Friday, April 19, 2013
Friday, April 12, 2013
A new investment group in Fort Worth acquired the 95%-occupied 82k SF 1612 Summit Ave in Fort
Worth.Summit Hilltop Partners, formed by real estate investor Will Martin purchased the asset from Omaha-based Ameritas Life Insurance Co for an undisclosed sum. It'll be held as a long-term investment with gradual improvements planned. (It's a beautiful thing to see a company and a building commit to one another like that.) Will says he's on the hunt for other Class-A and Class-B office and industrial buildings with Class-A locations in both Dallas and Fort Worth.
The five-story building includes an underground parking garage and is leased to 15 tenants. Will tells us his brokerage firm, W. Martin and Co, will move its offices into the building at the end of the month and handle leasing. At I-30 and Summit Avenue, Will says this location is the gateway to the new Chisholm Trail Tollway, which is scheduled to open next year. Centra Partners' Jeff Day repped the seller. Liberty Bank provided the financing with Reagan Casey handling the transaction.
North Texas apartment leasing cooled a bit in the first quarter of 2013. But there was no sign of a step back in construction.
The 1,574 net apartment rentals in the Dallas-Fort Worth area during the first three months of the year was an improvement from leasing in the same period last year, MPF Research said Monday.
But net leasing in the area fell from strong fourth-quarter levels of more than 1,900 apartments rented.
At the same time, developers completed 2,315 D-FW apartments in the first quarter.
North Texas leads the country in apartment building, with 22,837 units under construction — the highest local building total since the first quarter of 2009, according to MPF Research.
“There’s no sign yet of construction slowdown, but you’d think — hope — the market is close to leveling off in starts,” said MPF Research’s Jay Parsons. “Dallas-Fort Worth is one of only a handful of markets nationally where apartment development has already topped historic norms.”
But Parsons isn’t in a panic over the volume of development.
“There’s a lot of construction, yes, but that’s almost always the case here.”
The fevered pace of apartment building and an increase in the number of renters buying houses caused overall apartment occupancy levels in D-FW to drop slightly in the first quarter, to 93.6 percent. That’s still ahead of year-ago occupancy levels, but less than at the end of 2012.
Overall rents in the first quarter were only up 2.3 percent from a year earlier, to an average of $833, MPF found.
“The local apartment market is still in very healthy shape,” Parsons said. “But occupancy is inching down and rent growth levels are easing.”
Most of the building activity is in Uptown and downtown Dallas, the Oak Lawn area, Irving’s Las Colinas district and Carrollton-Farmers Branch.
As the local housing market has turned the corner, some renters are opting to buy and take advantage of near record-low home finance rates.
“The increase in buyers has softened apartment demand in some of the key suburbs, and that — along with all of the new construction — has forced apartment operators to limit rent hikes,” Parsons said.
But he said that the rate of home purchases so far isn’t enough to have a serious impact on the D-FW apartment market.
“This market is accustomed to heavy home sales and large apartment construction volumes,” Parsons said.
Developers say they’ve seen no sign of a slowdown in leasing at their new projects.
“We had the typical seasonal slowdown, but for the most part all of our properties are experiencing strong leasing activity now that spring has arrived,” said Scott Sherwood with JLB Partners, which has several new rental projects in the Dallas area.
DALLAS-FORT WORTH APARTMENT PROFILE
First quarter 2013
Completions: 2,315 units
Net leasing: 1,574 units
Average monthly rent: $833
Average occupancy: 93.6%
Under construction: 22,837 units
The spring housing market started with a rush of sales in North Texas.
But sellers are not rushing into the market with pre-owned home listings.
Sales of pre-owned single-family homes in March rose 22 percent from a year earlier, with 7,483 properties sold. It was the most homes sales for a March since 2007.
And median single-family home sales prices were 8 percent higher last month than in March 2012, the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems reported Monday.
With March’s increase, sales prices in North Texas are at a record high in area multiple listing services. Median home sales prices are now about $10,000 higher than they were at the peak of the market in mid-2007, before the recession hit. March’s median sales price was $168,000.
“Part of the increase is from demand growth, part is from the short inventory of available properties,” said Dr. James Gaines, Real Estate Center economist. “It’s a double-whammy on prices.”
So far this year, home sales through real estate agents’ multiple listing services are up 19 percent from first quarter of 2012.
Even with the jump in sales and higher prices, there’s no sign of an increase in the number of houses on the market. Total inventory of homes for sale in North Texas at the end of March was down 22 percent from a year ago.
There’s only a 3.4-month supply of houses listed for sale with agents in the area.
In March, there were 10,857 single-family home listings added to the MLS, about the same as a year ago and less than in March 2011.
The number of homes on the market in the Dallas-Fort Worth area is at the lowest level in more than 20 years, according to the Real Estate Center.
Real estate agents had expected a surge in home listings because of the stronger market, low interest rates and rising prices.
George DeCourcy, associate director of the real estate program at the University of Texas at Dallas, said it will take more than the recent price increases to cause a big jump in homes on the market.
“Prices have come back, but not like a bull,” DeCourcy said Monday. “People feel there is no compelling reason they should move at these prices.
“I think you will have to see significant move-up from here before people decide to list their homes,” he said.
Since many homeowners have refinanced at near record low mortgage rates, their costs of owning their current house have also fallen.
“Even as prices escalate, does it make sense to sell my house and buy another one?” he said. “If home prices went up dramatically, people who had a lot of equity might cash it in, but what would you do with it?”
Indeed, with a shortage of houses for sale in many neighborhoods, potential buyers are often outbid by other shoppers.
The time it takes to sell a house in North Texas dropped to 65 days in March — about a quarter less time than it took a year ago.