Study Tour Day 5- Houston, TX

Houston City Officials
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.

Study Tour Day 4- San Antonio, TX Continued

Patrick Sheer: Friedrich Lofts Tour


















Friedrich Lofts is a building complex that an old refrigerator company from the 1920s and 1930’s, Friedrich refrigeration used to inhabit. A partnership out of Dallas, TX owns the property and wants to sell it for $8 million. That is a low price for the amount of space; it would only be about $4 to $5 per foot. Whoever buys it will have to do a lot of work to get it up to par. There are many different plans you could go by to put in condos, retail, or offices. It would be a big project. The city decided to make that part of town better and when they came in they redid the streets and put up new light poles to make it more inviting. This has helped in renting the space that is currently rented. The current owners have made it into a few offices, but much of the building has been untouched since the old refrigerator company occupied it. Out of the entire building only 20,000 sq ft is rented and only offices have been put into the building. It is in an empowerment zone which is an incentive for companies because their employees could live in the same building where they work and which would equal tax credits for the companies. The offices shown in the pictures have new electrical, but the floor and ceilings are original. Also, the building has been deemed historical.

Alamo Architects: Sustainability Project











The Alamo Architects are an architecture firm in San Antonio, TX. Nikki and Kevin talked to us about how in 2005 they started with a property used by a custom trailer manufacturer with oil on the ground and turned it into a sustainable, Green building. There are many different aspects of the building that were kept. For example, the metal shell of the building, they reused the wood and concrete from it as well. The concrete was made into a really cool fence. On one side of the building they have a tank that captures the water and uses it to irrigate the landscaping. Instead of using concrete on the parking lot they used ground up granite. There was a lot of natural light inside the building. They kept the same concrete floor inside the building, but cleaned all the oil spots left on it. The Alamo Architects tried to incorporate a variety of LEED projects at the site. The building is LEED Silver. 95% of materials that would have normally ended up going to a dump were recycled back into the project. The building has been occupied for 3 years. Their energy bills are cut 20-30% each month because of following LEED as much as they did. The original floor is still inside the building. The way the building was done, it was very unique and I saw a lot of things that others could do to when making sustainable buildings. After thinking about the entire building, the water tank and concrete fence were my favorite things about the building.

Marty Winder: Large Scale Land Developer

Mr. Winder is a graduate of UT and he came to San Antonio to work for his wife’s family business which built small homes and financed them. He worked for the family business for 12 years and then in 1981 went on his own. His first development that he talked to us about was Crown Ridge. This was a very hard project to complete not just because of the limestone in the ground, but also because of the politics around this area. He then looked towards the west for his next development. Mr. Winder bought ranches with a rock quarry in it; it was about 3500 acres. It is now known as Westover hills. He picked this area because he knew the city was growing and predicted this is the area in which it would grow; he was right. He said he is not the guy over the idea. He is the guy that gets things done. Mr. Winder said the most important real estate rule is that time is the enemy of real estate deals. In order to become successful he hired the most experienced people which were usually older than him and this meant that he had to pay premium prices for them. He built the Hyatt Hill Country which is the most successful Hyatt in the country. Many people thought that the Hyatt Hill Country was a bad idea, but he didn’t listen. Many data centers have come to San Antonio, TX because the electricity is cheap, no hurricanes, no tornadoes, and no earthquakes affect the area. The best way to become a developer is to work under someone that you can learn a lot from. This was a great experience listening to someone that has done many different projects and has a lot of great stories.

River Improvements Project














River Improvements Project tour was given by Steven. The Riverwalk is 13 miles in length. He told us that the Riverwalk and the Alamo are top tourism spots in the United States. The new part of the Riverwalk is meant to be more for locals. They thought that the retail and other surrounding businesses would help make it for the locals and with just a little tourism. One problem with the river is E Coli Bacteria. The waterfalls keep the water oxygenated for river life and the water at the Riverwalk is only 4 to 6 feet in depth. Pearl Restaurant/Bar gave $3 million to the River Project to put island in for entertainment. $72 million of public money has gone into improving the 1.3 miles of new area on the Riverwalk. There are many different art pieces along the way. There is a painted concrete cave and stump that look real even though they are made out of concrete. On the Riverwalk there is a tunnel with birds chirping and different sounds which is a form of “sound art” or sounds collected from around the river. Under each bridge there were things to look at. The walk was really hot and long.