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Today Houston Business Journal’s Commercial Real Estate Outlook was published:

Houston’s outlook continues to offer more options than the rest of the country in regards to businesses and job seekers alike, say local economic and development experts.

Most parts of the city have seen continued growth throughout 2011, and that momentum is not expected to slow down. The Houston metropolitan statistical area will add about 84,600 jobs this year, up from about 80,000 jobs added in 2011, according to the Greater Houston Partnership.

The Houston Business Journal has identified six Houston submarkets that experts expect to be active in 2012 — Downtown, The Woodlands, East End, Uptown, North and the Energy Corridor. Below is an excerpt about each area. Click on the submarket name for more thorough information.

North Houston
With many large corporations, including ExxonMobil moving or expanding to North Houston, we should expect to see land sales and spec construction increase this year. The corridor is appealing because it offers more available shovel-ready land, nearby residential, a strong labor pool, amenities and transportation. This aerial photo shows the new Exxon Mobil campus site under construction at I-45 North and the Hardy Toll Road. Photo Source: Brian Kennedy, www.birdseyehouston.com.

The Woodlands
The Woodlands continues to be a boon for energy companies drawn by Exxon Mobil’s planned corporate campus near the master-planned community. The demand for office space in the submarket — and the desire to be near Exxon — puts further pressure on the Class A office market. This growth should also positively affect the retail market.

Energy Corridor
Despite the exodus of energy companies flocking to The Woodlands, the Energy Corridor is still appealing to firms of its namesake. Dallas-based Trammell Crow Co’s purchase of 18.8 acres from the Texas General Land Office at the southwest corner of Interstate 10 and Eldridge for future development proves continued interest. Sources told HBJ last year that Trammell Crow anticipates doing a multiphase office campus, with construction starting in 2012. Besides office construction, growth in the multifamily industry in the corridor is focused on lifestyle and creating walkable communities.

Uptown
This link on the HBJ website was not working so we will update it when it become available.

East End
The Houston Dynamo’s opening game and the debut of the new BBVA Compass Stadium will occur on May 12, and with it comes an expected surge of people to the east side of the city. The 22,000-seat, open-air stadium will be a boost to growth and development on the east side of Interstate 59 downtown. Also promising for the area is the “Building a Better Houston” campaign, established between the Dynamo and BBVA Compass, which will focus on revitalizing Houston’s East End, among other initiatives. Rendering of the new Dynamo Stadium. Photo Source.

Downtown
Vacancy rates are expected to drop into the single digits this year due to rapid demand in the heart of the city, sending rental rates soaring. Last year saw the entrance of two new office buildings, Hess Tower and BG Group Place, (about 1.9 million square feet combined) and they sit at . 100 percent occupancy and 70 percent occupancy, respectively. Several new buildings have also designed, but are on hold until tenants can be secured. There are no large retail projects planned to date and any hotel projects are at the beginning stages. The addition of a free bus service on a 2.5 mile loop around downtown also will contribute to changes downtown. The contemporary-designed shuttle will connect workers, hotel guests and residents to the George R. Brown Convention Center, shopping and other amenities in the area. The Greenlink Circular Transit is set to start its first route in May.

Via culturemap:

When we asked you to show us your best Houston photos to commemorate Houston’s 175th birthday, we had no idea you were just as in love with the city as we are. And we certainly learned one thing in picking the best photos for our contest: There’s nothing like seeing the Bayou City from the eyes of a Houstonian.

Photo by James JacksonEmile Brown
Julie Gomez
Kyle Jones
Jim Goode

12 PREDICTIONS FOR 2012 via Real Estate Bisnow Houston

1. HOTELS IMPROVE

Performance in the hospitality industry is on the up, according to Smith Travel Research and PKF Hospitality Research. Smith reports that Houston is doing particularly well; our hotels rank second in the US (behind Nashville) for year-over-year gain in room demand.

2. WESTCHASE RISES

With at least two spec office buildings slated to break ground in 2012, Westchase may just be the hottest submarket this year. Westchase District’s Sherry Fox tells us leasing volume in the submarket had topped 1M SF by Q3 ’11, well ahead of 2010 numbers. That put occupancy at 86.7% by the end of Q3, and Sherry says very big blocks are available.

