Texas Real Estate Business • AUG 2018

www.REBusinessOnline.com August 2018 • Volume 14, Issue 6 OVERSUPPLY, TAXES CHOKE SELF-STORAGE GROWTH As a result, rent growth is weakening and investor demand is plateauing, suggesting the industry has become a victim of its own success. By Taylor Williams elf-storage properties have had a pretty good run in Texas over the last several years. Surg-ing population growth has brought more material possessions into the state, boosting absorption of existing space. In addition, ample land for development has enabled builders to bring self-storage — a submarket-specific business — to new, under -served communities. The investment side of the business has flourished as well. A capital-rich environment has sustained a healthy pace of development and price esca-lation has kept cap rates low, incen-tivizing many owners to market their S Skyview Advisors closed the sale of this 784-unit facility in San Antonio in June. Owners in sell mode must move quickly as property taxes rise and more supply threatens rents. properties for sale. The building boom is still running hot. According to Tennessee-based research firm STR, as of June 2018, there were more than 300 self-storage facilities in the development pipeline in Texas. In the 12 months leading up to that point, 72 new facilities total -ing almost 7 million square feet came on line. In addition, about 130 new proper -ties are slated to open by June 2019, adding more than 9 million square feet, or 5.7 percent of the existing in-ventory. And those figures only en -compass the seven biggest markets in Texas. SEE SELF-STORAGE, page 20 COWORKING OFFICE SPACE BARRELS AHEAD Office concepts that revolve around flexible uses of space are expanding rapidly across the U.S., to the tune of double-digit annual growth. By Taylor Williams oworking space is redefining major American office markets, thanks to a desire for more vi-brant atmospheres that attract talent, an overall move toward more effi -ciency in office spaces and a need to keep older office properties relevant. The coworking concept dates back to the late 1990s. It differs from shared office space and executive suites — the concepts from which coworking was born — via its lack of profession-al services: receptionists, secretaries, private offices, etc. But only in recent years has coworking infiltrated the C American office scene at speeds that allow it to capture significant market share. A 2018 article from allwork.space , a research and marketing platform for the coworking sector, states that the total number of coworking users in the United States currently totals about 2.3 million people. That figure is expected to grow to 3.8 million us -ers by 2020 and to exceed 5 million by 2022. The study holds that the number of coworking spaces worldwide has grown by 200 percent over the last SEE COWORKING, page 22 Coworking spaces, like this one in Fort Worth from provider Common Desk, feature the rental rates and amenities to appeal to individual users and large companies alike. INSIDE THIS ISSUE Houston City Review: How Are Rising Oil Prices Impacting Each Asset Class? pages 18-19 Updated Details & Agenda for InterFace Multifamily Texas page 7 Dallas Market Highlights: California Targets Retail, Offices Get Wired page 14-17