July 20, 2012
More People Relocating to Austin, McAllen
AUSTIN (Austin Business Journal) – More people are seeking greener pastures in Austin, relocating to the Capital City at a rate faster than nearly every other U.S. city.
Austin ranked second in The Fiscal Times’ list of “The Ten Top Cities People are Moving to in 2012,” following Kennewick-Pasco-Richland, Wash. Between April 2010 and July 2011, the tri-cities area grew 4.3 percent, with Austin close behind at 3.9 percent.
Strong private-sector business activity is credited for Austin’s rapid population growth.
Rounding out the top five on The Fiscal Times’ list includes Hinesville, Ga. (up 3.4 percent), McAllen-Edinburg-Mission (up 3 percent) and Raleigh, North Carolina (up 2.9 percent).
Aggieland Best for Business
COLLEGE STATION (Forbes) – In its latest “best of” list, Forbes highlighted the top small towns for business and careers.
Aggieland topped Texas and ranked sixth nationally.
The Best Small Places for Business and Careers focuses on cities with populations less than about 250,000 with strong job growth, high college attainment and a reasonable cost of doing business.
Northern cities Sioux Falls, South Dakota, and Fargo and Bismarck, North Dakota, took the top three spots on the list.
Besides College Station’s sixth-place finish, other Texas cities making the top 100 were Amarillo (No. 31), Tyler (No. 53), Longview (No. 54), Midland (No. 61), Abilene (No. 67), Texarkana (No. 69), San Angelo (No. 85), Odessa (No. 95), Sherman (No. 98) and Waco (No. 99).
Apple Bites Into Site for New Complex
AUSTIN (Austin American-Statesman) – New York City may officially be The Big Apple, but Apple Inc.’s planned Austin expansion could change things.
The Cupertino, California, computer giant recently closed on nearly 39 acres on West Parmer Ln., adjacent to the campus it operates in Riata Crossing. Today, Apple occupies about 550,000 sf in Riata Crossing and nearby Parmer Business Park.
Apple will likely build two four-story office buildings on the site, at 140,816 sf each.
About $35 million in city, county and state incentives have been offered to persuade Apple to locate its operations center on Parmer Ln.
As with many of the company’s major undertakings, Apple has yet to officially confirm its plans for the Austin site.
Hilton Carving Space in Granite Park
The 293-room, nine-story hotel and 32,000-sf conference center is the latest addition to the 90-acre office and retail complex at the southeast corner of Dallas North Tollway and SH 121. Granite Park COO Greg Fuller believes demand for new accommodations and meeting space is strong in the area.
The Hilton is expected to open in mid-2014.
Development Landing on Lake Woodlands
THE WOODLANDS (Houston Chronicle) – The development boom in The Woodlands is about to get even bigger.
The Woodlands Development Co. is planning Hughes Landing, a 66-acre mixed-use development on Lake Woodlands’ east shore. The $300 million first phase is expected to include a boardwalk and pier surrounded by restaurants, as well as an office building, 400 apartments and 200,000 sf of retail space.
The long-term plan for Hughes Landing is to include around 750 apartments, an upscale grocery store, an entertainment venue and as many as eight office buildings.
An eight-story, 200,000-sf office building is the first structure in the planned development. Construction is expected to begin this fall.
Downtown Waco Development Breaks Ground
WACO (Waco Tribune-Herald) – Sorrells & Gunn has broken ground on the Cameron Heights subdivision just outside downtown Waco.
The first phase, a condominium development at Bosque Blvd and North Fourth St., will include 50 units in a single block. The units, aimed at professionals working downtown or at Baylor University, are expected to sell for between $120,000 and $170,000.
The second phase of the development, Cottages at Cameron Heights, will include 20 units and will start construction within the next couple months.
Sorrells & Gunn received $1.1 million in tax increment financing from Waco. It will be used for site work, landscaping and common areas.
Green Building’s Growing Market Share
UNITED STATES (RCLCO) – Green home building is on the rise, and most buyers are willing to pay more for it.
According to RCLCO, about 17 percent of single family homes built in 2011 were labeled “green,” compared with just 8 percent in 2008. McGraw-Hill Construction expects the green market share to reach between 29 and 38 percent by 2016.
When comparing RCLCO survey results from 2007 versus 2012, the biggest driver of buying a so-called green home, in both surveys, was anticipated cost savings and/or health benefits. However, fewer today are willing to pay extra for green construction for any reason: just 80 percent of buyers in 2012, compared with 95 percent in 2007.
Buyers aged 18 to 34 and those in the West are more likely to go green on their home purchase. They are also more willing to pay extra for the sake of environmental responsibility. Overall, though, those buyers considering environmental responsibility as their primary motivation for going green represent just 6.1 percent of buyers.
RCLCO recommends that builders highlight features and building practices that save buyers money and promote their health, as well as focusing on green upgrades that pay back additional costs within a reasonable time.
Austin Industry Continues Improvement
AUSTIN (Austin Business Journal) – Area industry continues to improve, according to data by NAI REOC Austin.