3. FUNDS ARE UNPOPULAR

Ernst & Young American RE sector leader Mike Straneva (we snapped him at an E&Y/Baker Botts event in December to the right of Archstone’s Neil Bown and HFF’s Jody Thornton) says the recession taught people that they need to know who all investors are in a deal. That said, funds that do exist are attracted to RE because of returns.

4. CMBS IMPROVES, BUT IS THAT ENOUGH?

Commercial Mortgage Backed Security values will be on the rise this year: Wells Fargo Securities expects $25B, and Credit Suisse Group AG and UBS AG predict as much as $45B issued in 2012. But Andrews Myers CRE attorney Patrick Hayes has less confidence. Although Patrick has seen a resurgence of CMBS loans, he cautions borrowers that underwriting is tough to the point of being unreasonable. He suggests borrowers avoid that route unless they’re confident their properties can withstand the underwriting process.

5. INVESTORS COME TO CRE

Texas A&M Real Estate Center chief economist Mark Dotzour thinks US stocks and CRE broken deals are the most undervalued assets in the country right now. People are bound to catch on soon, making them the next investment trend.

6. AND TEXAS IN PARTICULAR

Houston and Dallas are among the top CRE hot spots (NY and DC are the others) generating investor interest, says Younan Properties chairman/CEO Zaya Younan. Foreign investors (including the Chinese and Europeans) only want to talk Texas because of its fast-growing, strong fundamentals.

7. DRIVING AUSTIN

A problem everywhere: traffic congestion. For Austin and San Antonio, the problem compounds with 70% of the NAFTA truck traffic making its way up I-35. But, that also means opportunities, too, according to the experts at the Bisnow Future of the I-35 Corridor in Austin yesterday. Only 80 miles apart, the two major metro areas may one day mesh into one greater MSA with a population of about four million. Major universities, international airports, and the NAFTA superhighway are a recipe for growth between the two cities.

7. OFFICE ABSORPTION INCREASES

Houston’s office leasing market fundamentals improved remarkably last year, according to PMRG VP of research Ariel Guerrero. Office product absorbed 3.2M SF, the most since ’08. Look for a continued shift to a landlord-favorable market as rents rise and quality space options diminish.

8. CLASS-A WILL DO EVEN BETTER

Of the 3.2M SF Houston absorbed last year, 2.4M SF was Class-A.

9. HEALTHCARE’S ABOUT CLASS-B

Marcus & Millichap’s Tanner McGraw tells us investors in the healthcare space are paying more attention to Class-B product. According to Marcus & Millichap’s October report, statewide MOB transaction velocity increased 28% from the same period in 2010. Activity accelerated dramatically for buildings below 5,000 SF, and lower-quality properties were the lion’s share of deals. Tanner is also seeing more health systems building and acquiring off-campus assets through physician practice acquisitions.

10. SPECIALTY GROCERS COME TO MARKET

The retail market in 2011 was dominated by HEB and Walmart, but look for specialty stores to creep into Houston in 2012. Transwestern’s Nick Hernandez says we’ll see Aldi, Trader Joe’s, Sprouts, and others open their first Houston stores this year. And here’s two for the price of one: Nick also says we can expect retail landlords to squeeze more value out of existing centers by adding pad sites in parking lots or tacking on small buildings for additional SF.

11. SELECTED CONSTRUCTION GAINS

Expect modest gains in construction this year, according to Andrews Myers construction attorney Ben Westcott. He expects construction to increase in infrastructure, municipal, education-driven, and multifamily projects. The latter three project types will see a bump from the population spread across our fair city. This is leading to more construction jobs: The Labor Department reports that 9,000 were added in November and 17,000 in December. Plus, construction spending increased over three of the last four months of 2011.

12. INDUSTRIAL STAYS HOT

Many of the spec developments under way will deliver this year, most have significant preleasing. And that means that concessions are burning off. The team predicts they’ll become the exception rather than the rule, a nice change for landlords from the previous three years. The north submarket will be the hottest, possibly running the risk of being overbuilt.

Each number has been summarized. See more on each category HERE.

Yesterday we posted about Houston’s “Third Loop,” the Grand Parkway, and the inevitable population growth the city will see. Today we thought we would share another vision for managing Houston’s growth presented by a new forum and exhibition by AIA Houston. Houston 20/20 Visions: Ten Years to Clarity exhibits what Houstonians consider the most critical issues challenging our city today and their ideas to solve them. Their mission statement is “to provide a forum for creative visions for the next decade that will explore how development, environmental responsibility, housing, and transportation projects will contribute to a sustainable future for the City of Houston.”

