I spend most of my time in the Northwest and North side of town doing tenant representation and leasing and have been active in the Houston commercial real estate market for about a year and a half. What I am seeing is that the general strength of the northwest market is reflected in the fact that there is not much product available. I represented a group that was looking for a small industrial site in the northwest, less than three acres. They looked for existing space and they were not able to find any that would meet their needs. It is very difficult to find any affordable second generation space. And when you do find it, it will be difficult to adapt the space to fit the needs of the new tenant. The alternative is to buy new construction which is very expensive when you are looking at less than 20,000 square feet. So, in the next 12 months I expect to see a strengthened lease market because of the scarcity of second generation product.
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