TEXAS SNAPSHOT, JUNE 2005

Galveston

James B. Selig Broker-Associate Joe Tramonte Realty, Inc.

Across the downtown area, redevelopment has continued; the upper floors of many buildings are being converted to residential condominiums while the lower levels are being sold or leased as retail space. Additional resort subdivisions are being developed on the west end of the island, and the east end is seeing development in terms of luxury high-rise condominiums as well as the first single-family resort subdivision on East Beach. Construction of Galveston County’s new Criminal Justice Center is spurring redevelopment plans at a crucial gateway to Galveston, and the development of a Schlitterbahn Waterpark next to Moody Gardens, along with the construction of an additional city convention center, is creating ancillary hotel and motel development. The expansion of research space, including the Galveston National Laboratory at the University of Texas Medical Branch, will attract hundreds of additional workers to the area, therefore creating necessity for additional development.

These factors have led to the positive trends currently serving the market. With such a large number of projects under development and with so many looking at and buying in  Galveston, all of these construction endeavors are selling quickly. People are building homes as soon as land opens for construction, the downtown area is going through extensive redevelopment and generally, something is happening everywhere all over town.

As a result, significant projects are popping up throughout Galveston. Luxury high-rise condominium projects include Palisade Palms, Ocean Grove and Emerald By The Sea. While in the past, Galveston has been known as “Houston’s Playground,” these projects also are attracting well-healed buyers from outside of Texas.

Beachtown, on Galveston’s East Beach, and Beachside Village, single-family resort subdivisions developed in the neo-urbanism traditional neighborhood style, and two canal single-family resort developments, Sunset Cove and Anchor Bay, have likewise attracted interest from all over. Pointe West, a Centex destination resort on both the beach and bay sides of the island, also is attracting a lot of attention.

The downtown submarket is seeing increased activity in loft development. The Panama Lofts, Electric Company Lofts, Lofts at the Texas Building, Harborside Condos, the Telephone Exchange Building Lofts and the Sergeant Building Lofts are attracting more permanent residents and second-home owners to the area and providing additional opportunities for stores, galleries and restaurants.

In addition, Evia, a traditional neighborhood, is being developed on the largest remaining tract of land behind Galveston’s Seawall. Encompassing 93 acres, it will add almost 400 new homes to Galveston’s inventory; furthermore, the development already is re-attracting those who left the island for new housing. Campeche Shores, a new townhome community, is located in close proximity to this project.

New hotel developments include a Holiday Inn – Sunspree Resort, a Quality Inn, a La Quinta and a Hampton Inn, which all have been built and are planned to handle the influx of visitors expected in direct relation to the Schlitterbahn Waterpark development as well as the completion of an additional convention center. A redevelopment of the 25th Street pier, now housing The Flagship hotel, also is planned.

Retail space outside of the downtown area is being developed at Piazza Blanca, a waterfront development that includes the Emerald By The Sea Condominiums. In addition, retail space also is planned for the corner of 21st and Seawall, where the city’s original convention center is located. Going west beyond the Seawall, commercial space is planned for the Beachside Village development and additional retail space has been added at Jamaica Village. Redevelopment of retail space at the major intersection of 61st Street and Stewart Road also is underway.

Active developers in the Galveston market currently include Jerome Karem, Centex Homes, Holliday Builders, Kahala Development, Sullivan Interests, Randall Davis, Falcon Group, Market Center Management, Sunbird Development and Landry’s Corporation.

The largest major lease that has occurred recently encompasses 8,700 square feet at 61st Street and Avenue L; the space will be occupied by a VA Clinic.

In the future, all of Galveston is worth watching as development and redevelopment is happening in many different spots.

— James B. Selig is a broker-associate with Joe Tramonte Realty, Inc.


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