Last call for the mall?Last call for the mall?David JonesJones, D.


To paraphrase a quote attributed to Mark Twain, reports of the death of America's malls may be greatly exaggerated. In 2017 alone, there have already been several obituaries.

A new report, however, calls the death notices premature. In “Why Mall Reuse is Just Beginning," author Brian Landes, director of GIS/location intelligence for Transwestern, said, “Statistics on malls tell a somewhat different story. . . . When malls are reconsidered and repurposed for other uses, their value may far exceed their use as conventional retail space."

Landes acknowledges the decades of mall challenges: online shoppers, bankrupt retailers, and millennial rejection of the suburban mall and the lifestyle it represents.

He notes that despite the growing number of stories that focus on malls' demise, regional malls have had positive net absorption since 2010 (the only blip in absorption was in 2009 at the height of the recession.)L

“At the end of 2016, occupancy across the U.S. was 95 percent, equating to 848 million sf. Store closures have increased, but for the most part, malls have rolled with the punches, finding tenants or alternative uses," wrote Landes.

Notwithstanding Amazon's incredible success and the growing adoption of e-commerce among shoppers of all ages, most purchases are still made offline, he said, and will be into the indefinite future.

According to the International Council of Shopping Centers (ICSC), of the $4.7 trillion in 2015 retail spending, only 8.3 percent happened online. Nearly 97 percent of 2015 retail spending happened in brick-and-mortar stores.

The report acknowledges the increased pace of major retail chain store closings. Since the beginning of 2017, plans have been announced to shutter more than 3,500 stores nationally. More than 62 million sf of retail space will go dark in the span of four months. Big box spaces (Sears, J.C. Penney, Macy's) are the most difficult to fill unless subdivided or repurposed.

“The picture is not entirely dismal," said Landes. “In 2016, the U.S. retail market experienced 105 million sf of net absorption, representing a growth in occupancy of nearly 1 percent." According to ICSC, mall productivity rose 0.7 percent in the last year to $465 per sf.

Landes believes the millennial migration that reinvigorated many urban neighborhoods will transfer its energy to the suburbs, which are becoming denser, more diverse, and offering more amenities. Many regional malls will adapt to the ongoing changes.

The report highlights four malls, two of which are in Texas.​

  • Highland Mall in Austin. 575,000 sf. Built in 1971. Austin's first regional mall is now owned by Austin Community College where the focus is technology education and in-demand job skills training. Unused space is expected to be developed as multifamily housing.
  • ​Windsor Park Mall/The Castle in San Antonio. 1.2 million sf. Built in 1976. After sitting vacant since 2005, the mall became the corporate headquarters for Rackspace in 2007. The cloud-hosting technology firm spent more than $100 million in renovations to create an exciting and environmentally friendly workplace known as “The Castle." More than 3,700 work there. The project has attracted new retail to the area.

“For the most part, malls are attracting new tenants through strategic marketing and property enhancements," said Nick Hernandez, managing director of retail for Transwestern. “And in cases where a retail mall no longer makes sense, we have seen many owners successfully adapt to the changes in their trade areas by repurposing the mall for another use."

Here are more examples of what's being done to give new life to malls.

Timeshare tales and tipsTimeshare tales and tipsDavid JonesJones, D.
Maui beach resort

It sounded too good to be true: a week in Maui at a Marriott resort, including a rental car, for only $699 for two people. Keep in mind this was pre-Sept. 11 pricing when vacationers still crowded Hawaii’s beaches. My wife and I had enough frequent flyer miles to take care of air fare, so the first day airplanes were flying after the terrorist attack, we were off.

Keta had been the first to suspect something was amiss. “This could be one of those timeshare presentations,” she recalled the night before we left. “Someone called today from the resort and said we must be sure to stop by the welcome center and pick up the packet of free discount coupons they have for us.”

A shiver went up my spine. Several years earlier we had spent an evening in hell having our arms twisted during a timeshare presentation at Lake Conroe. Even the grandfather clock prize everyone was guaranteed to receive turned out to be cardboard.

“Well, at least they will be twisting my arm in paradise,” I thought.

As promised, the rental car was waiting. Of course, getting our luggage into the Toyota Echo required several attempts. We arrived at the hotel both weary and wary.

“Two J-2 welcome packets needed at registration,” the clerk said over the telephone. “Aha!” I thought. “Here it comes.”

