Monday, October 26, 2009

Lenders could take ownership stakes in some of Dallas' top buildings

Ownership stakes in some of the Dallas area's biggest office projects could be handed over to lenders.

Wall Street firm Morgan Stanley – which paid $6.5 billion to buy Fort Worth-based Crescent Real Estate Equities two years ago – is scrambling to meet $2 billion in debt requirements due next month.

One option being considered is to turn over a share of the properties – including several of Dallas' most prominent buildings – to lender Barclays Capital, The Wall Street Journal reported Wednesday.

Morgan Stanley's purchase included stakes in Dallas' Crescent complex in Uptown and downtown's Fountain Place and Trammell Crow Center. Suburban office buildings were also in the deal.

Morgan Stanley doesn't own all of the properties.

In 2004, Crescent sold a 60 percent stake in the Crescent complex to a JPMorgan Chase & Co. subsidiary. JPMorgan Chase bought a 76 percent share of the Trammell Crow Center and Fountain Place.

Morgan Stanley representatives wouldn't talk about the Crescent debt issues Wednesday. "There's lot of speculation going on, and obviously there's no comment," said spokeswoman Alison Barnes.

Crescent representatives didn't respond to requests for information.

The original purchase from Crescent included more than 50 office buildings nationwide.
Morgan Stanley has already written down hundreds of millions of dollars in value on the Crescent properties.

Barclay's $2 billion loan on the real estate is due Nov. 2. The debt was originally due in August but was extended.

Commercial real estate values have plummeted since Morgan Stanley made the Crescent buy in August 2007. And lenders have all but closed the window on making additional loans for commercial properties.

Morgan Stanley reported Wednesday that it has taken a further $251 million write-down of the Crescent properties for the quarter that ended Sept. 30.

Another high-profile Dallas real estate deal wound up in the hands of lenders last summer.
In July, developer Hillwood handed over its ownership share of buildings in Victory Park to a German investment group that had provided funding for the developments.

"It is apparent that any purchase with high leverage conducted in the past four years is likely upside down on value relative to the in-place debt," said John Alvarado, managing director in Jones Lang LaSalle's Capital Markets Group. "This phenomenon is not unique to the Dallas market; it is happening everywhere.

"It is also not a reflection of weaker real estate fundamentals as much as a liquidity shortfall in the debt markets and a higher risk premium desired by capital sources today as compared to two years ago," Alvarado said.

"The Crescent properties do hold a unique position in the market – particularly the Crescent and Trammell Crow Center – and should retain more of their original values than almost any other properties in the market."

Wednesday, October 21, 2009

Woodall Rodgers Park Under Costruction

New Web site Launched – www.theparkdallas.org – For the Latest Updates

DALLAS (Oct. 20, 2009) — Construction staging started today on the 5.2-acre deck park that will bridge over Woodall Rodgers Freeway between Pearl and St. Paul streets in downtown Dallas. The Harwood Street bridge and St. Paul exit ramp are officially closed for demolition, scheduled to begin this weekend according to TxDOT.

As we watch construction begin, it’s a time to celebrate Dallas’ generosity,” said Linda Owen, president of the Woodall Rodgers Park Foundation. “The Park will be a feat of engineering and we will all watch with anticipation, curiosity and wonder as this bridge park comes together.”

TxDOT will work with the selected general contractor, Archer Western, to manage the construction schedule. Weather permitting, the Harwood bridge will be removed on the weekend of Oct. 23. The St. Paul exit ramp is slated to be removed on the weekend of Oct. 30 and will remain closed for the approximately 8 months.

“As construction begins, we look forward to the many transportation enhancements that the park will bring to this corridor of downtown,” said Owen. “In the long term, we will see improved pedestrian and bicycle access, signal lights, crosswalks, ADA accessibility ramps, public transportation such as the trolley and DART stops, and improved lane flow into and out of downtown.”

The St. Paul off ramp will be straightened from its current radius ramp movement. This will allow a left turn from St. Paul onto the eastbound frontage road which is currently not permitted. The improvement will allow access to the Arts District from St. Paul and eliminates the need to travel into downtown to reach Akard. Harwood Street will be closed to create a pedestrian bridge and great lawn.

