Houston booms with new apartment construction in 2020, report says

STANDING APART

Houston comes in at No. 7 on a new list of most apartments completed during the first six months of 2020. Photo courtesy of Caydon

The coronavirus pandemic has brought many activities to a unsettling halt. But it has failed to blunt Houston's apartment construction boom.

New data from Yardi Matrix, a supplier of commercial real estate data and research, shows that Houston comes in at No. 7 for most apartments completed during the first six months of 2020, with 2,085 apartments built.

Houston also comes in third place for projected apartment completions in 2020 is the Houston metro area. Yardi Matrix foresees the Bayou City region welcoming 10,404 new apartments this year, up 2 percent from 2019.

Little surprise to those paying attention to Texas real estate: More apartments were completed in Austin during the first six months of 2020 than in any other U.S. city. In the first half of the year, construction of 3,827 apartments was finished within the city of Austin, according to Yardi Matrix.

Right behind Austin on that list is San Antonio, where 2,871 new apartments hit the market in the first half of this year. Dallas follows Houston at No. 8 with 1,869 units; behind Big D is Farmers Branch, No. 18 with 1,161 units.

"Around the U.S., we have seen a variety of states, counties, and cities choose to close nonessential businesses for 'stay at home' or 'shelter in place' orders. For the most part, construction activity has been included as an essential activity that can continue with business as usual during these orders," Doug Ressler, manager of business intelligence at Yardi Matrix, says in a release.

"The popular Texas metropolitan area saw an increase of 62,000 residents from 2018 to 2019," Yardi Matrix says. "In response to the high demand, Austin metro has been an active scene for new construction in the past five years, having completed over 50,000 new apartments since 2016."

In the Yardi Matrix forecast, Dallas-Fort Worth eclipses all other U.S. metro areas for the number of new apartments predicted to be finished this year — 19,318. This would be DFW's third year in a row to lead all metro areas for annual apartment construction, with New York City claiming second place.

While that's an impressive amount of apartments, this year's anticipated final total for DFW would be down 29 percent versus last year, Yardi Matrix says.

Coming in at No. 19 for predicted apartment completions this year is the San Antonio area, with 4,595 new units on taps. However, that total would represent a 20 percent jump over last year, putting San Antonio in fourth place for the percentage increase from 2019 to 2020.

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This article originally ran on CultureMap.

Dolce Midtown Apartments is one of the many new apartment options in the Houston area. Photo courtesy of Dolce Midtown Apartments

Houston booms among nation's top 10 markets for new apartments

They come, we build

It's not all in your head. Those new apartments you spotted on your way to work probably did just pop up — and it's happening in big numbers in Houston and around the state, according to a new study.

RentCafe estimates 7,143 new apartments will be built in the Houston metro by the end of 2019 — the 10th highest projection nationally. Nearly half of those new units will rise within the city of Houston proper.

And these aren't vanity projects. With more than 90,000 new residents calling the Houston area home, we need all the apartments we can get.

Houston leads the region in terms of projected new apartment units at 3,163, followed by Conroe's 724 expected units and The Woodlands' 678.

Most of Texas is booming, too. No. 1 on RentCafe's list is Dallas-Fort Worth, with 22,196 new units expected by the end of the year. No. 5 Austin is expected to bring 10,783 new units to the region. Meanwhile, 3,510 new units will be built in San Antonio, a steep decline of 41 percent from the 5,993 units built there in 2018.

Nationally, Seattle makes for a distant second behind DFW with 13,682 new units expected, followed by New York City, which was No. 1 in 2018, with 13,418 units planned for this year.

Unlike the Lone Star State, the nation as a whole is seeing a slump in apartment construction. The 299,442 new apartments expected in 2019 represent an 8.2 percent drop from 2018's 326,240 new units, which also were weaker numbers than in 2017, when 331,765 new apartments were built.

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This article originally ran on CultureMap.

The Houston apartment market is rising. Photo courtesy of Vantage Med Center

Why investors are targeting Houston's multifamily housing market

Show me the money

As local developers, renters, and anyone trying to navigate all the new construction knows, Houston is in the midst of an apartment boom. A recent national report suggests that boom may not slow anytime soon, as it lists Houston as a top buy for apartment investors — and an area that will see rising rents in the foreseeable future.

Ten-X Commercial, an online platform for commercial real estate transactions, identified two Texas cities (Houston and Fort Worth) that commercial investors should target in its annual U.S. Apartment Market Outlook. Only three other American cities are considered strong buys for apartment investors: Raleigh-Durham, North Carolina; Charlotte, North Carolina; and Salt Lake City. The data in the report is generated from the more than $20 billion worth of transactions handled by Ten-X Commercial.

In analyzing Houston and Fort Worth, Ten-X Commercial finds that both offer strong net operating income benefits — a key driver in commercial real estate — to investors for years to come. Houston's apartment rents are buoyed by a "resurgent energy sector" that is "turbocharging the local economy" and jumped 6.1 percent year over year. The report also forecasts that Houston is "likely to prove considerably more resilient during a modeled downturn than other markets."

