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HOUSTON-Houston’s $324-million, light-rail system, set for early 2004 runs, won’t significantly raise rents or land values of real estate along the 7.5-mile route, say two of the city’s leading real estate professionals. At least, that’s the perception about the first leg of the system, which features 16 stations connecting the downtown to the Medical Center.

The section of the line now under construction is the “beginning of a great vision,” but it will be more of an attraction until it extends into the suburbs, Todd Mason with McDade, Smith, Gould, Johnston, Mason + Co. in Houston tells GlobeSt.com. Mason says developers have a general wait-and-watch attitude about the real estate development promise.

“They are not going to spend a whole lot of money until they see it being used and that won’t happen until the extensions are built,” Mason explains. The five mayors in Fort Bend County have asked Metropolitan Transit Authority to extend the high-speed transit system south to their areas. Other key destinations logically would be the Woodlands and George Bush Intercontinental Airport.

Mason says existing land values in the submarkets in the line’s path are roughly $150 per sf for the Medical Center; $100 per sf in the CBD; and $30 per sf to $40 per sf in Midtown. He predicts there could be an “overall 10% speculative bump” in land values after the MetroRail is unveiled, but the current route isn’t likely to yield lasting increases.

Coy Davidson in the Houston office of Colliers International agrees with Mason, both active brokers in the areas bisected by the rail line. “This is just the first piece of the puzzle,” Davidson says, adding there are just a few key properties that would be able to achieve higher rents as a result of the high-speed transit line. One beneficiary is sure to be the under-construction 1000 Main, a 1.4-million-sf tower being outfitted with a Metro Superstop.

However, Davidson says tenants might not be willing to pay more for the privilege. In fact, he says none of his clients would want to shell out higher rents for rail access to the Medical Center or Midtown, at least at this stage of the game. The transit authority, though, is betting on its studies, which show there will be 40,000 weekday tickets issued by 2020.

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