The new Web site, www.theparkdallas.org, launched this week to keep Dallas informed on the latest news and construction progress. The site was created by Dallas web development company, The Old State, and includes many features designed to build an active community who will enjoy the Park upon completion.

Those interested in The Park can sign up to receive a monthly e-newsletter, follow @TheParkDallas on Twitter, become a fan on Facebook or join the conversation on “Common Ground,” the Park’s new blog. Photo galleries, site plans and a virtual fly through are also available to encourage visitors to imagine how they will use The Park in 2012. Downloads of high res images, brochures and more are available upon password request. TxDOT mobility information, including lane closures, will soon be added to the site.

The Park is expected be complete in late 2011 with amenities complete in 2012. Visit www.theparkdallas.org for more information.

About The Park

The Park will serve as a central gathering space for Dallas and its visitors to enjoy in the heart of the city. The 5.2-acre deck park will create an urban green space over the existing Woodall Rodgers Freeway between Pearl and St. Paul streets in downtown Dallas. Plans include a performance pavilion, restaurant, jogging trails, a dog park, a children’s playground, a water sculpture, an area for games and much more.

Tuesday, October 20, 2009

Dallas City Council approves subsidy packages for Deloitte, Continental Building

By RUDOLPH BUSH / The Dallas Morning News rbush@dallasnews.com

The Dallas City Council approved two major subsidy packages Wednesday aimed at drawing workers and residents to downtown.

A $17.5 million tax-increment subsidy was approved for Cleveland-based developer Forest City to restore the vacant and decaying Continental Building on Main Street.

And the council voted unanimously to provide a $2 million grant to accounting giant Deloitte in exchange for the firm's agreement to move 470 employees from Irving to an office at Chase Tower in downtown Dallas.

In 2005, Forest City received $68 million in city subsidy, mainly for redevelopment of the Mercantile Building, which has since become one of downtown's largest apartment complexes.
The deal became one of the richest tax subsidy packages in Dallas' history but proved to be too little to restore both the Mercantile and the Continental as intended.

So the council returned to the subsidy table for the Continental on Wednesday, with the hope its redevelopment will bring downtown more of what it desperately needs – residents.

The $17.5 million in tax increment money – paid out over many years – will be used to help repay federal loans Forest City also needs for the deal.

Tax increment is a portion of property tax money the city sets aside in a specific area as property values rise.

Most of the tax increment raised for the Mercantile and Continental deals comes not from downtown but from growth funded through private investment in Uptown.

Council member Ann Margolin was alone in voting against giving more subsidy money to Forest City.

She said that while she believed the deal was a good one, she wanted the city to study how it doles out tax-increment funds and whether they might better be used for other projects.

"We are on a course that is going to use up the [tax-increment] money pretty quickly," Margolin said.

Mayor Tom Leppert, along with the rest of the council, said the deal was important to keeping downtown's redevelopment momentum going.

Leppert said he expects that, eventually, the city will not have to provide subsidies for downtown redevelopment.

"Clearly, we're dealing with some challenges that weren't invested in long ago. We're trying to kick start that," Leppert said.

Deloitte's move

In the day's second subsidy deal, the grant to Deloitte, to be paid in four installments from 2011 through 2014, requires the company to maintain at least 1,111 employees in the Chase Tower office.

Margolin said she voted for the deal because it makes good business sense for the city.
"The economic model is very conservative and shows over 10 years the employees should bring about $8 million to the city," she said.

Many at City Hall hope the benefit becomes much greater over time.
Deloitte plans a $20 million renovation to its downtown offices, Assistant City Manager A.C. Gonzalez said.

An investment like that suggests the firm may be thinking of making Dallas a major regional headquarters, if not something more.

Southern Dallas plans

The council deferred action on a zoning and development plan for neighborhoods around the University of North Texas campus in far southern Dallas.

The plan, devised around new urbanist principles of walkability and connections to rail lines, is intended to define how the area around UNT will grow in coming decades.

City Hall has high hopes that its plan will spur strong urban neighborhoods centered around stations on DART's planned Blue Line.

