REDNews December 2018 - North Texas

DECEMBER 2018

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE

2018 Q3 Industrial & Office Reviews

Cashing In On Qualified Opportunity Zones

Keeping Pace with Parkside Banking on West Houston

For more information, see page 8 & 9

±35 ACRES

US US HIGHWAY HIGHWAY 90 90 CROSBY, CROSBY, TEXAS TEXAS

2018 ESTIMATED 2018 ESTIMATED DEMOGRAPHICS DEMOGRAPHICS within 3 miles within 3 miles

KRISTEN MCDADE KRISTEN MCDADE Senior Director Senior Director 713.469.4509 713.469.4509 kristen.mcdade@berkadia.com kristen.mcdade@berkadia.com

±35 acres with ±830’ of frontage along US Highway ±35 with ±830’ of frontage along US Highway 90 inacres Crosby, Texas 90 in Crosby, Texas

• •

Immediate access to US Highway 90 and Kennings Immediate accessfrom to US Highway Rd., and minutes Beltway 8 90 and Kennings Rd., and minutes from Beltway 8

• •

Crosby ISD with close proximity to Crosby Elementary, Crosby withand close proximity toSchools Crosby Elementary, Crosby ISD Middle, Crosby High Crosby Middle, and Crosby High Schools

• •

Contact broker for pricing Contact broker for pricing

13,112 13,112 POPULATION POPULATION MATT DAVIS MATT DAVIS Associate Associate 713.974.2407 713.974.2407 matt.davis@berkadia.com matt.davis@berkadia.com

$$

SITE SITE

• •

$49,635 $49,635 AVG. HOUSEHOLD AVG. INCOME HOUSEHOLD INCOME

$ $

$173,464 $173,464

AVG. HOUSING AVG.VALUE HOUSING VALUE

LAUREN GEARY LAUREN GEARY Transaction Manager Transaction Manager 346.444.8968 346.444.8968 lauren.geary@berkadia.com lauren.geary@berkadia.com

© 2018 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively

by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and businesses are conducted exclusively Berkadia Commercial Mortgage LLCbrokerage and Berkadia Commercial Mortgage © 2018 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® areservicing trademarks of Berkadia Commercial Mortgageby LLC. Investment sales and real estate businesses are conducted Inc. In California, Berkadia Real Estate Advisors Inc. conducts business under CA RealInc. Estate Broker Lic. #01931050, Commercial Mortgage LLC under CA Finance Lender &byBroker Lic. Commercial #998-0701, Berkadia Mortgage Inc. underMortgage CA Real exclusively

by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Commercial mortgage loanBerkadia origination and servicing businesses are conducted exclusively Berkadia MortgageCommercial LLC and Berkadia Commercial Estate Broker Lic. #01874116.

For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx Inc. In California, Berkadia Real Estate Advisors Inc. conducts business under CA Real Estate Broker Lic. #01931050, Berkadia Commercial Mortgage LLC under CA Finance Lender & Broker Lic. #998-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx

±4.88 ACRES

SEC BLVD. SEC FM FM 2218 2218 & & TOWN TOWN CENTER CENTER BLVD. ROSENBERG, TEXAS ROSENBERG, TEXAS

Approximately 4.88 acres located on the southeast corner of FM 2218 (B.F. Terry Blvd.)

Approximately 4.88 acres located on the southeast corner of FM 2218 (B.F. Terry Blvd.) and Town Center Blvd. in the rapidly growing Rosenberg, Texas market area. The property ±41,543Center sf of land located west side of Patterson St. just north of Cornish on themarket north sidearea. of I-10 in the Heights and Town Blvd. on inthe the rapidly growing Rosenberg, Texas The property is at the hard corner of a fully signalized intersection in Brazos Town Center. ±41,543 sf of land located on the west side of Patterson St. just north of Cornish on the north side of I-10 in the Heights neighborhood.

Propertyof is adjacent White Oak Bayou and the White in OakBrazos Hike and Town Bike trail.Center. is at the hard corner a fully tosignalized intersection neighborhood. Property is adjacent to White Oak Bayou and the White Oak Hike and Bike trail.

