HOUSTON: Return of the CBD
Houston's seeing an influx of new businesses in the CBD, which makes it a hotspot for multifamily, ARA managing director of capital markets Adam Allen tells us. Considering the 1.5M SF of office space under construction Downtown (room for 7,500 employees, or 3,500 diva employees), ARA projects demand for 1,500 new units. But only four multifamily projects are underway in the submarket, which will deliver 1,216 apartments. (That means there's gonna be a few folks sleeping in their brand new offices.) We were already looking at a tight market—the CBD is about 95% occupied—and Adam says recent activity in the live/play front (like eight new hotels announced) are causing residents to eye Downtown more than ever.
The numbers get even more dramatic as we look at the five-year outlook. There's 4.8M SF of office announced Downtown that hasn't broken ground yet. That would create space for 24,000 employees and demand for 4,800 apartments, but only five multifamily properties totaling 1,740 units are pending groundbreaking. (Would bunk beds help?) Adam, who's touching up his golf game this summer with a few trips to Colorado's Castle Pines Golf Club, is working on a JV equity deal Downtown that would join the supply lineup.
