Texas Market Reports

Shifting Investment Patterns Prompt IPA’s Industrial Expansion in Texas

by Taylor Williams February 19, 2021

By Taylor Williams The decision by Institutional Property Advisors (IPA), a division of Marcus & Millichap, to recently bring its investment sales services for the Dallas-Fort Worth (DFW) industrial market not only represents an opportunity to gain share of a booming market, but also to capitalize on a pronounced shift in buying patterns. COVID-19 has drastically accelerated demand for e-commerce services and industrial space on the leasing front. As investors that put new acquisitions on hold early in the pandemic regain their aggressiveness and as more capital sources diversify into the asset class, the line between requirements for institutional and private investors is growing blurrier. Ultimately, the shift in investment philosophy for industrial product in major markets boils down to private buyers targeting assets that have typically been considered institutional quality. This trend is a factor of several marketplace tendencies: the cautiousness with which institutional capital proceeds, the willingness of private investors to accept lower returns and the general mixing up of the Tier 1 industrial buyer pool. Like demand for industrial product from both tenants and the capital markets, the creeping of private buyers into the institutional space was taking place before the pandemic. But the overlap has become …

February 19, 2021

Market Reports Texas Texas Market Reports

Exclusive Survey: New Administration Worries Texas Real Estate Professionals

by Taylor Williams February 5, 2021

By Taylor Williams At a time in which politics pervades nearly every facet of life and business, and in which ideological divides are wide and getting wider, commercial real estate professionals in Texas have some concerns about how the Democrats’ newfound control of two of the three branches of the federal government will impact business. President Joe Biden has been sworn into the nation’s highest public office, and Democrats now hold control of both houses of Congress following the Senate runoff elections in Georgia that flipped two seats from red to blue. That chamber consists of 50 members on each side of the aisle, with Vice President Kamala Harris representing the tie-breaking vote as head of the Senate. In conducting its three annual forecast surveys for brokers, developers/owners and lenders, Texas Real Estate Business received a multitude of opinions on how and to what extent the new political regime will impact deal volume and velocity. Respondents also weighed in on how the changing of the political guard will affect ancillary issues such as taxes, regulation and marketplace confidence. Unsurprisingly, out of all the brokers, developers and lenders who provided written responses on how the political landscape will affect commercial real …

February 5, 2021

Market Reports Retail Texas Texas Market Reports

Pent-Up Demand Grows for Experiential Retail in Texas

by Taylor Williams January 7, 2021

By Taylor Williams With widespread vaccination several months away and the federal government having passed additional relief legislation, the end of the COVID-19 pandemic appears to be in sight. To that end, retailers and restaurants that have survived the public health crisis can, with some reservations, start to look toward the rebound phase. Because there’s no question that American consumers are itching to make up for lost eating, drinking and socializing time, provided they can do so in what they feel are safe environments. “Our biggest point of optimism for 2021 lies in the fact that people want to go out, eat, shop and be entertained,” says Lucas Patterson, executive vice president at metro-Dallas based Bright Realty. “As we continue to respond to the pandemic, people are increasingly ready to get out of their homes, be with others, eat at restaurants, have drinks and listen to music. We believe we can offer those opportunities as soon as the time is right.” “Looking forward, our biggest source of positivity involves consumers’ built-up savings and pent-up demand for human connection in a more normal existence,” adds Terri Montesi, CEO of Trademark Property Co, the developer behind mixed-use projects such as Victory Park …

