Howard Hughes Corp. announces details about The Woodlands Hills development in Conroe, Willis

|   June

Howard Hughes Corporation

The Howard Hughes Corporation announced details about The Woodlands Hills, a 2,000-acre master-planned community under development in north Conroe and Willis, during a presentation on Monday morning.

The community will feature more than 4,500 residences, 112 acres of open space, 20 neighborhood parks and a village park, a retail village center, extensive hike and bike trails and dedicated bike lanes, said Heath Melton, vice president of residential development at the The Woodlands Development Company.

“The Woodlands Hills will feature gently rolling terrain for its natural amenities and acres of green space,” TWDC Co-President Tim Welbes said. “We plan to develop The Woodlands Hills with the same high standards and commitment to environmental preservation that have continued to make The Woodlands and Bridgeland, two of the best-selling communities in the nation, with a wide variety of housing options and extensive outdoor recreation.”

Welbes said the community will feature a variety of retail options, including a retail village center in the middle of the development as well as retail property along FM 1097, FM 830 and League Line Road.

“The Woodlands Hills captures and extends The Woodlands tradition,” Melton said. “The community is forested with natural terrain and has hills that are unique to this area. We will maintain the same high-level development standards that has made The Woodlands one of the top selling master-planned communities in the nation.”

Company officials highlighted plans for a 17-acre Village Park, which will help launch the community upon opening. Plans include an activity center, an events hall, a fitness center, a resort-style pool with a lazy river, lap lane fitness pool, playground as well as tennis courts and a dog park.

“It is really nicely nestled in the woods there,” Melton said. “You can see some of the architectural appeal that we are trying to achieve. We think it is very well fitting within the surroundings, but it has a little bit of a modern flair to invite some of our residents into our community.”

Along with the announcement, the company launched the official website for the community and corresponding social media accounts, and billboards promoting the community will be installed starting this week. The corporation plans to announce home builders by the end of summer, and expect the community to host a grand opening celebration in spring 2018.

Shenandoah legislation enables city to fund special events center with hotel tax revenue

Shenandoah Community Impact News

The city of Shenandoah now has the option of paying for its proposed special events center with hotel occupancy tax revenue following the passage of Senate Bill 2166 during the 85th Texas legislative session.

Shenandoah city officials have been discussing the possibility of building a multiuse special events center within city limits since 2011. If built, city officials want to pay for the $20 million-$40 million center with hotel occupancy tax revenue as the local industry continues to boom.

“This area has been discussing this type of facility for many, many years,” City Administrator Greg Smith said. “I think there is an appetite for a facility that can be used for multiple purposes and we have a very good relationship with the sports industry so this just gives us another mechanism to bring visitors to Shenandoah and have a positive impact on our hotels.”

However, prior to the 85th state legislative session the city was unable to use hotel tax to fund the project due to the sports component of the facility. Therefore, the city submitted proposed special legislation in late 2016 for review at the state level with hopes of amending that prohibition.

“[Those sporting events are] a huge economic boost to the whole area,” said Rep. Mark Keough, R-The Woodlands, who authored the House bill. “As the city wants to continue to [host sporting events], they want to build an athletic center, but rather than put it on the backs of the people, they’ve got some resources available right now in hotel occupancy tax revenue. It would be nothing but a huge opportunity for this entire area to be able to do that.”

Now that the legislation has passed, Smith said the next steps for the city involve getting a cost estimate on the center and conducting both a feasibility study and an economic effects study to evaluate whether the center would be a good financial decision for the city.

“The deciding factor on this facility actually getting built is based on the hotel occupancy tax revenue that comes into the city,” Smith said. “So if we don’t get any of the proposed hotels that have been approved—today we don’t have enough money to pay the debt service for this facility—so we would not build it. So we do need more hotels to be built in Shenandoah to build the special events center.”

Three new city council members took office in Shenandoah following the May 6 city election—Byron Bevers, Charlie Bradt and Ted Fletcher. During a candidate forum on April 20, all three stated they were not in favor of incurring $30 million in debt to build a special events center, however, that did not mean they were against the project altogether.

