Coastal Bend Experiences A Coastal Boom Thanks To Influx Of Investment

CORPUS CHRISTI – January, 2015 – Corpus Christi is experiencing an economic boom. However, it would not be fair to the communities surrounding Corpus Christi, which make up the Coastal Bend, if Corpus Christi took all the credit. These communities have all contributed to the boom and, together, the region has a bright future ahead.

The Coastal Bend is comprised of Nueces, San Patricio, Aransas, Kleberg and Jim Wells counties along with all the communities inside those counties directly supporting Corpus Christi.

Matthew Cravey, Founder of Cravey Real Estate Services, Inc.

Matthew Cravey, Founder of Cravey Real Estate Services, Inc.

The Port of Corpus Christi led the way for growth with the Joe Fulton Corridor, which was built to provide access to the north side of the port.

The Port of Corpus Christi then developed land on the La Quinta Channel hoping this would someday be used for a container facility when the Panama Canal expansion is completed.

What nobody realized at the time was these two projects put the Coastal Bend in a position to take advantage of the oil and gas drilling in the Eagle Ford Shale to the north.

As the shale drilling took off, numerous industrial plants wanted access to the relatively cheap natural gas and abundant land close to the La Quinta Channel.

Companies planning to build new plants in the area include M&G Group, Italian PET & PTA Co., Voestalpine, Cheniere Energy LNG, Tianjin Pipe Co., Occidental Petroleum, Pangea LNG and Kiewit Off shore Services, totaling almost $20 billion of investment.

When this figure is combined with other announced projects the total comes to $32 billion of new investment in the region.

It is estimated that it will take approximately 15,000 workers to build these plants.

Along with this growth, employees who work in the oil and gas industry are now making salaries three times more than what they used to make.

Laborers and waiters who were making between $28,000 and $35,000 a year are now welders or oil field workers earning between $80,000 and
$125,000 a year.

There are two types of companies moving to or expanding in Corpus Christi. The fist caters to oil and gas exploration, and the second supplies or constructs the plants.

There is a shortage of service-type warehouses sitting on two to five acres, along with a shortage of dock high distribution warehouses.

However, because the oil and gas business tends to be cyclical, it is not anticipated there will be any overbuilding of industrial space in the near future.

Retail Renovation Abounds
Trademark Properties purchased Padre Staples Mall in July 2008 and renamed it La Palmera Mall, and started remodeling and adding tenants to the property before the boom had become apparent.

Once the boom reached the mall, Trademark purchased the former Staples Center across the street in April 2012 and renamed it The Shoppes at La Palmera.

Trademark has also remodeled the property and brought in tenants including Dick’s Sporting Goods, DSW, T.J. Maxx, HomeGoods, Chipotle Mexican Grill and the Corner Bakery Café.

A Sam’s Club has moved to the former Walmart site at the corner of Everhart Road and SPID (SH 358). The former Sam’s Club has been taken over by At Home.

Sam’s moved because of a proposed Costco that was to be developed at the corner of Rodd Field Road and South Padre Island Drive.

Costco had the site under contract and several out-of-town developers were working on other retail stores that wanted to be next to Costco.

However, Costco has dropped the site for now. Small, shadow-anchored centers have been built all around the area, but other than several new Walmarts, a new Academy Sports + Outdoors and a outlet mall, there has not been a lot of retail development.

A new outlet mall at Robstown, 16 miles west of Corpus Christi, is under construction and will be called The Outlets at Corpus Christi Bay.

EWB Development and Carduner Commercial are developing the project. Phase I will span approximately 300,000 square feet.

It will be located along I-69 at the entrance of the Regional Fairgrounds and is set for completion in late 2015.

Multifamily Moving Forward
As expected with the growth of employment, multifamily projects are also being completed, are under construction or are being planned at a rapid pace, including Bay Vista and Cosmopolitan downtown, and Palms on the north side.

According to ALN Apartment Data, a Carrollton-based fim that tracks apartment rental trends, in January 2010, apartment occupancy in the Coastal Bend was at 89 percent with an average rent of $700.

By January 2014 occupancy had jumped to 95.2 percent, with an average rent of $830. By November 2014 average occupancy rates had dropped to 92.8 percent, but average rent continued to climb, reaching $878.

Several projects are under construction in downtown Corpus Christi along Ennis Joslin Road and South Padre Island Drive.

Office Vacancy Down
Office occupancy has not changed substantially in the last year. No new non-medical spec office buildings have been constructed since the crash of the 1980s. However, that lack of development has helped the Class A and B properties experience increasing occupancies.

All the new construction on the other side of the bay has accelerated the re-aligning of the Harbor Bridge.

This project is estimated to cost $1 billion and bids should be awarded during the fist quarter of 2015.

Another project nearing completion is Schlitterbahn on North Padre Island. This development is 500 acres and incorporates a 65-acre water park.

The project has taken longer than expected. It was originally scheduled to open on Memorial Day 2013, and is now scheduled to be completed March 1, 2015 because of the numerous additions and expansions by the developer.