What's Changing in Industrial Development?
Institutional investors (typically not based in Houston) are more freaked out about oil prices than we are, says EastGroup Properties SVP Brent Wood, speaking at Bisnow’s Industrial Summit Thursday. (We snapped him with Arch-Con’s Jason Cooper, InSite’s Rives Nolen and TNRG’s Robert McGee.) Brent doesn’t forecast a devastating impact, but with people talking about the ‘80s again, financing will be hard to come by. EastGroup doesn’t plan to abandon construction entirely, but it’s seriously slowing the pace. It had been launching the next phase of its business parks when the current one reached about 33% occupancy. Now it’ll wait until almost full occupancy, and will consider other factors like how difficult it was to lease up.
Stratton Development & Construction president Casey Butaud makes his developments more leasable (and backfill-able) by making every building crane-ready, even if it’s a build-to-suit that doesn’t require it. He’s also raising clear heights (as most developers are) and because he’s doing a lot of development on retail land on 1960, he’s upping aesthetics. Here’s Casey with MAPP’s Shelly Antley and Ward Getz’s Cynthia Foteh. If you’re thinking a slowing economy will lower construction costs and make development cheaper, don’t hold your breath. He says costs are quick to rise and slow to come down, especially when most contractors have a strong existing pipeline to work through.
We snapped Gallant Builders’ Jonathan Shaw, Hoar Construction’s Scott Evans and our moderator, Kirksey VP Marty Fifer. (Scott says they’re Mo, Larry and Curly, but he’s not telling who is which.)
Our sponsor Texas Capital Bank’s Elaine Opper and Q10 Kinghorn Driver Hough & Co’s Larry Peters enjoyed a cup of coffee before the panel. Larry’s working with developers on permanent financing for construction. (Elaine jokes she’ll take every one of those deals.)
