Brokers Now Assessing Impact of Possible NASA Cuts

Coy Davidson, vice president of Colliers International in Houston, tells GlobeSt.com that the submarket's future is difficult to predict until the NASA budget is firmed up. From all indications, it's going to be downsized.

Brokers already are taking stock of the inventory in the wake of a local university's impact study. Congressional cuts could result in the elimination of up to 5,000 jobs in the region, according to researchers. And that ultimately could trickle down to blocks of space possibly coming on line. Davidson says long-time residents are very familiar with the scenario; it's played out every few years.

Clear Lake's first office building totaled 24,993 sf and was built in 1961. Davidson says most of the four million-sf inventory was developed in the 1980s. In the 1990s, a total 386,689 delivered. And last year brought just 98,078 at Clear Lake Tech Center, a project of Dallas based-Jackson-Shaw Co. There is a persistent rumor that American National Insurance's development company is planning a 120,000-sf office building in South Shore Harbor next year. Still, it's a hard fact that the buildings' tenants are largely tied to NASA.

Davidson says the submarket remained stable in the last half of 2001. Occupancy increased by one percentage point mainly due to the move and expansion of Boeing Co. Boeing vacated 119,000 sf of class B space to move to 3700 Bay Area Blvd. where it signed a lease for 157,000 sf. The submarket's occupancy is 84.06% and rental rates flat despite a 1.2% increase in the final six months of last year, Davidson says. Class A space is bringing an average of $19.38 per sf; class B, $14.84 per sf; and class C, $12.80 per sf.