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The Houston apartment market's ugly duckling: No one wants these units

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one-bedroom apartment floor plans Houston
Today, 80 percent of the units in a typical newly built apartment complex are one-bedroom units.  Century-Apartments.com
Post Oak Central Houston RUN FLAT
Cousins Properties has purchased noteworthy buildings. including the Post Oak Central complex near the Galleria in Houston. PostOakCentral.com
Houston Super Bowl committee Mayor Annise Parker, Ric Campo, Ed Emmett RUN FLAT
Ric Campo, second from right, received high praise as the leader of Houston’s Super Bowl Bid Committee, which landed Super Bowl LI in 2017.  Houston Texans/Instagram
one-bedroom apartment floor plans Houston
Post Oak Central Houston RUN FLAT
Houston Super Bowl committee Mayor Annise Parker, Ric Campo, Ed Emmett RUN FLAT
USE THIS ONE News_NEW HEAD SHOT_Ralph Bivins_column mug

One is enough. Two is too much. Three’s a crowd.

Actually, if you’re talking about the apartment market, three is just not needed.

Nobody wants three-bedroom apartments anymore and developers aren’t building them.

“Today, no one is doing three bedrooms,” says Houston apartment broker Ryan Epstein, senior vice president of the Multi-Housing Group at the CBRE Group real estate firm.

 Today, 80 percent of the units in a typical newly built complex are one-bedroom units. 

Single people —  and to a lesser degree, couples — dominate the apartment market today. There’s just not much demand for three-bedroom units, Epstein says.

Ten years ago, developers would construct apartment complexes with 30 to 40 percent one-bedroom units, Epstein says. Today, 80 percent of the units in a typical newly built complex are one-bedroom units.

“People want to live by themselves — no roommates,” he says.

The exception is with families that are relocated to Houston on short notice by their employers. These families may rent a three-bedroom unit for a year or so, usually in someplace like The Woodlands, while they shop for a single-family home to buy. But this is a limited market.

Another reason for the growing demand for one-bedroom units? The single female.

In comparison to decades past, there are more women graduating from college and more women professionals living on their own, Epstein says. And these women tend to choose to rent an apartment rather than buy a house.

Cousins Buying Up Texas

Atlanta-based Cousins Properties can’t get enough of Texas.

The massive company has made major realty plays in Houston, Dallas, Austin and Fort Worth.

The biggest deal was announced at the end of July: Cousins will pay $1.1 billion for the 10-building Greenway Plaza project on Houston’s Southwest Freeway and for a 40-story office tower in downtown Fort Worth. That is a big bite of Texas realty.

Cousins made a lot of noise in Austin a couple of months ago, when it broke ground on the 29-story Colorado Tower office project in Austin, at Colorado and Third streets. It was the first major office building to break ground in Austin in more than a decade. 

Over the last year, Cousins has purchased some other noteworthy buildings in the Lone Star State, including 2100 Ross in Dallas, 816 Congress in Austin and the Post Oak Central complex near the Galleria in Houston.

Although Cousins is making a huge splash, the Atlanta company isn’t uniquely smart. A number of other real estate investors from around the world have been focusing on Texas because the state has great fundamentals. Texas has been leading the nation in job growth, its office buildings have strong occupancy and rents have been rising.

Campo on a Roll

Ric Campo, chairman and CEO of Camden Property Trust, is in the midst of a winning streak.

A couple of month’s ago, Campo received high praise as the leader of Houston’s Super Bowl Bid Committee with H-Town winning to host Super Bowl LI in 2017. Campo got a lot of positive publicity then, including a 2,000-word write-up by Dale Robertson in the Chronicle sports section. Robertson’s piece listed Campo alongside Houston’s other great civic leaders of the past: Jesse Jones, William P. Hobby, Gus Wortham and, uh, Enron front man Kenneth Lay. (Dale, I’m not sure I would have included good ol’ Ken on this one.)

 Campo just has the Midas touch right now. 

Campo has also been scoring big as chairman of Houston First Corporation, the local governmental corporation that is backing the construction of the much-needed 1,000-room Marriott Marquis convention hotel in downtown.

The latest feather in Campo’s cap came at the end of July when he rang the opening bell on the floor of the New York Stock Exchange. The event was to celebrate Camden Property Trust’s 20th anniversary as a public company.

Camden, which has its headquarters offices in Greenway Plaza, owns 179 apartment complexes across the country with 62,000 units. Plus it has 10 additional projects under development. And Fortune magazine just put Camden No. 10 on its “100 Best Companies to Work For” in America rankings.

Campo just has the Midas touch right now.

Ralph Bivins, a past president of the National Association of Real Estate Editors, is founding editor of RealtyNewsReport.

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