Houston’s commercial market is flaming hot

Houston's commercial market is faring very well.

Real estate experts in the fourth-largest city in the U.S. say the capital and commercial markets are growing and are set for a long period of further expansion. Many in Houston are optimistic about the future, with Mayor Annise Parker saying the metropolitan area is "the most affordable mega-city on earth," The Houston Chronicle reported.

The experts recently gathered to take part in a panel sponsored by the Houston chapter of the Urban Land Institute. Glenn Lowenstein, co-founder of Houston-based investment firm Lionstone Group, also expressed anticipation for much future success in the city.

"This is decidedly the most positive and optimistic moment in those 24 years in the city of Houston for the real estate community," he said, according to the Chronicle.

The city's ethnic diversity, major place in the country's energy, healthcare and transportation industries, and its "unparalleled quality of life" are all contributing to the standout growth, Parker said during the panel.

Bright future 
A Jones Lang LaSalle report on Houston's office market for the third quarter of this year shows that the city's economy added about 97,700 new jobs in the 12 months ending July 2013, which is a 3.6 percent annual increase. Its gross domestic product also increased about the same during that time, at 3.7 percent.

"Most impressively, Houston added 202 percent of the jobs lost during the most recent recession," the report read. "While much of the U.S. is just beginning to see upturns in the office market, Houston continues to lead the recovery and show its strength."

In 2014, Jones Lang LaSalle said Houston can expect to be a market that is favorable to landlords, with rental rate increases and tightening of tenant concessions. New developments are planned to be completed in Galleria, West Houston and the Woodlands in 2014, which could loosen up vacancies, but much of those developments are already pre-leased, the report said.

"Tenants in the market remain active as the robust Houston economy allows for aggressive expansion and growth plans," it said of what tenants can expect in 2014. "Oil and gas companies, as well as their service providers, continue to actively canvas the market for availabilities to meet those growth needs, with a focus continued to be in West Houston and the surrounding submarkets."

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