Tuesday, January 29, 2008

Shelton developers put most of tower up for sale

Shelton developers retain brokers to market 68 units in a bulk deal
Monday, January 28, 2008
The developers of a North Dallas condo project have decided to put most of the building up for sale to a single buyer.
The owners of the Shelton high-rise in Preston Center have hired real estate brokers to market 68 unsold units in the building.
It's the second time in recent weeks that a Dallas condo developer has decided to opt for a bulk sale.
CB Richard Ellis has been selected to find a buyer for the units in the 105-unit Shelton tower on the Dallas North Tollway just south of Northwest Highway.
About 37 units in the 23-story tower have been sold to individual owners, according to CB Richard Ellis.
"We are hoping that someone will come in and take the bulk of the remaining units," said broker Bill Baxter, who's working with Mark Stymiest, Nita Stewart and Robert Key to market the property.
Built in 1983, the Shelton has been owned by Dallas-based Dunhill Partners since 2006.
The building operated as apartments until Dunhill Partners bought the tower to convert it to condos.
The owners have spent $18 million on renovations including remodeling the lobby and building a clubroom, fitness center, putting green and heated pool with cabanas.
About 25 of the units that are for sale have been renovated, Mr. Baxter said.
"I think there is some upside with this property to do some higher-grade renovations because of the location," he said.
The tower overlooks some of Dallas' most affluent residential areas. According to online real estate sites, condos in the tower are listed at more than $400,000.
Earlier this month, the developers who renovated the historic Lake Cliff Tower in North Oak Cliff said they have hired real estate brokers to find a buyer for more than 30 unsold units.
The owner said a slowdown in sales prompted the move. Frey Young GroupThe 23-story Shelton tower in Preston Center has 68 unsold units. About 25 have been renovated, one broker said. The 105-unit Shelton was built in 1983. By STEVE BROWN / The Dallas Morning News

Sunday, January 27, 2008

Dallas-Fort Worth Job Growth Slowed Last Year, but It's Still Hot

If there's any doubt about the economic slowdown, just look at the Dallas-Fort Worth employment numbers.
Early in 2007, the D-FW area was churning out new jobs at a pace of more than 95,000 a year.
But by December -- the most recent numbers -- the local job gain had fallen to about 65,800.
Even with that big falloff in job growth, the area had one of the hottest employment markets in the country last year.
The economy in D-FW was even stronger than energy boomtown Houston, which had 59,800 more jobs at the end of last month than it did in December 2006, according to the Texas Workforce Commission.
But the deceleration on the D-FW job market is worth worrying about. Job growth is the engine that drives the real estate industry in demand for everything from apartments to office space.
And some economists are warning that the D-FW area will fare worse than other Texas markets, if the national economic slowdown becomes an honest-to-gosh recession.
The recent peak for employment growth here was in 2006, when just over 100,000 new jobs were counted in D-FW.
2008 forecast
Getting a panel of real estate execs to agree can sometimes be a long shot. But prognosticators at the Society of Industrial and Office Realtors' annual forecast session this week were consistent about one thing: 2008 is going to see a slowdown in commercial real estate.
While the local property market isn't out of balance, top commercial real estate execs expect to see some decline in building sales, leasing and construction this year.
''We have some outside forces coming in to affect us,'' said Jeff Turner, Duke Realty's executive vice president. ''I think we are in for a real challenge in 2008.''
Cushman & Wakefield executive vice president Bill McClung predicts that office leasing in Dallas-Fort Worth -- down in 2007 -- will decline a bit further this year, as the economic slowdown makes businesses more cautious.
Mr. McClung said there is also some sticker shock with the rents for the newest office buildings.
''I'm seeing some clients say they can't afford that,'' he said.
Top broker Jack Fraker, vice chairman of CB Richard Ellis, said there's still plenty of capital interested in commercial real estate, even though underwriting has tightened up.
And the turmoil on Wall Street this year may be a plus.
''There is so much money that wants to be in real estate vs. the stock market,'' Mr. Fraker said.
While the slowdown in homebuilding will no doubt mean cutbacks in some shopping center starts, said Steve Lieberman, CEO of the Retail Connection, some national retailers are ramping up their plans for Texas in 2008.
''There is no question that the national economy and the subprime meltdown will have an impact on our market,'' Mr. Lieberman said.
''But the cutbacks are not uniform across all markets.'' By Steve Brown, The Dallas Morning News

