press breakfast

NAI Partners recently held its quarterly press breakfast, which as usual featured a panel of the company’s experts—this edition was rounded out by Griff Bandy, John Simons, Jason Gaines, Jim Tainter and Andrew Pappas—holding forth on a variety of trends and topics they are seeing across the company’s Office, Industrial, Retail, Landlord Services and Investment Fund service offerings, respectively.

At the outset of the press breakfast it was noted that NAI Partners had a very strong 2017, and has shown no signs of slowing down in 2018, continuing to complete deals at a furious clip and rapidly expanding its ranks, as evidenced by rising to the 5th-largest commercial real estate brokerage in Houston.

The company remains dedicated to continuing to fill out its product lines and service offerings in Houston as well as its Austin and San Antonio offices. NAI Partners now boasts professionals specializing in all three of its product types—office, industrial and retail—representing both tenants and landlords in every market the firm operates in.

That diversification has paid off, as the leader of NAI Partners Investment Sales, Joshua Lass-Sughrue; and leader of its Retail division, Jason Gaines, both ranked among the company’s top 10 producers in 2017 across all product types. In fact, Mr. Lass-Sughrue and the NAI Partners Investment Sales team have been closing an impressive number of deals of late, and industry-watchers are realizing that NAI Partners Investment Sales has made a name for itself among the more well-known names in town when it comes to elite investment sales production.

Some of the primary storylines the company’s professionals are seeing include a dip in the NAI Partners Sublease Index to 14% following about 450,000 sq. ft. of sublease space in Greenspoint moving over to direct space; a robust overall industrial market that has recorded a 5.5% or lower vacancy rate for over 6 years; and booming retail, with average asking rents at an all-time high and sub-6% vacancy.

Griff Bandy, Partner, on the Houston office market:
“Our NAI Partners Sublease Index—which measures the amount of sublease space as a percentage of total available space—decreased 140 basis points in April to 14.0%, due in large part to a chunk of sublease space moving over to direct. So while we’re pleased to see a decline in sublease space, overall vacancy remains at elevated levels. This has resulted in an increasing number of tenant improvement requests from users of office space, with some landlords more motivated to meet certain concessions than others.”

Jim Tainter, Managing Director, Landlord Services:
“We’ve seen a healthy amount of activity in the sub-20,000-sq.-ft. requirement arena, and continue to hear from our landlord clients and those in the market that they are looking for opportunities to drive value. Thankfully we’ve been able to help them in that regard, as we remain focused on expanding our Office Project Leasing and Property Management portfolios.”

John Simons, Partner, on the Houston industrial market:
“Houston industrial construction has been very balanced, with demand heading toward spec construction. One of the projects my team is currently working on is a 540-acre master-planned multi-modal distribution park in El Campo, Texas—which ground will be broken on in June—that will be able to accommodate up to 10 million sq. ft. of Class A warehouse, manufacturing, and distribution facilities. It will also provide access, visibility, and rail service via the Kansas City Southern Railway—the premier carrier for rail traffic to and from Mexico.”

Andrew Pappas, SVP, NAI Investment Fund:
“We’re expecting Fund II—which originally sought to raise $9 million and is officially oversubscribed—to be fully deployed by the end of the year, with the goal of building a strong $50-$60 million portfolio of office, industrial and retail properties throughout Houston, Austin, San Antonio and Dallas.”

Jason Gaines, SVP, Retail Services:
“One of the more interesting trends we’ve seen in retail is that long-term held assets are increasingly being purchased by non-institutional investors. The positive side of this is that these entrepreneurial-leaning entities tend to be nimbler when it comes to getting deals done; on the flipside, there is sometimes less of an incentive to meet prospective tenants in the middle on certain aspects of the negotiating process.”

Last quarter’s roundup and subsequent media coverage of our quarterly press breakfast.

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