July 27, 2012
Office Market Healthy in DFW
DALLAS-FORT WORTH (PM Realty Group) – Office market recovery continues in Dallas-Fort Worth with occupancy at its highest level in over three years, according to PM Realty Group.
The Metroplex posted a net absorption of 587,164 sf during the second quarter and just over one million sf absorbed year-to-date. Office occupancy bumped up to 80.2 percent, its highest level since first quarter 2009.
Demand for Class-A office space is increasing, with occupancy up 20 basis points to 80.5 percent. The majority of Class-A growth occurred in Uptown/Turtle Creek, Quorum/Bent Tree and Las Colinas.
Occupancy for Class-B office space is also up for the sixth consecutive quarter, improving 30 basis points over the previous quarter, to 79.6 percent.
PM Realty Group predicts continued occupancy improvements through the rest of 2012 and further anticipates a landlord-favorable market during the next 12 months for submarkets such as Far North Dallas, Uptown/Turtle Creek, Preston Center and Fort Worth’s central business district.
Canadian Investors Buy Stake in U.S. Properties
TORONTO (GlobeSt.com) – A Canadian group is investing in several U.S. apartment properties.
Canada Pension Plan Investment Board is laying out $355 million to buy a stake in seven multifamily properties, including a 45 percent share in the 700-unit AMLI at the Ballpark at 7755 John Q Hammons in Frisco.
Their other investments include apartment complexes in San Francisco and Dublin, Cal., Chicago and Vernon Hills, Ill.
According to the AMLI website, AMLI at the Ballpark will begin pre-leasing in August.
The Toronto-based board now has interest in over 6,000 U.S. units worth about $912 million.
SA Office Building Acquired, Expansion Planned
SAN ANTONIO (San Antonio Business Journal) – A North Central San Antonio Office Building has been acquired with plans to add to the property.
Birmingham, Ala.-based Harbert United States Real Estate Fund IV LP purchased the 116,545-sf office building at 4350 Lockhill Selma Rd. near I-10 and Loop 1604. The group plans to construct a second phase on land adjacent to the building.
Stream Realty Services will continue to manage the property, which is 100 percent leased.
Tech Firm Relocating to Legacy
PLANO (Dallas Business Journal) – Tyler Technologies Inc. is locating its new corporate and division headquarters in Plano’s Legacy Business Park.
Dallas-based development firm KDC has broken ground on the 142,000-sf campus on the 26-acre site of the former Plano Family YMCA. Construction will include a new three-story 82,000-sf office building and renovation of the 60,000-sf former YMCA.
The Dallas software company will consolidate its North Texas operations to the new campus when it opens in August 2013.
HKS Architects is designing the project.
Houston Tops in Self-Employment Growth
HOUSTON (NewGeography) – People who want to be their own boss are going into business here faster than any other U.S. metropolitan area.
Research by Economic Modeling Specialists International lists Houston's 12.2 percent growth in self-employment from 2008–11 as tops in the nation. San Antonio-New Braunfels was sixth at 8.1 percent. Dallas-Fort Worth-Arlington ranked eighth with 6.3 percent. No other Texas metros were in the top 30.
Houston's high ranking was attributed to widening economic opportunities and structural changes in the energy industry. Since 2005, self-employment in the energy industry has grown 35 percent. Self-employment in oil and gas support activities rose 75 percent.
Border Metros Headed for a Million
MCALLEN (TheAtlanticCities.com) – Two Texas border metros are on track to join the one-million-inhabitants club sometime in the next 30 years.
According to a report by JHS Global Insight, McAllen-Edinburg-Mission and El Paso will be among 70 U.S. metros with populations of at least one million by 2042.
Those 70 metros will be home to 213 million or more than half the Census Bureau's estimated U.S. population of 392 million by then.
The population of McAllen-Edinburg-Mission is expected to increase from 819,600 today to more than 1.6 million three decades from now. That's a 96.3 percent change.
El Paso is predicted to grow by 40.8 percent from 839,500 to nearly 1.2 million.
The JHS report was prepared for the U.S. Conference of Mayors.
Bellagio at Beach Street Bought
HALTOM CITY (Dallas Morning News) – A Dallas investor has picked up an apartment community north of Fort Worth.
Hayman Woods LLC purchased the 398-unit Bellagio at Beach Street at 4200 Northern Cross Blvd. in Haltom City for about $20.5 million.
The property was built in 2001.
SA Housing Going Up, Supply Coming Down
SAN ANTONIO (San Antonio Express-News) – Things are looking up for San Antonio’s homebuilders.
Area builders started 2,272 single-family homes during the second quarter, up 15.7 percent over the same period in 2011, according to Metrostudy. The 3,904 homes started during the first half of the year also is up about 13 percent from the first six months of 2011.
