Wednesday, March 27, 2013

Majority Agree: Glare is a Problem


In a fairly close race, 79 of you said the Museum Tower glare is a problem versus 55, who said not so much. It started in the fall of 2011, as the tower's curtain went up; folks at the Nasher Sculpture Center began to notice the reflections into the museum. Finger-pointing and bad feelings followed. (This is how the Hatfields and McCoys got started—barbed wire reflections on the chicken coop.)

Museum Tower leadership has ongoing studies on the effect of the glare, and the stand-off continues as marketing for the residences fires up. Here are some of your comments:

"If you've visited the new deck park, you may have experienced the burn from the glass firsthand."
"Get over it, like the sun doesn't glare on EVERYTHING in its path!"
"All glass buildings produce glare, and most office buildings are glass, so downtown areas of any city are going to be subject to glare. The Museum Tower people have offered a sensible solution to fix the Nasher's roof system at no cost to the Nasher."
"The roof of the Nasher was designed to reflect light in a way that would showcase the art that would be displayed. The glare from Museum Tower negates the entire design and function of the roof."

Cushman & Wakefield senior managing director Mark Dickenson (left, with colleague Bill Brokaw) says he's not taking sides. His take: I expect that the economics of the situation will force a solution and they'll find common ground soon. It's disappointing to see the negative publicity regarding the glare. Museum Tower is a downtown landmark and will be a wonderful showcase for the live, work, play dynamic in the Dallas CBD. It's a real focal point for a larger renaissance that is changing the city and improving the quality of life.

Capital Hunts For Medical CRE


As healthcare systems evaluate space needs, there's plenty of money out there, according to our panel of experts at last week's Bisnow Healthcare Real Estate Summit. Newmark Grubb Knight Frank's executive managing director Todd Perman says real estate investors are hungry for healthcare properties. But there's not a huge supply to buy. "There's a lot of gunpowder on the sidelines," Todd told our audience in Atlanta. (Maybe they can infill all the old Border's locations and do all their vaccinations in the music section.) Todd says 2013 saw more than $22B in capital raised for MOB and healthcare facility investments.

Bull Realty partner Paul Zeman says we could be on track for $7B in transactions this year, topping $5B last year. And interest for off-campus medical properties is heightening—and shown in cap rates, which are compressing into the low 7% range. And with rental rates increases this year, Paul says, "I think everything is trending in the right direction."

Rendina Cos's EVP Todd Varney says with the cost of capital still low, he sees more hospitals and healthcare system reevaluating development projects, especially off-campus, that were shelved earlier. (Like that book you never had time to read, but now the movie is coming out, so you have to.)

REITs Will Boom


What to do with those assets from the heady (lax) underwriting days of '02-'07? As closed-end funds sell off their portfolios, REITs with deep public pockets will be the likely beneficiary.

NAREIT SVP Brad Case tells us REITs will beef up their market share for the next few years. (Right now, they control 15% of US real estate.) Although most people think growth comes from IPOs, he says most expansion will be through acquisitions by existing firms. A huge opportunity: As 10-year funds shut down and sell off their portfolios, REITs will be well-positioned to buy them. And since most other groups don't have access to capital, limited competition means they'll get good prices. What's limiting IPOs? Although everyone would love to be a REIT, most private funds don't have the capital structure to pull one off.

The Deal Sheet


SALES
Calif.-based Xebec Realty Partners and CT Realty Investors acquired a 530-acre tract in the South Dallas Intermodal Hub (east of I-45 and half a mile from the gate of the Union Pacific Dallas Intermodal Terminal). They plan to build almost 9M SF of big box distribution and e-commerce logistics buildings, ranging from 500k SF to 1.5M SF each, as well as spec and built-to-suit Class-A logistics buildings. The venture is repped by CBRE's David Anderson. CBRE will handle leasing, sales, and other support services.

***

Tight-lipped on the buyer and the price, ARA's Brian O'Boyle Sr, Brian O'Boyle Jr, and Brian Murphy repped the seller of the 208-unit Broadstone Stonebriar. The Class-A multifamily project was built in 2010 and was 92% occupied at sale time.

***

Transwestern's Todd Hawpe negotiated two sales: D&M Custom Homes' purchase of 62k SF of land at 2873 Tinsley in Fort Worth and Cooperstown Cages' purchase of 95k SF of land at Business Hwy 287 and Tinsley Lane in Tarrant County.

***

JM Miller Properties purchased almost 16k SF at 600 E Centre Park Blvd in DeSoto. Transwestern's Nathan Rylander repped the purchaser.

