Real Estate Round-up
Gerald Hines' best customer re-ups, apartment rents rise & Firethorne gets salehappy
There are repeat customers. Then, there are repeat, repeat, repeat customers.
Rowan Companies has leased its office space from Gerald D. Hines since 1969. And Rowan is going to stay with Hines.
In fact, Rowan is Hines’ most loyal customer. And when you’ve been around as long as Hines, that’s saying a lot. Since Gerald Hines started his real estate development company in Houston in 1957, Hines has been landlord to thousands of tenants. Hines developed the Galleria retail center in Houston and hundreds of downtown skyscrapers, hotels, sports arenas and residential projects around the world.
“Of the millions of agreements we’ve signed with tenants in our firm’s 53-year history, this lease renewal is notable because Rowan has chosen to stay in a Hines building continuously since the late '60s,” says Jeff Hines, president of the real estate company.
In 1969, Rowan moved into Hines’ Post Oak Tower, 5051 Westheimer, and then moved to Hines’ Transco Tower (now Williams Tower) in 1990.
Rowan just renewed its 80,000-square-foot lease in Williams Tower building in the Galleria area, keeping its alliance with Hines alive for several more years. Rowan, an offshore drilling services company, has constructed about a third of the mobile offshore rigs in existence — in other words, they're a major player in the offshore industry.
The 64-story Williams Tower, the tallest Texas building not in a downtown area, was completed in 1983. One thing that makes it popular with tenants is its skywalk connection to the Galleria. That makes lunch hour shopping almost too convenient.
Williams Tower, designed by Philip Johnson and John Burgee, is the key landmark on Houston’s suburban skyline. My only problem with it is the name. The building’s original name, Transco Tower, went away in 1999 after Williams bought the Transco Energy company. Williams Tower just doesn’t have the same ring to it. I’ve continued to call it the Transco building all these years and everybody always knows what I’m talking about.
Rents are going up as the Houston apartment market gets healthier. The rent increases aren’t enough to make apartment dwellers give up their morning cup of Starbucks. But on the average rents are creeping up.
The average Houston apartment unit rented for $761.73 per month in June, up from the average monthly rent of $750.80 in June 2009, according to O’Connor & Associates. That number includes all kinds of apartments — old and new projects. (For “Class A” apartments, which are the newest and the nicest in the best locations, the average monthly rent was $1,105.60 in June, O’Connor reported.)
Landlords have been able to elevate the rents over the last six months as the fundamentals of the Houston apartment market have improved, says Stacy Hunt of Greystar Real Estate Partners, a large apartment management firm.
Tighter lending requirements have made it tougher for many people to buy homes and that has helped the apartment market. “Young people can’t buy homes and they are having to stay in apartments longer,” Hunt says.
The occupancy rate for Houston’s apartments stood at 86.5 percent in June, up from 85.4 percent at the beginning of the year. And with the construction of new apartments tapering off, the Houston apartment market will be more in balance. Houston hasn’t had the big waves of foreclosure and vacancy that hurt apartment landlords in other cities.
“We are in better shape here than the rest of the country,” Hunt says.
Optimistic Home Builders
New home sales declined this summer in Houston – and across the nation. When the federal tax incentives for home buyers expired at the end of the spring, home sales dropped sharply.
But in Houston, home builders and land developers have been starting some residential projects that show signs of optimism about the future.
The latest of the optimistic announcements was made by the developer of Firethorne, a 1,400-acre project in the Katy/Fulshear area.
Work has just begun on Firethorne West, a 430-acre section of the master planned community that will create an additional 1,400 home sites.
Firethorne was started five years ago and 2010 has been its best year ever for new home sales, according to Wayne Meyer, general manager of the project. Firethorne registered 178 new home sales in the first seven months of 2010, a record pace for the community.
Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of RealtyNewsReport.com.