HOUSTON-The last RealShare Houston conference took place in late 2007. At that time, the subprime market was imploding, dragging along the US economy. As such, much of the discussions taking place at that 2007 conference focused on how Houston would weather the pending crisis.
Among the speakers at the time was Robert Duncan, chairman of Transwestern. As the guest of ALM ‘s Real Estate Media Group’s vice president and group publisher Michael Desiato’s segment “Inside the Mind,” Duncan pointed out that Houston would likely feel the pain of both subprime and credit crunch, noting that the region’s very diverse structure ensured it would “become more vulnerable to outside factors.”
Fast-forward a little more than five years. Houston did end up weathering the Great Recession and its aftermath relatively unscathed. The area, in fact, is booming, which was a major theme running through this morning’s RealShare Houston conference, which took place at Houston’s Petroleum Club. And this time around, as Desiato’s guest again during “Inside the Mind,” Duncan and Desiato both marveled at the changes that have taken place between 2007 and today.
“Houston in 2007 was solid, and we felt we’d weather the downturn,” Duncan noted. “But we didn’t predict the evolutionary changes that would take place in the energy industry, which is good.”
Duncan went on to point out that, at around the time of the previous RealShare Houston conference, the US imported approximately 70 % of its energy, while manufacturing about 30% of it. These days, he continued, that figure is approximately 50-50, with half of the US energy coming from US ground and half imported. Within the next several years, the US will be using about 70% of its own energy and important around 30%. Because energy is such a huge driver of Houston’s economy, “you can’t look at Houston’s real estate without looking at energy,” Duncan observed.
Another topic of discussion involved foreign investment in Houston. Early in 2013, the Association of Foreign Investors in Real Estate placed Houston on its top five cities garnering international attention (the other cities included New York City, London, Washington DC and San Francisco). This, incidentally, was another theme running throughout the entire conference, the idea that Houston is now considered a gateway city, and one in which international investors are interested. “Those who come here are thinking these trends are sustainable,” Duncan said. He doesn’t disagree; despite a somewhat slow Q1 absorption across industrial and office leasing, “we were somewhat surprised but not concerned,” Duncan said. “The demand for real estate is still strong.”
Though many things Houston – and the economy – have changed since 2007, Duncan’s advice to those entering the commercial real estate industry is solid. Namely, pick a reputable firm to work with and consider who you’re working for as well as who you’re working with. “Be proactive and engaged,” he added. “Be a team player. Be bold. Trust your judgment and good things will happen.”