Houston Area Land

1
Houston Area Land
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• Trends and Issues Facing
• Owners, Developers and Investors
• In the Year 2001

2
Late Breaking News

• New Storm Water Management Rules.
• Effects all tracts over 5 acres within Houstons
  ETJ.
• Effective October 1, 2001. Be Ready !

3
Late Breaking News

• Isolated wetlands no longer Jurisdictional.
• Result of recent Supreme Court ruling.
• If isolated, no longer under the jurisdiction
  of the Army Corp of Engineers.
• Corp has issued guidance on whether a wetlands is
  adjacent to a river, stream or tributary or is
  isolated.
• Advise caution. Hire a good consultant.

4
Late Breaking News

• Developer reimbursements from the city of
  Houston.
• New ordinance allows for reimbursement of 70
  water and sewer costs to the developer.
• If development is for affordable housing, an
  additional 3,000 per house is available for
  drainage costs.
• City has 2.5M budgeted for the year 2001.

5
Late Breaking News

• The city of Houston has implemented recordation
  by appointment.
• Process final plats for recordation during one
  meeting lasting around 45 minutes.
• Takes three weeks off the platting process.
• City also going to electronic plat filing system.

6
Land Use Trends and Patterns
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How Did We Do ?1999 Vs. 2000 Total Acres Platted
Increase of 38.9
8
Platting ActivityResidential Vs.
CommercialAcres Platted in 2000
SFR was 62 of all platting
while commercial was 36 of total.
9
Platting Activity1999 Vs. 2000Residential
Commercial
Increase of 53
Increase of 21
10
Where Was It ?City of Houston Vs. ETJ Acres
Platted in 2000
Residential platting in the City was only 11 of
total
while commercial platting in the City was 41 of
total.
11
Trends in Use by AreaAcres Platted - 1999 Vs.
2000City of Houston Vs. ETJ
Residential platting increased 61 in the ETJ
while Commercial platting in the ETJ only
increased 14, but had a 31 increase in the City.
12
Commercial Building in City Square Footage
Permitted - 1999 Vs. 2000
Although the total commercial SF permitted
declined 2.5
retail and office SF increased 31 and 49
respectively.
31
(31)
(37)
49
13
Commercial Building in City Value Permitted -
1999 Vs. 2000
Although office SF permitted increased 49
107
the value of office permits decreased by 37
21
25
(37)
(34)
(In millions)
14
City of HoustonDistribution of Building Permits
by SFYear 2000
40
26
12
11
11
(thousands)
15
City of Houston Distribution of Building Permits
by ValueYear 2000
44
30
15
8
4
(thousands)
16
Industrial Land

• Industrial construction within the City decreased
  37 to 2,984,300 SF permitted.
• Most activity is focused along Beltway.
• Clusters around intersections with major freeways.

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Industrial Land

• Land use along Beltway is migrating from
  industrial to office.
• Land prices are in the 1.75 - 2.75/SF range and
  are moving to 4 6/SF as office users squeeze
  out industrial users.
• Some user ready land in good secondary locations
  still available below 1/SF.

18
Office Land

• Square footage permitted increased 49 in 2000.
• Decreased inside the loop but increased 59
  outside the loop.
• Downtown land values have exceeded 100/SF to as
  much as 340/SF for certain tracts. Lesser
  quality tracts available well below these
  numbers.
• Flurry of class B/B- bldg along Beltway and I-10.
  Tracts are in the 4 6/SF range.
• 10 20 increase in bldg activity in 2001.

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Office Land Forecast

• FORECAST for of land sales for office buildings
  gt80,000SF.

12
20
Retail Land

• Square footage permitted in 2000 was 6,752,600
  SF, an increase of 31.
• SF increased 18 inside the loop but 34 outside
  the Loop.
• Land prices have seen some of their biggest
  increases in this category.
• Prime 8 acre tracts in northwest Houston that
  were selling for 6/SF now selling for 8.50/SF.

21
Retail Land

• Inner city prices even higher, with some going as
  high as 35/SF.
• Prices for 4-5 acres in the 20-25/SF range are
  not uncommon.
• Continued firm prices but slowing of increases.

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Retail Land Forecast

• FORECAST for of land sales for grocery sites.

23
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Multi-family Land

• Of the approx. 7,600 starts last year, 4,899 were
  permitted within the city of Houston.
• Of that, 2,682 were inside the loop.
• Although there was a dearth of construction
  activity, 14,000 units were absorbed.
• This bodes well for the apartment industry and
  starts should accelerate.

24
Multi-family Land

• Inner city land for Class A apartments will be in
  the 20-25/SF range.
• Suburban sites will go for anywhere from 1.50/SF
  for tax credit apartments to 3.75/SF for Class A
  sites.
• The highest price paid for a tract outside
  downtown was 50/SF for a 60,000 SF site for
  mid-rise residential.

25
Multi-family Land Forecast

• FORECAST for of land sales for multi-family
  sites.

25
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Urban Single Family Land

• Of the 26,157 lots platted in 2000, 21
  were within the city.
• Of the 4,666 SFR permits issued in the city,
  1,804 or 39 were inside the loop.
• There were five communities within Houstons city
  limits that had over 100 starts in 2000. They
  were

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Urban Single Family Land

• Royal Oaks Country Club 161
• Bridgegate 113
• Greenpark 109
• Corinthian Pointe 107
• Mills Creek Village - 95

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Urban Single Family Land

• Prices increased 20 35 in the past year but the
  rate of increase should slow.
• 6,600 SF lots in St. George Place are selling for
  27/SF. Lots were 10/SF less than 3 years ago.
• Land in Midtown that was 5-8/SF now trading in
  the 15-16/SF range, with 25/SF ASPs.
• Trend to higher densities Perry Homes offers a
  1,200 SF, 2BR, 1BA, 1 car garage for 170K.

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Urban Single Family Land

• Trend also to fringe areas and overlooked areas
  in search of affordability.
• For example, TC Jester and 18th Offers great
  access to the Galleria, Memorial Park and three
  major freeways.
• Another would be just west of Chimney Rock,
  between Richmond and Westheimer.

30
Urban Single Family Land

• Look for small 46 acre tracts to be developed
  into 710/acre densities for homes priced below
  250K.
• Oversupply of three story townhomes in the 350 -
  500K range in several areas.
• Look for a slowdown in land prices in these areas.

31
Suburban Single Family Land

• With 80,000 jobs predicted for Houston for the
  year 2001, SFR starts should increase 6-8 over
  2000.
• Land prices continue to rise rapidly.

32
Suburban Single Family Land

• Look for increases in densities, with 40 45
  wide lots becoming more prevalent among entry
  level housing.
• With increasing land and development costs, the
  consumer will be the loser as home prices
  continue their rapid rise.

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Suburban Single Family Land

• What was selling for 20-25K/acre is now selling
  for 30K.
• A 1,000 acre tract surrounding a golf course
  recently sold for 17K/acre. This might have sold
  for under 12K/acre 2-3 years ago.
• Land can still be obtained for under 10K/acre,
  but usually has development constraints.
• Better off paying more and getting more.

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Single Family Land Forecast

• FORECAST for of Single Family Residential
  starts.

31,009
35
Single Family Land Forecast

• FORECAST for Average 65 Lot Price in a Planned
  Community.

37,128
36
Single Family Land Forecast

• FORECAST for of New Home Lots Developed.

28,720
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Summary

• It will be another good year for the land market,
  with prices remaining firm but with less rapid
  increases. The amount of acreage platted in 2001
  will increase over 2000, with residential housing
  again leading the way.