• Houston began as an urban place with its earliest developments based on transit and walkable, compact neighborhoods. Many of these neighborhoods are still walkable and convenient.
• Houston 2.0 began with the destruction of the streetcar system and the advent of new roads and then enormous highways that enabled and encouraged suburban development far from the city center.
• Against all odds, a pretty good – and pretty smart – transit system has evolved over the years. And today the region is moving back towards walkable urbanism.
• The 7.5-mile Main Street light rail line acts as the spine of the transit system, connecting the major employment centers of Downtown and the Medical Center. Houston’s single line carries more people per mile than any other light rail system except Boston’s.
• Suburban areas are linked to jobs in the urban core by a comprehensive system of park & ride buses. As Metro board member Christof Spieler has noted, the park & ride transit system would rank among the top ten commuter rail systems in the country if it used rail instead of buses. But, there are major gaps in the service. Trips to Downtown tend to be easy; trips to other job centers – Greenway, Uptown, Westchase, Energy Corridor – are often longer with more transfers. Many suburban areas have no local bus service at all; as the population ages and suburbs get more diverse that’s becoming a greater problem. The success of the park-and-ride system and the light rail line proves that Houstonians will ride high quality transit when it is offered, but it isn’t offered everywhere.
  
• We should focus mass-transit on where people are clustered.
• The next round of light rail development that is evolving will be five more lines, adding 32 miles of rail. Within the next five or six years, this intense system will have 65 stations with more than 150,000 boardings a day.
• The large activity centers will continue to grow and at least three of them are working on master plans to make them more walkable and amenable to regular high-quality transit service.
• Perhaps the most interesting activity center in this system is Uptown/Galleria, because it has a large residential base of more than 30,000 residents in addition to the largest retail base in the region. It’s a 24/7 magnet for people and that should only increase with the new service.
• But the most exciting prospect will be that of the growth of small destinations,neighbor- hoods with interesting restaurants or shops or other amenities, including parks. People who ride transit discover these places because they are not distracted by driving and actually are able to see what’s there.
• The emergence of popular places could drive economic development in a large number of neighborhoods.
• Generally, a kind of development that Houston hasn’t seen much of for a century will occur: transit-oriented development (TOD). In TODs, shops and other amenities are clustered around transit stations because many people accessing them will be on foot and will want the convenience of complete neighborhoods (and a cup of coffee.)
• With 65 station areas encompassing some 30 square miles of TOD possibility, Houston may soon have the largest real estate market in the nation for walkable urbanism based on transit.
• It’s difficult to grasp the significance of so many different neighborhoods almost suddenly being linked together by light rail transit service.
• First, many of these neighborhoods are diverse, low-income areas where car ownership is low, often slightly below one car per household on average.
• These new, inexpensive links to jobs, health care, schools, and other amenities should allow significant improvements in hundreds of thousands of lives. Also, small businesses in these neighborhoods will be accessible to a new group of potential customers and clients.
• Secondly, people who want to live in urban circumstances – which in Harris County is more than 41% – are a huge market of 1.7 million people who are really not currently served by the market. There are public policy reasons for that; urban form is essentially illegal everywhere in the City except in the Central Business District. The City’s Urban Corridors ordinance begins to address that by setting up an optional development code for the light rail corridors.
• The City is forecast to grow by about 30% by 2035, so if each of these 65 neighborhoods grew by just that much right around the stations, all would improve the prospects for neighborhood amenities such as shops and services, which could also mean more local jobs.
• But the opportunities for much more significant growth, particularly in some of the larger, more urban places, could mean that these 65 station areas could accommodate half or more of all of the City’s growth, without needing to pave and develop greenspace and farmland.
• This is the Houston region’s near-term opportunity to develop a true “urban zone” in which many different places are connected by good transit service. This will begin to moderate the cost of such places by increasing the supply in response to clear market demand, enabling many of the people seeking walkable urbanism to find it.
• Can neighborhoods work with the City to develop a vision and plan for their own futures?
• Plenty of places have sufficient job and population density to support good transit service, but decades of sprawl make the future tough.
• There is no single service or mode that answers all issues; what we need is a connected seamless system that combines multiple modes and levels of service.

See more here and here.

