Everything you wanted to know about the Urban Core, Uptown and Downtown Dallas, Texas & Dallas Ft. Worth Area Real Estate - Its growth, prosperity, setbacks and unprecedented revitalization is told here...Randall Turner of Harvard Companies, Inc 214-373-0007, 3500 Oak Lawn Avenue, Suite 325, Dallas, Texas 75219
Hotels had another great year in 2016, even though developers keep on opening new properties. For the whole year of 2016, the occupancy rate for hotels averaged 65.5 percent in the U.S., according to hotel data firm STR.
“It’s the highest occupancy rate ever recorded for a year,” says Jan Freitag, senior vice president of lodging insights for STR.
Occupancy rates have kept rising even though hotels face competition both from home-sharing websites like Airbnb and from hotel construction. However, occupancy rates are expected to dip slightly in 2017 and 2018, while demand will help keep room rates rising at a healthy rate.
There are now 183,000 hotel rooms under construction in the U.S., according to STR. That’s up 30 percent from 2015. This year, the inventory of hotel rooms is expected to grow by 2.0 percent. Demand for those hotel rose is expected to be high, but not high enough to keep the occupancy rate from falling on average by 0.5 percent in 2017.
Nevertheless, revenue per available room is expected to rise 2.3 percent in 2017, according to STR. Room rates should also rise 2.8 percent on average.
The danger of overbuilding would be higher if banks were more willing to make construction loans. Some large hotel projects in downtown areas have been delayed because banks are not willing to lend as much.
“The level of new construction is not as high as it would normally be given the occupancy numbers,” says Jeff Myers, managing consultant for CoStar Portfolio Strategy. “The financing is not there.”
Overbuilding threatens downtowns
“There has truly been a shift in new construction—in what is being built and where it is being built,” says Myers. More than a third of all the new hotel rooms that have opened since the recovery began in 2010 have opened in central business districts (CBDs). Before 2010, the share of all new hotels that opened in downtown areas was closer to one in six, according to CoStar.
“If there is a supply risk, the risk is going to be most pronounced downtown or in downtown submarkets,” says Myers.
When Facebook Inc. (Nasdaq: FB) initially decided to put a major data center campus in North Texas, the company purchased 110 acres for the data center campus, which officials said was estimated to cost $1 billion to develop.
With the acquisition, Facebook has nearly 150 acres of land in Fort Worth.
At the time, real estate sources said they weren't surprised by Facebook's acquisition of additional acreage.
"Land is finite; they saw the opportunity to purchase more land and they wanted to make sure they had an ample amount of land to expand on, should they need to do that," said Bo Bond, a managing director with JLL's Dallas office, who specializes in data center real estate.
"They have a lot to build and have only committed to three buildings on their current site," he added. "They are probably looking 10 years down the road and looking into the future."
A new northeast Dallas home development will be aimed at buyers hunting more affordable urban-style housing.
A new northeast Dallas home development will be aimed at buyers hunting more affordable urban-style housing.
Builder Diane Cheatham has already built one unique Dallas neighborhood: the Urban Reserve project off Forest Lane.
Cheatham’s Urban Edge Development has sold sites for more than 40 homes in the custom home community, which she started about a decade ago.
“We will be close to finished by the end of the year,” she said.
So Cheatham is ready for her next neighborhood, on Abrams Road in northeast Dallas. She’s bought 10 acres, which will be divided into up to 80 high-density home sites, a small park and walking trails. It will be called Urban Commons.
“We will have 10 pocket parks,” Cheatham said. “Each one of these houses will face on a park.”
There’s also a pond, a creek and green space on land that was once part of the Beck family farm.
Cheatham jumped at the chance to purchase the property, just north of LBJ Freeway, when a broker pitched it to her. The tract previously was zoned for commercial development.
“I had been looking for another tract and came close a few times,” she said. “These kind of sites are very hard to find.
“They need to be places that are pretty much ignored. Youcan’t buy the corner of Main and Main and do single-family houses.”
The homes in Urban Commons will be much smaller and less pricey than houses in the Urban Reserve neighborhood.
“We hope our houses start at around $200,000,” she said. “Some of them will go up to $650,000.
“We are going to do some micro houses at 600 or 700 square feet, and they will go right up to 2,800 square feet. We want this to be a mixed-income development.”
Custom homes in the Urban Reserve started near $500,000 and went to more than $2 million. They were as large as 4,500 square feet.