“Welcome to Maui,” said the wahine as she placed a lei around our necks​. “The welcome center is open until 8 p.m., so be sure to come by and pick up your packet of free discount coupons,” she said with a smile.

I couldn’t help but wonder why she had not brought the coupons with her. When I looked over my shoulder, I knew.
Across the lobby was the welcome center. It must have been three blocks long with a huge glass storefront. Inside I could see a world map with lights blinking at numerous locations. Above the map a sign proclaimed these were Marriott’s worldwide resort locations. A couple with leis around their necks sat at a desk while a well-dressed young man spoke to them. Avoiding eye contact with anyone in the welcome center, we hurried to our room.

We never did get the sales pitch. Each day we left the hotel early and returned after dinner. But we returned to a daily message on our telephone reminding us that Marriott had a packet of discount coupons waiting for us in the welcome center. Our timeshare experience of years past had left us unnecessarily paranoid. Timeshares have changed.

Brand name companies—Disney, Marriott, and Hilton—​are now active in timeshares or vacation clubs. There’s more flexibility, too. We knew owners can trade their weeks for stays at worldwide properties but only after we returned did we discover you also can trade for services such as plane tickets and cruises.

“Cruises! Did you say cruises? I knew we should have gone to the welcome center,” said Keta. She loves to cruise.

Vacation timeshares give you the right to use a vacation home for a limited, pre-planned period.  Owning a piece of resort property guarantees you an annual vacation and the chance to exchange the privilege for other properties around the world. It is an alluring dream fueling an industry that sold $8.6 billion in 2015.

Timesharing intervals have been sold in condominiums, cruise ships, houseboats, recreational vehicles, campgrounds, buses and airplanes. The latter has really picked up momentum since the terrorist attacks.

Two basic types of timeshare units are sold: fee simple, in which the buyer gets title to a fraction of the unit, and right-to-use, in which the purchaser is entitled to use the unit for a specified period but does not have ownership interest.

In a typical timesharing program, weeks (also called intervals) are offered at a golf, seaside, or ski resort at prices starting in the $16,000-$19,000 range, depending on the season, quality of accommodations, and location. Sales may be financed over several years by the developer or an outside source. Generally buyers pay a percentage of the price down and the remainder in installments. In addition, they must pay annual maintenance fees and the cost of a resort exchange program.

While many timeshare ventures have been successful, there are pitfalls. Under a right-to-use (lease) agreement, you do not have title to the property. Some timeshares are offered before construction has begun or adequate financing has been obtained. Buyers can lose their money if the project fails. Here are some timeshare tips from the Better Business Bureau.

Remember, it’s a vacation. Don’t look at a timeshare strictly as a real estate investment. Look at it like you would an expenditure for an annual vacation.

Visit the site. If you can’t, find someone you trust who can. Make sure it’s an area you like and would enjoy returning to year after year.

If a “free” inducement is offered for you to come and inspect the resort, find out if you will end up having to pay a lot of money for travel expenses and extra charges after your trip. I have been called many times and told I won a free cruise to the Bahamas. Of course, I have to get to Florida first; the cruise lasts one day; and I have to hear about a timeshare.

Remember a timeshare is a major investment. Ask questions. Do not sign anything unless you are fully aware of the consequences. Be particularly wary if salespersons pressure you to sign that day without allowing time for you to consider carefully what the contract involves.

Determine if the unit is offered as fee simple or as a right-to-use unit. Fee simple units usually are more expensive, but they may provide some tax benefits. They also allow buyers to have a voice in the resort’s management. Right-to-use units often have a lower price and less management responsibility, but resale rights may be limited.

A timeshare isn’t a one-shot deal. Find out how long-term management of the resort will be provided and whether the operating budget will meet future needs.

Offers of exchanges for other timeshares are an important consideration. But there may be no assurance the resort can provide you another accommodation that is desirable or available at the time you prefer. The resort may not continue its contract with a given exchange or with any exchange. Don’t buy a timeshare in a less desirable location expecting to “trade up.”

Timeshare owners pay maintenance costs for the resort. These annual fees usually run around $600 but will increase as the property ages. And the fee may not cover major expenses. Make certain your money is held in an escrow account until you have title to the unit.

Lastly, consider the alternatives. Carefully weigh all costs of buying a timeshare, including costs of taking a vacation every year. Can you afford the travel costs and other expenses of a vacation annually, either to your unit or to one you have exchanged for? If your timeshare is in another state or country, recovering your money in the case of a breach of contract may require traveling to the locale where the transaction took place.

