Q&A with Ric Campo: Houston Downtown Development and Multifamily Market Insights
Ric Campo, Camden CEO and Houston civic leader.
HOUSTON – With new multifamily projects taking shape, proposed office towers and expanding green space, downtown Houston has transformed significantly in recent years. One of the leaders behind much of this change is Ric Campo, CEO of Camden Property Trust. During a dozen years as chairman of Houston First, Campo played a central role in encouraging downtown development, including major hotel projects. He also led the Houston Super Bowl Host Committee that helped bring Super Bowl LI to Houston in 2017. Camden is building a 20-story, 275-unit residential tower adjacent to the Toyota Center—its first ground-up high-rise in Houston. With interests in 159 properties comprising 54,480 units nationwide, the company was recently recognized by Fortune magazine for the 11th consecutive year as one of the “100 Best Companies to Work For” in America. Realty News Report spoke with Campo about development, green space, Houston’s multifamily market and the future of downtown.
Realty News Report: Camden is constructing a downtown residential tower in Houston and may build another. Can you tell us about that?
Ric Campo: Camden is investing about $140 million in a downtown project across the street from the Toyota Center. I’ve been involved in downtown civic development for many years and have watched the area change. Over the past five to six years there has been more than $5 billion of investment downtown. Civic leaders have worked continually to bring people downtown and help Houston become more of a 24-hour city. Incentives played a role, including the Downtown Living Initiative, which encourages developers to build multifamily housing downtown. Roughly 3,000 units have been built or are under construction as a result. Camden has aligned with that momentum. Public improvements—such as Discovery Green, the redevelopment of the George R. Brown Convention Center, the Marriott Marquis hotel and pedestrian enhancements—have all helped make downtown more inviting and user-friendly.
Realty News Report: Do you plan to build more multifamily in Houston in the coming years?
Ric Campo: We’re evaluating a second phase of our downtown project and could move forward soon after completing the first building, so the short answer is “we’ll see.” Construction costs continue to rise, and building two structures back-to-back can be more efficient—teams and equipment can move from one block to another. Camden will continue to invest in Houston; it’s one of our largest and most important long-term markets. We will also reexamine our existing Houston portfolio—some properties are 25 years old and may need significant renewal or be considered for sale.
Realty News Report: The Houston market saw a surge in occupancy after Hurricane Harvey destroyed many homes. How is the multifamily market performing as the post-Harvey recovery continues?
Ric Campo: Before Harvey, Houston’s multifamily market was oversupplied and was Camden’s weakest among our 15 U.S. markets. The market was showing improvement in summer 2017, then Harvey accelerated demand—at one point we leased 600 apartments in two days, compared with 400 in the previous eight months. Harvey essentially advanced recovery by about a year. The multifamily industry also supported displaced residents: we froze rents at pre-Harvey levels, waived additional deposits and fees, and allowed short-term leases of three months without penalties. Occupancy surged in 2017, moderated in early 2018 and normalized by June 2018, with Camden properties in Houston reaching about 95–96% occupancy. Today, only a few residents from Harvey remain; the market has settled and is healthy.
Realty News Report: You have one major high-rise under construction and another proposed downtown, while other developers are also building. Downtown Houston seems to be advancing—what’s driving this change?
Ric Campo: Rising land and construction costs make low-rise wood construction impractical in many downtown locations, so developers need to build higher to make projects economically viable.
Realty News Report: Downtown has transformed over the past decade and a half. You’ve been part of that through leadership roles at Houston First Corp. and Central Houston Inc. What’s next for downtown Houston?
Ric Campo: Downtown will continue to densify. From a density standpoint, Houston remains one of the least dense major U.S. cities—even less dense than Dallas. The region is expected to add about a million people over the next decade, and density will increase inside the loop and downtown. Land values downtown have risen, and multifamily developments will move toward higher density. Camden has mostly built mid-rise projects to date, but rising rents now support high-rise development.
Realty News Report: While you led Houston First, several major projects were completed: the Marriott Marquis convention hotel, the George R. Brown Convention Center redevelopment, and the Partnership Tower with the proposed W Hotel. Why were those projects important?
Ric Campo: The Marriott Marquis was designed to provide direct hotel access to the George R. Brown Convention Center and to expand downtown’s convention capacity. We added roughly 3,000 hotel rooms close to the convention center to grow Houston’s convention business. Prior to these investments, convention bookings had plateaued at about 550,000 room nights annually because of limited proximate hotel capacity. Through public incentives, hotel development and the convention center redevelopment—including a pedestrian entrance connecting Discovery Green to the George R. Brown—we created a more walkable downtown. The Super Bowl was our first major event after these improvements. With the new hotel rooms and facilities, convention room nights rose from about 550,000 to more than 800,000 annually—an increase of nearly one third. Attracting more conventions brings visiting companies and individuals who experience the city firsthand and helps stimulate job growth, economic development and a more vibrant downtown. The Partnership Tower consolidated civic organizations responsible for economic development—the Greater Houston Partnership, Houston First, the Greater Houston Convention and Visitors Bureau, the Hotel and Lodging Association and the Harris County Houston Sports Authority—under one roof, fostering cooperation and more effective collaboration.
Realty News Report: You were the lead presenter when Houston pitched for Super Bowl LI. How did you shape the city’s presentation to the NFL?
Ric Campo: We framed Houston as a true football city—Texas is synonymous with football at the high school, college and professional levels. We argued that Houston offered a strong platform to grow the NFL’s brand because of its diversity and large Hispanic population, many of whom were not traditional NFL fans, and because of a growing number of female football fans. We presented Houston as a dynamic place to live, work and play where the NFL could expand its reach with a large and diverse audience. The NFL liked the presentation and awarded Houston Super Bowl LI.
Realty News Report: Many older downtown office buildings have been converted to residences or hotels. With a large stock of aging office buildings, how far can this trend go?
Ric Campo: Repurposing older downtown buildings will continue for some time. One notable trend could be converting parking garages into residential or other uses over the next decade as autonomous vehicles and ride-sharing reduce parking demand. Today, a significant share of built space in America is devoted to parking; future mobility changes will change that. At Camden we are already planning for this by spending slightly more—2–3%—on current garage construction: using poured-in-place rather than precast concrete, installing flat garage plates instead of sloped layouts, placing ramps at building ends rather than centers, and running utility sleeves so future conversions to residential use will be simpler. These measures make it easier to adapt garages into living spaces when demand for parking declines.
Realty News Report: How do you see Houston changing over the next 10 to 20 years?
Ric Campo: The next one to two decades will be dynamic. Technological and infrastructure changes will reshape the built environment, with autonomous vehicles having perhaps the largest impact on how we design streets, highways and parking. Self-driving cars will use space more efficiently than human drivers. The energy industry will continue to evolve as demand patterns shift, and companies will adapt to a changing energy landscape. Houston will keep densifying and becoming more of a 24-hour city. Our city’s young population and can-do spirit mean Houston will continue to innovate and adapt to future challenges and opportunities.
