Harris County Appraisal District 2015 Market Trends Report Harris County Appraisal District 2015 Market Trends Report Table of Contents Residential Property ................................................................................ 1 Sales Volume Update .............................................................................................1 Sales Price Update ..................................................................................................2 Inventory Update ....................................................................................................2 Lease Property Update............................................................................................3 Summary of Houston Real Estate Milestones in 2014 ........................................... 3 Looking Forward ....................................................................................................4 Commercial Property .............................................................................. 6 Vacant Land ............................................................................................................6 The Central Business District....................................................................................... 6 Uptown District / Galleria ............................................................................................ 9 Inner Loop .................................................................................................................. 12 Midtown ............................................................................................................................ 12 Montrose ........................................................................................................................... 13 Upper Kirby ...................................................................................................................... 13 Washington Avenue .......................................................................................................... 15 The Outer Loop .......................................................................................................... 18 Katy ............................................................................................................................ 19 The Energy Corridor .................................................................................................. 20 The Grand Parkway .................................................................................................... 23 Cypress Fairbanks ISD ............................................................................................... 24 Tomball ISD ............................................................................................................... 26 Spring ISD / ExxonMobil Campus ............................................................................ 27 Humble / Kingwood ................................................................................................... 29 Clear Creek ISD ......................................................................................................... 30 Sales ........................................................................................................................... 31 Summary .................................................................................................................... 32 February 10, 2015 i Harris County Appraisal District 2015 Market Trends Report Office ....................................................................................................................33 Inventory Analysis ..................................................................................................... 34 Construction Activity and Deliveries ......................................................................... 35 Net Absorption and Leasing Activity ........................................................................ 37 Vacancy ...................................................................................................................... 38 Rental Rates ............................................................................................................... 38 Sales Activity ............................................................................................................. 39 Capitalization Rates ................................................................................................... 39 Summary .................................................................................................................... 40 Apartments ............................................................................................................40 Rental Rates ............................................................................................................... 41 Market Trends ............................................................................................................ 42 New Construction ....................................................................................................... 44 Summary .................................................................................................................... 47 Retail .....................................................................................................................48 Net Absorption ........................................................................................................... 48 Market Occupancy ..................................................................................................... 49 Largest Lease Signings .............................................................................................. 49 Rental Rates ............................................................................................................... 49 Inventory & Construction .......................................................................................... 49 Sales Activity/Capitalization Rates ............................................................................ 49 Detail by Property Type ............................................................................................. 50 Shopping Centers .............................................................................................................. 50 Power Centers ................................................................................................................... 50 General Retail Properties .................................................................................................. 51 Specialty Centers .............................................................................................................. 51 Malls ................................................................................................................................. 51 Summary .................................................................................................................... 51 Medical .................................................................................................................52 The Texas Medical Center ......................................................................................... 52 Demographics: Driving Demand ............................................................................... 54 February 10, 2015 ii Harris County Appraisal District 2015 Market Trends Report Medical Office Buildings ........................................................................................... 56 Hospitals ..................................................................................................................... 58 Nursing Homes and Retirement Homes ..................................................................... 60 Economic Uncertainties ............................................................................................. 62 Summary .................................................................................................................... 63 Hotels and Motels .................................................................................................63 Texas Lodging ............................................................................................................ 64 Revenue Growth ............................................................................................................... 64 Room-Nights sold ............................................................................................................. 64 Revenue per Available Room (RevPAR) ......................................................................... 64 Occupancy......................................................................................................................... 64 Supply Below Demand Growth ........................................................................................ 64 Houston Lodging ........................................................................................................ 64 Developments ............................................................................................................. 64 Summary .................................................................................................................... 65 Golf Courses .........................................................................................................65 New Construction ....................................................................................................... 66 Summary ...................................................................................................................