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Research Publications

Our research publications provide timely information on trends in the marketplace while taking a slightly different perspective to develop unique insight for our clients.

Houston’s Multihousing Market: The Season of New Beginnings

Houston’s Multihousing Market: The Season of New Beginnings

Spring is the season of new beginnings, welcoming warmer weather and a fresh start before the grueling Texas summer sets in. Similarly, the Houston multihousing market is regaining its footing and primed for better days. With that in mind, what is the outlook going into 2017?

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The Texas Office Market: Through the Eyes of the Sublease Market

The Texas Office Market: Through the Eyes of the Sublease Market

An office market can be analyzed from many different viewpoints, but the number one rule for real estate research professionals is to follow the demand. In this piece, we will analyze the relative health of the Texas office markets from the sublease market’s perspective and highlight trends within the Class A and Class B office segments

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Future of Houston Industrial Market

Future of Houston Industrial Market

Since the beginning of the current cycle, Houston’s real estate market—regardless of property type—has endured declining oil prices and elevated construction volumes. However, the subsequent impact upon the industrial markets have been negligible. With that in mind, what is the outlook going into 2017?

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Strong GDP Growth Defines Texas Metros

Strong GDP Growth Defines Texas Metros

On September 20, 2016, the U.S. Bureau of Economic Analysis (BEA) released 2015 data on gross domestic product (GDP) at the metro level. Despite the significant lag time, the strong historical correlation between GDP growth and real estate performance keeps the data relevant and provides a baseline moving forward. From that perspective, the four large metros in Texas are faring well and economic outperformance is expected to continue moving forward.

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The Cost of Doing Business

Austin Rents Reach All Time High

By all accounts, from fundamentals to the longevity of the technology cycle, Austin is red hot. For the office market, third-quarter 2016 represented the 16th consecutive quarter of positive net absorption, new supply remains modest and the average asking rent surged to a new all-time high.

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The Cost of Doing Business

The Cost of Doing Business

Texas has long been a star when it comes to business which in turn has led to increasing demand for office space and higher rents. This raises the question, given the recent spike in office rents, do Texas cities remain competitive relative to other markets within the South and Southeast?

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Connecting The Dots:The Correlation Between Commercial Real Estate and Mergers & Acquisitions

Connecting The Dots
The Correlation Between Commercial Real Estate and Mergers & Acquisitions

Commercial real estate (CRE) and merger and acquisitions (M&A) have demonstrated an under-the-radar parallel based on similarities in the motivation, valuation and financing of deals. Following this logic, a connection between the two can provide a forward-looking indicator that is useful for the commercial real estate industry.

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Houstons Real Estate Risk August 2016

Houston’s Real Estate Risk: Does Perception Equal Reality?

Given all the bad news surrounding the downturn in the oil industry, Newmark Grubb Knight Frank wanted to determine whether or not perception equals reality when it comes to the Houston real estate market. Look past all the doom and gloom headlines, however, and the reality may surprise you.

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Houston Industrial Trends

Houston Industrial Market Trends

The increasing number of fulfillment and delivery options, including shifts in the once imperturbable grocery industry, has created ripple effects throughout the supply chain. Consumers can buy online and then ship to a store, their home or a third party. Manufacturers now sell directly to consumers, and online returns make up an unusually large percentage of sales. The use of online marketplaces, distribution and fulfillment centers, reverse logistics for store returns and true omnichannel commerce is influencing the what, where, when and how of industrial real estate.

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Houston Class A Office Market Trends

Houston Class A Office Market Trends

Despite a rebound in oil prices, the office market remains the weakest performing sector among Houston’s major property types. Specifically, this piece explores the performance of Class A office space and expectations moving forward.

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PDF One

When Good News Turns Bad

To get a holistic view of commercial real estate, you must analyze the key drivers for demand. At the top of the stack is the labor market. The good news is the Texas economy has experienced annual employment gains for 71 consecutive months; however, the pace of employment growth has been slowing lately. The purpose of this piece is to dive into the reality of recent layoff announcements to determine the most impacted areas.

