The Texas economy has recovered quickly from the recession, and Fort Worth is a prime example of a flourishing commercial real estate market. Leasing activity in the city’s retail market is high, despite low inventory and increased rental rates. Cap rates are low, investment sales have increased, and the scarce inventory has prompted multiple new developments. Incredible leasing activity involving both national and local credit retailers has been seen across the market, and the activity is projected to continue throughout the year. In particular, there are many high-end grocers entering the Tarrant County market, such as H-E-B, Sprouts and Whole Foods, to name a few. With leasing activity increasing in the market, there is a high demand for retail space, but there is a low supply, evident in the current 8 percent vacancy rate. The limited availability of leasable retail space coupled with high demand in the market has continued to drive up rents — rates have increased by 5.5 percent since the first quarter of 2013 — and has also begun to affect sales prices. The average asking price for Tarrant County retail investment properties currently stands at $146 per square foot, compared to $142 per square foot in …
Texas Market Reports
While growth and development have been evident in most Texas areas during the last few years, Lubbock shines bright among cities in the Lone Star State. As Marci Russell, former chief economist with CNBC, said, “Lubbock’s got oil and gas, a strong agricultural presence, a great university and a health care system that is the envy of other communities.” The year 2013 brought amazing growth, and the positive economic trends look to continue in 2014. Building permits climbed to a surprising 987 last year, up 143 percent, and retail sales and payroll employment are still growing. Employment increased by 4 percent in 2013, ranking Lubbock fourth in Texas in terms of growth in that metric. The unemployment rate declined sharply to 4.3 percent, the lowest since 2008, and Lubbock’s consumer price index was up 2.1 percent year-over-year in January. Another sign of improvement in Lubbock is how the transportation system in the city has been enhanced with the completion of the Marsha Sharp Freeway and the Northwest Passage. Additionally, the Milwaukee Corridor continues to expand with development in retail, office, and small business on the West side. Sector-by-Sector Several large users of office and industrial space relocated and/or expanded to …
There is no denying the Houston commercial real estate market is one of the strongest in the nation, and all indications are it will remain on this upward trajectory — especially the industrial sector. The Urban Land Institute (ULI) recently ranked Houston as the second best market to invest in industrial real estate in the country in its Emerging Trends in Real Estate 2014 report, and the organization predicts we will continue to build on this momentum. While energy-related businesses and healthcare have certainly fueled the overall real estate growth in recent years, we are now seeing more consumer goods and e-commerce tenants take occupancy in industrial properties. This activity will ramp up even more as we move closer to the Panama Canal expansion opening in 2015, as well as the enlargement of the Port of Houston. Larger Trends In the first quarter of 2014, we saw 2.4 million square feet of industrial space delivered, and more than 8 million square feet of industrial construction underway. Vacancy remains low at 5.4 percent, and net absorption is at 1.6 million square feet for the first quarter of 2014. A steady increase in job creation and homebuilding are also contributing factors. Houston’s …
There is no doubt that Walmart is the dominant force driving growth in the San Antonio area right now. San Antonio-area shoppers gained four new Walmart Supercenters in 2013, five more are nearing completion and scheduled to open in the next few months, and two or three more are expected to break ground later this year. At the same time, two new Sam’s Club stores will be opening in the first quarter, and Walmart’s new Neighborhood Market concept stores are slated to debut in the area this year with three locations already announced and more expected. Meanwhile, speculative development has remained very limited, but two new projects — both located in the Northwest sector — were delivered in the final quarter of 2013. Although not huge projects, these two new centers mark the delivery of San Antonio’s first sizeable speculative retail properties in over a year. One of these developments was Helotes Town Centre, which serves as an example of growth stimulated by the adjacent Walmart that opened earlier in the year. Pre-leasing activity in the 50,000-square-foot Helotes center includes Great Clips, Cash Store and Marco’s Pizza. Elsewhere, Dominion Ridge is a two-story retail project located along the I-10 corridor …
Although El Paso’s industrial vacancy rate remains near recession highs, the city is surrounded by positive developments expected to drive stronger demand and allow for tighter industrial fundamentals. The high vacancy is due in large part to the availability of large, bulk spaces of 200,000 square feet and more. However, such properties account for only 30 percent of El Paso’s industrial inventory, and these structures do not serve the market’s core tenants, which typically seek spaces of 100,000 square feet or less. There are currently six of these large vacancies in El Paso for a total of 2.6 million square feet, which represents 34 percent of the total vacant space in the market. Without these large blocks of availability, the market vacancy rate would be in single digits; also, several encouraging trends point to improved conditions ahead. Submarkets The East and Lower Valley industrial submarkets, which account for more than half of the total industrial inventory in the city, have stabilized for spaces less than 100,000 square feet. Bulk vacancies (in this case, buildings greater than 600,000 square feet) in these submarkets are keeping overall vacancy elevated, but for industrial space that meets the size of El Paso’s core tenants, …
