Houston real estate sector adapts new tech to stay competitive during coronavirus outbreak

virtual tools

Both commercial and residential real estate businesses have been greatly affected by social distancing mandate. These two Houston companies are using technology to help grow their business. Photo courtesy of Cameron Management

As the coronavirus impacts foot traffic throughout businesses in Houston, the real estate world is ushering in digital resources to adapt to a socially distanced city.

Mike Miller, vice president of Ashlar Development, saw the growing threat of COVID-19 in early March and knew he and his team had to find new ways to engage prospective home buyers safely. By the time Houston County Judge Lina Hidalgo announced the stay-at-home order, Ashlar Development had started the process of drafting a 360-degree interactive map for its northeast Houston community, The Groves, that would allow homebuyers to virtually tour the property.

"People were scared to come out of their homes, to touch model home door knobs, and walk-in and see a sales agent," says Miller, who noted the initial decline in foot traffic.

The interactive map debuted on The Groves' website on March 30, allowing users to experience the community through 35 different touchpoints. Website visitors can peruse nearby trails, the playground, pool, community amenities, and the local elementary school to immerse yourself in the community.

"One of our mantras at The Groves is to get outside. We encourage our residents to get outside and enjoy the community, enjoy the trails, and enjoy everything. What this [interactive map] does is it allows you to safely get outside from the safety of your home," he says.

Ashlar Development launched a virtual tour tool for its northeast Houston community. Image courtesy of Ashlar Development

Commercial real estate is also paving the way for innovation amid the pandemic. Houston-based real estate group, Cameron Management, unveiled its virtual 3D office tour on Monday. Partnering with Austin-based Swivel, a digital leasing platform for office space, the real estate group's latest venture will allow tenants and brokers the ability to take a 3-D virtual tour of suites.

The SaaS-based leasing application, AgileView, will feature 50,000 square feet comprised of 12 Cameron Management suites.

"We were looking to provide a tour to a broker, [or] to a broker's client, without anybody having to put themselves at any risk," says Jano Nixon Kelley, Cameron Management's director of marketing.

Kelley had built a strong relationship with the Swivel team prior to the coronavirus outbreak. When she learned of the capabilities of AgileView, "we jumped on it," she says.

"We were so pleased that they actually got the feeling for the building," Kelley says, "It doesn't look cookie cutter."

Another way both companies are getting creative is through digital marketing. Ashlar Development pivoted to digital advertising through paid media ads, email campaigns, and social media marketing. Rather than cutting its marketing budget, the community reallocated funds to building out the 360-degree interactive map and transitioning from print ads to digital display ads.

The response equated to what Miller deems an "incredible success." In the first week of launching the 360-degree interactive map, Ashlar Development saw a 3,000 percent increase in page views. The traffic resulted in a 1,200 percent increase in views to its "Meet the Builder" page, which features various home builders partnered with The Groves community. Since the tour launch, the company has seen a 220 percent increase in first-time visitors to its website.

Ashlar Development's significant web traffic isn't just a vanity number; Miller states that the Groves has seen a 116 percent increase in April sales as compared to last year. To date, the community is seeing approximately 30 percent in year-over-year sales since the stay-at-home order took effect.

Similar to Ashlar Development's approach, Kelley says Cameron Management utilized email marketing to launch her campaign. Cameron Management is also incentivizing brokers to use the application by hosting a two-week-long scavenger hunt for a chance to win an Amegy Bank debit card in an effort to support local business. "They can choose how to use their money, but hopefully they use it locally," says Kelley.

"Even if you're at home, [AgileView] gives you something visual to look at. Maybe you've got kids at home and can say, 'look, here's a game we can play together.' It's something to get people engaged," says Kelley.

"Office space needs for organizations of all sizes are modifying quickly, and likely will be changed for the long term. As the commercial real estate community adjusts to this new normal, there are still many unknowns," Kelley says. "At Cameron Management, we believe our differentiator is the ability to be nimble and pragmatic across all areas of our business—now and well beyond COVID-19," she continues.

For Ashlar Development, foot traffic has returned "almost back to normal," according to Miller, who attributes the rise to "pent up demand" once the stay-at-home order lifted.

"We're all kind of stuck in our houses, and our only outlet is to get outside and enjoy where you live," he says. "Our residents don't have to get in the car to enjoy a nearby county park, they can enjoy the community and the great outdoors right outside of their home," he says.

Miller himself recently bought a house from the comfort of his residence, electronically depositing his earnest money and signing for his future home.

"I think we're on the verge of a digital revolution in our industry," Miller says confidently. "Real estate has been slow to get into the digital realm, but I think this is going to force us to embrace technology."

Usually, Ashlar Development's selling point for The Groves is its access to "get outside." But, in a time of COVID-19, the company has optimized its technology to let home buying and touring stay inside for the time being. Photo courtesy of Ashlar Development
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Report: Houston's hot medical office market might be on track to cool

by the numbers

Houston’s medical office market is on a roll.

A report from commercial real estate services company JLL shows net absorption and transaction volume saw healthy gains in 2022:

  • The annual absorption total of 289,215 square feet was 50.5 percent higher than the five-year average.
  • Transaction volume notched a 31.7 percent year-over-year increase.

