Power Restoration Is CRE’s Primary Concern Days After Tropical Storm Beryl

Houston commercial property managers prepared as much as they could as a rapidly course-changing hurricane approached on a holiday weekend. 

Property damage ended up being minimal overall, Gulf Coast-based managers told Bisnow. Yet over a million CenterPoint customers remained without power Wednesday amid 90-plus-degree temperatures, extending a dangerous situation in the days after Tropical Storm Beryl killed 11 people in the Houston area. 

The storm exacerbated CRE players' existing frustrations with Houston’s power infrastructure and the emotional and physical resilience required to live in the area.

“In my own staff, I hear people say, ‘Why are we even living here?’” said Seth Eslami, chief operating officer of Stellar International Commercial Real Estate, which provides property management services. 

“Tenants are coming to work happy because they don’t have power at home, so at least they can charge their phone, they can sit in air conditioning,” Eslami added. “But they’re not happy because they have to go back and deal with their house.” 

Like many others, JLL property managers have seen minor damage, including broken tree limbs, fallen trees, damage to awnings, roofs and signage, and minor to moderate water infiltration, said Connie O’Murray, managing director of property management at JLL’s Houston office.

“The JLL property management teams were well prepared for Hurricane Beryl, including having building engineers — also known as ‘storm riders’ — on site at properties 24/7, as well as standby remediation companies in place to support cleanup and restoration efforts,” O’Murray said in a statement. “As a result, damages were minimized.”

Advance notice for Beryl was helpful, but there was uncertainty around its path and intensity until the last minute, she said. Annual hurricane readiness is a must in Houston, while tornadoes and derechos are much rarer, she said.

A May 16 derecho caused extreme, unprecedented damage in Downtown Houston and highlighted the importance of being nimble and responsive after a disaster, O’Murray said. 

For The Deal Co., which develops, owns and operates commercial real estate primarily in Houston, the derecho was much worse than Beryl, Director of Development and Acquisitions Ori Batagower said. The derecho peeled a good portion of one of its buildings’ roofs back, but the company repaired that and got the tenant back in within days, he said.

The Deal Co. has its own maintenance team of more than 30 people who immediately mobilize as soon as the weather allows, he said.

“You have to be vigilant year-round,” Batagower said. “If it’s not hurricane season, it’s something else.”

But just like the derecho, some commercial buildings incurred significant damage from Beryl. 

At 1225 N. Loop W., where Stellar ICRE has its office, a tree shattered a first-floor window, Eslami said. A repairman was able to come out and board up the window the same day, though he is already overseeing 1,200 windows, Eslami said. 

Many of those are likely from the derecho, which blew out thousands of windows in Downtown Houston skyscrapers. Before the pandemic, glass companies kept significant inventory in stock, Eslami said. Now they are all made-to-order, so Beryl exacerbated an already long timeline to repair $5B to $8B in derecho damage, he said. 

Beryl made landfall as a Category 1 hurricane near Matagorda Bay just before 4 a.m. Monday, then was downgraded to a tropical storm as it moved inland across Houston. It brought winds as fast as 91 mph and heavy rain that flooded many roads, bayous and parking garages. 

Michael Knight, executive vice president of Better World Properties, said he drove by about a dozen multifamily properties between northwest Houston and Pasadena on Monday to check for damage. While most properties saw minor damage, one complex in Lake Jackson lost its brick facade, some trees and fences. About a half dozen units had water damage, he said. 

“Otherwise, the main issue is lack of power,” Knight said by email. “This will quickly become the main issue: gasoline and ice will quickly be in short supply. After [Hurricane] Ike in [2008] it was off in places for two weeks.” 

Some gas stations were out of gas by Monday evening, while lines at others backed up traffic on Tuesday. People filled gas cans to power generators. 

CenterPoint said it plans to have power restored to a million people by the end of Wednesday, but the energy provider on Tuesday released a map that some found discouraging. The map specifies that as of Wednesday morning, crews are focused on restoring electric infrastructure to facilities essential to public health and safety. 

It also color codes the Houston area to show whether areas have power, have been assigned for repairs or are in the process of being assessed, which drew complaints of inaccuracy from residents.

The standard CenterPoint outage tracker map has been down since the May derecho. Many residents reportedly turned to the Whataburger app — which has a map of its 24-hour restaurants specifying whether they are open or closed — for power outage updates. 

The storm knocked out power to nearly 2.3 million people, and CenterPoint had restored electricity to more than 850,000 by Tuesday evening. More than 1.3 million customers remain affected. 

The CenterPoint map urges users to be prepared for restoration efforts to take several days, bringing back fears from the recent derecho, when power had yet to be fully restored nine days later. 

“Getting power fully restored is going to be the key to being back to 100%,” Batagower said.

CORRECTION, JULY 11, 10:45 A.M. CT: This article has been updated to correct the year that Hurricane Ike occurred.