UNT's Dallas campus is expected to support 25,000 students and thousands of faculty and staff members.

The school should be a strong impetus for growth in one of the few areas of Dallas that still has large open stretches of developable land.

But council member Tennell Atkins, who represents the area, said he had concerns about elements of the development plan and asked that it be returned to council's economic development committee for a hearing on Dec. 9.

Specifically, Atkins is worried about a provision that prevents the covering of creeks and streams. He said that could affect construction of the planned DART lines.

He also said work needs to be done on requirements governing building height and setbacks from the street.

Nearly 250 Dallas-Fort Worth commercial properties facing foreclosure next month

By STEVE BROWN / The Dallas Morning News mailto:Newsstevebrown@dallasnews.com

A McKinney mixed-use development tops the long list of North Texas commercial properties scheduled for foreclosure next month.

The Times Square at Craig Ranch complex includes four levels of apartments and retail space and is located at 7951 Collin McKinney Parkway.

Bank of America, which loaned $44.48 million on the project in 2006, said in legal filings that it plans to sell the property at the November 3 foreclosure auction in Collin County, according to information collected by Foreclosure Listing Service.

The McKinney development is the most expensive of almost 250 commercial properties scheduled for foreclosure next month in the Dallas-Fort Worth area, according to Addison-based Foreclosure Listing Service.

A Telecom Corridor office building $27.75 million in debt at 2350 Lakeside Blvd. in Richardson is also set for foreclosure in November. Wachovia Bank provided the mortgage on the 24-year-old building in 2007, according to the filings.

And Compass Bank has filed to foreclose on a warehouse at 2200 Big Town Blvd. in Mesquite that has $25.7 million in debt.

The D-FW commercial property foreclosure postings for November add up to more than $482 million in debt.

So far this year, almost 2,000 commercial properties in Dallas, Collin, Tarrant and Denton counties have been posted for foreclosure, according to Foreclosure Listing Service.

Thursday, October 15, 2009

Hike & Bike Trail to Connect Baylor/E. Dallas to White Rock Lake

Construction Begins on Phase One of the Santa Fe Trail

Friends of The Santa Fe Trail

Dallas, Texas Oct 15, 2009 This month, the City of Dallas officially kicked off construction of Phase One of the Santa Fe Trail, a recreational pathway traversing through East Dallas' cultural and natural landmarks. The section of the Trail now under construction begins at the south end of White Rock Lake and continues toward Woodrow Wilson High School. A great deal of progress is evident from East Grand Ave to West Shore at Lindsley Park.

"It is a great milestone to see dirt moving on this section of the trail," said Chris Angarola, Chairman of the Friends of the Santa Fe Trail. "As Dallas becomes a more pedestrian oriented city, the availability of an extensive recreational and commuter trail system is vital. The Santa Fe Trail we hope will mature into a critical piece of this city-wide link, connecting East Dallas to Downtown in a sustainable, socially conscious and enjoyable manner."

The City of Dallas and the Texas Department of Transportation have dedicated close to five million dollars to-date to establish the Trail. An initial two mile section now connects Randall Park near Woodrow Wilson High School to Hill Street. Near S. Hill Avenue, the trail will connect to the DART right-of- way, connecting Fair Park and Baylor. Plans for the trail also include a pedestrian bridge over Garland Road, as well as a long-term vision of a connection to the Central Business District.

Summary of construction:

constr phase 1Phase One - Current construction of a paved trail from White Rock Lake to Woodrow Wilson High School near Glascow. Construction began in October 2009 with expected completion in January.

Phase Two - Phase two was completed in April 2009 with a paved pathway from Woodrow Wilson to Deep Ellum. Landscaping, public art and other amenities are being planned.

Phase Three - With authorization given last summer for extension, Phase Three will continue the Trail from Deep Ellum to Fair Park and Baylor, with a long-term vision of connecting to a trail system that extends to the Central Business District.

About Friends of Santa Fe Trail

About the Friends of the Santa Fe Trail: Our mission is to bring value to our community by bringing neighbors together, encouraging healthy lifestyles, improving the quality of life, increasing usable green space, and providing alternative commuting options through quality sustainable development that reflects the unique qualities of East Dallas. We want our neighbors to get fit, get connected, and get involved.