Meanwhile, net rents held steady at $26.92 per square foot, up 1.3 percent from the previous year. The fourth-quarter 2022 vacancy rate stood at 15.9 percent.

Despite those numbers, the report suggests a slowdown in medical office rentals may be underway.

“Tenants who may have previously considered building out or expanding their lease agreements are now in a holding pattern due to increased construction costs and higher interest rates,” the report says. “These factors are having a direct impact on financial decisions when it comes to lease renewals, making it more likely that tenants will remain in their existing location for the foreseeable future.”

Still, the report notes “a number of bright spots for the future of healthcare in Houston.” Aside from last year’s record-high jump in sales volume, the report indicates an aging population coupled with a growing preference for community-based treatment “will lift demand even higher in coming years.”

The report shows that in last year’s fourth quarter, 527,083 square of medical office space was under construction in the Houston area, including:

  • 152,871 square feet in the Clear Lake area.
  • 104,665 square feet in the South submarket.
  • 103,647 square feet in Sugar Land.
Last fall, JLL recognized Houston as a top city for life sciences. According to that report, the Bayou City lands at No. 13 in JLL’s 2022 ranking of the country’s top 15 metro areas for life sciences. JLL says Houston “is poised for further growth” in life sciences.

Houston financial services firm announces acquisition, plans to grow

M&A radar

A Houston-based financial services company has made a recent strategic acquisition that gives it a new banking status.

LevelField Financial, which is creating a platform that combines traditional banking and digital asset products and services, announced this week that it is acquiring Burling Bank, an FDIC-insured, Illinois state-chartered bank. According to the company, once it receives regulatory approval, "LevelField will be the first full-service bank to offer fully compliant traditional banking and digital asset services."

The financial terms of the deal's transaction, which is expected to close later this year, were not disclosed.

The combined company will be able to provide traditional banking services, as well as LevelField's digital asset management. Burling Bank's senior management team will join LevelField's leadership, per a press release. They will focus on serving the bank's existing clients and growing the banking business nationwide.

"We conducted a broad review of banks in the U.S. to find the ideal institution with both an existing business and a management team who are aligned with our vision; we exceeded our expectations with Burling Bank. With this acquisition, LevelField will become a traditional bank, albeit one serving customers interested in the digital asset class," says Gene A. Grant II, CEO of LevelField Financial, in the release.

"We are thrilled to have the Burling executives join our leadership team, and together we intend to deliver fantastic customer service and well-designed products to customers who have an interest in accessing the digital asset class through a traditional bank," he continues.

Founded in 2018 by former banking executives, LevelField's leadership believes "the future of money is digital and that banks will continue to be a trusted provider of financial services," according to the website. This acquisition comes ahead of the company's plans to expand nationally.

"LevelField's strategic approach presented a tremendous opportunity for the bank to expand beyond our local footprint and serve customers with shared interests across the nation," says Michael J. Busch, Burling Bank president and CEO. "Together, we will continue to provide superior service and demonstrate that we truly understand the expanding and unique needs of our customers. Additionally, through the carefully developed suite of products we can address our customers' interests in digital assets and introduce them to LevelField's safe, simple, and secure platform."

How this Houston innovator's tech is gearing up to impact EV charging, energy transition

houston innovators podcast episode 172

With more and more electric vehicles on the road, existing electrical grid infrastructure needs to be able to keep up. Houston-based Revterra has the technology to help.

"One of the challenges with electric vehicle adoption is we're going to need a lot of charging stations to quickly charge electric cars," Ben Jawdat, CEO and founder of Revterra, says on the Houston Innovators Podcast. "People are familiar with filling their gas tank in a few minutes, so an experience similar to that is what people are looking for."

To charge an EV in ten minutes is about 350 kilowatts of power, and, as Jawdat explains, if several of these charges are happening at the same time, it puts a tremendous strain on the electric grid. Building the infrastructure needed to support this type of charging would be a huge project, but Jawdat says he thought of a more turnkey solution.

Revterra created a kinetic energy storage system that enables rapid EV charging. The technology pulls from the grid, but at a slower, more manageable pace. Revterra's battery acts as an intermediary to store that energy until the consumer is ready to charge.

"It's an energy accumulator and a high-power energy discharger," Jawdat says, explaining that compared to an electrical chemical battery, which could be used to store energy for EVs, kinetic energy can be used more frequently and for faster charging.

Jawdat, who is a trained physicist with a PhD from the University of Houston and worked as a researcher at Rice University, says some of his challenges were receiving early funding and identifying customers willing to deploy his technology.

Last year, Revterra raised $6 million in a series A funding round. Norway’s Equinor Ventures led the round, with participation from Houston-based SCF Ventures. Previously, Revterra raised nearly $500,000 through a combination of angel investments and a National Science Foundation grant.

The funding has gone toward growing Revterra's team, including onboarding three new engineers with some jobs still open, Jawdat says. Additionally, Revterra is building out its new lab space and launching new pilot programs.

Ultimately, Revterra, an inaugural member of Greentown Houston, hopes to be a major player within the energy transition.

"We really want to be an enabling technology in the renewable energy transition," Jawdat says. "One part of that is facilitating the development of large-scale, high-power, fast-charging networks. But, beyond that, we see this technology as a potential solution in other areas related to the clean energy transition."

He shares more about what's next for Revterra on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.


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