$55B worth of Houston commercial real estate has been impacted by Hurricane Harvey
According to a CoStar analysis of flood maps, as much as 27 percent of Houston’s commercial real estate, may be impacted by flooding.
Houston’s commercial property market has impacted by Hurricane Harvey. It is the sixth-largest US metro area with 1.6 billion square feet of leasable space (this doesn’t include single-family homes). The aftermath is already creating some challenges for the industry since more than a quarter of Houston-area’s commercial property were likely impacted by storm.
According to CoStar, 400 million square feet of commercial space in 12,000 buildings has been hit by flooding. This means that 27% of Houston’s gross leasable area may be flooded today, representing an estimated $55 billion in property value.
Regarding total losses, Accuweather has stated, “the total losses from this storm would reach $190 billion or one percent of the nation’s gross domestic product (GDP), countering the expected growth in the economy for the rest of this year.” Dr. Joel N. Myers, founder and chairman of AccuWeather, said in a statement, “This is the costliest and worst natural disaster in American history.”
On the other hand, Moody’s Analytics has published a more conservative approach, up to $108 billion with homeowners and businesses suffering a combined $60 billion to $75 billion in property damage
Regarding the office inventory in 100 year floodplain, CoStar’s report mentions that the most impacted office submarket is Greenspoint, which has elevated vacancies after the departure of ExxonMobil in late 2015. There is 3.5 million SF that falls within the 100-Year floodplain.
“Unfortunately, the number of displaced residents could be far larger than current media reports indicate,” CoStar Group Founder and Chief Executive Officer Andrew Florance said in a new report. “Our property by property review of the apartment buildings in the floodplain reveals an outsized share are low to moderate income households, including those in Southwest Houston where the bayous have overflowed.”
As the San Antonio Express News stated, “Developers are just starting to survey the extent of Harvey’s damage in Houston, now that roads are reopening and they can inspect their properties.” Howard Hughes Corporation, a company that owns more than 4 million square feet of real estate in the Houston area, said via press release that its properties are “fully operational and open with only minor damage.”