Friday, February 15, 2013
DALLAS (CBRE) – Locally based Invesco Real Estate has purchased three Class-A industrial buildings just north of the Dallas-Fort Worth International Airport. The buildings total 1.4 million sf.
Trade Center I is at 2700 Regent Blvd., and Trade Center II and IV are at 2520-2525 Esters Blvd.
Constructed between 2004 and 2008, the buildings have 30- to 34-foot clear heights, large truck court depths, ESFR sprinkler systems, and showrooms and office space.
At the time of sale, Trade Center II and IV were 92 percent leased to four tenants. Trade Center I was vacant.
CBRE represented sellers Bentall Kennedy and Trammell Crow Company.
If the North Texas real estate market takes off this year — and all signs are pointing toward that — you can thank employment growth.
It’s new jobs, more than anything else, that fuel big increases in real estate demand.
That only makes sense.
People with new or better jobs often seek better housing — a nicer apartment or a home.
And companies that are adding workers require additional office and industrial space.
Last year was the best for home sales and commercial building leasing in the Dallas-Fort Worth area since before the recession started.
No surprise, it was also the strongest year for employment gains in the area since 2007.
Looking at December job numbers, Dallas-Fort Worth employment was 79,200 jobs ahead of where it was in December 2011, according to the Bureau of Labor Statistics.
The D-FW area ranked fourth, behind New York, Houston and Los Angeles for total employment gains.
“Some were expecting more, but it’s still not too bad,” said James Gaines, research economist at the Real Estate Center at Texas A&M University.
And it’s been enough to light a fire under housing and commercial property demand.
“In the fourth quarter, D-FW not only surpassed the 3 million total employment level for the first time, we also eclipsed the previous high before the economic downturn set in December 2007,” said Ted Wilson, a housing analyst with Dallas-based Residential Strategies Inc.
“The recovering economy is manifesting in North Texas with solid job and population growth.
“The overhang of housing inventory, both in the form of vacant for-sale housing and unoccupied rental units, is largely gone.”
Wilson said that with the local population expected to rise by an average of 100,000 a year, home and apartment builders will have to scramble to keep up with rising demand.
“The job growth continues to promote in-migration to the D-FW area,” he said. “In November, the Texas State Data Center revised its population estimate for the 12-county area, showing we had grown to 6,615,013 by year end 2012.”
All those new D-FW residents need more houses and more apartments.
“This should mean expanding activity for builders and developers,” he said. Wilson’s data show the largest generator of jobs last year was the business and professional services sector — a primary occupant of office space.
North Texas job gains have a ways to go before return to the level we saw before the recession. Employment growth in the D-FW area totaled almost 92,000 as recently as ’06.
Full article at:
Tuesday, February 12, 2013
Where have all the doubters gone?
Until recently, whenever I’d write about signs of a turnaround in the troubled housing market, there were always a few magpies squawking about how things were really getting no better.
In previous economic downturns I’ve experienced, folks tended to be optimistic about better days ahead.
But in the recession just past, I heard from lots of people who were convinced — either because of the depth of the crash or political leanings — that good times were never going to return.
“The home picture continues to get bleaker,” argued one who wrote me last spring. “You can’t make it look anything but depressing — we’re going down the residential tubes and it looks like it’s going to get worse.”
Actually, just the opposite has happened.
Since early 2012, North Texas housing — along with home communities across the country — has seen steady improvement.
Sure, there have been some fits and starts, but the trend lines have steadily moved up.
And the local housing statistics released this week should put an end to any fears that the current home market rebound is just a dead cat bounce.
The positive numbers
Pre-owned home sales rose by 16 percent in North Texas last year, the best showing in four years. And median prices for houses sold by real estate agents increased by 8 percent from 2011.
Surveys show that we have gained back all but about 4 percent of the housing price loss during the recession. Nationwide, home prices are still about 30 percent in the hole.
The news for the new-home market is even better.
In last year’s fourth quarter, usually a slow period for builders, home sales jumped about 20 percent from year-earlier levels.
And starts of new houses in the Dallas-Fort Worth area were up almost 48 percent from the fourth quarter of 2011.
The number of new homes on the market in North Texas is at its lowest point in 14 years.
And you have to go back almost a decade to find a time when there were fewer pre-owned D-FW houses with “for sale” signs out front.
Not all rosy
Of course, the gains are not across the board. They never are.
I recently heard from a Frisco homeowner who says his house is still worth about $40,000 less than what he paid for it in 2007, just before the recession hit.
“We are upside down in our mortgage and really do not see our value going up anytime soon,” he wrote. “We also have a house that is abandoned right down the street, so I think things are not as optimistic as you see it.”
Certainly they aren’t for this guy. And about 11 percent of North Texans with a home loan still owe more than their house is worth.
But that’s going to change. The shortage of houses for sale in many North Texas neighborhoods is already leading to multiple offers and big price increases by the builders.