• • • • • • • •

Easy access to US 59 and FM 762 Patterson benefits easy access on and off I-10 with its own exit from the freeway and immediate on ramp just past Easy access to USfrom 59 and FM 762 Patterson benefits fromPatterson easy access on and off I-10 with its own exit from the freeway immediate onto ramp past the light at Shepherd. reaches across I-10 to the south side making it well and located and easy get just to retail, Sidewalks already in place the light atalready Shepherd.

Patterson reaches across I-10 to the south side making it well located and easy to get to retail, Sidewalks in place restaurants and businesses. restaurants and businesses.

Site has full utilities through MUD 167 - Brazos Town Center, and off site detention Site has full utilities through MUD 167 - Brazos Town Center, and off site detention Price: Make Pricing: $45Offer PSF, all offers will be responded to.

Price: Make Pricing: $45Offer PSF, all offers will be responded to.

KRISTEN MCDADE KRISTEN MCDADE Senior Director Senior Director T: +1 713 469 4509 T: +1 713 469 4509 kristen.mcdade@berkadia.com kristen.mcdade@berkadia.com

MATT DAVIS MATT DAVIS Associate Associate T: +1 713 974 2407 T: +1 713 974 2407 matt.davis@berkadia.com matt.davis@berkadia.com

LAUREN GEARY LAUREN GEARY Transaction Manager Transaction Manager T: +1 346 444 8968 T: +1 346 444 8968 lauren.geary@berkadia.com lauren.geary@berkadia.com

IN THIS ISSUE

12

8

14

18

28

Scoop Market

Sales & Leases 1-3, 7, 10, 11, 13, 15, 17, 19-21, 23, 25, 27

Services Environmental 30, 43 Financial 10, 44 Legal 27 Real Estate Programs 1- North Texas, 8, 9 Real Estate Summits 5 1031 Exchange 23

Events 5, 32, 34, 36, 41 Social 33, 35, 37 Bulletin 38-40

Features

UNT-believable Undertaking 8,9 Keeping pace with Parkside 12 Reimagining Houston 14, 16, 22 2018 Q3 Industrial & Office Reviews 24, 25, 26 RAY’S BUZZ CCIM Luncheon: State of the Debt Market 18 Ray Interviews Dr. Mary Ann Reynolds Wilkins 41 CIVIL FAIR PLAY Cashing in on an opportunity: A deep dive into Qualified Opportunity Zones 28, 27

4

DECEMBER 2018

Register Today to Hear From Top Industry Pioneers John Hammond, President & CEO of Riverway Title Bill McDade, Principal, William A. McDade Mike Boyd, Principal, Boyd Commercial Ed Page, Managing Partner, Streetwise Marty McAdams, CEO, McAdams Associates Al Ross, CEO, Al Ross Group Greg Barra, CCIM,SIOR, Boyd Commercial

Register Today to Hear Top Industry RegisterToday Today Hear FromFrom TopIndustry Industry PioneersPione Register totoHear From Top Pioneers

John Hammond, President of Title Riverway TitleMcDade, Bill McDade, Principal, William A. McDade John Hammond, President & CEO ofCEO Riverway TitleBill Bill Principal, William A. McDade John Hammond, President & CEO of&Riverway McDade, Principal, William A. McDade January

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Mike Boyd, Principal, Boyd Commercial EdManaging Page, Managing Partner,Marty Streetwise Marty McAdams, CEO, McA Boyd, Principal, Boyd Commercial Ed Page, Managing Partner, Streetwise Marty McAdams, McAdams Associates MikeMike Boyd, Principal, Boyd Commercial Ed Page, Partner, Streetwise McAdams, CEO,CEO, McAdams Associates

January 2019 January January Do Do NotNot Miss This Opportunity to Hear Do Not Miss This Opportunity to Hear Miss This Opportunity to Hear From These Industry Titans Lessons Learned From Their Past From These Industry Titans From These Industry Titans For More Information, Location, Speakers and Registration:

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Ginger | Summits (713) 661-6300 | Ginger@rednews.com JeffWheless Johnson |REDNews Real Estate Summits || 952-405-7780 | jeff.johnson@resummits.com Jeff Johnson | |Real Estate 952-405-7780 | jeff.johnson@resummits.com

Ginger Wheless | REDNews | (713) 661-6300 | Ginger@rednews.com

Wheless | REDNews|| (713) (713) 661-6300 GingerGinger Wheless | REDNews 661-6300| Ginger@rednews.com | Ginger@rednews.com

Letter from the Publisher

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE PUBLISHER Ginger Wheless ginger@REDNews.com

EDITOR Margie Gohmert info@REDNews.com

STAFF WRITERS Janis Arnold janisarnold1@gmail.com Ray Hankamer rhankamer@gmail.com Brandi Smith info@REDNews.com

Dear Readers,

A

s 2018 comes to a close, I hope you are happy about the outcome of your year and optimistic about the coming New Year.

