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Construction

Office and Retail Occupancy Up, Industrial Down in The Woodlands in November

2024-12-11

In early December, the Woodlands area witnessed an upward trend in office and retail occupancy when compared to the previous year. However, industrial occupancy took a different turn, experiencing a decrease of approximately 15 percentage points compared to the fourth quarter of 2023, as per November data from Caldwell Cos. Let's delve deeper into these details.

Sorting out the Details

Office and retail trends in the area remained consistent with those observed in October. This indicates a certain stability in these sectors during this period. Regarding rental rates, industrial spaces have shown an upward trajectory since 2021. On the other hand, retail rental rates have witnessed a decline since reaching a four-year high in late 2023. These fluctuations provide valuable insights into the local market dynamics.

Office Sector

There are fewer buildings under construction in the office sector. This could potentially lead to a more balanced supply and demand situation in the future. With fewer new offices coming up, existing spaces might become more sought after, which could have implications for rental prices and occupancy rates. It also suggests that the market is maturing and evolving.

Another aspect to consider is the impact of these occupancy changes on businesses operating in the area. For example, office-based companies might need to adapt their strategies to accommodate the changing landscape. Retailers, on the other hand, might need to focus on differentiating their offerings to attract customers in a competitive market.

Retail Sector

The consistent trend with October indicates that the retail sector in the Woodlands area is showing some resilience. Despite the overall economic conditions, retailers are able to maintain a certain level of occupancy. However, the decrease in rental rates since late 2023 poses a challenge for retailers. They need to find ways to optimize their operations and manage costs to stay profitable in this environment.

One possible strategy for retailers is to focus on customer experience and offer unique products or services. By differentiating themselves from competitors, they can attract more customers and justify higher prices. Additionally, collaborating with local businesses and community organizations can help build a stronger customer base and enhance the overall shopping experience.

Industrial Sector

The increase in rental rates since 2021 shows the growing demand for industrial spaces in the area. This could be due to various factors such as the expansion of local businesses or the rise in e-commerce activities. However, the recent decrease in occupancy by about 15 percentage points compared to 2023's fourth quarter is a cause for concern.

Industrial developers and investors need to closely monitor these trends and adjust their strategies accordingly. They might need to focus on improving the quality and functionality of industrial spaces to attract tenants. Additionally, providing flexible leasing options and better infrastructure can help address the challenges faced by the industrial sector.

The building stands opposite the Rite Aid at the junction of Broad and Belvidere. (Mike Platania photo) showcases a significant addition to VCU's real estate holdings. In the past week, as per city records, the VCU Real Estate Foundation made a purchase of a vacant two-story structure spanning 2,800 square feet at 508 W. Broad St. for $540,000. This acquisition is strategically located across from the under-construction arts center at the intersection of Broad and Belvidere. A VCU spokesperson confirmed the deal, stating that the foundation bought the property with the potential for university use. If the university cannot utilize it, the property will be leased out. The seller was an entity associated with James and Laurie Daigle, who acquired the property in 2002 for $50,000. James Daigle, whose contact details could not be reached, is the registered owner of Artcraft Designs, whose signage still adorns the building. It remains unclear whether Artcraft is still in operation or how long the building has been vacant.

University's Intent and Seller's Approach

The VCU spokesperson revealed that the sellers reached out to the university to "check VCU's interest (in 508 W. Broad St.) before putting it on the market." This indicates a proactive step by the sellers to explore potential buyers. The parcel, which measures less than a tenth of an acre, is zoned for business use and was most recently assessed at $457,000. In 2023, the VCU Real Estate Foundation had a highly active year, spending over $8 million on the Ipanema and Bookholders buildings on West Grace Street and a small office building on Shafer Street. In 2024, its real estate interests have been mainly focused elsewhere in the city. The university is actively pursuing the massive Altria Center for Research and Technology on East Leigh Street, while the VCU Health System Authority recently made a nearly $10 million investment in a facility near The Diamond.

