There appears to be no sign that the recent growth experienced by many Texas metropolitan areas is slowing down anytime soon, and Fort Worth is no exception. Substantial job growth, solid multifamily fundamentals, low interest rates and a pro-business climate have put many eyes on the Fort Worth market. The Fort Worth-Arlington MSA is experiencing positive job growth, and is listed as one of the best performing metros in the nation. The MSA added 36,700 jobs, an expansion of 4.2 percent year-over-year ending February 2013. The MSA also experienced an unemployment improvement of 0.8 percent. This was the largest year-over-year percentage increase in employment among all metropolitan divisions and good enough to be ranked 13th nationally in job addition. Many of these jobs have come from the numerous road construction projects that the area has undertaken, such as the North Tarrant Express, which has more than 1,100 employees working on the corridor. The $2.5 billion project just passed the three-year mark and is currently ahead of its estimated completion date of June 2015. When complete, the North Tarrant Express will run from Interstate 35 West in Fort Worth to Industrial Boulevard in Euless, relieving congestion, improving safety and providing for …
Texas Market Reports
Austin has quickly become one of the hottest office investment markets in the country. In fact, many local market players say they’ve never seen this market more active, and for good reason. For Austin, it’s all about the strong combination of both outsized job growth and limited new development activity. On the jobs front, Austin gained 150,000 new residents over the past two years, according to the Census Bureau. In terms of construction starts, only three buildings were delivered to the market in the fourth quarter, and only 171,468 square feet of space was still under construction. These factors contributed to the Austin office market ending the fourth quarter of 2012 with a vacancy rate of 10.1 percent, down from 11.3 percent in the third quarter, with net absorption totaling positive 824,646 square feet in the fourth quarter. This year will see continued improvement in occupancy growth in Austin, though property performance will vary by submarket. For example, in the Round Rock/Georgetown/Cedar Park area, where a substantial amount of space was delivered during the recession, vacancy will tighten but will remain above 30 percent. As a result, rents in the area will continue to languish nearly 20 percent below the …
The Woodlands office submarket is one of Houston’s better performing submarkets, experiencing a robust fourth quarter 2012 with total absorption of 107,932 square feet. Spec office buildings have recently achieved 85 percent occupancy or higher prior to completing construction. For example, both 4 Waterway Square Place (a nine-story, 216,000-square-foot Class A building) and 3 Waterway Square Place (an 11-story, 234,000-square-foot Class A building) preleased to more than 95 percent prior to completion of construction. Total net absorption registered a positive 145,804 square feet in 2012. In addition, total vacancy for the market dropped 5.2 percent overall in the third quarter of 2012 to 4.2 percent in the final quarter of 2012. Class A rental rates in the second quarter of 2012 were $33.07, up 83 basis points from the prior quarter. Similarly, Class B rates increased three basis points to $22.81. Based on the continued decreasing vacancy rates, as well as continued increasing rental rates, The Woodlands projects to be a landlord favorable market for the year 2013. Several high-profile projects are under construction, including: • ExxonMobil Corp. is currently developing a 385-acre site along Interstate 45 and Spring Creek. The site will serve to consolidate all upstream Houston ExxonMobil …
The Houston industrial market ended 2012 on a positive growth trajectory and will continue to be one of the healthiest markets in the U.S. into 2013. 2012 ended with a fourth quarter vacancy rate of 5.2 percent and a positive net absorption totaling more than 1.7 million square feet of combined industrial space. A lack of available industrial inventory in the market is driving new development projects (2.5 million square feet) for both traditional warehouse/distribution space as well as freestanding, crane-ready manufacturing facilities that remain at a premium citywide. The lack of available inventory is pushing development outwards and driving rental rates and sales prices upward. This trend will continue to grow into 2013, but rental rates and sale prices will taper-off midway through 2013 as the market can only bear so much increase. Land prices have also seen a sharp uptick forcing users and developers to consider sites upwards of $4 per square foot when they have historically fought to stay under $3 per square foot. Additionally, there is a strong need for rail-served land sites or facilities. As the energy sector continues its growth and the Port of Houston takes on more capacity, the need for rail served …
San Antonio has been hard to ignore by national and international commercial and multifamily real estate investors on both the equity and debt side of capitalization. It has many of the positive ingredients that combine to score compelling marks in the various economic and investment models that are used to evaluate investment strategy. NorthMarq Capital works with national and international debt and equity real estate investors raising capital for commercial and multifamily properties every day in our role as an intermediary. Factors consistently standing out that make San Antonio attractive are its economic foundation based on financial services, healthcare, government and tourism and includes industries as diverse as medical, energy, biosciences, cyber security and aerospace. San Antonio is a top travel destination and has experienced very healthy population growth. It has an affordable and business friendly environment along with a unique geographic location and high quality of life. These factors translate into positive sustained demand for real estate. Several sources have given accolades validating the success the San Antonio economy in recent history. The Milken Institute named San Antonio as the No. 1 performing city in the country and emphasized the productivity and energy the city has had in recent …
