Despite Office Fallout, Land Sells in Well-Placed Parks

Sugar Land Business Park is a 1,000 acre deed-restricted business park.

SUGAR LAND, TX—While the deep oil downturn continues to be a governing force for the local economy, the Houston metro led the nation in population growth for the second consecutive year, driving demand in consumer sectors such as healthcare and retail, according to Transwestern ‘s first quarter outlook reports. Now seven quarters into an economic downturn, the office and multifamily markets will record further softness this year due to weak job growth and additional supply. While Houston’s office and multifamily markets are the hardest hit, retail, healthcare and industrial are still performing well. This softness will likely continue through 2016 and 2017 as the true impact of the downturn becomes more evident. The office sector is experiencing the most fallout by far in the current economic conditions as workforce reductions, mergers and acquisitions, cost cutting and downsizing by energy companies further weakens fundamentals. Net absorption for all classes of space totaled 996,000 square feet during the first quarter, fueled largely by preleased deliveries. Total available sublease space continues to grow, adding more than 940,000 square feet this quarter to hit 8.7 million square feet on the market. Despite the areas of concern in the commercial real estate sector, land continues to be sold and developed, especially in the Sugar Land city limits for worthwhile endeavors such as educational facilities. Thirteen Eldridge Ltd. recently sold a 6-acre tract to a buyer that has proposed plans for developing it into a school. Transwestern’s Houston land sales specialists/vice presidents, Carlos Bujosa and David Schwarz , SIOR, brokered the transaction. Bujosa tells GlobeSt.com: “Sugar Land Business Park is a 1,000 acre deed-restricted business park. Area businesses include Minute Maid, Fluor, Schlumberger and Boise Cascade .” The site is located on the east line of Eldridge Road, approximately a half-mile south of West Airport Boulevard, within the master-planned Sugar Land Business Park , a development near the intersection of highways 59 and 90. “This transaction represented a significant win for our client, as a school will complement the veterinarian clinic and proposed Alzheimer’s clinic on the three acres previously sold,” said Bujosa. “These three services create a cohesive synergy in the park, boding well for the remaining four acres available for sale.” With regard to the economy, payroll employment grew by just 0.3 percent, or 9,000 jobs, during the 12 months ending in February, ranking Houston last in both metrics among major metro areas. However, positive job growth is still projected each year through 2018, putting the metro on better footing than in past economic declines. And activity continues in various business parks in outlying areas, to boost optimism of a recovery sometime in the coming years.