Wednesday, May 23, 2007

BOOM TOWN: Houston, the Oil Town, Is Sharing in a Boom - New York Times 

Houston, the Oil Town, Is Sharing in a Boom - New York Times

Despite the collapse of Enron, the energy market in Houston is running full steam ahead. The city is benefiting from the boom in the energy business with a boom in the real estate market.

Some energy companies are expanding and putting up new buildings. Others, like Citgo, Schlumberger and Halliburton, have moved their headquarters to Houston. Oil and natural gas companies have helped reduce office vacancy rates to 15 percent, a five-year low, according to Grubb & Ellis, a real estate company. Job growth is double the national average — 97,400 jobs were created in 2006. The National Association of Realtors says the housing market in Houston is one of the strongest in the country.

“The increase in the oil business has made Houston,” said Randall Davis, a Houston condominium developer. “It feels a touch like the 1980s — everyone is out, the restaurants are full, the bars are full. It’s like New York.”

The good news extends across the city. The port recently opened a $1.4 billion container terminal to tackle soaring traffic. In 2006, it handled 1.6 million 20-foot containers, up 29 percent from 2003. At the Texas Medical Center, hospitals and universities are investing billions in new facilities. Residential and mixed-use developments are going up downtown.

The Houston economy has been growing since 2004, when energy companies started investing more in big-ticket projects and hiring thousands of employees to run them. Before that, oil companies had been hesitant to pour more into exploration and production, because they had lost millions in the past when oil and natural gas prices collapsed.

“There was always a real reluctance to buy into the commodity cycle,” said Robert W. Gilmer, vice president and senior economist at the Federal Reserve Bank of Dallas.

Those fears are long gone. Real estate investors, enticed by rising rents and occupancy rates, are returning. Over the last five years, sale prices for office buildings in Houston have climbed by 34 percent, to an average of $129 a square foot in 2006, according to Real Capital Analytics, a national research and consulting firm. Compared with other large cities nationwide, like Chicago and San Francisco, where prices average $191 and $338 a square foot, respectively, Houston is still a relative bargain.

“The office investment market has taken off,” said Ariel Guerrero, Texas research and client services manager at Grubb & Ellis in Houston. “If you look at the price per pound, there’s still value.”

Brookfield Properties, a New York-based real estate investment trust, seems to think so. Last October, Brookfield became the biggest landowner in downtown Houston when it joined with the Blackstone Group to buy Trizec Properties for $8.9 billion in cash and debt. The deal gave Brookfield eight buildings in Houston, for a total of 7.4 million square feet.


THE PLAZA & THE PLAUSIBLE By STEVE CUOZZO - Business News | Financial | Business and Money 

THE PLAZA & THE PLAUSIBLE By STEVE CUOZZO - Business News | Financial | Business and Money

Steve Cuozzo wonders what is going on with the landmark Plaza Hotel. He brings up some very good points.

But Elad's lust to spread the Plaza "brand" raises the question: What's going on at the real Plaza - the one in Manhattan that Elad bought in 2004 for $650 million, and which it plans to reopen as a mixed condo/hotel/retail address this fall?

Well, restaurateur brothers Frederick and Laurent Lesort (of Frederick's on Madison fame) have dropped out of a prospective deal for the Oak Room and Oak Bar after six months of talks - leaving the fabled venues without an operator just four months before they're supposed to reopen.

"We backed out because we couldn't get what we wanted," Laurent Lesort said yesterday. "We definitely wanted the space, but we couldn't agree on points that were very important to us."

"Elad was very difficult," he said.

Meanwhile, reps for Elad's U.S. president, Miki Naftali, could not confirm a single store or restaurant lease, despite a year of buzz.

When Elad bought the money-losing Plaza, it upped its retail space from around 35,000 square feet to more than 160,000 feet on several levels.

But with the Plaza's grand, 100th anniversary reopening set for Oct. 1, Elad's reps confirm only three done deals so far: for celebrity trainer Radu, day-spa Caudalie, and hairstylist Warren Tricomi. Combined, they account for a mere 16,000 square feet.


BUYING PIECE OF PARADISE By LOIS WEISS - Business News | Financial | Business and Money 

BUYING PIECE OF PARADISE By LOIS WEISS - Business News | Financial | Business and Money

Donald Trump is involved with a project in the Dominican Republic. On average, 1.5 acre lots will go for $6 million.

The $350 million in sales in just four hours - a record for the Caribbean - can be explained by the fact that the parcel is called Trump Farallon. Donald J. Trump was on hand to meet and greet buyers, including an unidentified woman who already owns a condo at Trump Park Avenue.

From the signature bluff, the site stretches as far as the eye can see along the Mona Strait, which separates the country from Puerto Rico. Cap Cana's northernmost edge is next to Oscar de la Renta's Tortuga Bay resort, which will be left in the dust once Cap Cana comes into its own over the next five years.

Already under construction is a marina for 1,000 boats, including the world's largest yachts, as well as multiple condo and villa projects - some under the auspices of the Golden Bear himself, golfer Jack Nicklaus - and a handful of hotels.

The peaceful Sanctuary Hotel should be up and running in September, with suites and bungalows carrying a tab from $500 to $5,000 per night. This Alto Bella-owned hotel will have eight restaurants, including one by Alain Ducasse, hotel President Felix Felipe told us.

The Donald was also there to play golf on one of the three Jack Nicklaus-designed courses at Punta Espada Golf Club, which includes an already infamous 13th hole: an approximately 125-yard stretch over the sea that eats balls for breakfast, lunch and dinner, and which sources tell us ate Trump's ball as well.


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