Friday, May 29, 2015
Thursday, May 28, 2015
A downtown Dallas landmark building is hitting the market as a new address for business offices.
The 60-year-old former Dallas Central Library at Commerce and Harwood streets is owned by Centurion Development Group – the same company that is renovating the Statler-Hilton Hotel next door.
Centurion has hired Venture Commercial to hunt office tenants for the 4-story, 120,000-square-foot building.
“There is retail possibility on the ground floor of the library, but most likely it will be all office,” said Venture’s Scott Lake who is marketing the property.
It’s one of the last largely untouched buildings designed by the noted Dallas architect George Dahl.
Built for $2.5 million, the library was “designed to house 800,000 volumes of books, with provisions for adding two more stories in the future.”
Many of Dallas’ buildings constructed in the 1940s and 1950s were built with structures to allow more floors on top.
The Commerce Street library replaced the old classical style Carnegie Library with a modern style building.
The project came with a fair share of controversy.
A 20-foot high sculpture that used to adorn the front of the library was done by artist Marshall Fredericks to depict a young boy standing in the hands of God and holding a book.
The story goes that the original version was missing something – the boy’s pants.
Needless to say a pair of aluminum blue jeans was quickly found for the 880-pound sculpture.
Inside the building a gilded metal sculptural mural designed by Italian artist Harry Bertoia was labeled “ a bunch of junk” by Dallas Mayor R.L. Thornton.
Dahl in a huff had the artwork removed from the library and took it home after cutting the city a check for the cost.
After months of bickering a private group came up with the money to pay for the mural and bring it back to the library.
It went to the new library on Young Street after it opened in 1982. But the blue jean boy sculpture was left behind at the old building and was moved in 1993 to the Marshall Fredericks Sculpture Museum in Michigan.
Wednesday, May 27, 2015
Trammell Crow Residential is joining the migration of apartment builders that are staking out development sites in East Dallas. TCR is planned to redevelop three blocks at Fitzhugh Avenue and Monarch Street into an urban rental community.
TCR’s project will replace old apartments and some homes on an entire block, just south of Henderson Avenue. New apartments will also be built on part of two adjoining blocks. The development will have 371 units, according to company exec Steve Bancroft.The planned project is in the same area where JLB Partners and UDR built large apartment communities.
“We are naming it Alexan Henderson,” Bancroft said.
TCR has new apartment communities on Ross Avenue near downtown, in Oak Lawn and North Oak Cliff. The developer has projects under construction in Uptown and Las Colinas.
The TCR project is one of two new apartment developments in the works along Fitzhugh in East Dallas. JLB Partners is building more than 300 units at Fitzhugh and Homer Street. And a new CVS Pharmacy will replace old retail at Fitzhugh and Capitol near the new apartments.
Trammell Crow Residential is joining the migration of apartment builders that are staking out development sites in East Dallas.
Crow Residential plans to redevelop a block at Fitzhugh Avenue and Monarch Street into an urban rental community.
The project is in the same area where JLB Partners and UDR have already built large apartment communities.
Crow’s project will replace old apartments and some homes on an entire block, just south of Henderson Avenue and west of Ross Avenue. The development will have 371 units, according to Crow Residential senior managing director Steve Bancroft.
“We are naming it Alexan Henderson,” Bancroft said.
Crow Residential already has new apartment communities on Ross Avenue near downtown, in Oak Lawn and north Oak Cliff.
And the developer has rental projects under construction in Uptown and Las Colinas.
The Crow Residential project is one of two new apartment developments in the works along Fitzhugh east of North Central Expressway.
JLB Partners is building more than 300 units at Fitzhugh and Homer Street.
And a new CVS Pharmacy will replace old retail at Fitzhugh and Capitol near the new apartments.
Steve Brown/Dallas Morning News
An Oak Lawn office tower is getting a $10 million makeover along with a new identity.
The 18-story 3500 Maple high-rise – located just north of Uptown and across from to Reverchon Park – was purchased last year by Dallas’ Champion Partners and Building Land and Technology of Stamford, Conn.
Construction has already started to remodel the 376,000-square-foot, 30-year-old tower, which is about 55 percent leased.
The building is being renamed Parkside Tower.
“The whole theme of the redo is health and wellness and the ability to access the park and the Katy Trail across the street,” said Champion’s partner Steve Modory.
Upgrades to the building will include a new fitness center, food service area and a new drive up and entry on Maple Avenue.
“Right now the building doesn’t have a front door,” Modory said. “We are redoing the whole outdoor plaza area.”
The reflective glass tower sold out of foreclosure last year for more than $64 million.
DTZ has been leasing the building.
“We’ve renewed tenants including Heritage Auctions, R.R. Donnelley & Sons and Katz Media Group,” said Johnny Johnson, executive managing director with DTZ.
All of the work on the tower should be completed this fall.
Five empty floors of office space have already been gutted and rebuilt.
The 3500 Maple renovation is one of the largest such building remodels outside downtown Dallas.