Strategic Location and Future Plans

The location of this newly acquired building is highly strategic. Being across from the Rite Aid and adjacent to the under-construction arts center provides various opportunities for VCU. It could potentially be used for academic purposes, such as hosting workshops, exhibitions, or research facilities. The fact that it is zoned for business use also opens up possibilities for leasing to local businesses, generating additional income for the university. With the university's growing needs and expansion plans, this property could play a crucial role in fulfilling those requirements. It showcases VCU's continuous efforts to enhance its real estate portfolio and strengthen its presence in the local community.

Historical Context and Property History

The property at 508 W. Broad St. has a rich history. It was purchased by James and Laurie Daigle in 2002 for $50,000, and since then, it has remained vacant for an unknown period. The presence of Artcraft Designs' signage on the building adds a touch of history and potential. It is unclear whether the cabinetry firm is still in business or if the building has been vacant due to their operations. This historical aspect gives the property a unique character and raises questions about its future use and potential. VCU's acquisition of this property allows them to take control and shape its future according to their needs and vision.

Impact on the Local Real Estate Market

The purchase of this vacant building by VCU has a significant impact on the local real estate market. It shows the university's confidence in the area and its commitment to expanding its operations. This acquisition could potentially lead to increased development and investment in the vicinity. It may also attract other businesses and organizations to consider the area for their own ventures. The VCU Real Estate Foundation's active role in the market sets an example and influences other players in the real estate industry. It demonstrates the potential for universities to play a vital role in shaping the local economy and community.

Construction on Union Depot in Bartlett is progressing steadily. Situated at U.S. 70 and Stage Road, this approximately $200 million project marks Bartlett's foray into mixed-use development and is located on the former campus of the Tennessee Baptist Children’s Homes. The Westerly at Union Depot is set to welcome its first residents in January 2025, with 15 apartment units already completed. These units offer a range of amenities including a lounging area, a pool area, a gym, and various functional spaces such as work areas and kitchenettes. The attention to detail is evident in every corner, from the dog grooming station to the residents' mailbox area. Each unit is thoughtfully designed, with bathrooms and kitchens that meet the highest standards. This project not only brings new life to the former campus but also sets a new benchmark for mixed-use developments in the area. It showcases the potential of repurposing existing spaces and creating vibrant communities. With its prime location and top-notch facilities, The Westerly at Union Depot is set to become a sought-after destination for residents and visitors alike.

Progress of Construction

Construction on Union Depot has been ongoing for some time now. The team has been working diligently to bring this ambitious project to life. The site at U.S. 70 and Stage Road is bustling with activity, with workers constantly on the move. The rough estimate of $200 million ensures that every aspect of the development is of the highest quality. From the foundation to the finishing touches, every detail is being carefully attended to. This project is not just about building structures; it's about creating a community. The ongoing construction serves as a testament to the commitment of the developers and the local community. It's a sign that great things are happening in Bartlett.

Features of The Westerly

The Westerly at Union Depot offers a plethora of features that make it stand out. The 15 completed apartment units are designed to provide maximum comfort and convenience. The lounging area is a perfect place to relax and unwind after a long day. The pool area is a great spot for a refreshing swim or a sunbathe. The gym is equipped with state-of-the-art equipment, allowing residents to stay fit and active. The work areas are ideal for those who need a quiet place to focus on their work. The kitchenettes in each unit are fully equipped, making it easy for residents to prepare their own meals. The attention to detail extends to every aspect of the units, from the flooring to the lighting. The bathrooms are modern and stylish, with all the necessary amenities. This attention to detail ensures that residents feel at home from the moment they move in.

Location and Significance

The location of Union Depot at U.S. 70 and Stage Road is highly strategic. It provides easy access to all parts of Bartlett and the surrounding areas. The former campus of the Tennessee Baptist Children’s Homes adds a unique charm to the development. It's a reminder of the area's history and heritage. This mixed-use development is not just a building; it's a symbol of progress and growth. It shows that Bartlett is moving forward and embracing new opportunities. The completion of 15 apartment units is just the beginning. There are more plans in the pipeline to further enhance the development and make it an even more attractive place to live. This project has the potential to attract more businesses and residents to the area, boosting the local economy.