***

Carter Validus Mission Critical REIT acquired a 61k SF hospital property in Grapevine for $23M. The property is 100% leased to Ethicus Hospital-Grapevine, pursuant to a long-term, triple net lease.

***

McRoberts & Co's David Tarrant and Andrew McRoberts repped the land owner in the sale of a 24-acre tract in Fairview to Davis Development, which plans to build a 268-unit, Class-A apartment community on the site. This will be the second community in Fairview by Davis Development.
ON THE MARKET


The CBRE Strategic Partners U.S. fund put Metroplex office towers, totaling 1.4M SF, on the market: The Urban Towers, The Point at Las Colinas, and Interchange Office Center. The local buildings are part of a portfolio of five properties, including one in Chicago and one in Atlanta. The portfolio is debt-free, a CBRE spokesperson tells us, which should allow an investor to take advantage of the low interest rate environment. Just a few weeks ago, another CBRE fund put Preston Commons and Sterling Plaza on the market, too.


LEASES
Transwestern worked several leases:


  • JCM Holdings leased almost 28k SF at 151 Regal Row in Dallas. Clint Riley, Greg Cannon, and Tim Veler repped the landlord.

  • Morgan Development and Supply leased 60k SF at 3715 Avenue E in Arlington. Jim Hazard and Brad Struck repped the tenant.

  • Advantage Aviation Technologies II leased 60k SF at Stemmons Industrial Center 12 in Dallas. Greg and Tim repped the landlord. Clint and Jeff Givens repped the tenant.

  • Masterguard leased 16k SF at 825 Sandy Lake Rd in Coppell. John Fulton and Brett Owens repped the landlord.

***

Stream Realty worked multiple deals, including:


  • Wasserstrom signed a new 87k SF lease at 2801 S Shiloh in Garland. Jackson & Cooksey's Mike Quick repped the tenant. Seth Koschak and Ryan Wolcott repped the landlord, DRA Advisors.

  • ZS Pharma signed a 26k SF lease at 508 Wrangler in Coppell. Blake Kendrick and Jeremy Kelly repped the landlord, PacTrust.

  • Let's Talk at The Hills renewed its 14k SF lease at 6341 Grapevine Hwy in North Richland Hills. Tommy Nelson and Kendall Cramer repped the landlord. The tenant was repped by Newmark Grubb Knight Frank's Mitch Wolff.

  • RR Donnelly signed an 82k SF lease at 4255 Patriot Dr in Coppell. Cannon Green and Blake Kendrick repped the landlord, DCT Industrial. CBRE's Nathan Lawrence repped the tenant.

5 Reasons You Should Buy a Warehouse


Move over, multifamily—industrial may be the next growth wave. PPR senior real estate economist Shaw Lupton has been advising institutional investors to get into the sector, and he tells us why.

1) Demand

Dallas' modern product (post-1990 and over 100k SF) netted 7.8M SF of positive absorption last year. That brought us to 9% vacancy, and Shaw expects a slight increase in absorption this year. Nationwide, 2012 was a sluggish year but ended on a strong note with net 78M SF absorbed (in line with 2011). Q4 set a record for US warehouse demand. He expects this year will look slightly stronger (but not by a lot thanks to economic headwinds).

2) Ability of supply to shut down quickly

Coupled with strong demand, almost nothing is under construction now. 2M SF is under way in Dallas, but more than half of that is pre-leased. Last year saw negative net completions nationwide, as the pace of space removals more than offset deliveries. This year is ramping up with 35M SF in the ground, but that's only 0.3% of inventory. (And 55% of it is BTS.) That's barely up from the trough and well below the last cycle, when we added 1.5% annually. He expects construction will ramp up rapidly over the next year or two as rents increase. But in the meantime, there's a great window where investors can benefit.

3) Outsized rent growth

Net asking rent in Dallas rose 4.6% last year, and Shaw expects about 3% or 4% growth this year. Things aren't looking as bright nationwide: We're 8% below the long-term trend. But that means a significant upside in asking rents today.

4) Below replacement cost… everywhere else

Nationwide, overall pricing per SF is 12% below the long-term trend. In Dallas, transaction prices are actually clocking in above their long-term trend. That means it's going to be tougher to find deals on existing space, but it should be easier to make development pencil out. Glass half full, right?