In this issue, we reviewed the newly created Qualified Opportunity Zone program the U.S. Treasury Department designed to stimulate development in more than 8,700 areas throughout the nation. REDNews writer, Brandi Smith, spoke with the Berkadia Land Team as well as Rick Westerfield with Briggs & Veselka about the program which you’ll find on pages 28 and 29.

Dr. John Baen, Professor of Real Estate at the University of North Texas, has been teaching real estate at UNT for more than 30 years. He is an “all in” teacher/mentor/ coach to his students in whom he continues to follow far beyond graduation. His philosophy is that an investment in UNT’s Real Estate Program is an investment in the future of Texas real estate. (see pages 8 and 9.)

Overall the office and industrial markets in Texas have done well this quarter and are predicted for continued growth in 2019, according to CBRE & Transwestern Q3 Reports and outlook. Although the Houston office market is still lagging, it has stabilized.

Now that Amazon H2Q is settled, I am proud of our Texas contingents that worked so hard on their proposals. Even though Amazon didn’t choose Texas this year, there are many other development opportunities on the horizon that are just as good, if not better. I hear Google and Apple are looking…

Next month’s January 2019 issue will be a retail market focus for highlighting the ICSC Red River States Conference & Deal Making Conference (formerly known as the ICSC Texas Deal Making Conference). The event is in Fort Worth on January 9 – 11, 2019.

Come by and visit us if you’re there!

Best Regards,

CONTRIBUTING WRITER Russell Thomman

MANAGING DIRECTOR Benton Mahaffey accounting@REDNews.com

EMARKETING DIRECTOR Robert Frogge emarketing@REDNews.com

CREATIVE DIRECTOR Terry Martinez digital@REDNews.com

SALES Ginger Wheless ginger@REDNews.com

PRINT & DIGITAL DISTRIBUTION REDNews is directly mailed each month to commercial real estate brokers, investors and developers throughout Texas and the US. Texas Brokers: 8,150 Texas Leasing/Tenant Rep: 6,232 Texas Investors: 4,979 Texas Developers: 4,710 Outside Texas Investors, Brokers, Developers etc: 26,387

TOTAL QUALIFIED ONLINE REDNews DISTRIBUTION: 50,458 REDNews has gone green using recycled paper.

Thank you Midway Press!

To subscribe to REDNews call (713) 661-6300 or log on to REDNews.com/subscription.

Ginger Wheless

2537 S. Gessner, Ste. 126 Houston, TX 77063

6

DECEMBER 2018

La Marque means business.

The City of La Marque is strategically positioned 15 miles southeast of Houston and serves as a mainland anchor for the booming Houston/Galveston Region.

La Marque is the geographic center of Galveston County with more than 14 miles of frontage on the expanding Interstate 45 corridor and is the second-fastest-growing city in the County. Now is the time for commercial expansion in La Marque as we have entered a development boom.

Get the RTA data at LMEDC.com.

10.7 % population growth from 2010-2017.

Steady residential & commercial development.

14.3 miles of prime I-45 FRONTAGE. $IB in local infrastructure improvements over next 10 years.

16,000 residents. Four school districts.

ONE LOVE, ONE Community.

Pro business & offering creative development incentives.

Seeking HOTELS, GROCERY STORES & RESTAURANTS. Traffic Counts at Interstate 45 & FM 1764 - 98,226 AADP.

Alex Getty, Executive Director

la marque economic development LMEDC.com | 409-938-9258

UNT-believable Undertaking:

How the University of North Texas is investing in real estate’s future

BY BRANDI SMITH

Get to know UNT Real Estate faculty: PhD from Texas A&M University Teaches Principles of Real Estate and Real Estate Investments JOHN BAEN

PhD from University of Texas San Antonio Teaches Property Management, Advanced Property Management and Real Estate Agency ANJELITA CADENA

PhD from University of Wisconsin Teaches Real Estate Finance and Advanced Real Estate Finance & Analysis

YINGCHUN LIU

JD from Texas Tech University Teaches Real Estate Law & Contracts and Property Management Law DENNIS ENGLER

Master’s from UNT Real Estate Program Teaches Real Estate Valuation and Principles of Real Estate MARC MOFFITT

8

DECEMBER 2018

F

or more than three decades, Dr. John Baen has poured his passion for real estate into his professorship at the University of North Texas in Denton.

