Grocery stores are always getting a better understanding of the priorities of their core customers. Convenience, value and service are the top reasons people shop where they shop. However, those priorities are expanding. The focus has shifted away from simply providing a “one size fits all” solution toward a customized strategy to attract a cross-section of customers — from the everyday shopper to experienced foodie. By doing so, retail spaces are successfully opening across the state at an elevated rate, addressing growing customer demand while navigating the ever-changing market. Here are five items impacting grocery stores in our state. Educated Customers Customers are becoming more educated about the products they buy. Their expectations are changing. Retailers are finding creative ways to successfully addressing them. To increase revenue and margins, drug stores are getting into the mix, with mixed results. Established chains like Walgreens and CVS/Pharmacy are renovating over 400 locations, with increased emphasis on rebranding their drug stores as health/wellness retailers and expanding the grocery items kept in stock. Big box stores, like Walmart, are also making changes as they try to refine their market strategies. The company announced that approximately 102 of its smaller Walmart Express stores will be …
In 2016, uncertainty in the oil and gas industry has made a major impact on the Fort Worth commercial real estate market. While each submarket is affected differently, the need for relocations and renovations will lead to a rising demand for quality office and retail spaces across the area. Development of Fort Worth real estate is expected to remain strong in 2016, with growing opportunities that create a strong and healthy market. Office Opportunity Downtown Fort Worth has become a hub for major players in the oil and gas industry, such as Holland Services, Forestar Oil & Gas and FTS International. Within the last 180 days, these tenants have put over 125,000 square feet of office space up on the market for sublease. However, the rest of the office sector has been consistently absorbing large blocks of space, proving healthy despite oil and gas concerns. We have seen at least six transactions totaling over 385,000 square feet within the last six months. Transactions included Charles Schwab’s 130,000-square-foot lease at Circle T in Westlake, and Teague Nall & Perkins’ 42,000-square-foot lease of the former Everest College building at the Mercantile Center in Fort Worth. The consistently strong demand for quality office …
Mexico is what drives El Paso. Mexico is the dog and El Paso is the tail. When the dog is happy the tail gets to wag, and we’re wagging pretty hard right now. The El Paso industrial market hasn’t been this strong since at least 1990. Juarez, Chihuahua, El Paso’s Mexican counterpart directly across the border, posted a third consecutive year of positive industrial absorption in 2015. Build-to-suit development activity is at a level not seen in five years. As a direct result, El Paso’s industrial vacancy rate dipped below 9 percent in the fourth quarter of 2015, the strongest tenancy performance in nearly a decade, according to Cushman & Wakefield | PIRES International. All the leasing activity we’ve been seeing has been chewing into the city’s vacancy rate. El Paso’s Class A vacancy rate is now below 2 percent. For example, in February, Los Angeles-based BH Properties leased a 409,000-square-foot industrial space located at 9600 Pan American Drive between Interstate 10 and the Rio Grande to a subsidiary of Sweden-based Electrolux Group. Electrolux Group chose the location because it is near the Zaragoza Bridge, El Paso’s far-east port of entry, providing convenient access to the company’s plant across the …
Retail and restaurant activity is strong in Houston. The Woodlands, an award-winning master planned community located 27 miles north of downtown Houston, has defied the negative impact of the oil and gas market by staying extremely solid with high occupancy and strong rents. Both retail and restaurants have seen robust growth. “Despite reports of Houston’s economic slowdown, the retail market isn’t fazed by the dropping oil prices,” says CBRE’s Houston retail research report for third quarter 2015. “In fact, construction has increased, national retailers are bullish on the Bayou City and five years of the strongest population gains in the nation are driving healthy retail growth.” Retail occupancy in the Far North sector, including The Woodlands, remains at approximately 94 percent for the third quarter of 2015, according to CBRE. Suburban Expansion While traffic in the Houston area continues to become congested, suburban cities such as The Woodlands offer shoppers and diners almost all of their retail needs within the walls of the community. Residents are finding no reason to leave. Retail in Houston and The Woodlands is limited by supply. As quickly as construction begins on new retail sites, preleasing occurs. “Fortunately, there is currently 2.6 million square feet …
Steadily rising home prices and a growing population base facilitated strong demand for apartments in Austin last year. A positive employment outlook and favorable demographic trends will continue to augment housing demand and attract investors to the Austin apartment market in 2016. In 2015, Austin employers added 34,600 workers to payrolls, expanding the workforce by 3.7 percent, according to the Bureau of Labor Statistics. Strong hiring last year contributed to a 40 basis point year-over-year decline in the metro’s unemployment rate, which reached 3.4 percent in the third quarter. The largest gains were in primary office-using sectors, which accounted for nearly 50 percent of additions. Austin will continue to grow this year, with more than 60,000 individuals anticipated to move to the metro, supporting the creation of 23,000 households. Employers are projected to add 37,500 new jobs this year, increasing the workforce by 3.9 percent, according to Marcus & Millichap Research Services. As was the case last year, demand for housing will intensify. Austin’s population and employment boom in 2015 led to surging demand for both single-family and rental housing. Ultimately, the consistent rate of growth for single-family home prices fostered higher demand for apartments as home prices in the …
