Buildings that house shops, restaurants and grocery stores are poised to withstand the ongoing oil price crunch better than any other sector of the commercial real estate market, according to a report from national property services firm CBRE.
What will help them the most is a limited supply of available space, compared with the building boom that's occurred in other segments of the market.
Over the past few years, shopping center developers had been elbowed out by office and apartment developers who could pay much higher prices for land.
In retrospect, that turned out to be a good thing for owners of shopping centers.
Retail space has hit a record-high occupancy rate of 93.4 percent, according to the CBRE report. It's even higher for so called Class A space, such as the Galleria, Sugar Land Town Center or Market Street in The Woodlands.
Luxury retail is experiencing a surge in growth, amid a swell in Houston millionaires that grew out of the recent energy boom.
The owner of the Galleria is making a quarter-billion-dollar investment in its iconic property, while rival development River Oaks District is under way just a half-mile away, bringing international luxury brands that are opening their first-ever Houston stores.
The suburbs are teeming with new construction as well.
Projects are planned or under way in The Woodlands, Valley Ranch in Porter, and on the old Camp Strake Boy Scout property in Conroe where a developer plans to add 750,000 square feet of new stores...
Gardere has renewed its office lease in downtown's Wells Fargo Plaza, but the Dallas-based law firm is downsizing and moving floors in the 71-story building.
When its new space is ready in July, the company will occupy 74,975 square feet on floors 20 to 22, according to building manager CBRE, which announced the lease last week.
Now, the firm occupies about 114,066 square feet on in the building, said real estate data firm CoStar.
The new space, designed by Gensler, will provide a more efficient design allowing the firm to accommodate the same headcount with fewer square feet, according to a spokeswoman with CBRE.
The move represents a change in the way lawyers and paralegals work.
The legal industry has begun to adopt a more compact office layout that its peers in the accounting banking and even oil and gas industry have done in recent years.
Other Houston law firms have downsized, reducing the number of window offices and creating more single-size workspaces.
"Through the reduction of space previously dedicated to large law libraries, file rooms and multiple reception areas, the new space will provide the firm with increased efficiencies, as well as a sleek, fresh design that will significantly enhance the workplace environment for Gardere's lawyers and staff," Gardere vice chairman Eric Blumrosen said in a statement.
Gardere has been a longtime tenant in the 1.7 million-square-foot Wells Fargo Plaza at 1000 Louisiana. The property is 93 percent occupied.
CBRE's Dave Hanusa and Bonnie Kelley represented the property owner in lease negotiations. Mark O'Donnell, Kevin Hodges and David Endelman of Savills Studley represented Gardere...Retail real estate should see little change amid oil slump
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National Office Sector Report (Q4 2014)