Website: http://www.friendsofsantafetrail.org

Friends of Santa Fe Trail

Chris Angarola

Media Contact

email: info@fosft.org

phone: 214.909.9961

Wednesday, October 14, 2009

Deloitte may move most of its local offices to Chase Tower in downtown Dallas, mayor says

By SHERYL JEAN / The Dallas Morning News

The lengthy courtship of accounting giant Deloitte LLP's growing local offices could be coming to an end soon – with downtown Dallas as the winning suitor.

Dallas Mayor Tom Leppert confirmed Tuesday that Deloitte has agreed to consolidate its Dallas-area operations in its existing office at Chase Tower contingent on City Council approval today of $2 million in economic development incentives. The company also had been considering Irving.

If Deloitte stays in Dallas and adds to its more than 800 employees, it will be another coup for a city that has worked hard to attract blue-chip corporations to help revitalize downtown. Companies such as AT&TCorp., Comerica Bank and Tenet Healthcare Corp. have moved their headquarters to downtown in recent years.

A spokeswoman for New York-based Deloitte said it's premature to discuss its plans.

"We are weighing several alternatives, carefully considering what would make the most sense for our employees, allow for the continued growth we expect throughout the region and help enable us to best serve our clients," said Deloitte's Melissa Norcross Wolf. "We expect to announce a final decision within the next several weeks."

Leppert said Deloitte has not yet signed a lease, but he's confident the company will finalize a lease to consolidate nearly all of its North Texas operations in its existing 150,000 square feet at Chase Tower.

An official with Hines, which owns Chase Tower, declined to comment.

Leppert likened the retention of Deloitte to a new company moving here.

"Clearly, it's a big employer we're retaining, but I think the more important aspect of it is the addition of jobs," Leppert said. "It's pretty hard to come up with another employer that's bringing 450 new jobs. And those are great jobs."

The average Deloitte salary is $100,000, according to a city report to the Dallas City Council Economic Development Committee obtained by The Dallas Morning News. The report estimates that Deloitte would generate an economic impact of more than $3.5 billion to Dallas over 10 years. That impact includes salaries, taxes and spending by employees and clients.

Irving Mayor Herbert Gears said Tuesday that he had "been under the impression for some time" that Deloitte would stay in downtown Dallas after it looked at several sites in his city.

Deloitte employs nearly 500 people at Las Colinas Corporate Center.

Deloitte looked at several Irving sites, including the new Las Colinas Station project, Gears said. Irving did not offer special incentives to Deloitte, but the city helped Las Colinas Station's developer with garages and other public spaces, he said.

If approved, Dallas' proposed $2 million economic development grant would require Deloitte to employ at least 1,111 people at Chase Tower and make $19.9 million in tenant improvements by Dec. 31, 2011. The job creation shouldn't be a problem for Deloitte, which the city estimates would employ 1,420 people at the downtown Dallas office by 2011.

Deloitte plans to add to its already large North Texas footprint by building a $300 million national training center in Westlake. Deloitte received $4.4 million in grants and property tax abatements over 10 years from Westlake and Tarrant County. Construction is to start later this month.

Deloitte's decision to stay downtown would "speak volumes" about the progress in revitalizing the city center, said John Crawford, president of the DowntownDallas economic development group, which also has offices at Chase Tower. The $354 million AT&T Performing Arts Center, which includes the Winspear Opera House and the Wyly Theatre, opened Monday.

"The economic development impact for downtown is enormous, and, frankly, I think this retention ranks side by side with AT&T and Comerica moving their headquarters to the central business district," Crawford said. "This is a sure sign that the central core of our city has firmly turned around."

It makes sense for Deloitte to remain downtown because all the other big accounting firms are there or in Uptown, said Phil Puckett, a real estate broker for CB Richard Ellis.

Downtown office leasing activity fell nearly 80 percent in the third quarter as fewer companies have relocated and existing firms have downsized or closed during the recession. The vacancy rate for Dallas' central business district rose to 29 percent as of Sept. 30, the highest in four years, according to Cushman & Wakefield of Texas Inc.

