxury apartment designed to woo Baby Boomers, such as ante on features, services and technolo- project in Houston. demonstration kitchens for cooking class- gy — as competition heats up for wealthy The senior principal of es and wine lockers. Some apartment renters. Houston-based Ziegler developers, like Martin Fein Interests and Developers are now planning new Cooper Architects Greystar, are building apartments that amenities that are poised to revolutionize started with about 35 cater to active-adult renters ages 55 years apartments. Many developers are design- amenities on his first and up. Both developers offer spas that fea- ing apartments for a future where drones, list about seven years ture hair and nail salons in their active- Scott Ziegler self-driving cars and artificial intelligence ago. Today, that list has adult projects. Rents at Greystar’s Over- will transform the way renters live. expanded to a whop- ture Sugar Land, a four-story, 200-unit Developers are building high-end ping 98 amenities. complex southwest of Houston, averages amenities and new technologies into Ziegler works with developers to dis- $2,174 per month. Rents at Fein’s Olym- their projects to differentiate them in an sect their target renter audience, narrow- pia at Willowick Park, an eight-story, 189- ever-crowded market. All of this means ing a project’s amenity package based on unit midrise near Highland Village, aver- living in a luxury apartment in Houston location, demographics and economics. age $3,554 per month. these days can rival a relaxing stay at a five- The architect travels the world looking Apartment amenities aren’t just about star hotel. for inspiration in hotels, markets and res- physical features — they’re also about offer- “Houston’s apart- idences in other countries. When he’s not ing unparalleled hotel-like services. ment amenities are globetrotting, Ziegler is constantly comb- Many Houston luxury apartments very, very nice and ing the Internet, especially Pinterest, to feature a concierge desk that can handle very upscale,” said give his design team ideas for Houston’s packages, dry cleaning, changing light- Hines Interests Bruce McClenny, presi- next big apartment amenity. bulbs and even restaurant reservations incorporated a pocket dent of Houston-based “Amenities are so important,” Ziegler and appointments. The Morgan Group park in the Southmore, a Apartment Data Ser- said. “From the moment you walk into a is offering a hotel-like shuttle service at 24-story, 233 unit tower in vices. “The amenities leasing center, we want the tour to have a Pearl CityCentre that transports apart- the Museum District. Bruce are right up there with wow factor so that by the time the tour is ment residents to the nearby CityCentre McClenny custom homes.” done, you’re ready to sign.” mixed-use development. The seven-story, JUNE 30-JULY 6, 2017 HOUSTON BUSINESS JOURNAL 17 COVER STORY
311-unit midrise has an average monthly of affluent renters in Houston? 1 To see a slideshow of some of rent of $2,069. It might not be as big as developers may " these apartments’ most unique Apartments are also catering to canine think, according to RENTCafé. The nation- amenities, go to HoustonBusiness.com residents, featuring dog washes and dog al apartment search firm analyzed U.S. parks, as 60 percent of renters in Houston Census data and found that Houston had own pets. Trammell Crow Residential set the fifth-largest number of affluent rent- aside a large 1 acre fenced-in park featur- ers nationally. There are 22,000 renter-oc- ing dog exercises for its four-pawed tenants cupied households in Houston who earn at its Alexan Yale Street apartments in the more than $150,000 a year, an increase of Heights. Rents at the midrise apartment 4.8 percent between 2014 and 2015. complex range from $1,231 per month Still, this well-heeled group represents for a one-bedroom, 630-square-foot unit just 4.4 percent of all renters in Houston. to $3,315 per month for a two-bedroom, The majority of Houston renters — 64.3 1,498-square-foot unit. percent — earn less than $50,000 a year, according to RENTCafé. ROI Nearly half of Houston apartment res- Some amenities may look good on paper, Americanidents are considered City Business “rent-burdened,” Journals - Not for commercial use but are often underutilized by residents, meaning they spend more than 30 per- 2 3 said Paul Forbes, a cent of their income on rent, according to co-principal at Hous- Abodo, an online apartment marketplace. ton-based Allen Har- In Houston, 48 percent of apartment rison Co. residents are considered rent-burdened. Amenities, like