The supply of new homes is declining, however.
New home inventory is at its lowest level in recent years, combined with what Jack Inselmann of Metrostudy says could soon become a shortage of vacant lots. The 17,500 lots represent a 28.6-month supply in San Antonio, but some neighborhoods only have a 16.4-month supply.
A supply of fewer than 20 months is considered a shortage.
VLB Land Loan Interest Lowest Ever
As much as $100,000 may be borrowed to buy land. A 6.75 percent interest rate was announced yesterday by the VLB. The previous rate was 7.25 percent.
Thanks to low interest rate loans and favorable terms, deals are being closed in an average 30 days or less.
“No other state can match what the VLB offers: low-cost home, land and home improvement loans; skilled nursing facilities and cemeteries — all exclusively for Texas veterans or their spouses,” said Jerry Patterson, VLB chairman. “And all of our programs are self-funding, which is good news for Texas taxpayers.”
Inland Buys Siemens Plant Near Houston
DEER PARK (MarketWatch.com) – An Ill.-based real estate company acquired an industrial building in Deer Park, east of Houston.
Inland Real Estate Acquisitions Inc. purchased the 160,000-sf building in Deerwood Glen Business Park, which houses Siemens Gas Turbine Service Division. Inland reportedly paid $17.8 million for the plant which is used for production of gas turbines.
The building was completed earlier this year and includes land for future expansion.
More Solar for San Antonio
SAN ANTONIO (San Antonio Express-News) – A landmark deal is expected to bring five new solar plants to Texas and over 800 jobs to San Antonio.
CPS Energy contracted with OCI Solar Power this week to construct five solar plants which will provide CPS with about 400 megawatts of power. The first 50 megawatts will be from a plant to be built in San Antonio, with additional phases to follow outside the area and in North and West Texas.
Also part of the agreement is a $100 million solar component manufacturing plant by Nexolon America LLC to be built in San Antonio’s South Side.
The series of solar plants will be the nation’s largest solar project by a municipal utility, according to CPS.
OCI expects to have all five solar plants running within four years.
Waco ISD Sells Downtown Buildings
WACO (Waco Tribune-Herald) – A Dallas group has been approved to buy two facilities owned by Waco Independent School District.
Leon Capital Group is acquiring Sul Ross Elementary at 901 S. Seventh St. and the Texas Playhouse at 201 N. Jack Kultgen Expressway for $1.4 million and $675,000, respectively.
Funds received from the sale will be used by Waco ISD for an addition to nearby Cesar Chavez Middle School and for renovations at the former A.J. Moore Academy.
Plans for the former school and theater have not been announced.
Fort Worth Ready to Ride
FORT WORTH (Fort Worth Business Press) – The Fort Worth Transportation Authority is about to add another mode of transportation to its list: bicycles.
Known as The T, the Fort Worth Transportation Authority was awarded a $941,741 grant from the Federal Transit Administration to launch the city’s first bike share program. They will start with about 300 bicycles and 30 stations, concentrated around public transit hubs, downtown and Texas Christian University.
Downtown Fort Worth Inc., Fort Worth CVB, Fort Worth South Inc., TCU and Texas Health Harris Methodist Hospital Fort Worth are contributing a combined $260,000 to help with capital and operations costs.
A newly formed nonprofit will run the program which is set to launch next spring.
New Medical Center Opens in Frisco
FRISCO (REBusinessOnline.com) – An upscale medical center has opened in Frisco.
Forest Park Medical Center, a 141,500-sf four-story building has opened at 5500 Frisco Square Blvd.
Developed by Neal Richards Group and designed by Dallas-based BOKA Powell, the hospital includes amenities such as VIP patient suites and an upmarket restaurant. The facility also includes 56,000 sf of medical offices, 34,000 sf of retail space and a 600-car parking structure.
A 2010 article by the Dallas Business Journal estimated construction costs of about $83 million.
Slow Sales Tied to Student Loan Debt
UNITED STATES (Bloomberg) – Student loan debt could be holding back the housing recovery, says one economist.
With young adults harboring roughly $904 billion in U.S. student loan debt, Neal Soss, chief economist at Credit Suisse in New York, says the combination with stricter mortgage lending requirements may be hurting home sales.
“We are trying to migrate towards a much safer underwriting standard, with let’s say 20 percent down payments required,” Soss said. “It takes a certain amount of time for people to save that up, and the more they’re burdened with student loans the less possible it is for them to accumulate that chunk of liquid capital that allows them to make that.”
Nationally, existing home sales fell to an eight-month low in June, signaling a slowdown in the recovery. Meanwhile, first-time homebuyers dropped to the lowest percentage of total buyers since 2006.