Friday, October 09, 2009

DFW APARTMENT DEMAND UP; OCCUPANCY, RENTS DOWN

North Texas apartment occupancy fell in the third quarter, as did its average rent when compared with October 2008 figures, according to Carrollton-based MPF Research Inc.
The apartment analyst firm reported a 4.1 percent decrease in Dallas’ average apartment rent to $772 between third quarter 2008 and 2009. Fort Worth experienced a 2.1 percent fall to $686 during the same period.
North Texas apartment occupancy came to 89.9 percent at the end of September, down from over 93 percent a year ago.
However, Dallas–Fort Worth net leasing during the third quarter increased for the first time in a year by 2,770 units.
With an estimated 17,576 apartments under construction at the end of September, about 8,500 apartments are set to open by the close of 2009.
Elsewhere, Austin’s average rent fell 6.8 percent to $829, Houston rents fell 2 percent to $783 and San Antonio rents fell 0.7 percent to $725.
BRUTON BUYS BRUTON OAKS

KV3 Bruton LP has purchased the 304-unit Bruton Oaks Apartments from LNR Property Corp.
The Class-C property is at 9901 Bruton Rd.
The transaction was negotiated by Transwestern’s Dallas office.
NORTH TEXAS HOUSING SHORTAGE IN 2010?

Even with new home sales in North Texas continuing to slow, cutbacks in new home construction over the past couple of years could result in a new-home shortage come 2010.
Builders have sold almost 13,000 more houses than they have started over the last two years, causing inventory to drop below 5,000 units, which is about a three-month supply. Compare that with the more than seven-month supply of new homes for sale in the United States as a whole.
"For homebuilders to maintain their current sales pace, they are going to have to start 30 or maybe 40 percent more homes than they are starting today," said David Brown, who heads the Dallas office of real estate analysis firm Metrostudy Inc.
Dr. Jim Gaines, research economist with the Real Estate Center at Texas A&M University, said he thinks prospects for builders to get funding for new-home construction are "severely limited, bordering on nonexistent.
"Some of the local regional banks that don't have significant existing exposure may be willing," Gaines said, "but what we're hearing is that most of the major institutions don't want to do anything."
Sales of new homes in the DFW area fell 34 percent between third quarter 2008 and the same period in 2009, with 4,163 transactions, housing analyst firm Residential Strategies reported Wednesday. - DMN & Globest

Monday, October 05, 2009

Apartments the only private-sector project under construction in Dallas Arts District


STEVE BROWN/Staff The Arts Apartments by Jefferson is the only private-sector project being erected in the Arts District.


The one private-sector development being built in Dallas' Arts District won't open until next year. The Arts Apartments by Jefferson is under construction at Ross Avenue and Routh Street.
The six-story apartment building is next door to the One Arts Plaza tower and across the street from the new AT&T Performing Arts Center. The Arts Apartments by Jefferson is the only private-sector project being erected in the Arts District.


Developer JPI Inc. has been working on the project since mid-2008.

"There are 228 units, and it will be completed by summer 2010," said JPI's Brad Taylor. "The Arts has a superior location, being located within the Arts District, and has generated a lot of interest from the community."

JPI officials say it's too early to say how much the apartments will rent for.
Designed by Atlanta-based Preston Partnership, the rental project will be clad in a combination of white, gray, blue and rust-colored stucco.

Arts District Development Delayed

Museum Tower developer John Sughrue has been waiting for more than a decade for the vision of the Dallas Arts District to become a reality.

But as the Oct. 12 opening of the AT&T Performing Arts Center draws near, marking the Arts District’s coming-of-age, Sughrue’s long-planned 42-story, 123-unit Museum Tower condo project faces its own frustrating reality: Frozen credit markets are preventing the developer from getting the nine-figure loan he needs to get the $200 million project off the ground.

“We’ve been on the site for 13 years now, and we’ve been waiting for the Arts District to transform into a truly great neighborhood,” said Sughrue, CEO of Dallas-based real estate development and investment firm Brook Partners Inc. “It’s done that. Now we’re waiting for the banking system to heal itself so we can launch the project.”

Other developers with projects in the Arts District find themselves in a similar position, says John Crawford, president and CEO of business group DowntownDallas.