Nearly 600,000 net sf of industrial space was absorbed during the second quarter, with net positive absorption during the first half of the year at about 747,000 sf. Vacancy is at 15.6 percent for warehouse and manufacturing space and 16.4 percent for flex space.
The largest second quarter leases were signed by American Tire Distributors, taking nearly 127,000 sf, followed by Serta Inc., which leased 108,800 sf.
The south Austin submarket is the tightest, where the vacancy rate for warehouse and industrial space is at 7.8 percent with nothing new under construction.
Austin Homes Selling Faster, at Higher Prices
AUSTIN (Austin Board of Realtors) – June marked the 13th straight month of sales volume increases and the fifth straight month of price increases for Austin-area existing homes compared with the same month of the previous year.
According to the latest Multiple Listing Service data, 2,593 single-family homes were sold here last month, 23 percent more than June 2011. During the same period, the median price for area homes was $218,350, an 8 percent increase from the same month in 2011.
The market had 4.4 months of inventory last month, 2.3 months less than June 2011. There were also 6 percent more new listings, 20 percent fewer active listings and 15 percent more pending sales than a year ago.
Austin Board of Realtors Chairman Leonard Guerrero said, “2012 is on pace to be the Austin housing market’s strongest summer since the recession. A healthy housing inventory, a continued increase in home sales and a 23 percent decrease in homes’ days on the market indicate that Austin has emerged as a seller’s market.”
Office Space Tightening in Houston
HOUSTON (PM Realty Group) – Strong employment growth in Houston has boosted its office leasing market, according to PM Realty Group.
The area posted a net absorption of 1.3 million sf of office space during the second quarter, with over two million sf absorbed year-to-date. Class-A occupancy climbed 220 basis points to 88.6 percent in the last year, with the increased tightness in the Class-A market beginning to spill over, benefiting Class-B properties.
Demand for office space is highest in the Westchase and Energy Corridor submarkets, with the energy sector driving the most demand.
PM Realty Group expects about four million sf of net absorption through the end of 2012, with overall occupancy anticipated to reach 86.6 percent.
Houston Home Sales Up in June
HOUSTON (RealtyNewsReport.com) – Houston existing home sales last month were up 14 percent over June 2011, according to the Houston Association of Realtors (HAR).
Some $1.7 billion worth of residential properties were sold last month, the highest monthly sales total since August 2007, HAR reported.
Just over 42,200 properties were listed for sale in June, down about 18 percent from a year ago. The 5.5 months inventory is the lowest level in more than five years.
The average home price of $236,656 was an all-time record for Houston, the association said. So was the median single-family home price of $171,000.
Month-end pending sales for June totaled 4,090, up 5.6 percent from last year.
Chrysler Dealer Coming to Frisco
FRISCO (Dallas Morning News) – A new Chrysler-Jeep-Dodge dealership is headed to Frisco.
Pat Lobb acquired a seven-acre site at the corner of SH 121 and Ohio Dr., east of Stonebriar Centre. Houston-based CDI Douglass Pye is designing the building.
Lobb hopes to open his newest dealership by March 2013.
The sale was brokered by Brandon Pogue of the Pogue Group, which is developing the project.
Houston CRE Market Highlights
HOUSTON (CBRE) – Commercial real estate experts talked about Houston CRE market conditions yesterday at CBRE's second quarter 2012 press luncheon. Real Estate Center Research Economist Dr. Harold Hunt was there and reported back. Here are some highlights:
- Energy drove the Houston office market to new heights in the second quarter. West Houston Class-A occupancy pushed above 95 percent while the Woodlands surpassed 99 percent.
- Less than 20 blocks of contiguous space 100,000 sf or larger remain citywide.
- New construction is low as well, with only two of the ten buildings currently under construction delivering in 2012.
- “Total office space under construction is only 2.7 million sf in a 190 million-sf market,” said Sanford Criner, CBRE Houston's executive vice president of global corporate services. “We believe there is about nine million sf of demand in the Energy Corridor alone, but only 760,000 sf remains to be leased.”
- Energy Corridor rents have been increasing rapidly, rising almost $2 per sf in the last year.
- According to Criner, Houston is the only U.S. office market where lenders are willing to underwrite future rent growth into their funding offers.
- More than 50 percent of the 2.7 million sf under construction has already been preleased.
- “Lenders are not going to oversupply the market again based on loose lending standards,” said John Fenoglio, CBRE's executive vice president of debt and equity. “Houston is now a preferred market for all property types, but only the best projects will get financed.”
First Apartments in Bryan's Traditions
BRYAN (GlobeSt.com) – Houston-based Bryan/Traditions LP and Brownstone Commercial LLC are building a Class-A, 240-unit luxury apartment property within the Traditions subdivision.
The apartment project is the first such multifamily property in the 900-acre Traditions.
The partners plan to break ground in September. The project will be on 13 acres on Health Science Center Pkwy. near Traditions Golf Club and the Texas A&M Health Science Center.
The development will have a mix of one-, two- and three-bedroom units. First units are expected to be completed by next July.
Commercial Resource Capital is sourcing both debt and equity financing for the development.