As we move into the busy spring home market, look for sales to rise even higher as consumers rush to take advantage of near-record-low interest rates.
There will be no way for homebuilders to crank out enough product to meet the growing demand.
And the housing market here is just going to get tighter.
If you thought the housing bust would have a lasting impact on the types of homes we are building in this country, guess again.
Homes being constructed nationwide continue to grow larger, with more bedrooms and bathrooms and extra garage spaces.
The average house built in the U.S. last year had 2,524 square feet. That’s the biggest yet, according to the National Association of Home Builders.
“This is the third consecutive increase we have seen in the average size of single-family homes,” builders association researcher Rose Quint told housing industry members meeting in Las Vegas this week. “It’s higher than it was in 2007, when it peaked at 2,499 square feet.”
After reducing sizes during the worst of the recession, builders are again supersizing their houses. More conservative buyer tastes brought on by tough times just didn’t last.
The average new-home size has grown by about 500 square feet since the late 1980s. And it is up a whopping 764 square feet since 1979.
More than 40 percent of the houses built last year had four or more bedrooms. And about 30 percent had three or more bathrooms, researchers found.
Almost 20 percent of new houses now have three or more garage spaces.
“On average, houses were bigger and had more square footage and were more expensive,” Quint said.
Part of that has to do with who is buying new houses. Tight credit restrictions and anemic income growth have made it more difficult for first-time and moderate-income Americans to get that new house.
“As a result, what was built last year reflects the preferences of those who did have credit — in other words the wealthier, better-off buyers,” Quint said. “The number of baths is related to household income.
“The more money they make, the more bathrooms they want.”
Good to know that rich people are clean folks.
Regardless of income, almost every new-home buyer wants to save money on utilities.
Energy-saving features were two of the top three “must haves” on buyers’ shopping lists for new houses, the builders say.
“The No. 1 thing is they want is energy efficiency,” Quint said. “Nine out of 10 buyers would rather buy a highly energy efficient home with lower utility bills.
“Seventy-three percent say utility costs will influence their next home purchase.”
New-home buyers on average say they will pay almost $7,100 more for a house that saves them $1,000 a year in utilities.
And while two-thirds of prospective buyers say they want an environmentally friendly house, in the next breath they say no to paying more for it.
To save money on that new house, potential buyers say they would opt for a smaller lot or a smaller house and would settle for a location that’s not as close to shopping and entertainment — whatever it takes to save a few bucks on the purchase price.
But that doesn’t mean they will give up fancy features or settle for shoddy construction.
“What homebuyers are not willing to embrace are less expensive materials in order to make their homes more affordable,” Quint said.
Out in Irving to the east of State Highway 114, thousands of apartments are springing up on the banks of Lake Carolyn.
Back in the 1980s — when Las Colinas was first planned as North Texas’ new urban center on the prairie — drawings show that land covered with skyscrapers.
Developers back in the day envisioned this would be a mini-Manhattan with enough office towers to rival downtown Dallas.
Of course, several real estate crashes put the quash on those grand plans.
And today those former office tower sites are chockablock with rental housing.
It’s the same story in Dallas’ booming Uptown District, where high-rise building sites of yesteryear are now sprouting acres of apartments.
Just up the hill from Turtle Creek on Cedar Springs Road, construction is under way on a midrise rental complex.
Back in the 1980s, developers wanted to build 30-story office buildings on that tract.
And over on McKinney Avenue, a block that’s zoned for a 24-story tower is being developed instead for agrocery store and — you guessed it — more apartments.
With about 20,000 apartment units under construction in North Texas and more on the way, developers are vigorously competing for well-located construction sites.
“People are buying everything they can to build more apartments,” said longtime Dallas broker Newt Walker.
The frenzy has reached the point that other developers are fretting about what will be left when the apartment boom is finished.
“So many good retail sites are being developed as apartments,” Herb Weitzman, chairman of retail real estate firm Weitzman Group, mentioned at his company’s recent shopping center seminar. “The challenge is retail land is so scarce and very expensive.”
Indeed, that’s the real story. There are still plenty of building sites in the Dallas area to be redeveloped, but at what cost?
Development sites in Uptown, for instance, are running more than $100 per square foot.
Full article at:
Back in the bad old days of the 1980s Texas real estate crash, you had to wait until sundown to tell what buildings were a bust.
Those big glass office towers all looked full during the day.
But driving down the Dallas North Tollway as the sun was setting, the light would stream through the buildings sitting vacant along the highway.
That’s the great difference in today’s North Texas property market and where we have been in the aftermath of previous downturns.
Unlike in almost every recession, the Dallas-Fort Worth area doesn’t have a huge overhang of empty space on the market since the economy tanked.
In previous economic cycles, we’ve been covered up in excess office space, empty shops and vacant houses out in the ’burbs.
