Job-hungry Houston leases faster than deliveries

HOUSTON – As Houston continues to create jobs and power the economic engine of Texas, every segment of the multifamily sector continues to push higher, according to Ryan Epstein of CBRE Capital Markets Multi-Housing Group

With more than 100,000 jobs added in the past year alone, the newly hired and the job-hungry are leasing up available space faster than units are being delivered to the market,

For the first time since 2005, apartment occupancy is averaging more than 90 percent. As the energy, medical, service and construction industries continue to expand, demand will remain strong across the board for Class A, B and C product.

New multifamily construction is heavily concentrated within the Inner Loop, Energy Corridor and the vicinity of The Woodlands where Houstonians are more than willing to pay premium prices for premium options.

• Hanover Rice Village is leasing at a rapid pace with steep rents, approaching $2.50 per sf on average.
   
• The Woodlands Town Center apartments are leasing for approximately $1.80 per sf.
   
• The Domain at City Centre is securing highly competitive rent levels with $2.35 per sf.

While construction activity for 2013 is slated to increase, estimates suggest that the delivered apartment product within the next three years will still fail to meet demand.

According to absorption rates and job growth released by the Bureau of Labor Statistics and the Apartment Data Services, Houston requires one apartment unit for every six jobs created.

If the numbers prove accurate, the city will be more than 15,000 apartment units short in supply during the next three years.