“Certainly the completion of the Arts District is going to expedite people’s interest in doing development downtown,” Crawford said. “Most of the commercial projects are going to be predicated on the financial markets loosening up, and for office buildings, on getting tenants.”
Developer Craig Hall of Hall Financial Group is planning a $120 million mixed-use tower in the block bounded by Flora, Crockett and Leonard streets and Ross Avenue. The plans call for about 430,000 square feet of office space and 30,000 square feet of ground-floor retail space.

Hall acquired the site, which has a large parking garage on it, in 1995. The city has approved a $9 million Tax Increment Financing incentive to encourage Hall to build the tower. To get the incentive money, Hall must start construction by the end of 2012 and get a certificate of occupancy for the project by the end of 2015.

Like Sughrue, Hall is waiting for the credit markets to improve.
“I would love to do that building,” Hall said. “My guess is it will be a 2011 or 2012 start. It’s just so hard to tell with the economy. The market is very tough.”

Hall and other area developers are excited about the completion of the Wyly Theatre and the Winspear Opera House, which will be dedicated in Oct. 12 ceremonies. The openings are being celebrated as the official completion of the cultural/institutional components of the Arts District, although one key piece — the City Performance Hall — is not yet complete.

“I think (the near completion of the Arts District) is just going to be fabulous for private development,” Hall said. “It’s a nice thing for the community and we expect to be part of it as soon as it’s possible.”

Projects unfolding

One private project already completed, in early 2008, is developer Billingsley Co.’s One Arts Plaza, a $150 million, 24-story, 1.1-million-square-foot mixed-use project at Routh and Flora streets.

The company plans two more buildings, called Two Arts Plaza and Three Arts Plaza, each of which will be of similar size to the initial building, said Michelle Carrig, director of marketing for Carrollton-based Billingsley Co.

About 80% of the 61 condominium units at the top of One Arts Plaza have sold, and the 10 floors of office space in the building are fully leased, with major tenants including 7-Eleven Inc. and law firm Thompson & Knight LLP, Carrig said. The project also has five restaurants on its ground floor.

The 22-floor Two Arts Plaza will be just north of One Arts Plaza at Routh Street and Woodall Rodgers Freeway. It will include 50 condos on the top floors over office and retail space, along with an urban park in front.

Construction on Two Arts will begin as soon as Billingsley Co. lands a lead corporate tenant willing to lease 100,000 square feet or more, and construction will take about two years, Carrig said. The company will start selling condos in Two Arts as soon as the lead office tenant signs on, she said.

“We have finalized the architecture and we’re pretty much ready to go,” she said. “The thing we’re waiting for is a tenant and financing. We think that will take some time, but things will come back around.”

Plans for Three Arts Plaza, to be built on what now is a surface parking lot east of Two Arts, are more fluid. Conceptual drawings call for a 25-floor tower that’s thinner than One Arts. The building may be a hotel or more office space, Carrig said.

“The market will dictate what it is,” she said. “We’ll wait to see what Dallas beckons.”
It’s not lack of financing, but lack of demand for condos and hotel rooms that’s stalling a project planned along Flora, between Olive and Pearl, said Graham Greene, president of Metroarts Corp., the entity that owns the land. Another entity would probably do the development, although that has not yet been determined, according to Greene

Greene plans a mixed-use development with a boutique hotel, condo and retail space, although the cost and scope of the project will be determined later. He envisions 80 to 150 condo units, 80 to 125 hotel rooms and about 60,000 square feet of space for restaurants, galleries, florists and similar retailers. The project is tentatively being called 2121 Flora, which is the property’s address.

The near completion of the Arts District’s cultural institutions is a positive development, but it isn’t enough to move 2121 Flora off of indefinite hold, Greene said.

“It just wouldn’t be very intelligent to try to do this at this time,” he said.
Plans are even less clear for a surface parking lot south of Ross Avenue between Leonard and Routh streets. Dallas-based real estate investment and management firm Spire Realty Group LP has acquired approximately 8 acres there over the past 10 years, said Jon Ruff, senior vice president.