According to the report, here's a quick breakdown of the numbers for the Houston multifamily market:

  • Q1 2018 rent: $987
  • 2021 projected rent: $1,184
  • Q1 2018 vacancy: 6.2 percent
  • 2021 projected vacancy: 4.4 percent

With every top buy report comes a warning to sell. Cities where investors should consider unloading are New York; Miami; San Francisco; Oakland, California; and San Jose, California. These markets are witnessing rising vacancies and flattening rents.

But how much is too much growth? Nationally, according to the research, multifamily completions should reach an all-time peak in 2018 as more than 300,000 new units flood the market, outpacing even the highest absorption levels in recent history. As a result, vacancies are expected to drift above 5 percent by the end of the year for the first time since 2011.

Ten-X Chief Economist Peter Muoio noted in the report that "while millennials and other demographic groups continue to forego homeownership in favor of renting in walkable neighborhoods, developers appear to have gotten ahead of themselves in creating rental supply."

Muoio added that the pipeline "can reasonably be described as a flood and though demand for these units is likely to come in the years ahead, we can expect to see some significant digestion issues in the near term."

Until that happens, Houston renters would be wise to lock in their lease rates, as it's clear that our apartment market is anything but flat.

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This story originally appeared on CultureMap.

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UH lands $1.2M NIH grant to fight superbugs using AI, quantum sensing

drug defense

The fight against antibiotic-resistant bacteria like MRSA is getting science fiction-like upgrades at the University of Houston thanks to a new four-year, $1.26 million grant from the National Institutes of Health.

The university says the recent funding brings total federal support up to $3.5 million for 11 years for the project, which uses AI and quantum-sensing technology to better understand how bacterial proteins develop resistance to drugs.

Any medical professional will tell you that one of the worst things that can happen is almost killing an infection. Bacteria that survive attacks from conventional antibiotic treatments emerge tougher, more resistant and more aggressive than before–making them much harder to treat. A good example is the superbug methicillin-resistant Staphylococcus aureus (MRSA).

UH chemistry professors Yuhong Wang and Shoujun Xu are working on this issue. They know full well that fighting superbugs requires new technology and new approaches, which is what they aim to pioneer with their new grant.

“Drug-resistant bacterial infections such as MRSA are becoming harder to treat, creating an urgent need for faster ways to understand how antibiotics and other small molecules interact with bacterial proteins,” Wang said in a news release.

Wang and Xu’s work centers around GTP, a cellular fuel that can cause tiny changes to a cell's structure when it mutates. Sometimes, those shape changes make it easier for drugs to breach the wall and attack the cells.

The UH scientists are employing AlphaFold, an AI-powered tool that can scan large molecular libraries in seconds. From these models, they can see promising drug combinations for future testing.

Once identified, the team uses their invention, super-resolution force spectroscopy, to monitor the cells. Tiny magnetic beads are attached to genetic material, then magnified to see how strong that material is when pulled. They can measure this incredible microscopic process through an atomic magnetometer, typically used in quantum physics. Combined, all these tools allow a high-definition look at how each molecule might respond to new chemical approaches.

“We're the only chemists in the world that use an atomic magnetometer for biological research,” Xu said. “It's a technique developed by physicists, and there is usually a gap between techniques developed by physicists and biological applications. Yuhong and I have been bridging that gap together for the past 10 years.”

Eventually, Wang and Xu hope to develop powerful software that can be used by drug manufacturers to model cellular responses. With enough predictive data, the software could even get ahead of superbugs’ own mutation, allowing drugs to be developed before new strains arrive.

"We want an algorithm where you input a protein sequence, score the mutation hotspots, and develop new inhibitors before a drug-resistant species even emerges," Wang added.

SpaceX to get more than 700 acres of Texas wildlife refuge in land swap

Space News

A federal judge on Monday, September 21, refused to block the Trump administration from giving SpaceX more than 700 acres of wildlife refuge as part of a land swap in Texas, while environmental groups vowed to continue their legal challenge.

U.S. District Judge Fernando Rodriguez Jr. declined the plaintiffs' request for a preliminary injunction to prevent the parcel exchange, saying they failed to prove it would worsen ecological risks to a Gulf Coast region already transformed by billionaire Elon Musk’s rocket operations.

In June, the U.S. Fish and Wildlife Service approved moving forward with the deal with SpaceX, which would surrender 683 acres the company owns in exchange for the federal land in the Lower Rio Grande Valley National Wildlife Refuge. The 103,000-acre refuge spans four counties along the Texas border and is home to animal habitats and historical landmarks.

Maps show the land SpaceX would acquire would be closer to the company's launchpad near the U.S.-Mexico border.

The swap amounts to a gift of public lands to SpaceX, “clearing the way for bulldozers to tear into this wildlife refuge as soon as next week and turn a public treasure into a private payday,” said Laiken Jordahl, a spokesperson with the Center for Biological Diversity, which filed the lawsuit alongside other opponents including tribal groups. Jordahl said Monday that the litigation will continue even as the exchange goes forward.