“I wanted more affordability,” Cheatham said. “I’ve been doing this for more than 30 years, and I want to do architect-designed houses that didn’t cost $1 million.”
The detached houses will be built in rows stretching between a creek and a greenbelt and an internal street. Garages will be along the street.
“We look at the creek as an amenity,” Cheatham said. “And we want to create a nice little pond.
“The houses will have zero front yards because they are on a park. This will be great for retired people that are over having a big yard.”
Cheatham said about half the sites have been reserved by builders.
“Most of the houses will be two stories, and some will be three,” she said. “We are also going to have four or five exterior materials.
“The houses will all be designed by architects, so they will be very different.”All of the builders in Urban Commons will be small firms.
“I’ve tried to meld the good parts of tract homes with the good parts of custom homes,” Cheatham said. “I hope that we can get the infrastructure done and start building houses in the fall.”
DALLAS — Aging baby boomers don’t get any love from the consumer products sector.
All the mainstream advertising is pitched toward 20- and 30-somethings.
The only nod we boomers get is from hearing aid manufacturers and erectile dysfunction drugmakers trying to stiff us out of our retirement savings.
Well, bless the homebuilders.
They’ve spent the last few years courting those fickle millennials and have now decided to dance with the ones that brung them — the 50-plus generation.
We boomers are da bomb when it comes to the builders.
We’ve got money and experience and know what we want in a house.
And the U.S. housing industry is ready to sell it to us.
The numbers of 55-plus home-buyers are increasing as America’s population ages.
By 2020 there are forecast to be 54 million 55-plus households in the U.S. — up by almost 4 million from 2016, according to studies by the National Association of Home Builders.
“It’s growing and projected to grow every singe year,” said Paul Emrath, a senior researcher with the Washington, D.C.-based builders group. “Not only are they growing in absolute numbers but as a share of all households.
“The 55-plus segment is on the rise as a share of the overall market.”
As these folks move kids out of the household and move into retirement, a large number are looking to change their address.
Often they have money from the sale of current homes to pay for new digs.
“Almost half of them are owned free and clear after a year,” Mr. Emrath said. “This is a segment of the market that’s paying cash.”
And even when they don’t, boomer buyers typically make much larger down payments than younger households.
Jim Chapman, a Georgia builder who heads the NAHB’s 55-plus building council, said that since home values around the country have recovered from the recession, more of these buyers have the equity to make a move.
His average buyer is in his early 60s, Mr. Chapman said.
“Ten years ago when I started building active adult communities our average age was probably 72,” he said. “About 20 percent are moving to be near the grandkids.”
Both Mr. Chapman and Mr. Emrath said the biggest obstacle for builders who want to woo boomers is producing a house they can afford.
Mr. Emrath said that a third of baby boomer buyers say they want a house priced under $150,000.
Dallas-based development firm KDC — the developer of Toyota's new North American campus in Plano — plans to develop more build-to-suit offices within Plano's Legacy Business Park.
KDC has teamed up with Gabriel Legacy, an investment firm, to develop an additional 53 acres for corporate real estate in the business park, which has garnered national attention.
"We are planning and positioning these two tracts with the goal of capturing Class A corporate development projects, which is reflective of the recent development in the area," said Bill Guthrey, a senior vice president of KDC, in a written statement.
With KDC's rich history in Plano's Legacy area, Guthrey said the firm is proud to continue its development efforts.
The iconic Dallas Design District — a 33-acre, 700,000-square-foot property — and its well-heeled investors have landed a $120 million permanent loan from J.P. Morgan Chase & Co., creating enough money to help the district land new tenants.
The terms of the loan, which was secured by Hamilton Realty Finance on behalf of Dunhill Partners, were undisclosed.
"We re-financed the property to consolidate two loans into one loan, which was bigger because the value of the district has increased," William "Bill" Hutchinson, president of Dallas-based Dunhill Partners, told the Dallas Business Journal, in an exclusive interview.
"This enabled us to bring more equity in on behalf of the Design District partners without bringing in new equity," Hutchinson added.
Since acquiring the property three years ago, Dunhill Partners and its group of well-heeled investors — which include the likes of Tim Headington and Ray Washburne — have benefited from a district on the rise in Dallas, which has added thousands of apartments and hundreds of square feet of retail space. Last year, Mark Cuban acquired a portion of the district for his team's new $70 million practice facility.
The Design District property also includes a 7.5-acre Decorative Center complex at Oak Lawn and Hi Line avenues, as well as the 18-acre Dallas Design Center along Stemmons Freeway and dozens of retail shops and showrooms.
