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S eptember 23, 2009

Industrial Forecast Luncheon. S eptember 23, 2009. Jim Casey. Industrial Development Current Market Trends - Houston. New spec project pipeline is shut down There is reasonable tenant leasing activity, but commitments are slow There has not been major give-backs of space

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S eptember 23, 2009

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  1. Industrial Forecast Luncheon September 23, 2009 Jim Casey

  2. Industrial Development Current Market Trends - Houston • New spec project pipeline is shut down • There is reasonable tenant leasing activity, but commitments are slow • There has not been major give-backs of space • Generally, the markets are declining slightly, but pretty stable • Need to see job growth to generate meaningful absorption

  3. Capital Markets • Values have declined; but little volume to establish values • Lenders terms have shifted significantly; they don’t want to make new loans right now • Equity is waiting on sidelines for more clarity on values • Effects of long term debt roll-overs yet to come • REIT’s are recovering, raising equity

  4. Houston Submarkets vary significantly • Northwest • Largest and most diverse • Oilfield services, computer industry, furniture, general goods • Modest amount of big new space • Sub Market is in balance

  5. Southwest • Fort Bend County is one of the fastest growing counties in the country • Electronics, engineering, oilfield services • Several new projects delivered in 2008 / 2009 • Proximity and access to residential areas is key

  6. East • Most forward looking submarket • Petrochemical commodities, container traffic • Big projects delivered; need to see new major increases in are housing to absorb the space • Long-term factors should promote growth, but near-term is going to be difficult

  7. North • Proximity to IAH is key • Freight forwarding, oilfield services • Export and import activities • New international cargo routes developing

  8. Summary • Houston industrial market is trending down, but the slope is shallow • Need to watch job losses;….. will there be job gains in 2010? • New construction pipeline has slowed to a trickle • Houston should out-perform most of the country long-term

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