Richmond Coward, Brian Crimmins, Ryan Albright, & Marlyn Gaphrate
Houston Development and planning meeting was much different than the San Antonio and Austin meetings because Houston only has zoning in one very small area of Houston. The advantage of no zoning is that developers are able to test new ideas in a faster time than if they had gone anywhere else. Houston's mission is to remain a vibrant and sustainable city. The city of Houston is 650 sq miles. There are three chapters of regulation that have the most significance currently for the city; they are chapter 42 over land development, chapter 26 that deals with parking ordinance, and chapter 32 dealing with landscaping. It was really interesting when they showed that 13 big cities across the United States could all fit inside Houston's city limits. The city officials noted that inside the 610 loop it is urban and outside is the suburban area. The city is developer driven; the cheap fees make it good for redevelopment. If you move out of the city then you have to pay for all the new utilities and build a new small city. Therefore it makes building in the city limits more attractive. To start a project in Houston you only need to have the city and community on board. Instead of zoning the developers must search for deed restrictions because the city does enforce them and there are only a couple of ways to change deed restrictions. When looking at property make sure the title is clear and find out as much as possible about any deed restrictions. Assume the worst before you buy property. It is better for everyone if developers work as partners with communities not adversaries. They also talked about Capital Improvement Planning (CIP) as well as the 88 "super neighborhoods" in Houston. The east side of redevelopment is coming because of the rail line. Not much brownfield site redevelopment is done because financing for that can take a long time. Houston is a very creative city, but they aren't as green as other cities because they would rather lead with a carrot instead of beating with a stick. The only thing that the market in Houston, TX doesn't provide is affordable housing.Green Building Project
The went to a city building that has many building materials inside that are Green along with many Green ideas for homes and commercial buildings. They had over 40 different displays. Many people go through the building to get permits and therefore the displays get a lot of traffic. Codegreenhouston.org has more information about Houston going green. All buildings over 10,000 sq ft the city now builds are LEED certified. Many aren't yet going green because it costs more since it is still fairly new. Local manufacturers is what everyone needs. Carpet is the number one product from real estate that ends up in the dump.
The West Ave
West Ave. was really cool. Gables residential did the apartments. Ben Peacock gave us a tour and gave us some information about West Ave. The apartments are an average of 1,080 sq ft. 89% of the 397 apartments have been leased in 14 months. The ipod doc in each apartment was a unique feature. There are 72 different floor plans at West Ave. The apartment we saw is $2700 a month rent. Like other places we saw it is a place for young professionals to live. The people that choose to live at West Ave. believe money is not an option and only care about the experience. West Ave. is in an established premium neighborhood (EPN). The bottom two levels of West Ave. is 195,000 sq ft of retails pace and it is currently 41% leased. When they opened they were doing 18 month leases, but now they are 9 to 13 month leases. The summer time is the busiest time for leases.The Core Apartments
At the Core Apartments we listened to Michael Morgan with the Morgan Group. He is 53 years old and the past 32 years he has been building apartments. His father was an apartment builder and he learned from the ground up about being successful in real estate. He believes that success is being able to not step on a land mine. When Mr. Morgan began working for his father he was given his first project in which he built 16 townhouses. He learned how to manufacture the property and then market it. It's important to build on a budget and rent at the right price. Being successful is all about fundamentals. He said to get three price quotes on everything from lumber to brick to concrete. Like others we have heard Mr. Morgan believes that timing is everything in this business. Their is a REIT that finances the property and 75% of the money that went into the project was borrowed from the bank. Mr. Morgan believes that the downside and worst possible outcomes of projects should be looked at before entering any project. He gave advice that you should try to look at areas where apartments are a little cheaper than single houses and also build in a place where there is a lot of exposure from drive by traffic. The Core Apartments were made to look a lot like a warehouse since it's surrounded by warehouses. The Core has been open for a little over 2 years and is about 99% leased. Most of the people living there are young graduate students, ages 25 to 28, that are just starting into their careers. It is $1.62 per sq ft and there are 326 units. The Core is Leed Certified. Mr. Morgan has a unique way of beginning a project; he goes first to the city officials and tells them what he wants to build and then takes the city's advice on what to do and does not argue with them. I think this probably helps him in the long run because he doesn't run any problems with the city. Mr. Morgan emphasized honesty and transparency with many different people including banks.
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