The collapse of oil and natural gas prices has reduced the value of commercial, industrial and residential properties across Texas, and threatens to reduce those values even further. This market collapse greatly impacts property tax appraisals and related tax revenue, especially as it relates to upstream, midstream and downstream properties, and to a lesser extent, commercial properties in general. Now more than ever, owners need to ensure they’re paying their share of property taxes — and nothing more. Judicial challenges are becoming increasingly popular due to their effectiveness in reducing appraisals to align with fair market values. The Houston Chronicle reported that there were 2,541 active lawsuits over commercial property valuations for the 2015 tax year in Harris County alone. The owners of 33 of the 34 high-rise commercial properties in downtown Houston have filed a judicial property tax challenge, as reported by the Houston Business Journal, and Exxon Mobil is suing the Harris County Appraisal District for its $1 billion appraisal of Exxon’s newly constructed campus. To file a judicial appeal, an owner must first file an administrative appeal with the Appraisal Review Board (ARB). These protests are common and typically yield a modest reduction in the appraised value. …
Dallas is on a hot streak. This is the best market Dallas has seen in years. Companies are expanding and corporate relocations are driving new development in office, industrial and retail. Based on the healthy, active market of 2015, the momentum should carry over and remain strong through the first half of 2016. Office Dallas has become a headquarters hub in the past few years with companies like Toyota and Liberty Mutual putting down roots in the Metroplex. Companies are doing well financially and are growing, which is great news for the office sector. Leasing activity is at an all-time high with all sizes of companies experiencing growth. Office expansions and mid-term lease extensions are becoming the norm. In November, GEICO’s regional headquarters relocated to a larger facility with the goal of hiring nearly 200 employees before year’s end. The insurance company leased 224,000 square feet at 2280 Greenville Ave. in Dallas, brokered by Tom Lynn and Nick Lee, CCIM, of NAI Robert Lynn and Griff Bandy of NAI Partners in Houston. GEICO’s former headquarters building in the North Dallas area is now on the market. We’re also seeing the employment industry shift from focusing solely on clients to employee …
Depending on who’s speaking, or what you’re reading, the forecasts for the 2016 Houston industrial real estate market run the full spectrum from bull to bear. Whether you are a landlord trying to fill a vacancy; a developer weighing the decision on whether to build or not; or an investor or a potential tenant looking for the best lease terms, your decision making is driven by a few key factors. These include the price of oil and where you think it is headed, the type of industrial facility you build/own/require, and in what submarket of Houston it is located. With current oil prices hovering in the low $30s per barrel, and threatening to go lower, you don’t have to look hard to find plenty of economists forecasting a rough 2016 for Houston industrial real estate. But that’s not the whole picture. No doubt the ongoing drilling downturn has hit the city hard. A recent survey was conducted of single-tenant manufacturing facilities ranging from 10,000 to 50,000 square feet in the West, Northwest and North Houston submarkets. The survey reported over 2.4 million square feet available in 120 buildings, with an additional 240,000 square feet under construction in 15 more buildings. …
Greater Waco’s economy is on a roll. Positioned halfway between Dallas and Austin, Waco is a prime destination for companies and individuals wanting access to large metro areas without the hassles of traffic, expensive real estate and labor shortages. With newly completed facilities such as Baylor University’s McLane Stadium and major downtown redevelopment projects, Waco is hitting the radar for new development opportunities. October 2015 marked 43 months of positive economic growth for the area, with 4.8 percent growth in the third quarter of 2015 alone. Major organizations, including Baylor, continue to aid in elevating the status of Waco as a dominant player in the Central Texas region. Just as Texas has seen significant growth since 2008, so too has Waco. One major contributor to Waco’s economic success has been employment growth. Employers are creating new jobs in the area, with 1,600 more positions now in place, 113,700 compared to 112,100 in October 2014. Construction, manufacturing, healthcare, hospitality and logistics remain strong drivers for the economy. The result is a community with a 4.8 percent unemployment rate and residents with more disposable income. In fact, real median household income for the Waco MSA grew 5.8 percent, to $43,184, between the …
Right now, the Dallas-Fort Worth metropolitan statistical area is one of the hottest multifamily markets in the country with an eye-opening 34,000-plus units currently under construction. Long-term trends suggest that even if construction slows somewhat, demand for north Texas apartments will outstrip supply for the foreseeable future. The reason is straightforward. Dallas has much going for it that employers find extremely appealing, including a central location equidistant from both coasts, an educated workforce, a diverse economy and a favorable business climate. These underlying advantages are simply not going to change. In the last three years, a number of companies, including Toyota North America and Nationstar Mortgage, have relocated their headquarters to Dallas-Fort Worth, while others, like Southwest Airlines and AT&T, have added thousands of positions to their headquarters. Most recently, American Airlines announced plans to create a corporate campus west of its current location near Dallas/Fort Worth International Airport. Dallas-Fort Worth has also become a popular site for regional corporate centers. State Farm is constructing a 2 million-square-foot campus on Dallas’s main north-south light rail line in suburban Richardson. When it is completed in 2016, the company will have more than 5,000 employees in north Texas. Liberty Mutual announced this …