Having been at the same desk and phone for 37 years, I can definitively proclaim that the activity has reached a level in Waco and Central Texas that has never been experienced before. Blessed with a diverse economic base and stable market growth, the greater Waco real estate market weathered the storm of the last few years rather well with the addition of jobs and capital investment throughout the recession and sluggish economic recovery. The metro is one of only 34 of the 372 MSAs in the U.S. that has now exceeded its pre-downturn employment levels, and the city saw 20 consecutive months of economic growth in 2012 and 2013. Capital investment in the past five years has totaled nearly $1.8 billion, including corporate, university, health care and public investments. There’s considerable excitement for several reasons, one of which is a resurgence of the Interstate 35 corridor. With the rise in popularity and awareness of Baylor University, especially its sports, activity has picked up on I-35 near the school, including demo and new construction at a fever pitch. What’s more, the new stadium serves as representation of the excitement and new development. Industrial Landscape Since 2010, the majority of industrial …
Whether your business is in the exploration of space, firmly grounded in oil and gas exploration or focused on residential and commercial development, Midland — center of the country’s fastest-growing and richest economy — is clearly the place to be in 2014. Continued growth in all sectors of the economy, strong public-private partnerships and a development plan that welcomes diversity are driving a continued resurgence of demand for locations in our downtown district. Current real estate development in the downtown area includes both renovation and new construction and ranges from office space to new retail stores and eateries, as well as hotels and lofts for downtown living. These new locations are supported with improvements in public transportation and multi-story parking garages, enhancing the rapidly expanding clientele and customer base. In line with Midland’s long-standing “Tall City” nickname, the hottest topic in town is the proposed Energy Tower at City Center. The tower is a 58 story mixed-use development, with 53 floors above ground and five subterranean floors provide parking for the Tower and surrounding developments. The property features 99,000 square feet of retail space, a four-star hotel, residential and office space and is topped by a sky restaurant/bar. And just …
Amarillo’s market rarely experiences periods of rapid growth or rapid deceleration. The market cycle sustains solid performance. This stability is due to a well-rounded economy that has benefitted from strong commodity prices and job growth. Like many markets around the country, the last couple years have been fairly flat, but we did see some areas of economic strength. Retail sales were much higher in 2013 compared to the lower levels of 2012. The leasing of previously empty big box space, significant centers changing hands and the construction of new projects point to a promising 2014. According to the Amarillo Economic Forecast for 2014 published by Amarillo National Bank, 2013 saw retail sales up 8 percent from the previous year. While such aspects as gains in the stock market have been a factor, a hail storm and the subsequent claims contributed to the increase as well. After a lull, national and regional tenants are making their way back to Amarillo. The leasing of two previously vacant big box spaces are indications of this reality: A 40,000-square-foot space at The Summit Shopping Center was leased by Sears Outlet, and a 33,000-square-foot vacancy at the Shops on Soncy, previously occupied by Circuit City, …
The Dallas/Fort Worth industrial market is one of the healthiest in the country and dodged the recession unscathed. Texas leads the nation in job growth and has now enjoyed six years of economic growth, and the cold hard facts underpin our high-performance industrial marketplace. Some 548,000 jobs have been added to the state of Texas since 2008, and Dallas/Fort Worth ranks third among metro areas in the state for job growth, according to the U.S. Bureau of Labor Statistics. Approximately 1.2 million new residents were added to the Dallas/Fort Worth area from 2000 to 2010. Business Facilities magazine ranks Dallas as the No. 3 center in the U.S. for logistics and distribution, while Fort Worth is ranked No. 5 for aerospace and manufacturing. We know about Houston’s oil and gas-fueled economy, San Antonio’s growing entertainment and defense sector and Austin’s phenomenal growth backed by tech companies and anchored by state government. But what’s up with North Texas and the Dallas/Fort Worth economic drivers? For readers in the developer camp, they will be pleased to know that DFW was on track to have a record year of absorption in 2013 by the time we went to press with this article in …
Looking back five years ago to the outset of 2009, new construction was the hot topic in the San Antonio office market. In 2008, 12 new office buildings were completed, adding approximately 1.5 million square feet to the market. That equated to a 6 percent increase in existing office inventory, with the new product concentrated in the key Northwest and North Central office submarkets.Of course, new development slowed considerably as the recession set in and wore on. Fast-forward to 2013, and as of press time the San Antonio office market only added 166,630 square feet of new product. The good news, though, is that San Antonio metro employment suffered much shorter and shallower losses than other metro areas as a result of the Great Recession. What’s more, the recovery from these losses has been sharp, with nearly 58,000 jobs added since local employment hit its lowest point in 2009, or approximately three new jobs for every one lost in the local downturn.One-third of these new jobs (or about 19,000) were created in office-using sectors such as finance, insurance and engineering. As a result, the office market is recovering, led by Class A space. The rapid decline in Class A vacancy …