5) Cash yields

Industrial yields are some of the highest of the four main food groups. Although warehouses may seem a little pricey, they're worth it, thanks to strong fundamentals. Warehouses aren't known for their growth, but Shaw's tracking 3.8% yields (after adjusting for below-the-line expenses). That's about 23% better than office yields, which is driving players from other sectors into the industrial arena. (Which is why every industrial building now comes equipped with a water cooler.)

FedEx Distribution Center Planned


Lindale Economic Development Corp sold an almost 18-acre site in Lindale Industrial Park to Tyler FXG, a subsidiary of Kansas City-based Jones Development, with plans to build a 163k SF distribution center for FedEx Ground. MW Builders of Temple will serve as the GC. Construction will start immediately it's slated to open July 2014, says City of Lindale EDC prez John Clary (here, with city councilman Bob Tardiff at the ICSC event in Dallas last fall.) The new distribution center will replace two existing faciltiies nearby and is part of FedEx's nationwide network expansion to boost its daily package volume capacity and enhance the speed and service capabilities.

Monday, March 25, 2013

“Spring Has Sprung” at Klyde Warren Park


“Spring Has Sprung” at Klyde Warren Park


What:             “Spring Has Sprung” at the Park: Klyde Warren Park will host a spring event on Saturday, March 30. Plans include:

·         12:00 – 3:00 p.m. Face painting
·         12:00 – 5:00 p.m. Kids crafts
·         2:00 – 5:00 p.m. Easter bunny photos: A suggested $5 donation benefitting Friends of Wednesday’s Child will be accepted for photos with the Easter bunny.
·         2:00 – 5:00 p.m. Balloon artist
·         3:00 – 5:00 p.m. Bunny petting zoo
·         12:00 p.m. Music by C.W. Ingram
·         1:30 p.m. Music by Dan O’Connell
·         3:00 p.m. Altius Quartet presented by Bridge the Gap Chamber Players
·         4:30 p.m. Music by Michael Prysock

Additional programming is being added throughout spring, including new fitness classes, music series and educational opportunities. For a full schedule of events, visit www.KlydeWarrenPark.org.     

Who:               Free and Open to the Public.

When:            Saturday, March 30 from 12 to 5 p.m.

Where:          Klyde Warren Park

About Klyde Warren Park
Klyde Warren Park serves as a central gathering space for Dallas residents and visitors to enjoy in the heart of the city. The 5.2-acre deck park, designed by the Office of James Burnett, creates an urban green space over the existing Woodall Rodgers Freeway between Pearl and St. Paul Streets in Downtown Dallas. The park includes a performance pavilion, restaurant, shaded walking paths, a dog park, children's park, great lawn, water features, and an area for games providing year round activities. For more information on programming, volunteering or donations, please visit www.KlydeWarrenPark.org or call 214-716-4500.

Saturday, March 23, 2013

13 for 2013 - Trends to Watch


LOS ANGELES- Love him or hate him, Barack Obama hit on some important CRE issues during his State of the Union addressand we discussed the coincidence this morningNow here are 13 main trends to watch for in 2013, as delineated by Jon Southard, director of forecasting for CBRE Econometric Advisors and his team.

Trend 1) Housing Will Finally Provide a Boost for the Economy. Given the sector's tough recent years, it is understandable that folks might hold out little hope, say the researchers. "Indeed, many headwinds remain," they point out, "in particular, shadow supply. Yet, the majority of housing markets are recovering, and although previous hints of recovery wound up being false starts, national statistics are now lining up in a way that makes the gains look more permanent."

Trend 2) Cap Rates Will Remain Steady. Expect rates to stay flat, say the folks of CBRE, who point to what they call the Fed's "loose monetary policy and the resultant low interest-rate environment." Fundamentals on a local level are expected to continue their slow and steady march to recovery, but in the meantime, you'll see their current levels reflected in cap rates. Also, debt availability will follow the same trajectory, "which will further assist in holding cap rates relatively unchanged."
  
Trend 3) Immigration Comes off the Back Burner. The analysts believe this could "be the year the nation makes some headway in the area of immigration policy. With the US economy in a prolonged slump, it is hard to believe that a labor shortage exists, or that the economy would benefit from increasing the number of work-related visas. But that is precisely the case."
  
Trend 4) Aging Consumers Impact Retail Strategies. Baby boomers are approaching retirement and taking their spending money with them. Seniors, 65 to 74 years old, spend 23% less than younger groups. (They don't say what happens when you hit 75.) That "will mean a significant downward adjustment in overall spending by the end of the current decade." And that shift, CBRE points out, is already taking place.
  