January 7, 2021

Market Reports Multifamily Texas Texas Market Reports

Austin Poised to Emerge From Pandemic as a Premier Multifamily Market

by Taylor Williams December 22, 2020

By Sean Sorrell, senior managing director, JLL As we enter 2021, there’s no doubt that we are emerging from one of the most unique and trying years that our modern civilization has ever confronted, and we all likely agree that we will never again endure a pandemic of this scale. As of the writing of this article, the first vaccines have arrived in Austin; our first responders have begun administering it to the public and we can finally see the light at the end of the tunnel. In the face of these challenges, Austin continues to flourish, at least on a relative basis, and its real estate industry is poised to take a firm lead as one of the strongest real estate markets in the nation, if not the world. A key discipline within the industry is the apartment rental market, which is currently facing obstacles but continues to successfully navigate market conditions all the same. The metro Austin apartment inventory is now approaching 200,000 units — a growth rate of 75 percent over the last eight years. While many cities would wilt under the pressure of this ongoing development surge, this market has flourished. The ongoing supply has marginally …

December 22, 2020

Industrial Market Reports Texas Texas Market Reports

Spec Industrial Development Accelerates Throughout Texas

by Taylor Williams November 24, 2020

Industrial developers throughout the major markets of Texas are hustling to acquire and entitle land, arrange construction financing and break ground on projects to meet ever-growing requests for an increasingly diverse group of users. Accelerated demand for e-commerce and logistics services and sustained population growth ensure that new, well-located industrial spaces will be absorbed as soon as they come on line — if not before then. Developers are increasing the proportion of spec projects within their portfolios in response to this. A recent example of such a project is the 1.3 million-square-foot Fort Worth Logistics Hub, a spec project by locally based developer VanTrust Real Estate that is designed to meet rising demand from logistics users. The developer broke ground on Phase I of the project, which is located in South Fort Worth, in late October and expects to deliver a 670,941-square-foot building in July 2021. “Right now, nearly all of our projects across 10 major markets, including Dallas-Fort Worth (DFW) are being developed on speculative basis,” says Rob Huthnance, partner at California-based investment and development firm CT Realty. “As long as the level of tenant demand remains at or near where it is now, there will continue to be …

November 24, 2020

Conference Coverage Market Reports Multifamily Texas Texas Market Reports

Multifamily Architects, Contractors Deliver Services in New Ways to Keep Projects Moving, Say InterFace Panelists

by Taylor Williams November 23, 2020

By Taylor Williams Like most members of the working world, professionals who design and build multifamily properties in Texas have had to adjust how they do business and service clients in response to COVID-19. But many of these companies and individuals have managed to do so in ways that haven’t significantly hindered workflow. From conducting virtual meetings with staff or clients to using complex interfaces that allow for real-time illustrations to maintaining strict distancing and tracking protocols on job sites, architects and contractors are finding solutions that minimize pandemic-related disruptions. Some delays in the design and building processes have been inevitable. Job sites sometimes have to be shut down when workers test positive. But these solutions, paired with Texas municipalities’ general recognition of construction as an essential industry, have limited the extent to which public health concerns have pushed projects behind schedule and/or over budget. That’s according to design and construction panelists at the ninth annual InterFace Multifamily Texas conference. The two-day event was held virtually on Nov. 18-19. Rich Kelley, president of InterFace Conference Group, the division of Atlanta-based France Media that hosted the conference, moderated the panel. Conducting Daily Work The pivot to platforms such as Zoom and Microsoft …

November 23, 2020

Conference Coverage Market Reports Multifamily Texas Texas Market Reports

COVID-19 Further Entrenches Digital Technology in Multifamily Leasing, Management, Says InterFace Panel

by Taylor Williams November 19, 2020

By Taylor Williams The unimpeachable role of technology in multifamily operations has been growing for some time, but COVID-19 has accelerated the importance of these platforms to a level that is unlikely to change even after the pandemic has fizzled out. Particularly with regard to leasing units to new renters and hiring and retaining talented management professionals, multifamily operators have had little choice but to embrace new technologically advanced ways of doing business. And since competition for tenants and staff are equally intense within the major apartment markets of Texas, operators that have developed proficiencies with new apps, platforms and equipment are pulling away from the pack. A panel of multifamily owner-operators and leasing agents discussed these topics at length during the first day of the ninth-annual InterFace Multifamily Texas conference. The two-day virtual event, which was hosted and organized by Atlanta-based France Media, was held Nov. 18-19 in lieu of the fall gathering that usually brings multifamily professionals from across the state together in Dallas. The Customer Side The panelists provided anecdotal evidence of just how important technology has become to the leasing and management aspects of their operations. “We’ve used basic equipment like video-stabilizing pods, which can be …

