Trammell Crow CEO: ‘We’ll put less leverage on a project in Houston’
By Cara Smith
Some of the biggest names in Houston real estate gathered to discuss a recent infrastructure project as well as the overall health of west Houston at a Wolff Cos. panel on March 6 at the Omni West Houston.
David Wolff, chairman of Wolff Cos., moderated a panel of five west Houston experts and stakeholders. Billy Burge, president at Ayrshire Corp.; State Sen. Jon Lindsay; Larry Johnson of Johnson Development Corp.; Matt Khourie, CEO of Trammell Crow Co.; and Carl Sewell, chairman of Sewell Automotive Cos. sat on the panel.
From left: David Wolff, chairman of Wolff Cos.; Billy Burge, president at Ayrshire Corp.; State Sen. Jon Lindsay; Larry Johnson of Johnson Development Corp.; Matt Khourie, CEO of Trammell Crow Co. and Carl Sewell, chairman of Sewell Automotive Cos. at a Park Row panel at the Omni West Houston on March 6.
COURTESY THE ENERGY CORRIDOR DISTRICT
They gathered to discuss the Park Row project, which recently connected and expanded Park Row between a Metro Park & Ride Lot and North Eldridge Parkway. The project has been underway for years and will provide west Houston commuters with an option to bypass State Highway 6 traffic.
But the conversation eventually shifted to why the developers bet on the area in the first place – and what’s kept them there after all these years.
Khourie with Trammell Crow didn’t skirt around the challenges that come with developing in Houston. Khourie said it’s hard for Houston to support projects that can’t weather a slump. Trammell Crow can’t do Houston projects that aren’t able to go through a downturn, he said, since the city is so dependent on a cyclical industry.
“We’ll put less leverage on a project in Houston,” Khourie said. “I know no other market that when times are good, you’ve got 500,000-square-foot users everywhere.”
An advantage that west Houston brings, though, is its diverse housing options, Khourie added, in that the area offers rooftops and multifamily developments that both CEOs and new college graduates can afford. And the benefits of Houston’s high concentration of energy companies outweigh the downsides, he said.
“The bad news is that Houston is very dedicated to one industry. … the good news is that Houston is dedicated to one industry,” Khourie said. “I’d choose energy over just about any industry that’s out there.”
Wolff highlighted the $1 billion in health care projects underway in the region. An expansion at Texas Children’s West Campus, a 75,000-square-foot hospital in west Houston, is set to deliver in May. Two years ago, the system launched the $50 million expansion plan for west Houston.
“Texas Children’s tells us they plan to have more square feet in west Houston than they do in the Texas Medical Center,” Wolff said. “The center of gravity in Houston … is moving westward.”
Houston Methodist is expanding its Katy hospital by adding a six-story building at 18500 Katy Freeway. The project should be complete in 2018. The expansion is Houston Methodist’s response to the rapidly growing west Houston area, hospital CEO Wayne Voss told the HBJ.
And Larry Johnson, who’s developed thousands of homes in the greater Houston area, kept his approach simple.
“We try to go where the market is,” Johnson said. “We go where there are good schools and good land.”
Johnson Development Corp. recently opened Jordan Ranch in far west Houston near Fulshear. The developer plans to build 2,800 homes on the community’s 1,350 acres. The developer is also behind the Veranda community southwest of Houston.
Cara covers commercial real estate and construction for the Houston Business Journal. Follow her on Twitter for more.