Trend 5) The Elderly Will Rent More. "Growth in the population aged 65 and above is so strong that even with its traditionally high homeownership rate, during this decade the group is likely to contribute more to net growth in rental demand than households under the age of 35," they predict.  
  
Trend 6) High (-Tech) Stakes for Office. Or, technology is breaking up that old office of mine. Miniaturization and mobilization have freed tenants from the bonds of the office. Corporate users are taking that freed-up space out on owners, and, according to CBRE, when development starts up again in earnest they will need to reflect users' drive toward technology.
  
Trend 7) The Comeback of Manufacturing. Increases in productivity might not result in more jobs right away as manufacturing picks up. But, according to CBRE, you will see a boost in the industrial and housing sectors. In the industrial front, more output means more warehousing and manufacturing facilities. In housing, the uptick in consumer confidence will bring about more spending, which means an increased flow of goods.
  
Trend 8) Shifts in Financial Services Jobs. "With the exception of just a few markets," the report said, "the financial services sector does not look like the major engine of economic growth it once was. It certainly seems possible that this era is coming to an end. New York City presents a great example of how changing industry patterns affect office demand at the submarket level: demand in Midtown South, dominated by technology firm activity, is outpacing the neighboring Midtown submarket, where demand for office space is more tied to financial and professional services firms."
  
Trend 9) Shifts from Investor Interest in the Urban Core. The researchers question the theory of a downtown resurgence. While they point to the fact that central urban cores are growing, "the areas outside CUCs and primary central cities are growing faster. 
  
"More important, we found that cap rate differences between CUCs and their markets could not be explained by their respective differences in employment, population or even revenue growth. . .  Investors seem to be paying a premium for CUC assets largely on the expectation that the cap-rate gap with the metros will widen."
  
Trend 10) The 'Burbs will Close the Investment Gap. The analysts question if the so-called urban bias of investors is due to superior asset performance or other factors. "Transaction data from 2012 show that sales volume in suburban areas is picking up, and there is evidence that the total-market-to-CUC cap rate spread will narrow." As a result, CBRE expects the interest in suburban assets to increase through 2013 and well into next year. 
  
Trend 11) The IT Revolution Will Continue to Impact the Supply Chain. E-commerce grew 14% this past holiday season. Expect it to continue, and as it does, "the nation's supply chain will be transformed, bearing on industrial and retail real estate in a major way." As just an example, distribution centers are now increasingly serving the end-user rather than the store.
  
Trend 12) Beware Theme Investing. "Investors brag about their ability to post superior investment performance in a given geographical market," the report states. This is called theme investing and it can hurt. The suggestion is to look at national trends for property cycles, since these can impact market and submarket performance. Pay close attention to market level rental performance. Finally, look for true opportunities to outperform by identifying unique submarket dynamics. In short, leave theme investing behind. 
  
Trend 13) Energy Markets Will Attract Investors. There's really no surprise here, but as the researchers of CBRE point out, "The emergence of the energy industry as a growth driver for the US economy holds great potential for economic recovery over the next year and for office markets where ties to the industry are strongest." Think Oakland, Oklahoma City, Houston and Denver, the experts suggest. 
By John Salustri -globest.com

Friday, March 22, 2013

Developer buys 185 acres in Princeton for large project


Dallas-based 35W Investments LP has bought a 185-acre tract of land in Princeton, which is about 30 miles north of Dallas, for an undisclosed sum.
The limited partnership plans to develop a large residential development on the acreage at the southwest corner of County Road 400 and Sheamar Lane, according to real estate brokers.
Princeton is a rapidly growing community about five miles east of McKinney. The area has seen a 96 percent growth rate between 2000 and 2010, real estate souces say.
Last year, the Dallas Business Journal visited the suburb's school district because it was ranked as a highly-efficient school district by the Texas Comptroller.
CASE Commercial's land services team Bruce Endendyk, John Endendyk and Collin Prater represented the seller, MAS Real Estate. According to the Texas Secretary of State, 35 W Investments is affiliated with Basswood Properties Inc. of Dallas.

