HOUSTON--(BUSINESS WIRE)--The densification of urban Houston is creating more demand for infill development sites in districts around downtown and property values are increasing, according to Deal Sikes, a leading Houston-based property valuation firm.
“Real estate developers are seeking well-located parcels for high-rise residential, mixed-use projects, retail and multifamily construction,” said Mark Sikes, principal with Deal Sikes. “Raw land parcels of significant size are exceptionally hard to locate at this point in the city’s development, so the acquisition activity is typically focused on obsolete buildings that will be demolished and replaced with new construction. In most cases, valuations for infill properties that can be used for new construction have increased significantly in recent years, perhaps as much as 50 percent over the last five or six years.”
Major development firms including Hines, Hanover Co. and Madison Marquette have recently completed or are currently constructing high-rise residential towers in Midtown and Montrose. Additional new development, primarily multifamily and retail development, has been occurring in the Heights, the Washington Avenue corridor and in EaDo on the east side of downtown.
“Young professionals are searching for walkable communities with access to public transportation, along with popular restaurants and lifestyle amenities,” Sikes said. “The market is responding to the Millennial cohort, which is maturing with influential buying power. The emergence of the Inner Loop markets is also growing as Houston’s population growth and commute times expand.”
Governmental policies and programs also play a role in the resurgence of Houston’s infill markets and a trend toward rising valuations, said Matthew Deal, principal of Deal Sikes.
“The introduction of Qualified Opportunity Zones, which allow real estate investors to obtain relief from federal capital gains taxes under certain circumstances, has encouraged investors to pursue properties in urban Houston,” Deal said. “The success of the City of Houston’s initiative to promote residential development in the Central Business District has transformed this market to a 24-hour activity center. The change in the downtown mixed-use environment is driving land values to new levels.”
Deal Sikes provides valuation and counseling services for real estate firms, governmental agencies, law firms, and investors across the region. www.DealSikes.com