“This court order is not the final word. These lands hold incredible spiritual, historical and conservation value for the people and wildlife of South Texas. We won’t stop fighting to keep this irreplaceable public wildlife refuge safe from SpaceX bulldozers,” Jordahl said in a statement.

The lawsuit asks the federal court to halt the exchange, which has worried SpaceX opponents in the area who have long criticized the company's expanding footprint over lost access to beaches and concerns over exploding rockets.

The Fish and Wildlife Service didn’t respond to a request for comment on Monday’s decision. Previously, a spokesperson had said the agency does not comment on ongoing litigation.

The agency issued a final environmental assessment report in June that determined the exchange would cause no significant impact to the area. The report said the federal government believed the acquisition would represent a “net conservation benefit” and provide “substantial long-term conservation value and improving landscape-scale habitat connectivity across refuges in South Texas.”

The judge said that the plaintiffs offered “relatively weak” evidence of environmental harm.

“While they rightfully argue that the preservation of wildlife and historical lands furthers the public interest, they present no evidence demonstrating that the Property will suffer aesthetic, environmental, cultural, or historical degradation during the pendency of this lawsuit,” Rodriguez wrote in his ruling.

In addition, the judge said a preliminary injunction would result in modifications to SpaceX’s development plans, “placing additional hardship on the company’s ability to meet milestones and contractual obligations.”

SpaceX did not return an email seeking comment on the judge's ruling.

The space exploration company first broke ground in Texas more than a decade ago and has expanded rapidly, so much that SpaceX employees last year voted to incorporate their own local government called Starbase.

Rice Alliance, Greentown name winners of Houston Energy and Climate Week pitch competitions

winner winners

Approximately 100 startups from around the world pitched their breakthrough technologies and businesses during Houston Energy and Climate Week, with a select few taking home top prizes and bragging rights.

Each year, investors at the Rice Alliance Energy Technology Venture Forum name the 10 most-promising startups. Greentown's Climatetech Summit also culminates in a pitch event, where member companies can earn cash prizes.

Here's who won at two of the week's anchor events and competitions.

Rice Alliance Energy Tech Venture Forum

The 23nd annual event was held Thursday, Sept. 17, at Rice University’s Jones Graduate School of Business. The most-promising companies were selected by industry experts and participating investors attending the event.

The 10 most-promising companies included:

  • Australia-based Aquafortus, which has developed a non-thermal liquid to liquid desalination technology for resource recovery from wastewater brine
  • Houston-based Focis AI, which converts industrial laser scans into a queryable digital twin of refineries and plants
  • Houston-based ironlattice, a semiconductor manufacturing company
  • Houston-based Licube, which has developed technology to produce ultra-high-purity lithium compounds for the fusion energy, pharmaceuticals, semiconductors and high-performance solid-state battery sectors
  • Houston-based Mars Materials, a clean chemical manufacturing business that is working to convert captured carbon into resources, such as carbon fiber and wastewater treatment chemicals
  • Dallas-based MCatalysis, which has developed a suite of proprietary microwave-driven catalysts to produce high-quality, ready-to-use fuels compatible with existing infrastructure
  • Oslo, Norway-based OTee, an automation machinery manufacturer
  • Houston-based Pike Robotics, which deploys its Wall-Eye robot to inspect hazardous tanks without taking assets offline
  • New Mexico-based Spiritus, a direct-air-capture (DAC) technology company
  • San Francisco-based UptimeAI Inc., which develops AI reasoning agents for industrial operations teams

Stellai won the People's Choice Award. The Norwegian company develops AI products for the waste management industry.

The energy technology ventures selected to participate in the forum were named earlier this year. See the full list here, and read about last year's winners here.

Greentown Lab's Climatetech Summit

The annual summit was held Wednesday, Sept. 16, featured a number of Houston startups in its pitch competition and lighting pitch round. Judges included Dave Dreessen,, Jon Greene, Naval Preet Singh, Philip Llewellyn, Erin Madro, Justin Yeung, Jay Kim, Rawand Rasheed and Moji Karimi.

Pitch winners included:

  • First place: Elementium Materials' CEO Matthew Dawson, winning a $10,000 cash prize sponsored by TotalEnergies plus another $10,000 in legal services sponsored by Foley Hoag. The company develops advanced battery electrolytes. It is a Greentown Boston member; though Dawson is based in Houston.
  • Second place: Houston-based Solidec CEO and co-founder Ryan DuChanois, winning $5,000 in legal services sponsored by Foley Hoag. The company electrolyzes air, water and electricity into onsite hydrogen peroxide.

Lightening pitch winners included:

  • First place: Montana-based MagDrive Technologies, winning a $1,000 cash prize sponsored by Energy Transition Ventures. The company develops magnetically actuated, zero-emission valve systems that eliminate fugitive emissions and improve reliability.
  • Second place: Houston-based HEXASpec, winning a $500 cash prize sponsored by Foley Hoag. The company has created a new material to improve heat management for the semiconductor industry.

Read Greentown's recap of the summit here.

Houston Energy and Climate Week announced that the 2027 event will move to the spring, held April 4-10.

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

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