Full article at:http://www.bizjournals.com/dallas/news/2013/03/19/developer-buys-185-acres-in-princeton.html

Downtown Dallas’ business roster changes from a century ago — and 20 years ago


This week I was doing some research with antique maps of downtown Dallas that showed the businesses on each block.
About the only familiar name that jumped out at me from those 1885 maps was Sanger Brothers, the legendary local retailer.
Back then, no one had heard of a “department store.” The map says that the Sanger Brothers sold “clothing, hats, gents’ furnishings and retail dry goods.”
Neighboring businesses were identified as farm machinery companies, a wholesale grocer and a livery stable.
More than a century later, downtown Dallas’ biggest businesses are in telecommunication, law, banking and utilities.
And even that’s a big switch from the 1990s, when oil and gas firms and insurance companies were among downtown Dallas’ top employers.
“The complexion has changed enormously over the years, like many other things that have changed downtown,” said John Crawford, CEO of the economic development group Downtown Dallas Inc. “AT&T is now by far the biggest.”
AT&T dominates
And the Dallas-based telecom firm is still growing downtown.
AT&T has about 5,000 workers in its Akard Street headquarters towers.
The company only had about 40 percent of that job total when it relocated the head office from San Antonio to Dallas in 2008, AT&T senior vice president Ronald Spears said this week at a downtown luncheon.
Spears said an additional 400 to 600 AT&T workers will soon be “moving from various parts of the country to the headquarters.”
The increase will make AT&T the largest private sector employer in the central business district and one of the biggest in the whole region.
Downtown Dallas Inc. says other major downtown employers include Bank of America, electric utility Energy Future Holdings, Neiman Marcus Group, Hunt Consolidated, 7-Eleven Inc., Belo Corp. and A.H. Belo Corporation.
Crawford doesn’t have a tally of exactly how many workers each firm employs.
“The numbers are constantly changing, and people hedge on them,” he said.
Law firms and major accounting firms KPMG and Deloitte are also substantial corporate employers downtown, Crawford said.
Oil and insurers
If you had counted heads a few decades ago, the makeup of downtown’s office tenants would be much different.
The huge oil companies Mobil and Atlantic Richfield had thousands of workers here.
And insurers including Southland Life and Union Fidelity were right behind them in central city workers.
Some of those companies bolted to the ’burbs in the 1990s. Others have left town altogether or are no longer in business.
The local bank holding companies that once dominated Dallas’ financial sector and had thousands of employees are long gone.
“We’ve had a lot of cutbacks by major companies,” Crawford said. “People like Blockbuster used to have a lot of people downtown.”

Beacon Investment uses $14.5M loan to buy Uptown office building


Florida-based real estate investment firm Beacon Investment Properties LLC purchased a nine-story, 120,599 square-foot office building at 2626 Cole Ave. near Uptown Dallas with the assistance of a recent $14.5 million loan.
The loan was secured through Morgan Stanley Mortgage Capital Inc. Terms of the deal were undisclosed. According to the Dallas Central Appraisal District, the property is valued at $12.5 million.
The Class A office building sits on 1.44 acres along Cole Avenue east of Cedar Springs Road. It is 96 percent leased with tenants that include Leadership Network, TPF Gas and Red Car.
Holliday Fenoglio Fowler LP represented the buyer, which bought the property from an institutional investor. The previous owner was VRS TA Cole Woodview LP of Dallas, according to county records.
Beacon has 6 million square feet of real estate under management. The investment manager and operator acquires and manages office properties in large metro areas in Texas and the East Coast.

Billingsley to develop office building, roadway at Cypress Waters


Dallas-based Billingsley Co. plans to develop an office building and a four-lane roadway at Cypress Waters, a 1,000-acre mixed-use development in the North Dallas Freeport area.
The office project is part of an $88 million corporate campus at Cypress Waters that developer Lucy Billingsley spoke to me about in November.
Billingsley told me she began marketing the corporate campus based on the demand in the market. In the Las Colinas area, Billingsley Co. is tracking more than 7 million square feet of deals, or corporate relocations.
The three-story, 150,000-square-foot office building will be the first office building developed in Cypress Waters. It is scheduled to begin in July, with an expected completion in July 2014.
Billingsley Co. hired Dallas-based Younger Partners to market Cypress Waters for both speculative and build-to-suit projects.Moody Younger, formerly the market leader for the now-defunct Grubb & Ellis, says the area is in the heart of the region's preferred location for Fortune 500 companies.
Along with the office building project, Billingsley plans to develop a four-lane roadway named Cypress Waters Boulevard that will serve as the corporate campus and town center's main entrance off Interstate 635.
Construction on the roadway will begin in April. It is scheduled to open this October. This fall, three Cypress Waters apartment communities totaling 637 apartments are also scheduled to open to residents.