By Michael Reed from yourhoustonnews.com

With Houston’s third loop, the Grand Parkway, expected to become a reality in 2016 and a boon to the job market soon afterward, it’s easy to wonder just how far from the heart of the city is too far to be a viable urban alternative.

Well, it wasn’t that long ago concerns along those lines were voiced over another major roadway project.

“I remember when they were wearing snake boots to do surveys of where the toll booths would go,” said Janet Wagner, president of the Harris County Historical Commission, referring to southern sections of Beltway 8 in the mid-1990s. “That was all vacant or farmland then.”

While that region on either side of state Highway 288 may have been among the least developed along the Beltway’s route, it was not alone in gaining both population and new businesses. And, according to statistics from the Houston-Galveston Area Council, it’s still growing.

Within two miles of either side of the entirety of Beltway 8, the population was 646,130 in 1990, about the time the final segment opened. It now stands at 952,634, but is expected to increase to 1,175,262 in 2025 and 1,322,042 in 2035.

The H-GAC data also shows the number of people working in the same proximity has grown from 217,218 in 1990 to a current level of 482,831. It is expected to reach 587,911 in 2025 and 676,576 in 2035.

That would be a projected increase increase of about 40 percent in both population and employment over the next 25 years.

Growth inevitable

“It’s a really large area, so it’s difficult to say how much this (growth) can be attributed directly to it (the roadways),” said Chris Van Slyke, a traffic program manager at H-GAC.

In many ways, the growth was inevitable and to large extent had already occurred by the time Beltway 8 was conceived, let alone became a functioning roadway, according to Billy Burge, president of the Grand Parkway Association Board.

“I can remember years of delay to building the first one, and how Bellaire didn’t want it,” he said, referring to Houston’s original loop – Interstate 610. “That came well after everyone was all clustered up.”

Burge said the Grand Parkway, hopefully, will allow for a more orderly distribution of growth ahead of major population increases that are forecast.

“It’s not so much a shift (in population) as it is getting ahead of growth this time, so people can do things like drive straight to the airport,” he said. “It’s a more orderly way of life with less congestion.”

As the outer loop, The Grand Parkway, obviously, will be bigger than the Beltway 8 – 177 miles vs. 88 miles in length. And, where the latter lies entirely in Harris County, the new roadway will also pass through Fort Bend, Montgomery, Chambers, Galveston and Brazoria counties.

H-GAC statistics show that within 2.5 miles of the Grand Parkway the population grew from 192,666 in 1990 to its current 455,116, and is expected reach 736,651 in 2025 and 972,473 in 2035. Jobs along the route – 50,184 in 1990 – doubled to 110,942 currently, and should climb to 164,041 in 2025 and 211,075 in 2035.

‘Unique and pretty’

Those increases of 114 percent in population and 91 percent in jobs are considerably larger than expected for the Beltway 8 corridor area between now and 2035.

Realtor Pattie Huey, who keeps close tabs on regional growth as HAR liaison to the Houston Builders Association, thinks she knows part of the reason.

“If you look at that land, it’s just waiting. People have been buying it up for years,” she said, specifically of areas to the north of Houston. “The population is always drawn to unique and pretty.”

She said increased access and better direct traffic routes will make the commutes much more manageable for many who will be working in Houston, but wouldn’t have considered living so far out with only the current roads to depend on.

“It’s not like we haven’t been living in outlying areas for very long time,” she said. “Do we refer to Cinco Ranch as being too far out now? I can remember when Memorial was too far out.”

Huey said she anticipates increased development around The Woodlands and predicted Magnolia’s population will grow considerably.

Well, if north of the Grand Parkway isn’t too far to be part of metropolitan area, what is? Could a fourth belt be in Houston’s future?

“From a loop standpoint, this is probably the last loop, and it is truly needed,” Burge said, adding that another loop would be built outside regional transportation authority, anyway.

See article here.

• Houston is appealing to Mexican National Investors
• Historically they used to buy/hold mainly land
• Now more focused on Income-Producing Deals
• Many times trying to move here and live off investments
• Very relationship oriented – sometimes deals can take longer – have to overcome some trust factors – they dont like to feel pressured
• Commission structure is the same

To jump-start their economies and create more jobs, states increasingly are trying to spur private sector business growth and investment. One way some political leaders are doing this is by reducing business taxes and government regulations.