DALLAS-FORT WORTH - According to CBRE Marketview first quarter 2015, 2014’s strong momentum continues into 2015 for DFW’s multifamily market.
In 1Q 2015 over 5,700 units were absorbed, an increase of over 5,000 units from 4Q 2014.
For the fourth consecutive quarter, average monthly rents remained over $1.00 per sf for DFW. The quarter over quarter average rent rose by $0.02 per sf, a 1.7 percent increase. Quarter over quarter, the number of new units in 1Q 2015 decreased by 1,058 units from 4Q 2014.
Across the Dallas/ Fort Worth Market, occupancy increased by 20 basis points to 92.7 percent at the end of 1Q 2015, bouncing back from seasonal decline in leasing activity during 4Q 2014.
See the submarkets in Dallas and Fort Worth including Uptown/Oaklawn/Highland Park and Northwest Fort Worth/Saginaw/Eagle Mountain in the full report.
Tuesday, May 26, 2015
300 + gathered at the Westin Galleria Dallas for the Marcus & Millichap Retail Forum, to get updates on the latest trends and info. One of the most interesting panels was a market outlook featuring Joe Hickman, CEO of Blue Star Land (think Cowboys new facility and master plan and large developments in Prosper), Stan Thomas, CEO of Thomas Enterprises (Wade Park- Frisco) and John Weber, Principal of Weber & Company (huge retail developments in Ft. Worth) These companies are currently producing developments totaling in excess of $1BB which will make seismic changes in the North Texas real estate landscape. Each of them were cautiously bullish on the growth projections for the Metroplex, and particularly the highest growth markets.
Another key note presentation was by John Chang, FVP of Research for Marcus & Millichap. Here are his highlights.
· The US has added 11.5MM jobs in past five years with steady quarterly gains. 8.7MM jobs were lost during the recession. He predicts about 3.0MM jobs added in 2015.
· Consumer confidence (index) is almost back where it was in 2007. This has raised retail revenues. The US is 19% higher in total revenue sales over 2007.
· Internet sales are up 65% since 12/08. That trend is being driven by Amazon, Apple and Walmart. This is helping traditional store sales, as many are becoming fulfillment centers.
· Drop in oil prices, which is close to historic average, is helping retail, manufacturing, and logistics providers. Acts as an inflation deflationary buffer.
· Texas has outpaced the US growth rate for the past 20 years, and in 2014, grew 3.4%. The state enjoys a steady migration of about 200K jobs per year. Texas retail sales are growing at around 5% annually.
- Nationally, retail vacancy has dropped from 8% to under 6%. Most recent M&M/NREI survey shows 68% of investors will increase their real estate holdings this year, and 58% expect their retail to grow in occupancy. With a 450 bps spread between cap rates and treasuries on retail, he predicts investment in the sector will remain robust, particularly in the high growth markets.
Sayres Dudley/DHR International
Another major West Dallas apartment project is in the works for a large vacant tract.
The planned Broadstone development is just across the street from the new Alta West Commerce apartments, which recently opened.Developer Alliance Residential plans to build a large rental community on the 4.5-acre property on West Commerce Street near Beckley Avenue, according to filings with the City of Dallas.
Alliance joins many of the Dallas-area’s largest apartment builders which have projects underway along Commerce, Fort Worth Avenue and Singleton Boulevard in West Dallas.
Phoenix-based Alliance is already a big apartment builder in North Texas. The company is building 340 apartments downtown, southeast of the Farmers Market at Cesar Chavez Boulevard and Interstate-30.
And the developer is building 460 luxury apartments on the former Park Place Lexus property on Preston Road and Plano Parkway in Plano.
Thursday, May 21, 2015
Wednesday, May 20, 2015
A flood of new apartment completions this year may not bring much relief to renters.
The Dallas-Fort Worth area’s apartment rents in the first quarter were more than 5 percent higher than a year earlier — a record annual increase for North Texas.
With 20,000 apartments set to open in 2015, industry analysts were expecting a slowdown in rent growth.
But that’s not happening yet.
“As we move into the second quarter this number is going to go up and could go up meaningfully,” said Greg Willett, vice president of Carrollton apartment analyst MPF Research. “In some places across the country and in other Texas markets, there is a slowdown in rent growth.
“Not in D-FW.”
Average rents in the area are now at $927 a month, with most new units renting for $1,200 or more.
Willett, who spoke at a Tuesday morning apartment market update sponsored by Marcus & Millichap and management company Pinnacle, said current construction will increase D-FW’s apartment supply by about 5 percent.
About a third of that new construction is high-end rental units in central Dallas.
“If there is any vulnerability in this market over the next couple of years, it is probably that sector,” Willett said. “Overall occupancy is going to cool off a little bit. But it will still be essentially full.”
Willett said D-FW apartment vacancies are now at a 14-year low at 5 percent.
He said that while the oil price plunge has slowed apartment building in Houston, that’s not so in North Texas.