Downtown Dallas retail space still lagging as residential and office population grows


Downtown Dallas’ new Mercantile Continental apartment building has 203 tricked-out rental units and a posh ground floor lobby lounge and spa.
There’s also 5,000 square feet of store space fronting Commerce Street, just a block from one of downtown Dallas’ new signature parks.
You would think that rounding up a few retail and restaurant tenants for such a choice location would be a snap.
But there’s still twice that much empty retail space across the street in the recently renovated Mercantile National Bank building.
Downtown Dallas has the highest retail vacancy rate of any North Texas business district.
What gives with this?
More than 100,000 people work in the downtown area. And in the last 15 years, developers have added close to 8,000 central business district residential units.
With all those daytime workers and thousands of new overnight residents, why is it still such a heavy lift to fill up a couple hundred thousand square feet of shop space?
That’s about the same retail space as in the largest suburban Wal-Mart Supercenters.
John Crawford, who heads the economic development group Downtown Dallas Inc., blames fractured property ownership, in part, for holding back the area’s retail potential.
“That, coupled with the hit of the recession at about the same time we began to tout legitimate critical mass, have been major factors,” Crawford said.
Glacial pace
Real estate developers and downtown business execs admit they are surprised that the effort to attract more retailers has taken so long.
Jim Truitt, senior vice president with Forest City Texas — which redeveloped downtown Dallas’ Mercantile properties — said his firm targeted some of its shop space in the Mercantile bank building for tenants that would complement the flagship Neiman Marcus store next door.
“With the recession, this was not possible,” Truitt said. “So, we are looking at other ideas today.”
Headington Cos. recently leased several shops near its Joule Hotel on Main Street to several high-end retailers and restaurants.
But even with those successes, retail real estate firm Weitzman Group estimates more than 30 percent of downtown’s shop spaces are empty.
Efforts to bring a high-quality grocer and national name apparel firms downtown have moved at a glacial pace.
“We are starting to get more calls from retailers, and it’s starting to happen,” said real estate broker Jack Gosnell with UCR Urban. “I think we are going to start seeing it trickle in, but it won’t be overnight.”
Gosnell said the housing population in the downtown area is just now getting large enough to justify significant increases in retail space in Dallas’ core.
“If you look at other cities, like Los Angeles, they had to get about 15,000 people before downtown retail takes off,” he said. “To get soft goods retail, you need over 20,000.”
Road to success
Downtown’s retail space would also be an easier sell if building owners took the effort to update some of the properties, Gosnell said.
“A lot of the space downtown just isn’t ready to go,” he said. “It’s archaic, almost archeological dig-type space.
“It has antiquated mechanical systems and storefronts.”
Retailers who are used to breezing into suburban strip malls are put off by the old downtown buildings.
That may be true, but the retail business is all about residential rooftops.
And with 200 more apartments now opening their doors downtown and hundreds more residential units on the way, retailers will eventually be shopping for a downtown location.
“We would classify retail downtown as on the road to success,” Crawford said.

Friday, March 08, 2013

Downtown Dallas’ business roster changes from a century ago — and 20 years ago



Steve Brown







This week I was doing some research with antique maps of downtown Dallas that showed the businesses on each block.
About the only familiar name that jumped out at me from those 1885 maps was Sanger Brothers, the legendary local retailer.
Back then, no one had heard of a “department store.” The map says that the Sanger Brothers sold “clothing, hats, gents’ furnishings and retail dry goods.”
Neighboring businesses were identified as farm machinery companies, a wholesale grocer and a livery stable.
More than a century later, downtown Dallas’ biggest businesses are in telecommunication, law, banking and utilities.
And even that’s a big switch from the 1990s, when oil and gas firms and insurance companies were among downtown Dallas’ top employers.
“The complexion has changed enormously over the years, like many other things that have changed downtown,” said John Crawford, CEO of the economic development group Downtown Dallas Inc. “AT&T is now by far the biggest.”
AT&T dominates
And the Dallas-based telecom firm is still growing downtown.
AT&T has about 5,000 workers in its Akard Street headquarters towers.
The company only had about 40 percent of that job total when it relocated the head office from San Antonio to Dallas in 2008, AT&T senior vice president Ronald Spears said this week at a downtown luncheon.
Spears said an additional 400 to 600 AT&T workers will soon be “moving from various parts of the country to the headquarters.”
The increase will make AT&T the largest private sector employer in the central business district and one of the biggest in the whole region.
Downtown Dallas Inc. says other major downtown employers include Bank of America, electric utility Energy Future Holdings, Neiman Marcus Group, Hunt Consolidated, 7-Eleven Inc., Belo Corp. and A.H. Belo Corporation.
Crawford doesn’t have a tally of exactly how many workers each firm employs.
“The numbers are constantly changing, and people hedge on them,” he said.
Law firms and major accounting firms KPMG and Deloitte are also substantial corporate employers downtown, Crawford said.
Oil and insurers
...
Full article at: http://www.dallasnews.com/business/columnists/steve-brown/20130308-downtown-dallas-business-roster-changes-from-a-century-ago--and-20-years-ago.ece