November 19, 2020

Market Reports Office Texas Texas Market Reports

Why Dallas May Have A Competitive Advantage in the Office Market Recovery

by Taylor Williams November 17, 2020

By Brett Merz, senior vice president and asset manager, KBS As this unprecedented year hits the midpoint of the fourth quarter and office investors consider their options, one market in Texas stands out: Dallas. This market has historically shown strong resiliency and continues to do so throughout the pandemic. While Texas as a whole has been ahead of many other states in terms of allowing tenants that are eager to return to the office after the COVID-19 shutdown to do so, the Dallas office market has especially embraced reopening and returning to work. According to a new report by Kastle Systems, Dallas County leads the country in terms of the share of employees who are back to their workplaces following government-mandated shutdowns. Across the 10 largest metroplexes in the country, an average of 27.4 percent of employees are back in the office, while Dallas employees are returning to work at a rate of 43.3 percent. This figure compares favorably to proportions of employees returning to offices in other markets, including Los Angeles (34 percent), Washington, D.C. (24 percent) and San Francisco (14.7 percent). This news is a testament to tenants’ appetite for occupying office space and the market’s resiliency despite …

November 17, 2020

Market Reports Office Texas Texas Market Reports

Office Trends Raise Property Tax Concerns in Texas

by Taylor Williams November 12, 2020

By Kirk Garza, Valarie Bradley and Caleb Snow of Popp Hutcheson PLLC With property taxes comprising a significant portion of the real estate operating budget at most companies, both tenants and landlords need to understand how trends sparked by COVID-19 can impact their property tax valuations. The pandemic has spurred governments to impose unprecedented restrictions on office capacity and fueled widespread uncertainty among companies that own or lease office space. Organizations are asking if, when and how they will use their offices in the months ahead and are scrutinizing expenses to reduce costs. Many businesses are reevaluating their space requirements after adopting work-from-home initiatives, while greater familiarity with Zoom and other applications that support remote training and online collaboration has firms reconsidering their ongoing need for conference or meeting space. It is essential for real estate decision makers to monitor the effects of such trends on taxable property values. Office Demand Evolves In the early 1990s, it was common for companies to occupy 350 square feet of office space per person. This requirement changed as some businesses sought to maximize density and encourage collaboration. In a COVID-19 world where social distancing precludes density, many companies are limiting the number of …

November 12, 2020

Market Reports Office Texas Texas Market Reports

Market Mystery: Why DFW Presents a Strong Case for Quick Recovery

by Taylor Williams November 10, 2020

By Nora Hogan, SIOR, principal at Transwestern The immediate future of the Dallas-Fort Worth (DFW) office leasing market is an enigma. Real estate professionals believe we are near the top of a V-shaped recovery curve. However, many tenants disagree and are being cautious about their office leasing decisions. Due to the pandemic, tenants became innovative in providing ways to service their customers. They have learned they can operate, survive and even excel under the current business environment, and thus are delaying their lease decisions. Tenants are learning which employees can work productively without the boundaries of the office. The million-dollar question is whether or not this partial work-from-home model is sustainable. Some employers think not, while others are betting that it has staying power and have placed either all or a portion of their office space on the sublease market. Today, sublease space in DFW represents 15 percent of the total vacant square footage. This percentage is higher than the volume of sublease space that the market posted during the dot-com recession of 2002. Currently the total sublease square footage is 9.5 million, which is almost identical to the December 2002 sublease inventory peak. The difference is that in 2002, …

November 10, 2020

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