For the past several years, the City of Laredo has focused on creating a safe environment that promotes both a high quality of life for its citizens and a business-friendly atmosphere where various industries can prosper. Although some have expressed concerns about the situation on the Mexican side of the border, the U.S. side is safer than many mid-to-large cities and our economy is booming. With our prime location on the U.S./Mexico border, access to Interstate 35, and both Union Pacific and Kansas City Southern rail lines, international trade is the city’s major industry, as reflected in our status as the nation’s No. 1 inland port on the U.S.-Mexico border. Laredo will be the first city in the nation to house Mexican Customs officials pre-clearing air cargo charters leaving Laredo. This allows the cargo to land in Mexico as “domestic cargo” which can then be sent immediately to the manufacturing facility. Additionally, with the recent discovery of the Eagle Ford Shale, a new industry is developing that will fuel Laredo’s, and the state’s, economy for years to come. Geography has certainly played well into the growth and development of the community, with more than $216 billion in annual trade passing …
The commercial real estate market for the Rio Grande Valley region, located in south Texas along the U.S.-Mexico border, has remained stable over the last couple of years. During the last half of 2012, there has been a general mood of optimism about 2013. The U.S. economic crisis did play some havoc in the region and many projects lost some momentum. However, the region managed to dodge the bulk of the effects, as some noted projects and acquisitions did come to fruition, including CVS/pharmacy store openings. The company has plans to open 25 stores in this market. H-E-B Grocery opened a new H-E-B Plus concept in Pharr and remodeled and expanded one of its Brownsville stores. The grocery chain is planning another store opening in Palmhust, north of Mission, this year. Other national retailers entering the market include Bass Pro Shop, Sam’s Club, Costco, LongHorn Steakhouse, Party Cityand Cinemark. The City of Pharrsaw the first Costcoin the market while McAllen added its second Sam’s Club. LongHorn Steakhouse is on a fast track and within 24 months will have opened five locations in the region. Additionally, Cinemark will be adding two theaters, including a state-of-the-art movie houseat the El Centro Mall …
Cheers and the clamor of new construction are among the dominant sounds wafting above the downtown Austin skyline of late, as the city welcomes a new wave of hotel construction and construction plans. Not a moment too soon. For several years, the hospitality industry has fretted that Austin’s growth as a destination city is outpacing the development of hotel accommodations, particularly in and around downtown. Voila! Hospitality’s proverbial “rooms available” signs are flickering brighter. By early 2013, no fewer than five major hotels will be under construction, delivering more than 2,000 rooms to Austin’s central business district. From all indications, more hotel developments are in the offing for later next year. That’s welcome news for those who promote Austin’s viability as a destination city and who roll out the red carpet for everything from conventions and corporate meetings to spring break activities and mega-events. In mid-November, Austin will debut as host city, through 2021, of the Formula One U.S. Grand Prix, accommodating Formula One racing’s return to the U.S. following a five-year absence. This high-profile race could attract some 300,000 fans. The South by Southwest Film Conference and Festival, Rodeo Austin, and the Austin City Limits Music Festival are just …
San Antonio’s multifamily market has historically been exempt from the fluctuations typical of other Texas cities. While San Antonio has had its share of new deliveries over the years, the multifamily stock has not increased in step with its Texas contemporaries. The traditional engines of the city– hospitality, health care and the military–provide a rock-solid foundation, but do not offer the types of high-paying wages that drive rent growth and new construction. New construction has also been inhibited by a lack of institutional capital flowing to San Antonio because it was perceived as a “low growth” market. Things, however, are changing. Job growth in industries such as energy, manufacturing, and the financial sector are drawing families to the region like never before, just as long-time San Antonio organizations such as USAA, the Medical Center and the University of Texas—San Antonio (UTSA) continue to expand. As a result of new jobs and a nationwide regression of home ownership rates to more historic levels, San Antonio’s multifamily market is seeing a rapid increase in demand. Developers, both local and national, have begun planning new developments… As of August 2012, San Antonio multifamily properties boast an overall occupancy rate of 92.9 percent. As …
More than a handful of times I have invoked the “If you build it, they will come …” line in discussions with office developers discussing the Southwest submarket of Austin, with the assurance that they can rely on statistics, trends and history. In fact, Austin is in a position to justify the delivery of new Class A office space in the Southwest submarket and there are some rock-solid reasons why. Located in the most geographically and environmentally challenging part of Austin, the Southwest submarket has grown from a mere 1.8 million square feet to more than 6.3 million square feet in the past 15 years. During that time, weathering two downturns, it has shown a resiliency for absorption, occupancy and rental rate strength that leaves the rest of the suburban market in the dust. Here are the factors that drive that resiliency: · Proximity to executive housing: Decision makers consistently find reasons to locate businesses close to their and other executives’ homes. The most attractive areas for executive homes is in the Southwest part of Austin’s MSA. This will be even more significant as traffic issues continue to cause longer commute times. · Adjacency to downtown: In particular, the south …