For more tips on timeshares, read MarketWatch's article, "6 things to know before you buy a timeshare​."
Moonscape: Selling unreal estateMoonscape: Selling unreal estateDavid JonesJones, D.

Lunar real estate pictureTalk about out-of-this-world real estate. Would you believe millions of earthlings have bought land on the moon?

According to the Lunar Embassy, more than 400 million acres of the moon have been sold worldwide. Among the buyers are former U.S. presidents and movie stars (think “Star Trek.")

The Lunar Embassy is the brainchild of Dennis Hope, who in 1980 claimed ownership of the moon and other planets in our solar system. Hope bases his claim on what the 1967 United Nations Outer Space Treaty does not say. While the treaty stipulates no government can own extraterrestrial property, it does not prohibit individuals and corporations from doing so.

“Therefore, under laws dating back from early U.S. settlers," proclaims the Lunar Embassy website, “it was possible to stake a claim for land and register it with the U.S. government office of claim registries." Hope, better known as the “head cheese," says his confidential list of lunar buyers includes celebrities, companies buying gifts for clients, investors, professionals, space hobbyists, and NASA employees.

One acre of moon property from Lunar Embassy is $24.99. Five acres will run you $124.95.For those needing more “space," Lunar Embassy has properties on Mars, Mercury, and Venus.

But Hope isn't the only one claiming title to the moon and selling parcels to would-be moonies. Lunarland.com has a standard package that includes one acre for $29.95. For another $10, they will put your name on the deed. A 20-acre purchase for $249.99 adds a framed map marking the exact location of the moon site by lunar quadrant, lunar lot number, and lunar latitude and longitude. But, wait; there's more. The package includes a 12-milligram (0.000423 ounce) piece of moon rock. The lunarland.com website shows the current locations already sold. Of course, it's of the lighted side of the moon only.

In February, SpaceX announced it will fly two private citizens on a trip around the moon in 2018. In a news release, the company said the passengers have made a “significant deposit" for the cost of the mission. Whether they own moon property or are “just looking" was not revealed.

Buyers of moon properties don't have to worry that they are being ripped off by being stuck with swampland. There is plenty of beach there, just no water.

Who really owns the moon? Geneva, Ohio, residents say they do. They claimed the moon as their own back in 1966. Thirty-five Geneva residents signed the “Declaration of Lunar Ownership" 50 years ago and unveiled it to the world at the high school auditorium. The city also claimed the right to rent or lease its moon holdings should two-thirds of the population approve. They were considering the sale of 100 deeds for 100 acres for $100 per acre.

Meanwhile, in an effort to bring the planetary land rush down to earth, Virgiliu Popa, Romanian space lawyer, notes that claims on celestial bodies have been going on for a long time. He writes that behind all the fun people have with moon “ownership," there's a serious element to the debate.

NASA and private companies are poised to play major roles in space colonization. Russia and China also have landed rovers on the moon. China plans to reach Mars by 2020 and eventually build a moon base. The European Space Agency says the peaceful exploration of space requires international collaboration.

Members of the International Institute of Space Law, the International Astronautical Federation, and others see the need for serious discussions on extraterrestrial property rights.

Once the colonization of the moon and planets begins, this will no longer be a laughing matter. Should oil be discovered on lunar land, you can bet more Texans will be donning space suits to walk in the steps of Alan Bean of Wheeler, Texas, and the fourth person to set foot on the ​moon.

A home for the agesA home for the agesBryan PopePope

​​​​Which generational category (e.g. millennials, generation x, boomers) represents the largest percentage of homebuyers in Texas?

I was curious, so I conducted an informal, entirely unscientific survey in Tuesday's edition of RECON. I asked residential real estate​ professionals to tell us which group is buying the most homes.​ We had 122 responses, and 30.3 percent said most of their buyers are millennials (born 1980-98), ​​​while 27 percent said Gen-Xers (1965-79). Younger boomers (1955-64) are the top group for 18.9 percent of sellers, older boomers (1946-54) for 16.4 percent, and the silent generation (1925-45) for 7.4 percent.

Turns out our results track fairly closely with what the National Association of Realtors (NAR) found in their recent study of buyer/seller generational trends​ (a study that's presumably more statistically sound than our quick poll). According to their findings, 34 percent of recent homebuyers were millennials.

