More online: http://www.boyarmiller.com/news-and-publications/events/breakfast-forum-the-houston-commercial-real-estate-markets-whats-ahead-for-2016/ As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the look ahead for Houston’s Commercial Real Estate for 2016. Speakers included: Jimmy Hinton with HFF; Jonathan Brinsden with Midway; and Trey Odom with Avera Companies.

1. 2016 STATE OF THE INDUSTRY
Houston Commercial
Real Estate

2. To Our Readers,
Commercial real estate is such a dynamic industry in Houston and reflects our local
economy to the rest of the nation. It is an important part of our practice and as business
partners to our clients, we strive to stay informed about market conditions. One way
we accomplish that is to bring together industry leaders who share their perspectives
on anticipated 2016 activity in the office, retail, industrial and mixed-use sectors—
as a glimpse of Houston’s overall business environment.
We delved into the office market ourselves this year to evaluate new space options
that will meet the current and future needs of our firm. In January, we are moving
into new space at One Grove Street, an office building in the Kirby Grove mixed-used
development by Midway.
No doubt that understanding market trends supported the process of investigating
space options for our firm. But even if you are not relocating, having a pulse on Houston’s
real estate market provides a strong foundation for strategic business decisions.
I hope you will enjoy reading the insights from Houston real estate industry leaders and
our own commercial real estate practice team. Feel free to contact us for more information
about our real estate capabilities – and come visit us soon at our new offices.
Sincerely,
CHRIS HANSLIK
Firm Chairman
CONTACT
4265 San Felipe, Suite 1200
Houston, Texas 77027
713.850.7766
Visit boyarmiller.com
TABLE OF CONTENTS
03 : State of the Industry
04 : Expert Insights
Real Estate Market Overview
Retail, Office & Mixed-Use Development
Industrial Market
07 : Attorney Insights
Today’s Commercial Real Estate Landscape:
Planning for Uncertainty
10 : Practice Leaders
LEARN MORE ABOUT THE FORUM

3. MULTI-FAMILYMIXED-USE
PAGE 03
2016 Houston Commercial
Real Estate Market
Optimism
with a pause.
INDUSTRIAL
Urbanization of
Houston emerging
Extremely
healthy market
+ Petrochemical drives activity
+ Panama Canal opens growth
vs.cost
convenience experience
RETAILOFFICE
94.6%
Occupancy
increased to
3under way
million
sq ft
Transaction
Volumes Plateau
5,000units
planned in central
business district
40%
of space
traded hands
over the last
4 5.2million sq ft
in 2016
Amenities
+ Connectivity
Drives value
Sublease
activity
is strong
yrs

4. WHAT ARE WE SEEING?
• IT’S A GOOD SCENARIO
Our CRE market needs to cool off and let other markets
catch up. So the drop in oil prices gives us a little pause,
and that’s okay; it comes at a good time. We don’t see
a negative scenario, but rather a plateau and that is a
reasonably healthy environment.
• INVESTORS STILL LOVE HOUSTON
Foreign capital continues to flow into Houston, and
Canada has always been one of the largest investors.
New investors are engaging Houston with fervor
including Israel and Asia, particularly South Korea.
• JOB GROWTH SLOWS; POPULATION GROWTH
REMAINS STEADY
We expect to add 33,000 jobs in 2015. For the next year,
job growth will be a little higher toward the back half of
the year. We continue to add 100,000 new residents
each year.
• PETROCHEMICAL INDUSTRY ROCKS
There are more manufacturing jobs here than anywhere
in the country—mostly in the petrochemical industry
and the manufacturing of steel drill pipe. We are not
losing jobs in petrochemical, we are shifting them to
the east part of town.
Real Estate
Market Overview
“I have a sanguine market outlook;
on balance we’re in a good place.”
JIMMY HINTON, Managing Director, Research – HFF
PAGE 04
Jimmy Hinton works with HFF’s executive management team to assist in investor
relations and to inform both HFF staff and firm clients with in-depth analysis of
economic, property and capital market trends. He is also responsible for providing
extensive market reports, client presentations and deal-specific analysis for debt
placement and investment sales assignments. Jimmy’s responsibilities include
substantial interaction with pension funds, life insurance companies, regional
and CMBS lenders, REITs, foreign investors and private equity funds.
Expert Insights