According to the Tax Foundation, a nonpartisan public policy organization in Washington, D.C., “the most competitive tax systems create the fewest economic distortions by enforcing the most simple, pro-growth tax systems characterized by broad bases and low rates.”

Recently, the U.S. Chamber of Commerce published a report called “Enterprising States 2011” that ranked states in a variety of performance metrics, including their tax and regulatory environments. Those environments were compared in five ways: overall state and local tax burdens, corporate taxes, small-business costs, state government budget gaps, and cost-of-living indices.

With the exception of Texas, States that made the Chamber of Commerce’s top-ten list are not found on the East Coast or the West Coast because desirable coastal states don’t always need incentives to attract business investment and expansion. So states that offer lower taxes and regulations view those attributes not only as advantages but also as necessities in today’s competitive landscape for business expansion and job growth.

The importance of this relates both to corporate entities and to real estate development. Locating in or doing business in a low-tax state can help generate higher profit margins, while operating with fewer regulatory and bureaucratic hurdles can reduce red tape in the real estate development process, whether for environmental reviews or incentive programs.

Here is what they say about #6 Texas:

The Lone Star State is a low-tax state that offers a low cost of living and has an enterprise-friendly climate that’s paying off with high job growth rates. Recent state initiatives include a business tax reform that raises the revenue exemption.

Article excerpt from the Urban Land Institute by Jeffery Spivak

The below article is reprinted from Texas REALTOR® magazine

How will new laws affect you? Several changes to state laws that affect real estate professionals, property owners, and tenants go into effect Jan. 1, 2012. Here’s what you need to know.

Do you remember what happened during the 82nd Texas Legislature earlier this year? If you’re like most people, you can barely remember what you ate for breakfast today let alone what state legislators did in May. The Texas Legislature changed and added many laws, but some specific to real estate don’t take effect until Jan. 1, 2012. Here’s a summary of the changes to come and what they mean for you, property owners, tenants, and real estate transactions.

Changes for you and your transactions

You’ll need more experience to qualify for a broker’s license
The Texas Real Estate Commission will soon require more time spent as a salesperson to qualify for a broker’s license and will require you to submit evidence that you’ve performed a certain amount of brokerage activity during that time.

As of Jan. 1, 2012, you’ll need to have been licensed as a salesperson in at least four of the previous five years. You’ll also need to show, using TREC’s new point system, that you’ve participated as a salesperson in “enough” real estate transactions during that time.

How much is enough? TREC has devised a points system that awards you for various real estate tasks. For example, re
presenting a buyer or seller in a transaction that closed is worth 300 points, and an executed lease is worth 50 points. To qualify for a broker’s license, you’ll need at least 3,600 points, with some points earned in each of those four years.

Part of your broker-license application will include a sheet showing the points you’ve accumulated. If you’re part of a sales team, you may only claim points for brokerage activity for which your name is on a document (e.g., a sales contract or a property-management agreement). Initially, you won’t have to provide proof of your experience; you and your broker will sign the sheet. However, TREC will have the option to require supporting documentation.

Education requirements for a broker’s license remain the same.

Buyers can get an HOA resale certificate
Beginning January 1, a homebuyer purchasing a property in a subdivision will have the ability to request a resale certificate directly from a homeowners association. The HOA may require the buyer to show he has a valid contract for the property and may require payment before beginning work on the resale certificate. The association is prohibited from processing the payment until the resale certificate is prepared and may not charge a fee at all if the certificate is not provided in a timely manner.

Buyer’s representatives should be aware that for contracts entered into on or after January 1, buyers will be required to pay the fee for the resale certificate unless the buyer and seller have negotiated otherwise in the sales contract. Currently, the TREC addendum provides options for delivery of the resale certificate and states the seller will pay for it. That addendum is likely to change early in 2012 to reflect the change in law.

The law still allows sellers, seller’s agents, and title and insurance companies to order updates to already issued resale certificates. But under the new law, a resale certificate is only good for 60 days. For any resale certificate older than that, a new one will have to be issued.

Tweaks to owner’s and lender’s title policies
Title policies could always exclude coverage of the ownership of minerals, but as of Jan. 1, 2012, title companies are no longer required to provide a 2% credit on the cost of the owner’s policy for this exclusion.