Downtown insurance firm Lockton Cos. expanding office with new location near Arts District


By STEVE BROWN

Real Estate Editor






Insurance firm Lockton Cos.' told its employees Friday that it will soon be heading to new digs near downtown Dallas' Arts District.
The company has rented four floors in the 2100 Ross office tower at Ross Avenue and Pearl Street.
"It is particularly gratifying to find a great building still in the downtown Arts District which allows us to remain part of this vibrant business community," Lockton's Steve Bohannon said in an email. "Numerous factors went into the decision; concluding 2100 Ross is the best solution for our business, our associates and our clients."
The company is now located in the KPMG Center tower on Harwood Street.
"Our lease at KPMG expires in January 2014, but we are exploring the possibility of moving into our new space as soon as this Fall," Bohannon said.
Lockton said that commercial real estate firms  Transwestern and Lincoln Property Co. advised the company on its new office selection.
Lockton rented its new office space from investor Cousins Properties, which purchased the skyscraper last summer and has a major overhaul of the building is in the works.
Lockton is expanding its downtown office footprint with the move.
...
Full article at: http://www.dallasnews.com/business/commercial-real-estate/headlines/20130308-downtown-insurance-firm-lockton-cos.-expanding-office-with-new-location-near-arts-district.ece
















Downtown Dallas’ office market looking up with new lease deals


By STEVE BROWN
Real Estate Editor
For years, downtown Dallas has been playing a game of Texas hold ’em with the suburbs.
Dallas’ central business district upped the ante with new housing, retail and public parks in an attempt to persuade businesses to stay put downtown and not move to the suburbs.
The efforts are starting to pay off.
Last year was the first time since 2008 that downtown Dallas gained more office tenants than it lost.
Several pending moves to the city’s core will bring hundreds of new office workers. And other major tenants that looked at leaving have decided to hang around now that the future of downtown Dallas is looking up.
“Those lease renewals and new tenants coming downtown are certainly providing an indication that what’s been done is working,” said Jon Ruff, senior vice president of Spire Realty Group.
Spire is scouting the Dallas area for tenants to go in a 21-story tower it plans to construct on the northeast corner of downtown.
“You are going to still see some people leave downtown for neighboring areas,” Ruff said. “But that’s different than going to Far North Dallas.
“I don’t view that as a black eye for downtown.”
In 2012, downtown office tenants leased more than 800,000 square feet of space.
That resulted in a gain in office occupancy of almost 100,000 square feet, according to figures from Cushman & Wakefield of Texas Inc.
The increase follows more than 1 million square feet of declines in leasing downtown starting in 2009.
Notable turnaround
The turnaround may be small, but it’s notable, commercial property brokers say.
“All of this is a good sign for downtown,” said Cushman & Wakefield executive director Mike Wyatt. “Some tenants are going to pay those big rents to be in new buildings in Uptown.
“But some of them are staying right where they are and refurbishing and putting the extra money in their pocket.”
The spread between first-class downtown office space and the handful of new towers planned in nearby Uptown is more than $10 per square foot.
“It’s wonderful to be in a new building, but you have to pay for it,” Wyatt said.
To compete with planned projects, owners of some of downtown’s offices — including the Plaza of the Americas, Patriot Tower and 2100 Ross — are spending millions of dollars on upgrades.
“Landlords are getting creative to add more parking,” Wyatt said. “They are putting in fitness centers and new areas on the first floor for employees.”
The tower remodelings have attracted two new large office employers downtown: architect HKS Inc. and Jacobs Engineering.
And other firms — including Greyhound Corp. — have decided to renew their leases downtown or relocate within the central business district.
Law firms that are downsizing their offices are still the mainstay of the downtown office market, said Tommy Nelson, vice president with Stream Realty Partners.
“Their footprints are getting smaller,” Nelson said. “The 200,000-square-foot tenant is now 110,000 square feet.
“The change in technology has made a lot of their big file rooms and libraries obsolete,” he said.
But the change in downtown is keeping some of those companies from leaving, Nelson said.
“We’ve seen people stay downtown because the revival of Main Street has been so successful,” he said. “They are not willing to double or triple their rates to move six blocks to Uptown.
“And downtown is only going to get better.”
The construction of billions of dollars in new cultural facilities, parks, apartments and retail space may have been key to improving the appeal of the district to businesses.
Parking problematic
...
Full article at: http://www.dallasnews.com/business/commercial-real-estate/headlines/20130228-downtown-dallas-office-market-looking-up-with-new-lease-deals.ece