“If this council decides to not proceed with consideration of the special events center, then the project will die,” Smith said. “But the legislation is still passed so it could come up again at a future time with a future council. At this point we’ve done about as much work as we can do without engaging some more consultants to help us take the next steps.”

City officials said they hope to have a plan for the special events center in place by 2019.

“This project will support our hotels,” City Finance Director Jennifer Calvert said. “We absolutely want to take care of our residents, but we also want to take care of our business owners so we want to help them fill their hotels and have successful businesses. When visitors come the eat and drink at our restaurants and shop at our stores so it helps all of our businesses—that’s our primary goal.”

Additional reporting by Marie Leonard.

One Northgate – Full Floor

Northgate OneRoss Foldetta represented One Northgate at 28420 Hardy Toll Road near I-45 in a lease with Total Airport Services for 3,237 SF. This 60,000 SF campus based office property offers a value opportunity with unmatched access to Hardy Toll Road, I-45 and the Grand Parkway with neighboring hotels and Class A apartment communities. The Tenant was represented by Diana Bridger with JLL.

Welcome Sean Smith, CPA, MBA

Sean Smith, CPA, MBASean Smith has joined Foldetta Commercial to specialize in Tenant Representation, Corporate Advisory Services and Land Sales. Prior to joining Foldetta Commercial Sean spent 10 years at Chicago Bridge & Iron. Read more at http://foldetta.com/about-us/sean-smith-cpa-mba/

CB&I names new CEO

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Chicago Bridge & Iron Company NV, commonly called CB&I (NYSE: CBI), announced May 18 that Philip Asherman will retire from his role as president and CEO, effective July 1.

Patrick Mullen has been named to succeed Asherman, who has led CB&I for nearly 12 years. Mullen has been serving as COO of CB&I since September. CB&I is based in the Netherlands but has its administrative headquarters in The Woodlands.

Asherman led CB&I during its transformation from a specialty tank subcontractor to a global technology and energy infrastructure corporation. During his tenure, he was a 2015 recipient of the National Safety Council’s Green Cross for Safety award, helped create a global Women’s Leadership Network, committed to hiring veterans, and supported historically black colleges and universities through scholarships, internships and recruitment of graduates for professional and technical opportunities. Click here to read The Business Journal Interview with Asherman from 2015.

Mullen joined CB&I in 2007 through the company’s acquisition of Lummus Global. Before being named COO in 2016, Mullen served as executive vice president of the company and president of CB&I’s Engineering & Construction operating group.

“It has been a great honor to lead CB&I for almost 12 years, and I am proud of the many significant accomplishments the company and our employees have made in that time,” Asherman said in a May 18 press release. “Pat has demonstrated tremendous leadership capabilities and has been an active executive partner in maintaining CB&I’s standards with our employees and our global energy customers. His technical and business credentials plus over 25 years of industry experience make him the right executive to lead CB&I into the future. I’m confident Pat will bring a fresh perspective on technology and innovation that will drive the company to even greater achievements.”

CB&I provides technology and infrastructure for the energy industry. Earlier this year, the company announced it would sell its Capital Services business to an affiliate of private equity investment firm Veritas Capital for $755 million in cash.

The deal is expected to close in the second quarter, and E. Chip Ray, executive vice president of CB&I’s Capital Services operating group, will continue to lead the business under Veritas Capital.

“The divestiture is part of CB&I’s previously announced strategy to optimize our balance sheet, and with the tax benefit, the resulting cash proceeds will significantly enhance our debt ratio and delever our balance sheet,” Asherman said in a February press release. “We expect an additional positive impact on our overall business by recognizing cost synergies and ensuring our business is more aligned with our long-term strategy and end markets.”

CB&I is the eighth-largest energy engineering firm in Houston, based on its 122 local licensed engineers, according to Houston Business Journal research.

Herb & Beet – LEASE ANNOUNCEMENT

Herb & BeetHerb & Beet, a new Fast-Casual restaurant, will be opening its flagship location in September 2017 at 448 Sawdust Road in the Woodlands, TX.  The fresh concept is represented by Terrie Smith with Foldetta Commercial.

