HOUSTON — By Ralph Bivins, Realty News Report
You feel fortunate the moment you score one of the ten free parking spots in the Post Oak garage. Parking is a prized commodity at Tilman Fertitta’s luxury palace, and most people prefer to avoid the valet fee rather than visit often.
The Post Oak Hotel is not modestly priced. Rooms rarely fall under $400 a night, and when they do, it’s a rare soft spot in demand. Walk through the side entrance and it’s immediately clear Fertitta spared no expense: ornate stone floors, glittering crystal chandeliers and curated artwork define the 38-story, 250-room tower that opened last year. Fertitta, who owns the Golden Nugget casino hotels and once targeted Caesars Palace, poured more into this project than most of his other properties.
Inside, the hotel’s sundry shop, Essentials Retail, greets visitors. Dominating the entrance is a display of Tilman Fertitta’s business book, SHUT UP AND LISTEN!, a conspicuous reminder that the billionaire entrepreneur — Forbes estimates his net worth around $5 billion — promotes his brand wherever he can.
On a Wednesday afternoon in November, two temporary bars are set up in the hotel foyer, serving complimentary wine and beer to early arrivals. Passed hors d’oeuvres include raw-tuna cylinders that don’t appeal to everyone. Nearby, a small Rolls-Royce display and a winding staircase serve as a micro dealership — a glossy, expensive accent piece befitting the crowd.
Ultimately, the event is about two things: wealth and the arrival of Douglas Elliman Real Estate in Houston. Elliman, a high-end residential brokerage based in New York, specializes in vertical living. In New York, high-rise units fetch an average of $1,773 per square foot, and top properties have traded for as much as $10,000 per square foot. The firm’s presence signals confidence in Houston’s luxury market.
The reception draws an A-list crowd of Houston real estate players. The foyer fills quickly with familiar faces and major dealmakers. Conversations during a one-hour cocktail hour reveal several sizable projects moving toward groundbreaking in 2020, and word circulates that an unsolicited, massive offer to buy the Post Oak was rejected outright. Fertitta reportedly spent more than $350 million developing the Post Oak complex on prime West Loop land and appears unlikely to part with it.
Howard M. Lorber, executive chairman of Douglas Elliman, attends, though unofficially he chooses to stay a few blocks away at Hotel Granduca. He is one of several top Elliman executives and prominent New York agents who flew in for the event. Founded in 1911, Douglas Elliman now has roughly 7,000 agents and ranks second nationwide by sales volume. Some of the firm’s best-known agents have become public figures through the reality series “Million Dollar Listing.”
Promotional materials emphasize the “arrival of vertical living in Houston,” a phrase that glosses over the city’s high-rise history. Gerald D. Hines built a 16-story residential tower near River Oaks in the 1960s, and Giorgio Borlenghi — who attended the event with his son Alex — developed Four Leaf Towers in the early 1980s less than a mile from The Post Oak. Large residential projects by Hines, Madison Marquette, Hanover and international developers are already underway in Houston, and developers like Roberto Contreras have begun selling million-dollar units for future towers such as The Allen near downtown.
Douglas Elliman’s entry into Texas came through a combination with Sudhoff Companies of Houston. Founded within the last decade by Jacob Sudhoff, who earned his real estate license at 18, Sudhoff built a strong presence marketing Houston high-rise condos. Company executives describe Sudhoff as a natural fit for Elliman’s expansion.
Jacob Sudhoff now serves as CEO of Douglas Elliman Texas. After the reception, he speaks to a packed Grand Ballroom — roughly 300 attendees — alongside Scott Durkin, president of Douglas Elliman, who praises Houston as “an amazing market” for the firm. Technical issues with the ballroom lighting and sound briefly distract from the program, but the message remains clear: Elliman plans to expand beyond Houston to Austin and Dallas.
Sudhoff reports he’s had little trouble recruiting agents for Austin, reflecting ongoing interest in the city. He and other speakers attribute the firm’s Texas push to broader migration trends: homeowners leaving high-tax states, New Yorkers relocating to Florida, and Californians seeking refuge in Texas. Wealth is shifting geographically, and Texas is a primary destination.
That rotation of wealth isn’t only domestic. Globally, the population of ultra-high-net-worth individuals (UHNWIs) — people with more than $30 million — is growing, and many are seeking tangible investments such as property. Speakers cited data from The Wealth Report, co-published by Douglas Elliman and London-based Knight Frank, noting that new UHNWIs are emerging rapidly worldwide and that a substantial portion plan property purchases.
Paddy Dring of Knight Frank, who presented onstage, emphasized that UHNWIs are expanding in number and appetite. He highlighted Houston’s rapid wealth creation, noting multiple new millionaires appear in the city each day, and argued that real estate benefits as wealthy buyers look for secure, tangible assets.
In short, Douglas Elliman’s arrival in Texas reflects broader demographic and economic shifts: a rising global population of ultra-wealthy buyers, domestic migration away from high-tax states, and Houston’s increasing role as a market for luxury residential development. For developers and brokers gathered at The Post Oak that November afternoon, the message was clear — Houston’s high-end market is alive and attracting national and international attention.
Nov. 18, 2019 — Realty News Report
Read the new book by Ralph Bivins, Editor of Realty News Report
Houston 2020: America’s Boom Town – An Extreme Close Up