During the past several years, Laredo’s retail sector has experienced tremendous growth. With the continued development of the Bob Bullock Loop (Loop 20) that connects I-35 to South Laredo, retail stores and restaurants are finding this major roadway to be an attractive alternative to the existing I-35 corridor. Up to this point, the major retail corridor in Laredo has been I-35, which serves the Mexican shoppers as they visit Laredo from Nuevo Laredo and Monterrey. However, since the development of Loop 20, a shift in retail clusters along the loop has brought in local shoppers and growing number of Mexican shoppers. • Weingarten Real Estate Investment Trust now owns and operates three shopping centers in Laredo, all anchored by HEB. Its third and most recent acquisition, Independence Plaza, was purchased from San Isidro Ranch. The property, designed by Madeline Slay Architecture, has the only HEB plus! in Laredo as well as Ross Dress for Less and other junior anchor retailers. • The City of Laredo recently sold 79 acres across from Laredo International Airport off Loop 20 to Laredo Town Center LP. The property will be developed into a shopping center. • To help revitalize downtown, a public-private partnership between …
Texas Market Reports
The North Texas industrial real estate market is hot, both in terms of development and leasing. The Dallas/Fort Worth Metroplex has seen a reduction in vacancy rates to just under 8 percent (which is an historic low), approximately 3.55 million square feet of positive net absorption and 6.4 million square feet of industrial space under construction as of the end of the second quarter of 2013. Add to these encouraging numbers the Bureau of Economic Analysis’ estimates of annualized U.S. GDP growth of approximately 2.4 percent for 2013, and the outlook is even sunnier. According to the Census Bureau, Dallas/Fort Worth is the largest metropolitan statistical area in Texas and fourth largest in the U.S. Demographics remain strong regarding a skilled labor pool and explosive population growth in the coming years, and at an unemployment rate of 6 percent, the Dallas/Fort Worth Metroplex is below both the U.S. and Texas average unemployment rate. Such statistics have Dallas/Fort Worth poised to continue to be an attractive location for industrial users and tenants. E-tailing is Here to Stay One key macroeconomic trend affecting industrial real estate in the Dallas/Fort Worth market — as well as that of the nation — is the …
Dallas/Fort Worth’s office market has experienced some of the strongest leasing activity in its history and will continue to tighten through 2013 as job sectors that demand space lead to record expansion. Additions to local office inventory should more than double this year compared with 2012. Meanwhile, pre-leasing has been steady, and its impact on the vacancy rate is predicted to be minimal. However, vacancy may start to inch up in 2014 as developers fill the pipeline with sizable speculative projects. Far North Dallas has become a draw for major corporate relocations, and therefore a hotbed for office development. This is due in part to the area’s relatively affordable housing and well-rated schools. Space slated for delivery this year in Far North Dallas has been largely spoken for, but the area is also home to one of the largest speculative projects underway, a 342,000-square-foot office tower scheduled to become available in late 2014. Office development has also increased in the Fort Worth area. That being said, near-term deliveries are expected to be light and limited to buildings less than 75,000 square feet, including some properties dedicated entirely for medical uses. Looking at both quarterly trends and monthly updates, healthy employment …
On account of the diverse local economy and a tech employment base in high demand by global firms, the Austin industrial market has realized a recovery that should sustain continued rent growth with a healthier inventory delivery schedule over the next 24 to 36 months. Austin has added nearly 105,000 jobs during the economic recovery through May 2013, bringing total employment 9 percent above its previous peak in late 2008. The unemployment rate, at only 5.4 percent in May, is more than 200 basis points below the national average of 7.6 percent. The broad tech sector expansion, including new facilities underway for Apple and Samsung, and the strong housing market are driving robust growth in construction employment, while all three areas represent key supports for industrial tenant demand. On the heels of record net absorption in 2012 of 2.1 million square feet — an annual total not experienced in more than 15 years — industrial vacancy in Austin has fallen to 12.5 percent, a low not seen since the market’s peak in 2007. An important differentiating factor for the market today versus the 2007/2008 cycle is the limited amount of construction. When vacancy rates fell to 11 to 12 percent …
The boom is back and stronger than ever in Austin, making the city a top destination for retailers and investors. Bass Pro Shops, H&M, Trader Joe’s, Fresh Plus, In-N-Out Burger, Gander Mountain and Five Below are among the list of well-known national retailers that have opened or announced plans to open their first Austin area stores within the last year. Meanwhile, a growing list of retailers in the Central Texas market are expanding, including Whole Foods Market, H-E-B, Walmart and Alamo Drafthouse, a locally-based chain of movie theaters. As host of the U.S. Grand Prix, the Austin City Limits Music Festival, the SXSW music festival and conferences, and ESPN’s Summer X Games (starting in 2014), Austin enjoys a certain cachet and glowing national and international media, but the coolness factor isn’t nearly as important as hard numbers for expanding retailers, and Austin’s numbers are impressive. The Central Texas economy is expected to add more than 35,000 jobs this year, including thousands of well-paying positions at Apple, GM, Samsung, National Instruments and Visa. More than 70 people move to Central Texas each day, and the Austin MSA is now the 11th-largest city in the nation, according to the U.S. Census. Signs …
