Keeping pace with changing property values
It’s hard to keep up sometimes. Bands you’ve never heard of are super popular, people start talking about “groundbreaking” TV shows you’re not even sure how to find, you’re told the best restaurant in town is closing — and you’re just hearing about it for the first time.
Keeping up is hard in the real estate business as well — tastes and cultures change, yet buildings are by their very definition fixed in place, a reflection of the time in which they were built. Architecture that was daring and enticing in 1980 is dated and tired in 2019. Remember when offices had doors?
The good news is that a thoughtful makeover can overcome many of the ravages of age. Sure, changing wardrobe and diet won’t turn the tide of time, but it certainly won’t hurt. The same logic is at work across Houston as landlords of older buildings embark on multimillion-dollar rehabs of their properties to keep up with flashier new towers that have become the gravitational center of the leasing market.
In this issue of Texas Inc., real estate reporter Nancy Sarnoff pulls double duty, looking at the wave of rehabs underway in the market and sitting down with architect Michael Hsu, the go-to designer of both new and rethought retail and restaurant properties in town.
Creating designs that have staying power is a challenge for any architect, yet Hsu looks to what worked in the past to inform his designs of the present.
“It’s like the old models of gathering — markets, plazas, courtyards that you see all over Europe and Asia, in old American cities. None of this is new,” he says. “I feel like we’re getting more back in touch with — authenticity is overused — but a retail experience that feels more connected.”
That harking back is evident in the new wave of office towers and in the redesigns being executed at the city’s older stock as those landlords seek to stay competitive.
Among the projects Sarnoff looks at is Brookfield Properties’ updating of its Allen Center property downtown, a $48 million effort that started three years ago. Part of that, she writes, is creating a “more active and open space where downtown workers could take yoga classes, watch musical performances or work on their laptops in casual seating areas.”
And there is the $18 million M-M Properties is about to spend to update the Marathon Tower in the Galleria area, which is losing its namesake tenant to a newer property on the west side. The redo, says M-M Chief Executive Kenneth Moczulski, is necessary to attract another large user to fill the space.
At the same time, columnist Chris Tomlinson finds that not everyone feels quite as compelled to adapt to changing realities.
In the face of serious threats posed by increases in both hardscape and flooding risk, Tomlinson looks at the effort underway by a host of real estate professionals to have city and county officials delay implementation of even minor changes to flood rules.
While owners of many older office buildings have shown a willingness to spend money to make money, the incentive to reduce flood hazards by using new — and more expensive — permeable materials for streets, sidewalks and driveways, for instance, is apparently seen as onerous by many in the trade.
And that, Tomlinson argues, reflects a “selfish shortsightedness.”
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