Actually, their survey turned up quite a bit about that age demographic. Among their other findings:

  • Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment.
  • Millennials were the most likely to use a real estate agent to both buy their home (92 percent) and to sell (90 percent).
  • Only 15 percent of millennial buyers bought in an urban area, which is down from 17 percent last year and 21 percent two years ago.​​​

National Association of Realtors' infographic on generational buyer and seller trends

Making a run for the borderMaking a run for the borderBryan PopePope
El Paso skyline

Mexico is Texas' largest trading partner, so it stands to reason that this relationship would have a significant impact on the border region's economy, not to mention the state's. It also stands to reason that we would create a report tracking that region's economic activity.

With our new Texas Border Economy​ report, we have. The report, which will focus on El Paso, Laredo, McAllen, and Brownsville, will be issued monthly.​

"The border area is one of Texas' major economic regions," said Dr. Luis Torres, a research economist here at the Real Estate Center and one of the authors of the report, "so it's important to know what's happening there. We're the number one exporting state in the country, and a lot of goods and services cross through all these border cities."

Texas Border Economy monitors many of the factors that influence this region's economy, including housing, employment, wages, the peso-per-dollar exchange rate, and, of course, trade.

Center Research Assistant Wes Miller, another of the report's authors, said he noticed two distinctive things about the border region as he was doing research for this publication. One was its reliance on the federal government in terms of jobs and the education system. The other was its reliance on the Mexican economy.

"If the Mexican economy is doing well, then the border communities traditionally do well," Miller said.

Texas Border Economy is available free on our website. Once you're done reading it, you might also check out Torres' other report about Texas trade, 'Texas' Stake in International Trade Through its Exports and Some Foreign Direct Investment​.'
The taxman goethThe taxman goethBryan PopePope
2017-05-18T05:00:00ZCenter News
​​Jerrold Stern then and now

​Today is the Real Estate Center's 46th birthday. While we've had fun celebrating the occasion, there's also been some sadness at hearing that one of our longtime associates is retiring from his role with us.

Dr. Jerrold Stern began writing for the Center as a doctoral student in 1978, only seven years after legislation creating the Center was signed into law.

"I remember when I was hired by the, then, Texas Real Estate Research Center as a doctoral student," Stern recalled in an email to the Center staff. "I interviewed with the TRERC’s first director, Dr. Pat Wooten. He asked me, 'Do you think you can write so people can understand it?' I responded, 'I think I can, sir.'  He then hired me. Who knew that day would lead to a nearly 40-year career with the Center?"

Since then, Stern has written 94 articles and reports for us, most of them covering real estate tax issues. If you read Tierra Grande regularly, chances are you're familiar with his work. If you're not, visit our online research library and search under his name.

Despite his longevity with the Center, many of us "newbies" here have never meet Dr. Stern in person. He spent much of his career as an accounting professor in the Kelley School of Business at Indiana University.

"I have greatly enjoyed my association with the Center from my doctoral student days during the late 1970s through now," Stern said. "I have treasured the opportunity the write for the Center. It’s truly been an honor to be associated with the top organization of its kind in the U.S. I will most certainly miss my Center friends and colleagues, many of whom I have known and with whom I have worked for literally decades."

Dr. Stern, we thank you for years of service and friendship, and for taking complicated tax laws and explaining them so clearly that even my third-grader could probably understand them. Your contributions to Tierra Grande will be missed. We wish you the very best in your retirement.
Good, bad home renovationsGood, bad home renovationsDavid JonesJones, D.

​​​​Renovated home

Not all renovations are equal. Before you start knocking down walls, the experts offer some words of advice. They say the two most important words to remember are: resale value.

Basically, remodeling projects are either ones that pay off when you sell the house and ones that don't. For simplicity, let's just call them renovation winners and losers.


Luxury rooms. Unless you live in an upscale market, you won't recoup an investment in an indoor basketball court, wine cellar, sauna, or movie theater when you sell, reports RISMedia's Housecall. Remember that today's technology is tomorrow's eight-track player.

Swimming pool. With an average cost of nearly $40,000, pools are an expense seldom recovered when the home is sold. Many think a pool limits resale value. Some buyers just don't want to do the maintenance. A guy I know builds pools for a living; when looking for another home, however, he would not consider any with pools. I've always thought that having a friend or neighbor with a pool is the better way to go.

Gaudy accents. Gold-plated molding or mosaic-tile backsplashes might be your dream, but they may not be in vogue when it's time to sell. I recently heard about a home on the market that's decorated entirely in a clown motif. That could be a tough sell unless the buyer's a real Bozo.

