"HOUSTON - Although Houston real estate has some open wounds - such as the Energy Corridor office market - next year won't be catastrophic, according to panelists at the recent NAI Partners forecast event.
"We actually had a pretty good 2015 despite the $40 a barrel oil," says Jon Silberman, managing partner of the NAI Partners realty firm.
Silberman notes that mergers and acquisitions in the energy business often benefit Houston as companies shut down offices in Midland and Tulsa and move the remnant personnel into Houston.
But Houston's office occupancy rates will decline in 2016 as more sublease space hits the market, more new buildings are completed while many energy firms shrink their work force.
Houston's industrial real estate market seen a mild slow down in some sectors, but overall the market is good, particularly in southeast Houston, says developer Robert Clay of Houston - based Clay Development & Construction.
Chemical plant expansions and plastic production in southeast Houston create a lot of demand for industrial space, Clay says.
The decline of oil prices and the slowdown in construction came as Houston was approaching overbuliding, says Brad Freels, chairman of Midway Cos.
"Their air went out of the balloon before the balloon popped," Feels says. "I look at this downturn as a good thing, in some respects."
The year ahead will bring some rough patches for HOuston real estate. Things will get ugly in some submarkets and some sectors. But compared to the devastation of the 1980's, this downturn will be mild."
By Ralph Bivins
Realty News Report