An executive at CBRE’s Houston office has been promoted to lead the real estate firm’s investor leasing, capital markets and property management business lines during a challenging time in the local industry.
Russell Hodges was elevated to CBRE Houston’s senior managing director for investor services, the brokerage said. He succeeds Mark Taylor, who held the role since 2007 and will retire in March after nearly 40 years in the commercial real estate industry, according to CBRE.
Hodges, who has 19 years of experience in commercial real estate, steps into the role after serving as an executive vice president for CBRE Houston’s investor leasing team. He joined CBRE in March 2021 from JLL, where he served as a managing director and its Houston agency leasing leader.
The promotion comes at a time when Houston’s capital markets face challenges, particularly with a lack of new investment, limited post-pandemic recovery and high interest rates, according to a CoStar Market Analysis report.
“Uncertain future demand has resulted in developers exercising restraint and supply-side pressure remains relatively benign as approximately 75% of the 3 million square feet under construction is pre-leased and/or built-to-suit,” according to CoStar’s analysis of Houston’s capital markets.
“The rise in interest rates has impacted deal flow within the capital markets, and the total number of office properties that traded in 2023 fell to its lowest level in 10 years,” the report said. “With many buildings underwater on their mortgages, foreclosures and distressed sales have increased in recent months, with many selling at land value or at auction, and this is likely to continue in 2024.”
Office Market Struggles
Houston’s office market, in general, has struggled with to recover from the impacts of the COVID-19 pandemic, and a recovery has not materialized on the leasing side, according to the CoStar analysis.
"While the vacancy rate has historically been among the highest in the nation due to overbuilding in the 1980s, its current 18.7% exceeds the five-year pre-pandemic average by 400 basis points," CoStar said in the report. "Meanwhile, the amount of available space, 76.2 million [square feet], has increased by about 10 million [square feet] since the end of 2019, reaching 21.2% of total inventory."
Before joining JLL, Hodges served as director of leasing at Hines in Houston and as a leasing manager at Crescent Real Estate.