Houston Industrial Real Estate Heats Up as City Becomes Investor Gateway
Trey Odom
HOUSTON – (Realty News Report) – Houston has emerged as a gateway market for investors, and its industrial real estate sector is especially strong as 2019 unfolds, Avera Companies’ Trey Odom told attendees at the annual BoyarMiller Real Estate Forum in Houston.
“The fundamentals are solid: of the 11 million square feet built in 2018, we absorbed 9 million square feet—about 80 percent,” said Odom, president and CEO of Houston-based developer Avera, which focuses on industrial and distribution properties. “2019 should also be positive, and we’ll see more large regional distribution facilities. Tariffs have raised steel prices, which could increase some costs, but overall it will be a good year. The state of our industrial market is really, really strong.”
Odom also forecasted increased inbound activity from the Far East this year.
Odom joined a panel at the BoyarMiller Annual Real Estate Forum alongside Jimmy Hinton of HFF and Abbey Roberson, vice president of planning for the Texas Medical Center and chair of the ULI District Council.
Chris Hanslik
“Our panel highlighted both opportunities and challenges for Houston’s industrial and commercial real estate markets, including progress on city mobility and transportation,” said Chris Hanslik, chairman of BoyarMiller, a Houston law firm. “The conversation reflected optimism and pride in Houston’s growing economic diversity and a reduced dependence on oil prices. That was a refreshing message for the roughly 150 investors and real estate professionals in attendance.”
Jimmy Hinton, managing director at HFF and head of the firm’s research, said Houston has made significant progress toward becoming a gateway market—on par with cities like San Francisco and New York—in terms of attracting international real estate capital.
Hinton noted that 2018 marked the first year many investors started to evaluate Houston alongside other major markets rather than classifying it solely as the world’s energy capital.
“That’s a meaningful shift: people outside Houston now view it as a gateway market that draws overseas capital,” Hinton said. “Developers deserve credit for this change. They’ve responded to consumer demands with products such as mixed-use developments that improve mobility and walkability. That was the most notable change I observed last year.”
Hinton acknowledged that oil prices still matter to some investors, but said oil is now less often regarded as the primary driver of property fundamentals, particularly beyond the office sector.
“Houston was the nation’s top job-growth market last year, which is remarkable given $50 oil,” he added. “We’re now seen as an economy made up of many sectors and subsectors that attract investment. That’s an incredible development.”
Abbey Roberson highlighted the scale of activity at the Texas Medical Center: while the campus provides 58,000 parking spaces, it also serves about 110,000 employees, 40,000 students and hundreds of thousands of patients, family members and visitors every year.
“Those numbers are staggering. We rely heavily on shuttles, buses and METRO light rail,” Roberson said. “We’re exploring ways to work with mobility partners both within TMC and beyond. There are challenges and opportunities as we integrate autonomous vehicles, rideshare services and more strategic use of our parking assets.”
