Global Market Report: Corpus Christi Region January 2009
The Corpus Christi economy has not suffered significantlyfrom the credit crisis. In Business Week Magazine, CorpusChristi was one of only two Texas cities listed in the recentarticle titled “Where to Live in Hard Times.”The office market continues to remain stagnant. Downtown occupancy of Class A office space has dropped slightly to 88%.Landlords are concerned about operating costs driving downprofits. This may be the start of a drop in occupancy as rents willincrease to offset operating costs.
The south side office market is starting to soften. TexasChampion Bank is completing their new headquarter building onStaples Street. They will be consolidating their offices, leavingvacant spaces in three buildings. One building, the Stewart TitleBuilding, will lose a whole floor. There is a strong demand formedical related buildings. Out of town developers are filling newbuildings with doctors and testing laboratories. Most have beenbuilt around the hospitals on the south side.
The industrial sector continues to lead the way for the othersectors. Vacancy is at a record low of 2% with industrialwarehousing being leased at abnormally high rates. There willcontinue to be speculative building for 5,000 to 10,000 SF ofservice type buildings. There should also be a quality stock ofhigh and grade-level tilt wall warehouses announced soon. Themajority of industrial development has been related to thepetrochemical industry, either refining or exploration. Calixas, a manufacturer of luxury yachts, is scouting the area for a suitable site to develop a manufacturing facility. All the refineries are either expanding or upgrading with the cost exceeding several billion dollars.
The overbuilding of smaller strip type centers containing 5,000to 15,000 SF are filling slowly. There are three major redevelopment projects that are nearing completion or are about to start. The former H.E.B. Grocery property in Flour Bluff has been redeveloped with new tenants including Beall’s Department Store, Dollar Tree and Gamestop. Padre Staples Mall, now La Palmera, was purchased recently and will undergo a $50 million upgrade.
A third redevelopment project is Parkdale Plaza. A portion will be torn down and replaced with a Wal-Mart Super Center and44,000 SF of retail space. A 700,000 SF outlet mall is planned at the Nueces County Fairgrounds in Robstown, a small community at Highways 77 and 44.
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