5. WHAT ARE WE SEEING?
• TAKING A HEALTHY PAUSE
A year and a half ago, the real estate market was
growing at an unsustainable rapid pace. This pause
in the market is a positive and comes at a good time.
• INVESTING IN PEOPLE
Office space used to be viewed as a cost with the
CFO in meetings keeping an eye on the budget. Now,
the HR director is in the room and office space is being
considered an investment in hiring and retaining the
best people.
• TWO CATEGORIES OF RETAIL
Successful retail is based either on cost and conve-
nience, or on creating an experience. The retail market
is strong and occupancy has increased to 94.6 percent.
• MIXED USE ADDS VALUE
There are several mixed-use developments coming on
market including the River Oaks District, Generation
Park and Hughes Landing in The Woodlands. These
are attractive because they have desirable amenities
and connectivity.
Retail, Office Mixed-Use
Development
“Houston is on the front end
of its urbanization.”
JONATHAN BRINSDEN, CEO – Midway
Jonathan Brinsden guides Midway’s overall business strategy and operations.
He joined Midway’s development team in 2001, was named COO in 2008 and
CEO in 2013. He is a member of the Urban Land Institute Global Board of Directors,
Board of Trustees and the Governance Committee, and past Chair of ULI Houston.
Jonathan holds a Master of Science in Land and Real Estate Development,
a Bachelor of Science in Construction Science and a Bachelor of Science in
Environmental Design, all from Texas AM University.
EXPERT INSIGHTS : PAGE 05

6. Industrial Market
“It is great to say that the
industrial market in Houston
is extremely healthy.”
TREY ODOM, Founder and CEO – AVERA Companies
EXPERT INSIGHTS : PAGE 06
Trey Odom is the Founder and CEO of AVERA Companies, a fully integrated,
partnership-driven, real estate development, construction and investment firm.
AVERA is one of the most active firms in the United States, leading the industry
in office and industrial development. Trey has over 28 years of experience in
the commercial real estate industry, beginning with a successful career at CBRE
where he specialized in the industrial real estate market, concentrating on
industrial facility sales, leasing and National client representation.
WHAT ARE WE SEEING?
• SINCE 2002, THE INDUSTRIAL MARKET HAS GOTTEN
STRONGER WITH LARGER DEALS
Houston is in a wonderful spot right now with no
anticipated changes the next couple of years.
While deal size has dropped a little, there are still
decent size projects under way.
• PANAMA CANAL EXPANSION PROJECT FUELS GROWTH
The Panama Canal’s Third Set of Locks Project will
double the capacity of the canal next year by creating
a new lane of traffic and allowing more and larger ships
to service the Port of Houston. In preparation, the Port
of Houston has expanded its container ship capacity
by 37.5 percent – and all of this propels industrial growth
for the city.
• VACANCY DROPS
This time last year the city’s industrial vacancy was
5.4 percent and now it has dropped to 4.7 percent.
New development is down so while rent prices are
stable right now, we may see an increase.
• CAPITAL RATES STAY IN THE 5.0-5.5 RANGE
Capital in industrial real estate remains under-
allocated to core industrial areas. We will see the
year-end momentum continue through 2016 with
a bullish outlook ahead.

7. Houston has benefited from five years of robust
growth, and while there is optimism that the
current economic climate will not reach the
same depths as earlier busts, it is clear that
the keyword for the near-future is uncertainty.
How can those in the real estate industry adjust
to this “new normal?” We have identified four
issues – which span the phases of development
from planning to completion – to keep in mind
when planning for uncertainty.
FLEXIBILITY IN CHANGING DEVELOPMENT PLANS
A developer who plans ahead understands the need
to adjust the uses of a project as market forces shift.
What once was intended to be a luxury apartment tower
that seemed like a home run opportunity in 2014 may
now be best suited for a mix of mid-rise apartments and
medical offices.
Ideally, a developer will have a flexible investor partner who
shares the same goals for the project, but to ensure such
flexibility, developers should seek the ability to revise devel-
opment plans and to require a timely response from an
investor partner. A developer will also want the opportunity
to dissolve the venture if an investor is not willing to change
the proposed development (or for a variety of other reasons).
In such an event, the developer should seek the right to
have the first opportunity to purchase the underlying prop-
erty and should be careful to provide adequate time to find
a replacement investor to provide the capital necessary to
make the acquisition.
PAGE 07
Attorney Insights
Today’s Commercial
Real Estate Landscape:
Planning for Uncertainty
BLAKE ROYAL, Shareholder, Business Group
HILARY TYSON, Counsel, Business Group