Also on January 1, title companies are no longer required to insure a loss from damage to property resulting from the use of the surface of the land to extract minerals. Prior to that date, if title companies excluded minerals from coverage, they were required, upon request, to insure against such damage. This insurance was provided through an endorsement to the policy, which cost $50. The endorsement is still available for the lender’s policy and the owner’s policy, but there will be no charge for the endorsement to the lender’s policy. For an endorsement to the owner’s policy, the charge remains $50.

Disclosure requirements for private transfer fees.
Most future private transfer fees on real property were prohibited on Sept. 1, 2011. However, as of Jan. 1, 2012, a real estate sales contract for a property with existing private transfer fees must disclose those fees.

Changes for property owners and tenants

HOAs face new rules for foreclosures, finances, and more
Homeowners associations, as of Jan. 1, 2012, have new guidelines for maintaining association documents, providing access to association records, and conducting open meetings. Also, unless waived in writing by a property owner, a homeowners association will be required to use an “expedited foreclosure” process, which includes obtaining a court order, before foreclosing against a property owner. Property owners can now add or remove an HOA’s foreclosure power by a two-thirds vote of association members. Additionally, HOAs are prohibited under the new laws from foreclosing a debt consisting solely of fees charged for obtaining copies of HOA records.

The new law dictates the order by which a homeowners association must apply owners’ payments: delinquent assessments, current assessments, attorneys’ fees, and fines—affecting their ability to foreclose. Also, the notice that must be given to a property owner by an HOA before it can take certain actions against the owner, including foreclosure proceedings, must now inform the owner that he may have special rights or relief if the owner is on active military duty.

Paperless property-tax bills.
Starting January 1, local tax offices can offer an electronic tax bill. Interested property owners should check with their tax office to see if they can begin receiving their bill via e-mail.

Appealing property appraisals without going to court
Also January 1, property owners in Collin, Denton, Fort Bend, and Montgomery counties whose properties are worth more than $1 million can appeal their property appraisals through the State Office of Administrative Hearings rather than taking that appeal to district court. Property owners in Bexar, Cameron, El Paso, Harris, Tarrant, and Travis counties were given that option two years ago.

Tenants can appeal eviction regardless of ability to pay court costs
Effective January 1, a tenant unable to pay the costs of appealing a judgment in a residential eviction suit may still appeal by filing a pauper’s affidavit. The tenant will still be required to pay rent, which goes into the registry of the court, and must make a rent deposit into the registry within five days of filing the pauper’s affidavit. Without this deposit, a landlord can request a writ of possession in his favor, which the court will immediately issue.

Lori Levy is legislative and regulatory counsel for the Texas Association. Reprinted from Texas REALTOR® magazine.

1. and 2. Austin, TX, and Houston, TX.

The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio.

See more here.

One of our most loyal clients recently attended the Institute for Regional Forecasting symposium, entitled “Houston – The Teflon® Economy and Real Estate Markets: A Few Scratches, But the Bad Stuff is Not Sticking and We Keep on Cooking…” Our client shared the slideshow with us in which Dr. Ted C. Jones, Senior Vice-President and Chief Economist for Stewart Title, painted a strong and exciting outlook for Houston over the next 12 months. Below is an article from the Houston Chronicle highlighting some of Dr. Jones’s points or you can get a full copy of the slideshow here.

A local real estate economist predicted Tuesday that the Houston area will add about 62,000 jobs next year, a gain of 2.4 percent.

Oil and gas exploration and production, construction and manufacturing will be among the sectors leading the growth, said Ted C. Jones, chief economist for Stewart Title Guaranty Co. He made his comments during a luncheon sponsored by the University of Houston’s Institute for Regional Forecasting.

The Houston economy is on pace to finish 2011 with more than 66,000 jobs added for the year, he said. According to the most recent data from the Texas Workforce Commission, the Houston area added 66,300 jobs from September 2010 to September 2011, a year-over-year increase of 2.6 percent.

Jones was not as bullish a year ago when he predicted that Houston would add a little more than 30,000 jobs in 2011. The increase, he said at last year’s luncheon, would be led by gains in government, retail and oil and gas exploration and production.

Jones said on Tuesday that he underestimated the growth at the Port of Houston, airport construction work that has created blue-collar jobs and the boom in energy-related manufacturing and services.

Demand for Houston-made energy products is strong globally, he said, which is boosting the local economy.

At the same time, he said, all levels of government have cut spending because of lower tax revenues and the end of federal stimulus spending.