“I wake up excited about what I’m going to do all day.

I have a “to do” list and there’s no way I can ever get it all done by the end of the day, so I’m never bored,” he explains energetically. “I’m never in a rut. I’ll teach two or three days a week, then I’m out looking for jobs for my students.”

Once they’re out of his classroom, that doesn’t mean the connection is over. Baen says he has a “great deal of passion” for watching his students succeed. In fact, he has a strict rule: They aren’t allowed to call him “Doctor” until they make more more money than he does!

“I come with a lifetime warranty, so they can call me up any time after they graduate and ask me any question on any topic,” he says. “I love doing business with my former students. They know who I am. We speak the same language. We have high ethics.”

Baen’s years of experience have taught him the value of hard work and determination, which he is now channeling into efforts to raise money for an endowment for a commercial real estate professor at UNT. He explains that very few schools offer a doctorate in real estate. Those graduates, despite having little to no real-world experience, will get job offers in the $150,000 to $160,000 range. UNT wants to sweeten the pot to bring to North Texas someone who has practical experience in commercial real estate.

“The endowment will help us supplement the statepaid salary,” he explains. “If we raise $2 million, that will add about $80,000 a year. That will help us entice the best candidate we can afford, someone who has passion, who really cares about the industry, cares about cutting edge, and cares about students being successful.”

UNT started its commercial investment and residen-

tial property management curriculum 40 years ago.

It’s the only university to offer a Bachelor of Business Administration for real estate and the program is now recognized as one of the best, not just in the state of Texas, but in the country. Real Estate Academic Leadership (REAL) also named it as one of the programs making the greatest contributions to real estate research.

“The Dallas-Fort Worth area has grown since our program started. The real estate market’s on fire,” says Baen, adding, “There’s always a market for our students.”

Via UNT, those students can pursue a BBA in Real Estate, as well as master’s and PhD options, from the Department of Finance, Insurance, Real Estate and Law (FIREL). Graduates of the program become experts in how to rent, buy and sell properties, as well as make site visits, prepare contracts, work with related experts, calculate rates of return and manage commercial or residential properties.

Even before they graduate, many students are able to sit for the real estate licensing exam because of the quality of courses offered at UNT. They often have four to five job offers lined up before they receive their degree, according to Baen. That’s why, he explains, there are no vacant seats in any classes.

“Our program has the reputation of getting our students jobs,” says Baen, who estimates that he’s taught approximately 30,000 students over his time in academia.

He is one of UNT’s four full-time faculty, all with PhDs or JDs from nationally recognized universities, dedicated to the real estate program. They’re invited to lecture all over the world, thanks to their knowledge, background and reputation for interesting speeches. That team offers ten specific classes (basic and advanced) in real estate investments, property management, finance, valuation and real estate law.

The courses are anchored in textbook theory, as well as practical applications of real-world real estate dynamics, problem solving and investment analysis.

Continued on Page9 >

The university also has partnerships with a variety of professional organizations. Over the years, CCIM, for example, has provided scholarships and student invitations to its luncheons. The Texas Apartment Association funded an endowed chair in multifamily property management for the past 12 years, along with offering scholarships and travel grants. Students have been able to take part in live retail case competitions for the past three years, thanks to a sponsorship from ICSC. Other partnerships include Denton / Wise Association of Realtors, North Texas Commercial Realtors, BOMA, IREM and CREW Dallas.

“The Dallas-Fort Worth area has grown since our program started. The real estate market’s on fire,” says Baen.

All told, the program offers 17 different scholarships, ranging from $500 to $10,000 for real estate students.

Receiving a boost late in October 2018 when a donor contributed $250,000 for scholarships as well.

The UNT Real Estate Alumni Association also plays a vital role in the program’s success. Often, some of its more than 1,400 members pay a visit to UNT’s Real Estate Club, which is made up of current students.