“In Houston, starts are stalling out,” Willett said. “People are waiting to see what is happening to the economy there.”
Drew Kile, a director at Marcus & Millichap’s Institutional Property Advisors, said that employment gains in North Texas this year will likely drop below 100,000 jobs. Last year, the D-FW area’s employment grew by almost 140,000 positions.
“We have a job growth story in Texas, but it’s not quite keeping up with our apartment deliveries,” Kile said. “We are expecting to see a little bit of increase in vacancy, with Houston leading that charge.”
Still, with migration to the state continuing, the forecast is for the D-FW population of 20- to 34-year-olds to grow by more than 140,000 in the next five years, he said.
More than 70 percent of those new young residents will be renters, Kile said.
“A lot of people are moving to the state of Texas,” he said.
By Steve Brown/Dallas Morning News
Tuesday, May 19, 2015
Shelby apartments on SMU Boulevard near North Central Expressway
Developers plan to convert a high-density apartment project just east of Southern Methodist University to condos.
The 55-unit, five-story Shelby apartments on SMU Boulevard near North Central Expressway opened in 2008.
Condos will be sold starting at $185,000.
As an apartment community, it has been popular with SMU students.
Owner Marquis Group is opening models to sell the condos this weekend.
“With just 55 homes available, the development represents an amazing opportunity to own in one of the hottest markets in the country,” Brent Halvorson, vice president of Marquis Group, said in a prepared statement.
The urban-style apartment project — which includes ground floor retail space — was built on the site of a garage once used by automotive designer and racer Carroll Shelby.
This is one of the few cases where apartments are being converted to ownership.
“I am honestly not aware of anything in this cycle that has converted to condo,” said Greg Willett with Carrollton-based apartment analyst MPF Research. “We’ve seen it in some other markets, but this is the first time I’ve seen it here in a long, long time.”
Steve Brown/Dallas Morning News
Friday, May 15, 2015
More construction cranes will be sprouting on America’s skylines.
The commercial real estate sector is forecasting one of the longest periods of expansion on record.
Top players predict that investment and returns in U.S. real estate will stay strong through 2017.
The forecast is for almost $500 billion a year in transactions over the next three years, according to a new study by the Urban Land Institute, which is meeting in Houston this week. The Washington, D.C.-based organization is the country’s largest commercial real estate association.
“Real estate volumes have been growing steadily,” said Urban Land Institute’s William Maher, a director with LaSalle Investment Management. “It looks like they will continue to grow in 2015.
“For real estate, it’s really about jobs,” Maher said. “This is the highest rate of job growth we have had for 15 years.”
The U.S. commercial property market has been expanding since 2010, following a sharp downturn during the recession.
Transaction totals are expected to increase this year and in 2016 to almost twice the 14-year annual average.
No surprise then that average commercial property prices are jumping.
“Last year it was up 13 percent — an enormous number,” Maher said. “This year it’s forecast for 10 percent, but trailing down.”
Even with higher price tags on many properties, the returns are high enough to continue attracting investment dollars, top industry execs say.
“We are pretty bullish about real estate demand and the ability to grow income,” said Lee Menifee, managing director of Prudential Real Estate Investors, one of the country’s top commercial property players. “Real estate still seems priced very competitively compared to other asset classes.”’
Menifee said that so far most lenders have kept a rein on financing for development.
“For speculative construction, outside of the apartment market it’s fairly difficult to get financing unless you have a fair amount of leasing — certainly much more than 10 years ago,” he said.
But the office construction increase in some cities is starting to raise eyebrows in the business.
More office construction is now being built in the Dallas area than at almost any time since the 1980s boom. Much of it is already leased.
“One of our big surprises is how fast office construction cycles have picked up,” said Paige Mueller, managing director with RCLCO Real Estate Advisors.
Another concern for real estate is the flood of foreign money flowing into the U.S. commercial property sector.
“For 2014, we had roughly $40 billion of foreign direct investment into U.S. real estate, representing roughly 10 percent of the total market,” said Brian Ward, president of capital markets and investment services with Colliers International.
In the first quarter of this year, foreign sources had poured another $22 billion into this country’s property markets — about a 17 percent share.
“If the current pace were to hold up, it’s a massive, massive increase in foreign investment in U.S. real estate,” Ward said. “There is way too much global capital looking for opportunities in real estate.”
The huge volumes of money being moved into real estate projects so far hasn’t meant a breakdown in underwriting, said Gayle Starr, senior vice president with industrial building developer and investor ProLogis.
“The capital is not so free that it’s gotten stupid again,” Starr said.
But she acknowledges that the flow of investment dollars is accelerating. “The banks and life insurance companies are falling all over each other” to do deals, Starr said.
Some investors are already planning for a retrenchment.
“Anything you buy has to be able to withstand a 10 to 15 percent pricing correction in the next three years — it’s going to happen,” said Glenn Lowenstein with Lionstone Investments, which has been a commercial property owner in the Dallas area.
Steve Brown - Dallas Morning News