“I can’t say anything about it yet,” he said. “We’re working on plans. It will be a significant project, in keeping with its location.”

The timing of whatever Spire decides to do with the property will be driven by the market, Ruff said. The firm, which owns the 1.1-million-square-foot Bryan Tower office building in downtown Dallas, owns and manages all of its projects, he said. In addition to office buildings, Spire has been involved in condo, apartment, hotel, retail and parking projects, he said.

Development forecast

A 2006 study of the developmental impacts of the Dallas Center for the Performing Arts found that rising land values in the area suggested the market was ripe for development. The study looked at changes in market value of commercially zoned land for certain properties along Olive and Pearl streets and found that those values increased by 17% to 49% between 1999 and 2005.

A look at the values shows even more dramatic increases since then, with land values for the same properties along Olive and Pearl soaring by 67% to 143% between 2005 and 2009, according to the Dallas Central Appraisal District.

Getting the right mix of development in and around the Arts District is critical to the district’s long-term success, said Veletta Forsythe Lill, executive director of the Dallas Arts District. Lill’s job is to market the district as a whole.

“We are coming close to reaching our critical mass of cultural institutions,” Lill said. “Now we need a critical mass of residential and retail.”
Beyond projects in progress, long-term implications of the Arts District’s completion on commercial development are hard to determine, said Bernard “Bud” Weinstein, an economist with the Cox School of Business at Southern Methodist University.

“Does the Arts District spur residential development, does residential development spur the Arts District and how do those affect office and retail? Only time will tell,” Weinstein said. “The different components feed off of each other.”

More than 20 of Museum Tower’s condo units, which start at $1.4 million, are presold, showing strong demand to live there, Sughrue said. That demand makes him believe that the tower will be among the first major commercial real estate projects nationwide to find financing once the credit markets rebound, he said. After the project gets started, construction will take about 30 months, he said.

“It’s an epic project,” Sughrue said. “It’s been an adventure getting here and there’s plenty of adventure in our future, but it’s a worthy project and it’s going to be a great addition to the Arts District.”

Bill Hethcock

Friday, October 02, 2009

D-FW office leasing slide continues

The Dallas-Fort Worth office market continued to soften in the third quarter, according to a new report by Delta Associates.

The area's office market recorded negative 1.3 million square feet in absorption, compared to a positive 1 million square feet in the first half of 2009. Absorption measures the net change in occupied space.

Overall office building vacancy climbed to 17.7 percent in the third quarter, rising from 16.9 percent at mid-year and 17 percent a year ago, according to the report from Delta Associates, the research affiliate of commercial real estate firm Transwestern.

Office rents declined slightly during the third quarter and have slid 4.3 percent year-to-date.

Robert Deptula, principal in the Dallas office of Transwestern, called it "the greatest tenant market since the early 1980s."

Deptula said it feels like the market is improving, albeit slowly.

"Based on the number of tours and phone calls and requests for information, it certainly seems like tenants are getting focused on their real estate requirement, and that's slowly starting to translate into some closed deals," he said.

On the development front, 2.8 million square feet of office space is under construction or renovation, dropping from 4 million square feet at mid-year and 6.8 million square feet a year ago. About 60 percent of the space is pre-leased, compared to 46 percent at mid-year and 52 percent a year ago.

Investment sales volume plunged to $162 million through the third quarter of 2009, compared to $1.5 billion during the same period a year ago. These numbers are devastating that is a 89% reduction in investment sales in one year!!



Dallas Business Journal

Thursday, October 01, 2009

Texas cities tops in home sales

We keep hearing that the economy in Texas is doing better than the rest of the country. Eye popping proof of this comes in the latest list of the country's top new home sales markets. Houston and D-FW lead the pack by a wide margin, according to analyst Metrostudy Inc. Even more startling is that the current rate of new home sales here is almost twice the start volume. How long can that last?

RankMarket2Q09 Annual New Home Closings
1Houston25,577
2Dallas-Ft. Worth21,573
3Phoenix17,432
4Atlanta17,144
5Chicago16,573
6Orlando16,036
7Maryland9,643
8Charlotte9,607
9Inland Empire9,449
10Austin9,406
Steve Brown/DMN