“Typically, they’ll come in and offer them their success story. It gives students a chance to talk to people in the real world and kind of get a feel for what it’s really like out there. It’s great for them to hear from professionals in the field,” says Ryan Blakeman, an

appraiser at Deverick & Assoc., as well as an ‘18 UNT Real Estate grad. “Some of our alumni also mentor students, helping them through their career path while they’re in school. And they help our students navigate the job market once they leave here.”

Because they value the program that helped launch their career, alumni give back in other extraordinary ways, including offering endowed scholarships and gifts.

“We had an alumni party a year before last. One of our alums said, ‘I’ll pay for it, whatever it costs,’” Baen says, offering an example of how the program’s grads step up. “We had 350 show up. It cost $28,000 with an open bar, open barbecue.

And that’s what I’m talking about.

We are UNT Real Estate.”

As Baen, who recently turned 70, prepares to retire, he is focused on ensuring the lasting and continued staying power of the UNT Real Estate Program. As such, he has focused his efforts on generating $2 million to create that named endowment. He even contributed $100,000 of his own money to the cause.

“I’ve been around for a long time and I’m going to have to retire someday,” says Baen. “I have no immediate plans whatsoever, but we have to fund this

endowed professorship before I go anywhere.”

“Baen’s been such a guiding light for everyone through this program for such a long time that to get someone else half as good or someone that can push the program even further is critical,” adds Blakeman.

“That’s why it’s so important to donate and do what we can to help the program, because not only does it help the program and the kids that are in it, it makes our degrees more valuable. It makes us more valuable as it goes down the road.”

With the support of UNT alumni and other real estate professionals, Baen wants to maintain the program’s high quality of teaching and research, as well as its near 100 percent job placement for its graduates.

“Our ideal candidates would be highly academic. They would have a Ph.D. That’s #1. They would have practical experience and understanding of commercial and investment real estate. And they would be able to relate with our industry, in terms of public speaking,” Baen says. “I don’t want to describe me, but that’s the kind of person we need.”

What it boils down to is simple: an investment in UNT’s Real Estate program is an investment in the future of the real estate industry in Texas.

For information about how to contribute contact John Baen at John.Baen@unt.edu.

Or, if you’re an alum who would like more information about getting involved with the UNT Real Estate Alumni Association, visit UNTRealEstate.org.

DECEMBER 2018

9

PRIME RETAIL/RESTAURANT SPACE ON INTERSTATE 10/KATY FREEWAY HIGH GROWTH KATY AREA (88.8% INCREASE SINCE 2000) Ideal Location • Excellent Visibility • Extremely High Traffic Count

New Retail: Katy Mills Plaza 2404 Texmati

Pre-leasing: The Shops at Cane Island 27252 Katy Freeway

Shadow Anchored by Bass Pro & Katy Mills Mall

KATY MILLS MALL

• On Interstate 10 in front of Katy Mills Mall • 1,020 SF – 20,000 SF • End Caps with potential drive-thru • $20 - $50/SF Tenant Improvements • Near new Katy Convention Center • Up and coming area with National Credit Tenants minutes away • Adjacent to Katy Mills Mall, Texas Typhoon & the new Katy Boardwalk District

Shadow Anchored by Buc-ee’s

• On Interstate 10 and next to Buc-ee’s • 1,500 sf – 19,543 SF Available • End Caps with potential drive-thru & pad site • Close proximity to Cane Island’s 1,100 acre master planned community

Joe Rothchild | 713-857-0567 | rothchil@yahoo.com

REAL ESTATE

PRIVATE LOANS

• +/- 157 Acres • Build-to-Suit Sites Available from +/- 3 acres to +/- 8 acres • Harris County, outside City Limits • Desirable access from Clay road • Convenient location to Grand Parkway • Master Planned Business Park • Deed Restricted • Regional detention provided • Outside Floodplains

Clay Rd

Katy H ockley Cut Off Rd

PROPERTY HIGHLIGHTS

99

10

www.mkiddproperties.com

M Kidd Properties | 1775 St. James Place, Suite 100 | Houston, TX 77056

Mark W. Kidd, Sr. President 713-968-4601 mark@mkiddproperties.com

Mark W. Kidd, Jr. Director 713-828-8480 mark2@mkiddproperties.com

Equity Secured Capital Texas Direct Private Lender Close in 7 Days www.equitysecured.com 512-732-8338

