Industrial Sector Back In Action After Ike

The Port of Houston Authority resumed normal operations late last Thursday. Two cruse ships of Miami-based Carnival Corp. are operating from Houston while repairs continue on their normal berths at the Port of Galveston. Area experts, in the meantime, are breathing a sigh of relief that damages to industrial properties weren't worse.

"The information that we've gotten is that there's a lot of roof-related damage. HVAC units that are on roofs, pressurization fans used for stairwells--those were damaged. But, we're doing better than I thought we would be," says Stephen Ash, managing vice president for Transwestern Houston.

Jay Jenckes, industrial associate with Grubb & Ellis Co.'s Houston office, says he's seen a lot of flooding and wind damage near the port as he drove around properties. He says the main damage that he saw were broken skylights and torn siding.

"Some of the tenants that were in buildings I would have been concerned about are really coming out all right," Jenckes says. "The great thing about the industrial buildings is you don't have the carpets and the dry wall and the low-to-floor electrical plugs."

Problems abound on Galveston Island, however, which is still without power and water. "The warehouses down there are likely completely destroyed," Clay says. He predicts some of Galveston's businesses will likely migrate inland, moving some warehousing and manufacturing needs as well. "But again they're likely so shell shocked right now, no one's sure what's going on," he adds.

In the meantime, the industrial market is positioned for a temporary spike in occupancy, courtesy of contractors and FEMA-based programs coming to town. Clay says he's getting requests for short-term leases ranging from one to six months.

"After something like this, a lot of people show up and need 100,000 sf for three months or six months," Jenckes says, adding accommodating tenants shouldn't be a problem for Houston. "Their requirements are pretty easy to meet by virtue that Houston is such a sprawled-out city with enough product."