Trends counter to local standards. Improvements that price your home out of the norm for those in the neighborhood may net you far less than you put in. Having the most expensive home on the block makes it hard for a real estate agent to find comparables when pricing the home to sell.

My wife is a real estate agent. She says a common losing remodel involves converting the garage to some other use. Just this week a homeowner wondered why her home with a garage-turned-game room wasn't selling when properties in the neighborhood were on the market less than a week.


Steel doors. The front door is a good place to invest, says RISMedia. Steel doors cost about $1,000 but offer many advantages. The National Association of Realtors reports steel-door upgrades bring the highest return on investment of any home remodel.

Solar panels. The average rooftop solar system pays off in seven and a half years. From then on, they are money in the bank. One study shows buyers willing to pay more for properties with solar panels. For more information on the value of residential solar, read Dr. Harold Hunt's article “Here Comes the Sun."

New siding. Talk about curb appeal. Your home's exterior makes the first impression. According to Remodeling Magazine, new siding recoups 92.8 percent of its cost.

New roof and windows. Replacing roofs and windows are also high on the list of winning improvements, returning 80 percent or more at resale. If the roof leaks, nothing else matters. Buyers will move on to another property.

​Broadband access. Homebuyers want to be connected. Faster internet speeds increase your home value as much as 3 percent.

Other items. In “Which home improvements pay off?" HGTV.com notes that other improvements pay off, too. Kitchen and bathroom remodels continue to be two of the best investments you can make in your house. Renovations that are not apparent (such as improved insulation) may pay dividends for the current homeowner, but they don't add to the curb appeal for the tire-kickers.

If you are going to repaint, consider your color choice carefully if you have resale in mind. Neutral color schemes are the safe bet.

Should you replace that old carpet? It's hard to predict what a new buyer wants. Maybe you should clean the old carpet and give an allowance for a new floor when setting the price. A couple I know thought replacing their carpet would help their home sell. The first thing the buyer did was rip out the new carpet and put down wood.

Want to know what homebuyers want? Take a tour of new homes in your area. The things home builders are splurging on is a good indicator of what buyers of existing homes want, too.​​

What's your H2O IQ?What's your H2O IQ?Bryan PopePope
2017-05-04T05:00:00ZInfrastructure & Transportation

Rio Grande 

​Soil & Water Stewardship Week is currently underway.​​​ This year's theme is "No Land, No Water," so now seems an appropriate time for a pop quiz on Texas water knowledge.

  1. About how much water do Texans use annually?
  2. What percentage of that is groundwater?
  3. Groundwater comes from how many Texas aquifers?
  4. Which aquifer provides most of the groundwater used by Texans?
  5. What percentage of groundwater is used for crop irrigation?

Let's see how you did.

According to Texas A&M University's Texas Water FAQ​, Texans use about 16.5 million acre-feet of water per year (one acre-foot equals 325,851 gallons of water). Sixty percent of that is groundwater. Groundwater comes from 32 Texas aquifers. The Ogallala Aquifer beneath the High Plains of West Texas yields about two-thirds of all the groundwater we use in Texas. Generally speaking, about 80 percent of all groundwater used in Texas is for watering crops.

​So, Texans use a lot of water, and with waves of newcomers moving here each year, water is going to become an even more precious resource. In fact, the Texas Water Development Board projects that by the 2040s cities and industries will surpass agriculture in water usage.

This makes conserving water all the more critical. To that end, here are some water conservation tips​, also courtesy of Texas A&M's Texas Water website:

  • Conduct a household water audit to assess how efficiently you're using water and identify ways to improve. Some water utilities offer free water audits or water audit kits to their customers.
  • Check toilets, faucets, and shower heads for leaks.
  • If you have a lawn irrigation system, do certain areas of your yard stay damp an unusually long time? That could mean you have a leaking valve, pipe, or sprinkler head. Check those as well.
  • Speaking of irrigation system, adjust the settings to meet plant water needs without overwatering them.
  • Has your sprinkler system ever continued running during a downpour? Consider investing in a rain shut-off sensor. They're inexpensive. 
  • Here's a tip your entire family can use: Turn the water off when brushing teeth.

For more on the state's water challenges and water-management efforts, read "Water Planning and Groundwater Management," "Marketing Texas Groundwater," "Just Add Water," and "Big Gulp: Quenching Texans' Thirst for Water​." You can download them free from our website.


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