Population and employment growth are providing a substantial boost to the Austin apartment market. Metro-wide vacancy is hovering in the mid-4 percent range and is 150 basis points below the average historical rate. Rents also increased measurably. In addition to rising job and resident totals, limited new apartment product in recent years supported an average quarterly rent growth of 1.2 percent, compared to three-month gains of roughly 1 percent in the year prior to the recession. The most notable economic news in the metro is Apple Inc.’s substantial expansion. Over the next eight years, the company will construct and staff a 1 million-square-foot, 39-acre development in Austin’s Far Northwest submarket. Day-to-day operations will yield more than 3,600 new hires, doubling the metro’s number of Apple employees. In the near-term, LegalZoom Inc. plans to add 600 new employees before the end of the year. Additionally, Accenture and General Motors hired a combined 700 workers during the first half of 2013. Beyond the large job announcements, both small and large businesses are hiring, attracting new residents and fueling apartment demand. In the 12-month period ending in the second quarter of this year, total nonfarm employment in Austin increased by 28,900 positions, a …
The Austin industrial market is comprised of 37.2 million square feet, representing investment-grade buildings that are not owner-occupied and larger than 20,000 square feet. While that may seem like a smaller tertiary market in terms of square footage, Austin has proven to be a dynamic market, attracting interest and commitments from both creditworthy tenants and high-profile investors. As of mid-year 2013, Austin’s industrial market is 12 percent vacant and trending in the right direction with positive absorption of 215,000 square feet, according to NAI REOC. There was no new notable construction from 2010 to 2012, which helped vacancy rates decrease as existing tenants expanded and new tenants entered the market. The recovery was highlighted by positive absorption of more than 2 million square feet during 2012. While some of the absorption was associated with short-term warehousing needs for Samsung’s $3.6 billion expansion of its semiconductor fabrication plant in northeast Austin, the market reached a state of equilibrium. As the market stabilized, investment sales activity increased with institutional capital acting as a major player. In the past 18 months, several noteworthy transactions took place including: – Karlin Real Estate purchased three former Dell facilities totaling more than 900,000 square feet; 297.9 …
Houston has long been characterized by its energy presence, earning titles such as “The Energy Capital of the World” and the “Petro Metro.” The American drilling renaissance has brought about significant changes on a national and international scale, and the boom is projected to be sustainable for decades. As a result, energy companies are shifting operations back to the U.S. Houston is at the heart of the American oil industry, and as companies grow and expand their footprint in the U.S., the Houston office market is positioned to experience significant growth. The economic impact of the shale boom has been felt throughout Texas. The Eagle Ford Shale, one of the most significant oil and gas plays in the country, spans 14 producing counties and had an economic impact of $46 billion in 2012. Surrounding cities, such as San Antonio and Corpus Christi, are experiencing growth in all product types to accommodate the population and employment gains in the region. Midland has become one of the most expensive places in Texas thanks to the Permian Basin, while the Dallas/Fort Worth metro area, with the Barnett Shale in its backyard, continuously tops various economic health indices. But Houston, home to 87,418 headquarters, …
As Houston As Houston continues to create jobs and power the economic engine of Texas, every segment of the multifamily sector continues to push higher. With more than 100,000 jobs added in the past year alone, the newly hired and the job-hungry are leasing up available space in Houston faster than units are being delivered to the market. Demographics demonstrate a growing shift toward rentals for the city in general. For the first time since 2005, Houston apartment occupancy is averaging more than 90 percent. As the energy, medical, service and construction industries continue to expand in Houston, demand will remain strong across the board for Class A, B and C product. New multifamily construction is heavily concentrated within the Inner Loop, Energy Corridor and the vicinity of The Woodlands. The development pipeline trends toward these job-ready markets as Houstonians dream of shorter work commutes and “live, work and play” scenarios. Multifamily options inch toward this dream, providing retail, dining and entertainment options on property or nearby. But living the dream does not come cheap. While convenience is desirable, these benefits can be packaged at a steep price. Houstonians, however, are more than willing to pay premium prices for premium …
The Houston metro retail market is attracting retailers and investors from across the world because of its booming economy and impressive job growth, primarily in the energy and healthcare sectors. Since 2012, Houston’s local employment has grown, on average, around 4 percent year over year. As developers continue building and leasing large office and medical developments, notably in The Woodlands and Energy Corridor, retail space has been and will continue to be in high demand. ExxonMobil is currently developing its 385-acre campus near the intersection of Interstate 45 and the Hardy Toll Road in The Woodlands. The development alone has more than 3,000 workers on site every day. With completion slated for 2015, nearly 10,000 workers will re-locate to the campus from the Houston area, as well as from Virginia and Ohio. Another notable development recently announced is ConocoPhillips’ 850,000-square-foot lease of Trammell Crow’s Energy Center Three and Four in the Energy Corridor. Energy Center Three, with expected occupancy in the second quarter of 2015, and Energy Center Four, with expected delivery in the second quarter of 2016, will house approximately 2,100 employees in the submarket. In addition to ConocoPhillips, The University of Texas MD Anderson recently acquired approximately 35 …