± 6.5 Ac Infill “Lake View” Tract in Katy Area On Morton Rd, Between Mason and Fry Roads

Price includes the following: 1. Cost of Offsite Detention 2. Cost of Sanitary Sewer Lines to Property 3. Cost of Water Lines to Property 4. Cost of Storm Sewer Channels to Property ◆ Suitable for Mixed Use: Multifamily, Retail ◆ +/- 370’ Frontage on Morton Road ◆ 2 miles East of Grand Parkway - 99 ◆ 2 miles North of I-10 (Katy Freeway) ◆ Overlooks 36-Ac. Private Spring Fed Lake

MORTON RANCH JUNIOR HIGH SCHOOL

FRANZ ELEMENTARY SCHOOL

MORTON RANCH ELEMENTARY SCHOOL

MORTON RANCH HIGH SCHOOL

MORTON RANCH

RAINTREE VILLAGE RECREATION

S. MAYD

E CREEK

6.5 acs.

MORTON ROAD

FIRE STATION

TON MOR

D

ROA

UNDER DEVELOPMENT

For Pricing/Info, contact: Joe Grillo 713-569-3322 Amar Amancharla 281-300-5353 Email: morton7acres@yahoo.com

GReenberg & Company Commercial Real Estate Brokerage Firm

RETAIL SPACE & LAND AVAILABLE | GREAT LOCATIONS

6111 Richmond | Houston, TX 77057 RETAIL | OFFICE | TOWNHOMES

Galleria Area | Major Thoroughfare | Great Visibility Between Hillcroft and Fountain View Dr. Less than a mile to the

Southwest Frwy, Westheimer Rd, Galleria Area. Easy access to 610 W. Loop/ Southwest Frwy/ Westpark Tollway/ Beltway 8.

Lot Size : 2.3 Acres

Space Available: 100,000 SF

Price : Call For Details

1700 Emancipation | Houston, TX 77003 GREAT SITE AVAILABLE

High Traffic | Easily Accessible | Excellent Visibilitry

5800 Richmond | Houston, TX 77057 RETAIL PROPERTY FOR LEASE

High Traffic | Major Thoroughfare | Prime Frontage

Located minutes away from the Central Business District and Downtown.

Within a short distance from the BBVA Compass Stadium, Toyota Center, Minute Maid Park. East of Downtown and in a very high traffic area.

This is a two- story, free-standing building on the corner of Richmond Ave and Bering Drive. Great Visibility, ample parking and major thoroughfare along Richmond Avenue. Accessible from the Southwest Fwy, 610

Space Available: 0.79 Acres

Lot Size: 2.75 Acres Space Available: 10,555 - 16,518 SF

Lot Size : 0.79 Acres

Price : Call For Details

5959 Richmond Avenue, Suite 440 Houston, TX 77057 WWW.GREENBERGCOMPANY.COM

South Loop, and Downtown Houston

Price: Call For Details

Broker Contact: David Greenberg | Phone: 713-778-0900 EMAIL: DAVID@GREENBERGCOMPANY.COM

KEEPING PACE WITH PARKSIDE: Why the equity firm is banking on West Houston

BY BRANDI SMITH

DAN MOODY

hen Parkside Capital started up ten years ago, its team began assessing where and how to invest some of its $35 million in capital. It set its sights on West Houston, where acres of opportunity waited for the right buyer.

W

interest we get, it seems like the traffic that’s generated is geared more toward corporate or medical users.”

“The I-10 corridor has been a remarkable growth corridor,” says Dan Moody, the company’s vice president. “It may be the most predictable growth corridor you could find, not only in Houston, but in the country.”

“With the extension of the energy corridor, coupled with single-family development such as Cinco Ranch and the various subdivisions between I-10 and the Grand Parkway, you could almost set your watch to it,” adds Moody.

In 2011, Parkside acquired 110 acres at the northeast corner of Mason Road and I-10, developing it into Mason Creek Corporate, a first-class business park.

In early 2014, Parkside capitalized on that demand, grabbing up 120 acres from Simon Property Group. Situated at the northeast corner of I-10 and the Grand Parkway, the equity firm initially planned for the property to become a corporate office development.

“We quickly sold about 35 acres to Transwestern, which built a series of five industrial buildings,” Moody explains. “Then we sold a couple tracts to Myers & Crow Co.” The office developer built spec, leasing one of its buildings to Geico. The other is still available.