Friday, March 01, 2013

Trinity Interests' Beverly Heflin flies under the radar

Nearly three decades ago, Beverly Heflin began to build her Dallas-based commercial real estate company — unsure where she’d end up in a male-dominated field. Now, Heflin, founder and CEO of Trinity Interests Inc., says she’s happy with the place she’s carved out in Dallas’ industry. “I like to fly under the radar,” Heflin said. “It boils down to our focus on a niche market we’ve created.” That niche: Trinity Interests focuses on property management for smaller owners with one to 10 office, industrial or retail properties. “So much of our business comes from a long-term relationship with clients,” Heflin ...
Full article at: http://www.bizjournals.com/dallas/print-edition/2013/03/01/beverly-heflin-trinity-interests-inc.html


Staff Writer-Dallas Business Journal

NC Landscape Firm Expands to Dallas Area


IRVING, TX—LandDesign, a Charlotte, NC-based engineering and landscape architecture firm, has expanded its company to include an office here.
The company recently opened an office at 222 West Las Colinas Blvd. in Irving, said Brian Dench, who will head the Texas operations, according to the Dallas Business Journal.
Dench has more than 12 years experience in Texas. The company is the engineer-in-charge for the ongoing development within the 2,500-acre master-planned Castle Hills community in Denton County.


Investors driving home market again in some cities


During the housing bubble, investors played a significant part in overheating home values.
And when all the air went out of the home market, the mortgage companies and ultimately the economy were left holding the bag when the investors bailed out.
Now that housing is picking up steam again, investors are back buying up thousands of homes in North Texas and across the country.
This time, the mortgage companies aren’t taking a risk with these sometimes speculative home purchases.
But that doesn’t mean the surge in home investment won’t have a big impact on the housing market.
Indeed, in many areas of the country, a flood of dollars is driving up home prices and dramatically reducing the number of houses for sale in some cities.
And while most of the purchases are for cash and don’t put mortgage companies at risk, what happens five years from now if many of these investors cash out of their deals?
The numbers are just huge.
Deep pockets
For January alone, the National Association of Realtors estimates that investors purchased about 1 in 5 of the houses sold across the U.S. And in many markets, the share is much higher.
That adds up to more than 55,000 homes snapped up by these buyers. It’s more houses in one month than were sold in the Dallas-Fort Worth area last year.
And in some markets, including Las Vegas and Phoenix, investors have outnumbered owner-occupants in recent months.
Most of the homes the investors are buying are previously foreclosed or distressed properties.
The purchases of these properties by buyers who plan to rent out the homes and wait for property values to rise is a major contributor to the decline in home inventories.
“We are seeing deep-pocket funds buying this stuff on the courthouse steps,” said George Roddy Jr. of Addison-based Foreclosure Listing Service.
Big investment funds with hundreds of millions of dollars in their pockets have shoved aside many mom-and-pop buyers who used to acquire previously foreclosed houses.
In some parts of the country, the investor scramble for homes is causing dramatic inflation in home values.
That’s the case Phoenix, Las Vegas and even Detroit, which have all seen huge spikes in home values in recent months.
Phoenix home prices were up 23 percent in December from a year earlier — more than three times the average nationwide increase.
“They’ve bid away a large amount of profit because of the competition for these properties,” said Mark Fleming, top economist at CoreLogic Inc. “The game is over in Phoenix — they are leaving.
“They are leaving for other places like Indianapolis, which is apparently a hot market now,” Fleming said to a mortgage banking group meeting last week in North Texas. “They are moving around seeking better returns.”
Going for return
With estimated average returns of close to 10 percent, investors have found rental housing a lot more attractive than traditional investments.
These buyers have taken thousands of problem properties out of lenders’ hands and filled them with renters.
And mortgage companies have saved millions by unloading these assets quickly rather than holding the real estate for months or years.
All of that is good stuff.

Steve Brown
Published: 28 February 2013 09:21 PM