That’s the case this time in some U.S. cities.
Last week, I was in Las Vegas for a national housing conference.
Instead of “sin city,” they should call it “empty city.”
Probably no place in the country got so overbuilt during the boom times of the early and mid-2000s.
At night when the lights go on in the high-rise residential buildings near the Vegas strip, most of the deluxe condos are still dark.
Near the old Sahara hotel and casino — which is boarded up after a redevelopment plan fell through — work crews have completed about 70 percent of the tallest skyscraper between Dallas and Los Angeles.
The 68-story Fontainebleu Las Vegas was to be a luxury hotel, casino, condominium and entertainment complex.
But after spending close to $2 billion, the development went broke and shut down in 2009.
From the outside, the huge green glass tower looks mostly done.
Investor Carl Icahn bought the unfinished building in 2010 for $150 million. Since then, most of the fixtures, furniture and equipment that were to go in the skyscraper have been sold off.
Word on the street in Vegas is that Chinese buyers are willing to pay almost $200 million to buy and dismantle the tower for scrap.
Another new 49-story hotel over on the strip has also been abandoned for more than three years, and there is talk of tearing that one down, too.
That’s just unbelievable.
Whole article at:
Neal Richards Group CEO Derrick Evers tells us that his project management, brokerage, and development firm is reaping the rewards of the Texas healthcare building bonanza. FPMC Dallas is a physician-owned hospital that is proving to be quite the beta model for a new entrepreneurial era. In fact, next up is Forest Park Fort Worth and also Forest Park San Antonio; at the southeast corner of I-10 and 1604, it's considered a premiere property site. Both of these will be minimum LEED Silver projects containing 150k SF, 50 beds, and 12 operating rooms, and will support an 80k SF medical office building. Derek says they are excited to be a contributing member to the community, both from an economic development stand point and a job-creating standpoint.
The land speculation market is heating up as projects like Cencor's West Plano Village—on hold for years—gets started, according to Henry S Miller SVP John St Clair. And the SH 380 Corridor may be the hottest spot of all. Prosper is clearly more than a city name.
John, right with friend Jim Wood on Lake Texoma last fall, says land speculation comes as development starts. The "today deal" triggers thinking about possibilities for the "next deal," he says. Now, developers and investors are formulating how to risk their money going forward. The hot spot John's projecting will likely be from US 75 to I-35 and from SH 380 north to the Red River. That's where investors want to go: north of the Metroplex.
John hopes to live long and prosper. When he sold his own family's property as part of Matthews Southwest's 157-acre purchase at the Dallas North Tollway and 380 in Prosper, he kept about 60 acres adjacent to the parcel where Jack Matthews plans to build a 3M SF mixed-use project in a public-private partnership with the Town of Prosper. John credits Frisco's maturation in the last 10 years with triggering the next wave of development in the area. The first guy in and maybe the second will be the successful ones near term, he says. The land speculation isn't quite there yet, but it's coming in the next year or two. When he's not looking for land to sell, John spends summers with his family at their Lake Texoma lake house.
ARLINGTON (Fort Worth Business Press) – Union Pacific Railroad Corp. has purchased about 14 acres at 3403 E. Abram St.
The tract, which was sold by Lewis-O’Donnell LLC, is next to the Arlington General Motors plant and on the same rail line.
SCM Real Estate Services arranged the sale.
IRVING (Dallas Morning News) – The city's convention center could be on track to get a hotel thanks to an incentive package approved yesterday by the city council.
If things go according to plan, Mortenson Development Inc. will break ground in October on an estimated $90 million Marriott or Starwood. The hotel would have at least 350 rooms and a 10,000-sf ballroom.
For its part, the city would spend $9 million on a connecting sky bridge, parking garage and infrastructure. In addition, the hotel would receive up to about $19 million in city and state tax rebates over the next 20 years.
SANTA MONICA, Calif. (RCLCO) – Seven Texas metros are on RCLCO's list of regional hotspots for economic growth.
Austin-Round Rock-San Marcos, Dallas-Fort Worth-Arlington and Houston-Sugar Land-Baytown were included on the list of large U.S. metros, while Tyler, Longview, Midland and Texarkana were on the list of small metros.
In addition, half the cities on RCLCO's list of metros where employment is back to peak levels are in Texas: DFW, Houston, San Antonio, Austin, El Paso and Corpus Christi.
RCLCO Managing Director Paige Mueller said "diversified employment bases, including energy and technology sectors, are benefiting the Texas economy as are low cost of doing business, warm climate, and proximity to trade routes."
Tuesday, February 05, 2013
The University of Texas at Dallas plans to begin a $53.25 million student living and learning center on its Richardson campus next month.
Staff Writer-Dallas Business Journal
It will take a village to pull off the $40 million redevelopment of Village on the Parkway, but the pieces are coming together.