HOUSTON--(BUSINESS WIRE)--Houston’s commercial property values have been uneven over the last year, as conditions vary significantly among the city’s different submarkets and property types, according to Deal Sikes & Associates, a leading Houston-based real estate valuation and counseling firm.
“The changes in Houston commercial property values cannot be characterized with a broad brush,” said Matthew Deal, principal with Deal Sikes & Associates. “In general, Houston’s retail and industrial properties have performed better than office and multifamily. But now, more than ever, properties must be carefully evaluated on an individual basis to determine market value.”
The Harris County Appraisal District reports 57 percent of the commercial properties in the county recently received initial value notices with value increases over the prior year. HCAD reported 18 percent of the properties received decreases and 25 percent were unchanged.
“Although valuations by appraisal districts do not represent a true reflection of market value, overall the prevailing trends for Houston commercial real estate valuations have indeed been mixed over the last year,” said Deal.
The continued strength of the retail sector supports stronger valuations in most cases, Deal said. Sites suitable for retail development also are in demand. Industrial properties have also shown increased demand and stronger valuations as warehouse rental rates rose and vacancy rates have been around 5 percent, he said.
“Available land for industrial development is scarce around the Port of Houston and property prices have been rising,” said Mark Sikes, principal with Deal Sikes & Associates. “The east side of Houston has shown significant strength from the industrial areas near the Port to the edge of downtown Houston.”
The proposed 150-acre redevelopment of the former KBR property on the east side of downtown appears to be a transformative project that will impact the entire eastern area in future years, Sikes said. Close-in areas such as Midtown are sought after by developers of multifamily, retail and mixed-use projects, Sikes said.
Deal Sikes & Associates, based in Houston, provides valuation and counseling services for real estate firms, governmental agencies, law firms, corporate clients, publicly traded companies and investors across the nation.