Mason Creek also includes a nucleus of medical offices with services that range from dermatology to eye care.

He knows that bit of property left will go quickly, as everything seems to these days.

“When the oil market crashed later that year, the Houston office market went with it, so we were left with a different asset type and had to really reformulate our approach,” Moody explains.

Of the 110 acres Parkside initially bought, only 15 acres remains.

Parkside started discussions with the University of Houston in 2016. UH went on to buy 45 acres to build a new campus serving the Katy area. The project broke ground this May and, when completed in Fall 2019, will feature an 80,000-square-foot building. Students there will be able to study nursing and engineering, as well as arts & sciences, business administration and education.

“I think that it will be office or medical,” Moody says.

“Based on the nature of what’s already in place and the

“That deal was the catalyst for the entire development,” he says. “As soon as that deal closed, we

“The combination of office, medical and some retail really creates a kind of corporate mix-use project,” says Moody.

University Center

sold 11 adjacent acres to a multi-family developer.”

University Center now also includes a NewQuest retail development, an H-Mart-anchored retail development, a retail development anchored by Newmark Homes and restaurants Whiskey Cake Kitchen & Bar and Slim Chickens. By the time this article goes to print, Parkside will have commenced construction on all the monument signs and landscaping. All the streets and utility have already been developed.

“By March, it will be a fully built-out park. We’ve only got about 10 acres left to sell,” says Moody.

He attributes part of the property’s success to the extension of the Grand Parkway from U.S. 290 down to U.S. 59.

“That infrastructure was a game changer. There’s been kind of a gold rush of development. We felt we were kind of in a pretty safe spot at the corner of I-10 and the Grand Parkway. It’s been a good project for us,” Moody says.

Years after Parkside pinpointed the I-10 West corridor as a hotspot, almost all its available property is gone.

“It’s getting a little more challenging now because people are running out of land and the growth has now pushed out pretty far west of Katy. A lot of the industrial guys are buying it up,” says Moody. “We’re starting to look in other places.”

Now Parkside is eyeing the next challenge, the next opportunity corridor in Houston. We’ll see if the rest of the CRE community can keep up!

Mason Creek

12

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REIMAGINING HOUSTON:

A flood of lessons from Southeast Asia

BY BRANDI SMITH

R

apid urbanization. Development in flood-prone areas. Flawed cooperation between agencies.

Repeated flooding.

RIZAL ALGAMAR

JACKSON EWING

BILL FULTON

Our readers could easily apply all of that to the Houston area, a region hit by three catastrophic flood events in three consecutive years. Those issues, however, are not isolated to Southeast Texas. Southeast Asia has been dealing with similar situations for decades and has taken steps to mitigate the damage done by Mother Nature.

To learn from those communities, Asia Society Texas Center hosted “Houston Reimagined: Building a Resilient City and Best Practices from Asia,” bringing in experts in the field to share how Houston can look to some Asian cities for examples of how to overcome its own challenges.

Houston flooding May 2015. Photo credit Texas Housers

First, let’s consider some of the factors contributing to the impact of flood events in Texas’s largest city and beyond. Urbanization is key among them.

“Southeast Asia is undergoing a structural, social and economic transformation as we speak. It is moving, as a region, from largely agrarian-based economies to economies based on services, manufacturing and industrialization,” said Jackson Ewing, a senior fellow at Duke University’s Nicholas Institute of Environmental Policy Solutions and adjunct professor at the Sanford School of Public Policy.

“As a driver of that reality, we see urbanization. The population of Southeast Asia is now roughly one-third urban.”

“More than four billion people around the world, that is more than 50 percent of the global population, live in cities,” stressed Rizal Algamar, the country director of The Nature Conservancy - Indonesia Program.

“This is for the first time in history that more people are living in cities than in rural areas.”

In a state the size of Texas, where you can drive for hours without seeing a large town, it’s easy to dismiss the idea of urbanization, according to Bill Fulton, the director of the Kinder Institute for Urban Research at Rice University.

“Sometimes in Texas, we don’t think we’re urban. We all drive our pickup trucks. But, in fact, about two-thirds of the population and about three-quarters of the economy of Texas exist in urban and

14

DECEMBER 2018

suburban locations,” he said.

The transition here is happening quickly, but it’s even more distinct in parts of Southeast Asia.