a Houston ranks No. 58 among the top 100 business center, can cities with the highest share of rent-bur- sit empty most of the dened residents, according to Abodo. time — costing devel- opers money to main- Amenities of the future Paul Forbes tain without benefit- Emerging technologies are transforming ing residents. the way developers build Houston apart- 4 5 “I believe the amenities arms race is a ments and amenities. losing battle because it’s kind of trendy,” With the rise of ride-sharing and auton- Forbes said. “Instead, we’re trying to focus omous cars, Gensler is advising clients on something that is going to stand the to delay construction on parking garag- test of time. That means building ameni- es and instead design parking structures ties that everyone wants, uses and values: that could be converted into other uses in a pool, fitness center and common area for the future. residents.” Peter Merwin, a principal at Gensler Higher-end amenities drive develop- overseeing the architect’s mixed-use prac- ment costs up, but it pays off major div- tice in Houston, believes emerging tech- 6 7 idends, Ziegler said. Apartments with nologies, such as self-driving cars and attractive amenities lease up more quick- automated parking garages that can stack ly and can charge higher rents. Moreover, cars on top of each other, could mean more high-end amenities add value to the prop- space for apartment units and amenities erty upon sale, he said. for Houston developers. “Amenities are expensive,” Ziegler said. “We won’t immediately eliminate the “But the cost of not doing it is more than need for parking, but if we can nibble back just doing it.” 10 percent, it’ll be a huge boon to develop- Ziegler points to one of his Houston ers,” Merwin said. “Like the Dutch from projects, The Sovereign at Regent Square, the sea, taking back real estate is very 8 9 developed by Boston-based GID Devel- crucial.” opment. Plans for the Class A apartment Several apartment operators, includ- project in Upper Kirby evolved from a ing Scottsdale, Arizona-based Alliance three- or four-story garden-style apart- Residential Co., are looking at incorpo- ment to an eight-story midrise to the cur- rating smart home technology and artifi- rent 21-story, 290-unit tower. The project cial intelligence into their units. Residents includes a demonstration kitchen, zen gar- of these “smart apartments” will be able den, on-site ATM, valet parking and elec- to control lights, surround sound systems
tric car charging station among its many and thermostats with just their voice. TAKAHASHI/HBJ PAUL BY PHOTOS ALL amenities. As online shopping becomes more pop- 1.) The “Sky Pool” at Market Square Tower, developed by Woodbranch Investments Corp. The The Sovereign came to market during ular, developers such as Morgan Group Plexiglas infinity-edge pool extends up to 10 feet from the edge of the 40-story tower.2.) The the middle of the oil slump, but leased and Midway Cos. are installing automated bike share program at Aria at Willowick Park, developed by Martin Fein Interests. In response up in half the normal time — within eight package lockers that can text or email res- to resident interest, developers are introducing ways their residents can connect with their months instead of the typical 12 to 15 idents to pick up their Amazon deliveries neighborhood. 3.) The arts and crafts room at Hanover Montrose, developed by The Hanover months, Ziegler said. Rents at The Sov- securely. Other developers, like Hanover Co. Developers wanted to create a space in artsy Montrose for residents to do arts and crafts ereign start from $1,470 per month for Co., have incorporated refrigerated pack- projects. 4.) The dog wash room at Hanover Montrose where residents can bathe and blow dry their dogs. Developers are adding dog washes because more than half of residents have a 592-square-foot studio to more than age storage areas for Blue Apron and oth- pets and these dog washes can help prevent pet hair from clogging up residential plumbing $5,000 per month for a two-bedroom unit er food deliveries. With the rising popu- systems. 5.) The game room at Aria at Willowick Park. Developers are designing spaces where spanning 1,453 square feet. larity of online shopping and near-instant residents can socialize. 6.) The spa at Olympia at Willowick Park, developed by Martin Fein “Our client wanted a blowout amenity delivery services, developers are also look- Interests. As more Baby Boomers move in, developers are creating luxurious spas where package,” Ziegler said. “And they hit it out ing into drone landing pads where flying residents can have their personal stylists do their hair, makeup and nails. 