The locally owned and managed restaurant brings a new and exciting dining trend to the Woodlands, as it strives to utilize as many local, whole, organic, and sustainable ingredients as possible.  From Farm-Fresh Salads and Gourmet Sandwiches, to House-Cured Meats and Smoked Brisket, Herb & Beet’s seasonal Menu of unique, hand-crafted dishes will satisfy every taste bud with “Texas-sized” flavors.

Herb & Beet’s visibly open kitchen design and in-house Herb Garden will give guests an inside view of the creative, chef-driven concept. Every dish will be created fresh for each guest by highly skilled team members.  Additionally, Herb & Beet will offer a rotating selection of locally sourced beer and wine, creating a memorable dining experience for both lunch and dinner.

Herb & Beet’s tagline of “Local Eats, Fresh Vibes” reflects its overall company philosophy of “serving fresh, localized ingredients in a trendy, upscale, and uniquely efficient environment.”  For more information, please visit www.herbandbeet.com.

5 new stores now open in The Woodlands’ Market Street

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If you have not visited Market Street since the holidays, you may notice a few storefront changes the next time you go shopping.

Here are a few things you may have missed:

A second location of Armario De La Bella opened in Market Street April 5 at 9595 Six Pines Drive, Ste. 1150, The Woodlands. The boutique, which translates to “the beautiful closet,” opened its first location in Oak Ridge North before moving to Creekside Park shortly after. The shop offers unique women’s fashion from all over the world, in addition to children’s clothing, gifts and jewelry. 281-516-2352. www.armariodelabella.com

Duette, a new boutique offering custom stationery, wedding invitations and fine gifts, opened in March in Market Street at 9595 Six Pines Drive, Ste. 690, The Woodlands. The boutique can print digitally in-house and also offers letterpress, engraving and foils through a local printer. The business also offers gifts and housewares including brands, such as Nora Fleming, Jon Hart, Elegant Baby, Pebble, Yeti and Michel Design. 281-419-0773. www.duettegiftandpaper.com

A new Suitsupply location is now open in The Woodlands at 9595 Six Pines Drive, Ste. 530. A grand opening celebration was held at the company’s fourth Texas store Feb 23. Suitsupply offers suits, jackets, trousers, shoes, outerwear and accessories that are made-to-measure or ready to wear. The store also employs a tailor for on-demand alterations. 713-322-9292. us.suitsupply.com

Philanthropy women’s clothing store opened March 17 in Market Street at 9595 Six Pines Drive, Ste. 1360, The Woodlands. The charitable retailer gives a minimum of 10 percent of its in-store gross profits plus 10 percent of online proceeds to various helpful organizations and nonprofits. The store also benefits Philanthropy Ministries—Philanthropy’s nonprofit that supports work in the U.S., the Caribbean Islands and East Africa. www.philanthropyfashion.com

YogaOne Studios opened its seventh Greater Houston-area location in January at 9595 Six Pines Drive, Ste. 4005, The Woodlands. Owned by Roger and Albina Rippy, the fitness studio offers classes in Hot Yoga, Vinyasa Flow and Hot Core, as well as workshops, retreats, meditation and other trainings throughout the year. 713-766-1160. www.yogaonehouston.com

Census: Montgomery County adds more than 19,000 residents in 2016

Mar 24, 2017: Montgomery County’s population increased 3.7 percent from 2015 to 2016, according to population figures released by the U.S. Census Bureau earlier this week. The Houston-The Woodlands-Sugarland Metropolitan Statistical Area gained more than 100,000 residents between 2015 and 2016, placing it among the top two largest numeric-gaining metropolitan areas.

According to the data, Montgomery County’s population grew from 536,434 residents to 556,203 residents between 2015 and 2016, adding more than 19,000 residents during that time. Since 2010, the county’s population has increased 22 percent.

Source: Census: Montgomery County adds more than 19,000 residents in 2016

Dan Vertrees with Foldetta Commercial Represented Several Clients in 2016

Dan VertreesLAND:

  • Sold a 51.042 Acre Tract on Hwy 105 west of Lake Walden Road, Conroe.
  • Represented the Buyer in the purchase of 2.5 acres at 1100 S. Conroe Medical Dr. for a proposed 25,000 SF medical office building to be leased by Dan Vertrees.

