Hurricane Harvey's impact on Houston's commercial real estate market was significant.
Spencer Levy, Head of Research at CBRE said, "Houston's commercial real estate market is resilient after weathering Hurricane Harvey and the largest rainfall the area has recorded in decades," Mr. Levy said. "The outlook for recovery is optimistic, but short-term disruptions are to be expected. Available space to house displaced companies, stores and residents--as well as relief workers -- is likely to become scarce in certain Houston submarkets, and the rebuilding effort will temporarily fuel a rise in retail sales and additional demand for warehouses in the area from building supply companies. Overall, Houston's recovery will take time, but the area's strong economy will help it rebound soundly."
CBRE also reports on the following commercial sectors in Houston.
Fewer than 40 office buildings, or 4.2 percent of Houston's office stock, suffered damage.
Displaced companies already are looking for temporary, turnkey space, likely soaking up some of the 11.1 million sq. ft. of availability in the market. Others that had marketed space for sublease have withdrawn it to preserve their options.
The majority of Houston's warehouse and distribution center market weathered the storm without major damage.
Expect a spike in demand for warehouse space from building supply companies, charities and consumer-goods distributors, which will further constrict availability.
Most damage limited to neighborhood and strip centers in hardest hit submarkets. Still, displaced retailers looking for space face a tight market.
Houston's retail sales will increase, especially for vehicles, home-improvement goods, furniture and appliances.
Up to 100,000 apartments were flooded, amounting to one of every six units in the area.
Expect occupancy rates to rise and concessions for new renters to be curtailed amid the rise in demand.
In other metro areas struck by hurricanes in recent years, hotel occupancy increased by an average of 15 percent for the four months after major storms.
The additional demand in Texas stands to deliver a 4.4 percent gain in revenue per available room for the U.S. hotel industry rather than CBRE's previously forecast 3.5 percent gain.
52 percent of residential and commercial properties in the Houston metro are at "High" or "Moderate" risk of flooding, but are not in a Special Flood Hazard Area (SFHA) as identified by the Federal Emergency Management Agency (FEMA).
According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family homes in July 2017 fell 9.4 percent to a seasonally adjusted annual rate of 571,000 units from an upwardly revised June 2017 reading.
According to the U.S. Department of Housing and Urban Development and the Commerce Department, nationwide housing starts fell 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million units.