"We are continuing to do capital improvements, with or without the funds from this particular loan," Hutchinson said, adding that another $5 million of capital improvements are being set aside for improvements tied to new tenants.
"New tenants always cost money and this adds to our war chest to go out and land new tenants," he added.
The Design District property is 99 percent leased, but Hutchinson said he's working through some office lease deals tied to a new 17-story, 267,780-square-foot office tower at 1640 Edison St. at the corner of Edison and Stemmons Freeway. If completed, this would bring some major lead office tenants to kick off the project.
The tenants could be architectural firms, design companies or other Design District like-minded tenants, Hutchinson said.
He is also shopping another boutique hotel concept behind Oak along Stemmons Freeway to a number of potential hotel developers. San Francisco-based Joie de Vivre is one of the potential hotel groups in the running, but Hutchinson said he has yet to officially select a brand.
Sen. Chuck Grassley, R-Iowa, has raised a red flag over Fannie Mae’s planned regional headquarters in Plano.
A veteran U.S. senator is hammering mortgage giant Fannie Mae over its plans for a regional headquarters in Plano.
Sen. Chuck Grassley, R-Iowa, has raised a red flag over what he calls “$24.2 million in excessive costs for the leased building in Plano.”
Last year, Fannie Mae leased a 10-story, 330,000square-foot building near the southeast corner of the Dallas North Tollway and State Highway 121.
Plano-based developer Granite Properties is building the high-rise for Fannie Mae, which plans to downsize its Dallas-area offices and move them into the new tower in the Granite Park development.
In a letter to Melvin Watt, director of the Federal Housing Finance Agency, Grassley said the deal indicates a lack of oversight.
“Choosing an area of Dallas known as the ‘platinum corridor’ makes me wonder who’s minding the store,” Grassley said. “It is inexcusable that neither Fannie Mae nor FHFA have conducted an appropriate review to determine the reasonableness of the lease or the budgeted build-out costs for this project.
“As an agency charged with oversight of the mortgage market, Fannie Mae has an even greater responsibility to effectively manage its own real estate project(s) and to do so in a manner that is not wasteful of taxpayer dollars.”
Grassley asked the Federal Housing Finance Agency, which oversees Fannie Mae, to provide a detailed accounting of the decision to move to the new Plano building and an analysis of the costs.
“Please explain why the build-out costs per square foot increased for the Granite Park VII office space, from $200 to $234.02 over a five-month period,” he said in the letter.
Federal Housing Finance Agency officials said they strongly disagree with criticism of the project.
Deputy Director Bob Ryan, in a letter to the Senate, defended “Fannie Mae’s new Dallas office space, which is expected to provide a significant reduction in square footage from the current leased space, have fewer offices, add resiliency operations and have a much higher density design than the space Fannie Mae currently occupies.”
Fannie Mae signed a 15 year lease in the Granite Park building, which will be ready late this year.
Leasing agents are getting a first look at a major addition to one of downtown Dallas’ signature skyscrapers.
Construction is underway on Ross Avenue for the parking garage and four-story retail and commercial building at downtown’s landmark Fountain Place tower.
The project, the first major addition to the green glass 1980s tower, is being built between Fountain Place and the Fairmont Hotel.
Commercial property firm CBRE/UCR is renting more than 16,000 square feet of retail in the development. The glass and metal garage and retail building were designed by architects James Carpenter Design Associates and Gensler.
Plans for the project show a second-floor terrace fronting Ross Avenue and retail fronting the fountains alongside the high-rise. There’s also a park area and plaza on the roof.
UCR’s Jack Gosnell said the project is attracting interest from restaurants and retailers.
“We are getting a good list of interested people,” Gosnell said. “We are showing it in hard-hat tours.”
Built in 1986, Fountain Place is one of the most recognized buildings in Big D. The 60-story skyscraper was purchased in 2014 by Atlantabased Goddard Investment Group LLC.
The addition to the tower has been valued in building permits at more than $37 million. Work started several months ago on the project, planned for completion later this year.
An adjoining lot at Field and Munger streets is being sold to apartment builder Amli Residential for a highrise project.
“The additional retail on this corner adds greatly to the urban fabric being created, and the Amli project is the beginning of what the future holds for residential buildings now that we have very few older buildings left for adaptive reuse,” said John Crawford of Downtown Dallas Inc.
“The combination of the additional retail and residential adds greatly to a hightraffic area of downtown and sets the tone for future development.”