Wednesday, January 02, 2008

D-FW apartment rentals rise in fourth quarter

An unexpected boost in apartment leasing gave Dallas-Fort Worth landlords something to smile about as they enter the new year.
Rents also edged to a record high – another positive sign for the local rental market.
Thanks to total net leasing of about 1,000 units in the fourth quarter, 2007 ended up with an overall increase of 8,240 apartment rentals for the year. That's about 10 percent below leasing in 2006 but higher than had been anticipated, according to a report Wednesday by apartment analyst M/PF YieldStar.
The fourth quarter is typically a slow leasing period, said M/PF vice president Greg Willett. But not this year.
"Demand is proving solid, helped by still healthy growth in the local economy and the fact that lenders remain hesitant to approve mortgages for would-be first-time home buyers," Mr. Willett said.
Net rentals were strong enough to easily outpace the 7,155 apartment units added to the market in Dallas-Fort Worth last year.
Indeed, because of the record apartment teardowns – 6,668 units – the market size increased by fewer than 500 units.
"Such tiny growth in the apartment base has happened only once before over the course of the past three decades," Mr. Willett said.
During the regional real estate recession in 1990, only 243 units were added to the market.
The 2007 market was tight enough that developers were able to increase average rents 4 percent. Rents were up in every area of the city.
"Recent increases pushed the average monthly rent for an apartment to $741 as of December," he said.
No doubt that was because apartment vacancy levels have dwindled to less than 6 percent. At the end of September, overall occupancy in North Texas was 94.1 percent.
"Occupancy climbed 1.3 points during the past year, finishing at the highest year-end rate recorded since 2000," Mr. Willett said.
Looking ahead, a lot will depend on how the housing market slump plays out.
"Lenders at some point are going to relax the temporarily too-stringent standards required for first-time home purchase," Mr. Willett said.
"Loss of renters to home purchase then could come back into play as an influence on apartment market fundamentals in a big way."
That would be bad news for apartment developers, who had almost 14,000 additional units under construction in the Dallas-Fort Worth area at the start of 2008.
"That's the second-biggest block of new product on the way anywhere in the country, only trailing the 15,123 apartments under construction in Houston," Mr. Willett said.
"By far the biggest chunk of ongoing building in North Texas is in the Dallas urban core, where construction of 3,142 apartments is occurring." By Steve Brown

Oak Cliff Renewal

Oak Cliff today is in the initial stages of a massive property build-out planned for the area. It's driven in part by a 1998 bond measure calling for the city to spend $246 million to transform the Trinity River into a massive urban retreat 2 1/2 times larger than New York's Central Park. Complementary development funds from the state, public utilities and other private sources bring the total investment package to $1.3 billion.
Scheduled for completion in 2014, the development will transform the weed-choked Trinity River floodplain, which now divides Dallas, into a town lake bordered by hiking trails, bike paths, an equestrian center, arboretum and wetland refuge for migrating birds. Three bridges designed by Spanish architect Santiago Calatrava will surmount all.
Partially incentivized by a series of Tax Increment Financing districts, or TIFs, new townhomes already are starting to appear on the Oak Cliff side of the Trinity.
River Run Rises In Dallas
From here, residents get an unobstructed view of the downtown Dallas skyline. Developer Scott Hager plans to spend $120 million building 90 to 100 condos and townhomes standing above the river levee.
"We're creating a sophisticated urban lifestyle at a prime location on the Trinity River corridor," Hager said.
A major factor driving new home sales is the soaring cost of energy. According to a study by the nonprofit research firm Surface Transportation Policy Partnership, the average commuter in Dallas spends 19.7% of his income on transportation and loses more time in traffic each year than a motorist in Los Angeles.
"At $1.50 a gallon, people could afford to make 25-mile-long commutes from (the northern Dallas suburbs of) Plano or Frisco, but at today's prices, Oak Cliff starts to look very attractive," said Alan McDonald, senior managing director of the Incap Fund, a Dallas-based private equity firm. Incap is investing more than $200 million to develop 5,000 residential units on 300 acres inside Oak Cliff's Davis Garden District TIF.
McDonald believes that Oak Cliff's value results from it being ignored for so long. "Instead of 'McMansions' and starter castles so prevalent in North Dallas suburbs, Oak Cliff's housing base consists of elegant older homes that would cost $600,000 were they on the other side of the river," McDonald said. "In Oak Cliff you can buy the same house for $300,000, spend $100,000 remodeling and have a $600,000 house just five minutes away from the city's best restaurants, nightlife and culture."
Bucking The Trend?
According to Dallas real estate agent Jim Fite, president of the Century 21 Judge Fite realty firm, Oak Cliff homes in the leafy Kessler Park neighborhood 10 minutes from downtown Dallas may have increased 50% in value over the past decade, but Fite says there is plenty of room for further appreciation.
"Look what happened to San Antonio after the city developed its river," he said.
After decades in decline, Oak Cliff is defying the national housing slump, says Dallas planning and development consultant Jeff West, president of Jeff West Consulting. "Speculators already are moving through Oak Cliff one block at a time," he says. "Even I'm investing my own money there." BY DAVID DEVOSS