Katy has broken new ground as the 4th highest site for construction in the Greater Houston Area, according to a recent article by Your Houston News. Houston’s population is making a westward push toward the Energy Corridor for sources of employment, which is also an area with good school districts. In consequence of its increasing appeal, Katy now ranks below only the Montrose/Museum District, Galleria, and Inner Loop West for apartment construction in the greater Houston area.
One site, the Lakeside Villas at Cinco Ranch only began leasing several months ago, and they have already leased 151 of the 160 units.
Gene Blevins, CEO of Orion Real Estate Services, the management company in charge of Lakeside Villas says that leasing is booming.
“We’ve been doing 15, 18, 20 leases a week out here. It’s just been phenomenal. It’s not unusual to have 50 people a week walk in … wanting to see the property.”
The monthly rent for the units is expensive, and Blevins says that high income-earners want to see the properties.
“It’s probably the most expensive property to live in out in Katy right now,” Blevins says. “For a suburban property, this is a very, very high-end, quality ‘A’ construction property. And the rents are really pretty strong for Katy. The people that have been leasing have good jobs; there [are] a lot of jobs here. They’re leasing here for long-term. And we’d rather have long-term … residents, with as little turn over as possible.”
Orion Real Estate Services has been in greater Houston for 22 years, but there are new companies entering the market. Oden Hughes plans on opening a 354-unit building south of Kingsland Boulevard. They are one of eight apartment communities under construction.
Mac McElwrath, Oden Hughes’ director of multifamily development, says that his company was drawn because of the population shift and the energy corridor, along with Katy’s attractiveness to parents and the area’s exceptional occupancy rate.
“It’s a landmark site,” he says, “in that it’s tucked right up against the Grand Parkway and the first exit that you [encounter] heading south from I-10. We really like the location, the visibility of it, and its proximity to all the amenities in the Cinco Ranch area.”
Katy’s Evolution and Growth
After the housing crash in the 1980s, the apartment complexes in Greater Houston contributed to gang members moving in, paying cash for units. But this isn’t true anymore, and Bruce McClenny, president of Houston-based Apartment Data Services, doesn’t think it will happen again.
“That’s way out there,” McClenny says. “The [number of] apartments that they’re developing now are miniscule compared to what was done back then. Back in the 1970s and 1980s, we were [building] 30,000 units a year, and [the city was] so small. Now we’re struggling to get – the entire city – maybe 15,000 this year, and we’re so many more times larger than [the 1970s and 1980s]. It’s hard to compare to those kind of times when we were so small. That was just a very unique time.”
“We couldn’t build them fast enough back then, we really couldn’t,” Blevins says. “And then one night in 1983, 100,000 people moved out of town. It went that quick. 100,000 people left Houston, [and] all the apartments went vacant. The average occupancy in Houston was 76 percent in 1986. Today it’s over 90 percent. [The area now has] some of the highest occupancies we’ve experienced in Houston in the last 35, 40 years.”
McClenny says that times have changed, and that the Houston market has more foresight than in the 70s and 80s.
“So many people build today to sell to investment-quality type companies – that kind of stuff’s not going to fly,” McClenny says. “That’s typically what’s happening now. They want to pass on their properties to an insurance company, to somebody that wants to invest in them for their quality, and because they’re going to be a long-lasting type of asset.”
Blevins agrees that the market shows long-term viability.
“It’s a phenomenal time. The apartments are doing well, office buildings are at a high watermark for occupancy and leasing, retail is doing fantastic. And … job creation in Houston is phenomenal. And there are quality jobs in finance [and] oil and gas.
“We’re hitting on all cylinders here.”