 

SALE:

  • Sold a 5,000 SF building at 26118 Interstate 45 North, Spring.
  • Sold Park Place Office Plaza Building at 3305 W. Davis, Conroe.
  • Represented the Buyer in the purchase of Two(2) Office Condominiums in the Pine Forest Office Condominium Complex at 150 Vision Park Drive, Shenandoah.

OFFICE:

  • Represented PBF Holding Company of Parsippany, New Jersey in leasing 5,036 SF at Town Center II at 1330 Lake Robbins Drive for their new Houston/ The Woodlands Area regional office.
  • Dan Vertrees represented Marcus & Millichap Real Estate Investments in relocating to 2,952 SF office at Town Center I located at 1450 Lake Robbins Drive, The Woodlands.
  • BBVA Compass Bank – represented the owner in a 5-Year renewal of 5,191 SF at 3,500 W. Davis, Conroe.
  • Homeland Title – represented the Landlord in leasing 3,126 SF at Wedgewood Falls Office Complex, 5452 Highway 105 West, Conroe.
  • Cendera Mortgage – represented the Landlord in a 2,646 SF lease at 12603 Highway 105 West, Conroe.
  • Children’s Safe Harbor – represented the Landlord in leasing 4,475 at 12603 Hwy 105 W.
  • Capital Title – represented High Timbers Executive Plaza at 2441 High Timbers, The Woodlands. In leasing 1,500 SF.

INDUSTRIAL: 

  • Represented the Landlord in leasing  5,652 SF Office/Warehouse located at 11497 Old Oak Lane, Spring.

Retail:

  • Better Homes & Gardens Real Estate, Gary Greene – Dan Vertrees represented the owner in leasing 3,098 SF at 3401 West Davis, Conroe.

Woodlands office market seeks rebound from oil and gas downturn, surplus space

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A high availability of office space in The Woodlands area due to the oil and gas downturn and new developments being completed has resulted in a tenant’s market. 

At the end of 2016, there was about 1.8 million square feet of vacant space in The Woodlands area on the market and a 12 percent vacancy rate, according to data from Colliers International.

“The net reality is, there is a significant amount of available space in the market right now,” said Jeff Beard, president of Woodlands-based J. Beard Real Estate Co. “If we were in the Galleria, downtown or near Westchase, that would mean nothing because the market is so large. But [in The Woodlands] it means we have a high availability rate.”

Woodlands office market seeks rebound from oil and gas downturn, surplus spaceVacancy factors

The rise in availability can be attributed to a flattening in demand for new office space and a combination of new buildings coming online, said Paul Layne, executive vice president for The Woodlands Development Company.

“In a slower economy—like Houston has been in due to the drop in oil prices—many companies have chosen to renew in their location rather than branch out and expand,” he said.

The oil and gas downturn, which began in late 2014, resulted in the downsizing of office space over the past two years as companies laid off employees; nearly 80,000 oil-related jobs have been lost in Houston since the downturn began.

“The oil and energy companies take up the majority of the office space, so when you have a contraction like we’ve had with oil prices, it’s a natural reaction to have the oil companies trim down,” said OJ Bobek, director of commercial real estate for Keller Williams in The Woodlands.

Before the oil and gas downturn began, oil at $100 a barrel was a major driver for a variety of industries in the Greater Houston area, including medical and commercial, said Ross Foldetta, founder and principal of Foldetta Commercial, a commercial real estate firm in The Woodlands.

“Whether we like it or not, the Greater Houston area is still very driven by the oil and gas economy,” he said. “However, developers had a practical level of reasoning to think opportunistically when new office product was originally planned and started.”

The addition of new office buildings over the past several years in Town Center, Hughes Landing and Lakeside has also affected the amount of square footage on the market, Beard said.

“Because of the new construction, I think it skews the numbers a little so that vacancy is higher than some other submarkets [in the Houston area],” he said. “But rental rates are some of the highest in the city, and that’s an indication it’s a desired market.”

There are three newly constructed speculative buildings on the periphery of The Woodlands with low occupancy numbers, Foldetta said.