7.) The catering of the park.” drones can deliver packages. kitchen at Olympia at Willowick Park, where residents can host large parties in the dining Amenities can be a risky proposition, room, complete with caterers who can prepare and warm up foods in the catering kitchen. 8.) The fitness room at The James, developed by StreetLights Residential where residents can ride Pool of luxury renters however, said Jonathan Brinsden, CEO of their spin bikes virtually anywhere in the world using a personalized workout system. With so many luxury apartment units Houston-based Midway Cos. High-tech 9.) The refrigeration room at Hanover Montrose. Residents can store their catering as well as their being delivered, industry observers have Blue Apron dinner packages here. As food delivery services have become more commonplace, often wondered: Just how deep is this pool CONTINUED ON PAGE 18 developers are planning ways apartments can keep residents’ perishable items cold. 18 HOUSTON BUSINESS JOURNAL JUNE 30-JULY 6, 2017 COVER STORY
CONTINUED FROM PAGE 17 10 11 elements in a niche neighborhood.” Ultimately, the fundamentals of real amenities in particular estate — great location and design — will can be hard to predict, always trump amenities and technolo- because new technol- gies, Brinsden said. ogies change rapidly. Midway Cos. recently completed Ave- “People tend to nue Grove, an eight-story, 270-unit apart- gravitate toward what’s ment project in Upper Kirby that features the hot new thing all the usual luxury amenities: a resort- today, but it may not be style pool, a high-end fitness center and Jonathan relevant in a decade,” an automated package locker system. Brinsden Brinsden said. “At one 12 13 But Avenue Grove’s biggest amen- point, everyone raced ity sits across the street. Levy Park, a to put in an iPod speaker dock, but when 6-acre urban park, underwent a $15 mil- Apple changed their connector, it rendered lion makeover and now features a pavil- everything into obsolescence.” ion, green space, playground, fountains, American City Business Journals - Not for commercial use games and even a restaurant. Rents start Neighborhood amenities from $1,650 a month for a one-bedroom Developers are increasingly harnessing unit spanning 623 square feet to nearly neighborhood amenities — restaurants, $4,000 per month for a two-bedroom nightlife, shopping, entertainment, park brownstone spanning 1,135 square feet. 10.) The conference room at Hanover Montrose. Residents can host boardroom meetings or even a grocery store on the ground in their apartment building. 11.) The electric car charging stations at Hanover Post Oak, Hines Interests also included a pocket floor — to attract high-end renters. developed by The Hanover Co. As electric cars become more commonplace, developers park in The Southmore, a 24-story, 233- Marvy Finger was one of the first to are adding charging stations into apartment buildings. 12.) The keyless locks at Olympia unit tower in the Museum District. Rents incorporate a grocery store in the One at Willowick Place. Emerging technology in security, entertainment and smart homes are for the average units range from $2,200 Park Place apartment tower downtown, revolutionizing Houston apartments. 13.) The Alcove bar at The James. Residents can stop by to $6,400 per month. which has a Phoenicia grocery store on during happy hour and have a drink and socialize. “Rather than focusing on the amenity the ground floor. of the day, we try to focus on the human Today, Ziegler Cooper is working with Buffalo Bayou Park. use apartment project can charge a 25 to aspect: What is it that day-to-day impacts The Morgan Group on a Pearl-branded Apartment and mixed-use developers 30 percent rent premium over single-use the way people live?” Brinsden said. “It’s apartment midrise anchored by a Whole are keen to partner with grocers because apartment projects. the simple things, such as connectivi- Foods Market in Midtown, as well as they can charge higher rents and earn “We’re seeing a densification in our ty, location and access to neighborhood with Midway Cos. on Buffalo Heights, a a greater return on their investment, living patterns,” Ziegler said. “People are amenities like restaurants. Those are boutique office and apartment midrise Ziegler said. A recent Urban Land Insti- looking for more of an urban lifestyle, going to be a constant for the foresee- anchored by a H-E-B grocery store near tute study found that an urban mixed- and we see the grocer as one of the key able future.”