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PDF One

Sum of the Parts

Understanding an office market as large as Houston takes some work. After all, Houston, which ranks as the fourth-largest metro in the U.S., has nearly 200 million square feet of office space, so there’s a lot of ground to cover. Since the vacancy rate represents both supply and demand, it makes sense to chart Houston’s office market in those terms. For a market as large as Houston, an analysis of the relative comparison across submarkets can reveal pockets of strength, weakness, momentum and cyclicality. NGKF has taken this analysis one step further by creating a single chart that documents this activity.

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PDF Six

Follow the Money
Part IV: The Retail Market

From an investment perspective, the retail sector continues to perform well. The U.S. retail sector recorded a 15.3% return in 2015, according to data from NCREIF. By comparison, retail performance easily outpaced apartments, hotel, industrial, and office, as well as the NPI index, as a whole. Moreover, retail offers favorable risk-adjusted returns on a historical basis. Over the previous 20 years, the retail sector has produced an average return of 10.8% per annum, with only two down years. Moving forward, key indicators such as employment trends, population growth, improving wage growth, and lower gas prices, suggest a continued positive outlook.

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PDF Six

Follow the Money
Part III: The Industrial Market

Healthy fundamentals and higher yield spreads have investors excited about the industrial sector. In fact, the industrial sector showed the greatest year-over-year percentage gain in sales volume nationally among the four major property types. The story was much the same in Texas, as the industrial sector recorded a 48% jump in total transaction in 2015 relative to 2014. By comparison, retail was a distant second with a 17% increase.

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PDF Five

Follow the Money
Part II: The Multihousing Market

Multihousing investors have been riding an unprecedented wave of success, driven by favorable structural tailwinds and cap rate compression. While the dynamics are no different in Texas, some investors are worried about the amount of new supply that will be delivered in Austin, Dallas and Houston. However, it should be noted that near record supply has been met with near decade-high demand. Furthermore, the general consensus is that any softness in the market will be temporary, and the capital flows back it up.

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PDF Four

Follow the Money
Part I: The Texas Office Market

After years of healthy growth, specific segments of the Texas economy now face headwinds due to lower oil prices and a stronger U.S. dollar. However, the negative impact varies when we analyze performance at the metro level. While the outlook for more oil-centric metros will dampen, other areas such as Austin and Dallas should remain robust. As such, Newmark dives into the research to uncover what this means for Texas real estate, and to specifically find out if Texas real estate is still attractive for investment—and if so, identify where the money is flowing.

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PDF One

An Overview of Houston’s Sublease Market

There’s no shortage of sublease office space within the City of Houston, thanks in part to lower oil prices and the prevalence of expansion plans cut short. By most accounts, lower oil prices are expected to stick around for some time, prompting questions about the vigor of the sublease market—and its subsequent impact on the market as a whole. To look ahead, we must first take a peek into the past.

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PDF Three

Robust Texas Office Market Construction Activity – Part III

Taking the top spot on our list with the most office construction underway is the Far North Dallas submarket. Far North Dallas, which incorporates the Upper Tollway corridor, West Plano, and Frisco, boasts an impressive list of companies that call it home. Some of the recent relocations and expansions in the submarket are Toyota, FedEx, Liberty Mutual and the Dallas Cowboys. With the influx of these businesses, we can expect to see additional retail, hotel multihousing and residential development. In this market, businesses and residents alike enjoy a high quality of life thanks to the outstanding real estate, educated workforce, proximity to transportation hubs, award-winning schools and easy access to recreation, cultural and entertainment venues.

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PDF Three

Robust Texas Office Market Construction Activity – Part II

At the second top spot on our list is the Houston Galleria/Uptown submarket, an urban community of exceptional beauty, sophistication, style and international prominence in the heart of Houston. It is a unique environment where business professionals, fashionistas, city dwellers and tourists from around the globe come together. The Galleria/Uptown submarket is also referred to as the “Mini Energy Corridor,” with a number of energy companies like Apache, Marathon Oil, Schlumberger and SUEZ North America headquartered within blocks of one another.

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PDF Two

Robust Texas Office Market Construction Activity – Part I

The following is a look at the state’s three most active submarkets and the reasons for their robust office construction activity. Taking the number three spot on the list of active office construction submarkets is Houston’s Central Business District. Downtown Houston has been experiencing an exciting renaissance.

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