“That’s a considerable amount of our office vacancy,” he said. “I think you’ll see these buildings will lag behind what [The Woodlands and Springwoods Village] experience for successfully landing major companies.”

Subleasing has also become more prevalent during the downturn as companies find themselves no longer in need of as much or any office space, Bobek said.

“Say I’m an oil company and I can’t use my space anymore, so I give it to a broker,” he said. “Now I bring that space to the marketplace, so we not only have new space, but sublease space. The current tenant is still paying on that space, so his incentive is to reduce his rent to have a more attractive tenant to take his space.”

Although there is a large availability of office space on the market in The Woodlands, the area is still faring better than other parts of Houston, real estate brokers said.

“It’s a more consistent, high-quality area to [work] and live in, and because of those things, historically we have stayed substantially better than Houston overall,” Layne said.

Tenant advantages, amenities

In terms of new office spaces, landlords have to get creative during a downturn if they want to lease properties, Bobek said.

“They have to offer tenant improvements, maybe free rent, or drop some of their rates to get more competitive with subleases,” he said.

Tenant incentives are tied to supply and demand, which means incentives typically increase when there is more supply than demand, Layne said.

“It’s what’s referred to as a tenant’s market,” Beard said.

Newly opened office spaces in The Woodlands also have new amenities not seen before to cater to new tenants, such as 3 Hughes Landing, which is in available for new tenants.

The space offers a number of amenities for tenants not typically found in the workplace, such as a boat dock, a fitness center and showers, a conference center and a lounge area. In addition, the parking garage will feature bicycle and kayak storage so tenants can bike, jog or row to work, Layne said.

“We’re trying to push a completely different lifestyle opportunity,” he said.

Just south of The Woodlands in Springwoods Village, there is a lot of leasing activity occurring; HP announced plans for a 12-acre campus in January. It will house 2,400 employees when it opens next year, according to Patrinely Group, the developer of CityPlace in Springwoods Village.

“That transportation amenity [Springwoods Village] has as an influence factor has clearly shown to be relevant,” Foldetta said. “They’re effectively at the hub of the Grand Parkway, Hardy Toll Road and I-45. They have transportation connectors others can’t replicate.”

Woodlands office market seeks rebound from oil and gas downturn, surplus spaceNew office development is still taking place on the west side of The Woodlands as well. Construction began in February on The Offices at Dry Creek, an office condominium project located a quarter-mile from the May Valley neighborhood.

The first model units will be complete this summer, featuring private, front-door walk-up entrances and surface-level parking.

“Unique to these modern office condominiums is smart office technology, which offers high-tech options such as fiber-optic cable to provide lightning-speed connectivity,” Sales Director Lewis Walker said.

Moving forward

Although it may take three or four years for the office market to fully recover from the downturn, Bobek said the demand in the coming months will most likely be for smaller office spaces in The Woodlands area.

“I think you’re going to see, on any new or existing space, most of the landlords or sublessors will break down spaces into smaller space sizes,” he said. “The demand for 20,000 square feet and multiple floors isn’t there anymore. Now there is a demand for smaller spaces anywhere between 2,000 and 10,000 square feet.”

Foldetta said the non-Class A office market will probably see the most traction in the next several months.

However, it is unclear how long it will take ultimately to absorb the vacancies in the local market, he said.

“That’s one of the key questions,” he said.

Layne said he is optimistic about 2017 and the recovery for businesses in Houston and The Woodlands that will create additional growth and stability.

“I think we’ll see a strong uptick in leasing as companies believe Houston is coming out of the down cycle,” he said. “We’ll begin to grow again, thereby [causing companies to take] more space and [be] more optimistic to move to higher-quality office buildings.”

Beard said he expects to see a firming of rental rates this year along with more leasing activity, which means more absorption of empty space.

“I think we’ve maybe bottomed out at peak availability, and I see those things improving,” he said. “Our activity in the first two months [of 2017] has been extraordinary.”

The current market state should place companies in a position to pick and choose what they want, Bobek said.

“Everyone was shell-shocked in the past two years,” he said. “The bleeding may be over, but the healing isn’t.”