8. FORCE MAJEURE
Delays may fall under the definition of a force majeure event,
and that may relieve a party of its obligation to perform
certain obligations within the specific time frame required
under the terms of an agreement. Due to unexpected
constricting of the availability of labor force, construction
materials and supplies, it is important for parties involved in
the development of a real estate project consider options
for the terms of force majeure provisions in an agreement.
Force majeure events typically will be defined to include
a laundry list of events that are outside of the control of
the party whose duty it is to perform. These most typically
include acts of God, acts of war or civil disturbances,
epidemics, governmental action or inaction, fire, earth-
quakes, storms, or unavailability of labor, materials,
power or communication. The list of matters that qualify
as force majeure events may be qualified generally to
matters outside of the control (or reasonable control)
of the party required to perform, or can be expanded
to include other matters that may be within some control
of the performing party (i.e. disputes with contractors.)
In drafting force majeure provisions in an agreement,
the parties should examine the terms by which a party
may be entitled to an extension of a deadline for perfor-
mance due to force majeure events. The parties should
consider whether an excuse of force majeure delay
should be specified as permitted in the definition of
specific deadlines in the contract, or whether it is more
appropriate to apply the excuse of force majeure delay
to all deadlines in the agreement, with carve outs for
specific deadlines that will not be extended due to force
majeure events (i.e. the time period in which a party is
required to make a payment.)
DELAY DAMAGES
Once a project is under development, the timing of the
completion is typically critical to maximizing the project’s
overall success. In this regard, it is important to be clear
on deadlines and other benchmarks for completion of
certain phases of a project.
Liquidated damages or other damage provisions may
be incorporated into an agreement to provide restitution
of a party injured by the delays, and/or incentive for a
party to meet the timing requirements of an agreement.
In the event of a contractor delay, the parties should
consider whether it is appropriate to include provisions
for liquidated damages that reduce the contract price,
because damages an owner may have as a result of
a delay in completion of a project in many cases are
difficult to ascertain.
Although a construction contract may be drafted to provide
that no damages may be claimed by the contractor for
construction delays caused by the owner, some courts
have concluded that these no-damages-for-delay provi-
sions will not shield an owner from damages related to the
deliberate and wrongful interference with a contractors
work. In this regard, an owner should consider whether
the contractor may have a counter argument or a claim
for damages caused by the owner’s interference with
performance of the contractor’s work before attempting
to enforce delay damages.
ATTORNEY INSIGHTS : PAGE 08

9. One may also want to consider whether the party obligated
to perform has any duty to exercise due diligence or take
reasonable steps to avoid or overcome the force majeure
event before claiming a force majeure delay. An agree-
ment may also require the party obligated to perform
to provide written notice of a force majeure event and
require additional notice, upon the conclusion of such
force majeure event, as a condition to claiming an exten-
sion due to force majeure delay and/or cap the aggre-
gate number of days of force majeure delay that may
be claimed by a party with respect to a specific deadline.
CONTROLLING THE SPACE
We have discussed potential ways to mitigate exposure
for projects in the pre-development and development
phases, but uncertain economic times obviously also
effect established developments.
When tenants face economic difficulties, many seek
to reduce one of their largest overhead expenses – the
rent – by assigning or subleasing all or a portion of their
premises. When negotiating leases, landlords should
ensure that they have the ability to approve potential
assignees and subtenants and explicitly require that any
potential assignee or subtenant provide the same infor-
mation a landlord would utilize in vetting a new tenant.
Landlords should require broad approval rights, particu-
larly with regard to the credit-worthiness of a potential
replacement tenant. Conversely, tenants want flexibility;
most often in the form of having the ability to assign the
lease to a successor through an acquisition or merger
without having to obtain the approval of the landlord.
Tenants should also seek to limit the landlord’s approval
rights to “reasonable” objections and attempt to limit
financial objections to assignees with lower financial
capabilities than the current tenant.
ATTORNEY INSIGHTS : PAGE 09
“A developer who plans ahead
understands the need to adjust
the uses of a project as market
forces shift.”

10. BILL BOYAR
Founding Shareholder, Business Group
Bill’s practice focuses on representing parties involved in
the acquisition, disposition, capitalization and financing
of assets and businesses on a national and international
level. He has served as lead counsel on numerous com-
plex, multi-party acquisitions and project financings,
with significant experience in corporate finance, private
equity, mergers and acquisitions, real estate and hospitality.
PAGE 10
Practice Leaders
CASSIE STINSON
Shareholder, Business Group
Cassie Stinson’s practice is focused on commercial real
estate and finance, public/private projects, business
transactions and public law, with a particular emphasis
on complex projects and multi-party transactions. She
handles real estate acquisitions and dispositions; leasing;
project structuring, development, design and construc-
tion; formation of business and non-profit entities, corpo-
rate governance, and business contracts; and foreign
investment in US real estate and businesses.
LEE COLLINS
Shareholder, Business Group
The goal of Lee Collins’ practice is to provide innovative
and value-driven solutions to the litigation-related problems
facing the client. This objective has been successfully
achieved through his direct and open communication with
the client, an early and immediate assessment of the issues,
strategic evaluation of the problem and its solution, and
aggressive representation.

11. PRACTICE LEADERS : PAGE 11
HILARY TYSON
Counsel, Business Group
Hilary Tyson’s practice focuses on commercial real estate
and business transactions. She joined the firm and returned
to Houston in June 2015 after practicing in the Dallas area
for more than 11 years. She represents developers, home-
builders and equity investors in a wide range of real estate
related transactions including land acquisition and disposi-
tions, residential subdivision development, financing, entity
formation, and office development and leasing.
BLAKE ROYAL
Shareholder, Business Group
Blake’s practice includes acquisitions and dispositions of
equity and assets, including recapitalization transactions
with venture capital and private equity funds; entity and
capital formation, including private placements, in domes-
tic and international jurisdictions; and general contractual
drafting and negotiation.