03-05-07 Special Called Joint Meeting of the La Porte Development Corporation Board of Directors and the La Porte City Council Minutes

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AREA OVERVIEW 11-9 Highways Highway transportation systems and ease of access can significantly affect demand for hotel accommodations. Houston and its surrounding areas are well served by major highways that provide good regional access. 1-10 is the major easUwest highway connecting Houston to Louisiana in the east and San Antonio and New Mexico to the west. Interstate 45 (1-45) connects the city to Galveston in the south and Dallas to the north. U.S. Highway 59 (US 59) runs from Brownsville in southwest Texas to Texarkana in northwest Texas. Houston is encircled by two ring roads, the Interstate 610 (1-610) and Beltway 8 (Sam Houston Tollway); which connect the major interstates and highways. The largest roadway construction project in Texas is the expansion of 1-10 in West Houston from 1-610 to Grand Parkway, proximate to the subject site. In total, there will be 24 lanes including frontage roads and shoulder lanes along this 21 mile stretch of freeway. Completion is scheduled for the end of 2008. The busiest section of Interstate 610 passes through the "Uptown Houston" commercial area located between 1-10 and US 59, which is currently undergoing a major reconstruction project. OFFICE MARKET Following 9/11, the collapse of Enron, corporate layoffs and national and local economic setbacks, the Houston office market suffered an increase in vacancy rates. However, vacancy rates began declining in 2005 and are below 2001 levels as of the end of 2006. For the first time since 2001, rental rates are starting to increase again with Class A rates exceeding 2001 levels. Houston office market data is presented in the following table. Houston Office Market 142,741,647 143,957,209 176,020,342 178,982,587 177,882,370 179,245,857 66,414,950 66,847,989 86,353,361 86,471,939 86,980,155 87,540,457 9.66% 12.67% 13.11 % 14.59% 12.46% 8.40% $23.86 $22.01 $21.47 $20.93 $20.60 $24.02 Source: CB Richard Ellis In downtown, the amount of sublease space available is falling as companies become more confident and expand or reclaim space that had previously been on the market. In the suburban areas, the excess of sublease space will continue to fall and occupancy will increase as the market strengthens based on steady economic growth and job creation. The largest concentration of office space is located in downtown Houston followed by the West Loop/Galleria, Westchase and the Energy Corridor market areas. Downtown revitalization continues and the area is expanding its appeal as a business location.