“Governments are struggling to keep up with the rapidity of these population movements and with the demands that the new citizens require as they move into cities,” Ewing said.

He cites Manila as an example. The swarm of new residents have, in some situations, resulted in informal settlements in the poorer areas of the city.

“Poorly managed urbanization can really exacerbate existing challenges and leave cities more vulnerable to natural hazards,” added Algamar.

Houston, per Fulton, has more engineers than any other city in the world, which results in a very deeply embedded engineering culture.

“That has led to a particular kind of approach to city building,” Fulton said. “That’s not atypical for the United States, but it’s really pronounced here. We’ve run up against the limits of, in trying to manage urbanization, sustained building resiliency. “ Ewing echoed that, describing examples of that playing out, including in China. There, efforts are underway to divert water from the southern part of the country to the north, where water is scarce.

“I think that will enhance urban vulnerability, even in some of the more modern cities there,” he said. “It’s a fairly myopic attempt at Continued on Page 16 >

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REIMAGINING HOUSTON < Continued from Page 14

population is a difficult endeavor. The same cities in Southeast Asia that have illustrated the challenges of building within a flood-prone area are also offering lessons about how to cope with it.

“Relocation and resettlement have been used as tools in areas such as Singapore. In the 1960s and 1970s, the government moved people en mass off of the rivers and into high-rise buildings and housing complexes,” Ewing stated.

“It wasn’t easy, and it wasn’t without its difficult results, but I think that those people are in a much more social place as a result,” he added. “Finding smart and nuanced ways to have those population relocations occur, in ways that do not completely erode the community that they’ve come to depend on, is challenging, but also essential.”

The Harris County Flood Control District is attempting just that through its voluntary home buyout. It started the program in 1985, but launched a Harvey-related buyout within weeks of the storm’s devastating visit to the region.

Shenzhen China Flooding. Photo credit Thatsmags.com

engineering one’s way out of a problem instead of a recognition of the realities of the land’s ecosystem that they depend on.”

disasters, such as the floods triggered by tropical systems and monsoon seasons.

“Not only does it flood in Houston, but that is not a

He also cited Singapore’s approach to being “masterful” in some instances, but far from it in others. The country has looked to examples like Rotterdam, Netherlands, raising the height of its seawalls.

“We need to give people a different set of choices other than ‘You can stay’ or ‘You can go there.’ It’s ‘You’re leaving,’” Ewing said. “Maybe we should have a conversation of ‘You’re leaving. That’s happening. We cannot as a municipal society continue to abide by you being here and it’s not in your best interest either.’”

“At the same time, they’ve reclaimed parts of their territorial sea to put new infrastructure on in ways that certainly don’t make a whole lot of sense,” said Ewing.

Another challenge, he pointed out, is the tendency for different agencies -- municipal, provincial and beyond -- to fail to communicate and cooperate.

Ewing said that’s especially evident in Indonesia’s capital, Jakarta.

Jakarta Dredging along the Karang River

“There are multiple municipalities within metro Jakarta and coordination among them is often relatively poor,” he explained. “This means that the problems in one municipality have often acute consequences downstream.”

problem you can make go away. This is a flood-prone area,” Fulton said. “I think we have to recognize that we have to start living on the water, rather than fighting the water all the time. That means that our goal should not be to stop flooding from ever occurring. Our goal should be to mitigate the risk to people and their property. Those are two very different things.”

Though all of these issues would be problematic on their own, they’re compounded in the face of natural

While simple enough in premise, learning to live with the flooding and lessening its impact on the human

16

DECEMBER 2018

“There are two problems with that,” said Fulton. “One is that there isn’t nearly enough money to buy everyone out, to get everybody out of risk zones. The other issue is that not everybody wants to go.”

“The government here is much less aggressive in making moves like that.

So, it’s a matter of creating enough incentive so people are willing to go and then mitigating where possible,” countered Fulton.

Greenspoint, he noted, has dozens of apartment complexes that are built not just in the floodplain, but in the actual floodway.

“For better or worse, this isn’t Singapore, so we can’t just move them all into high-rise buildings that the government builds. That’s much more difficult to do in a democracy than it is in an authoritarian society,” said Fulton. “We have a bunch of first world problems and Continued on Page 22 >

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BY RAY HANKAMER rhankamer@gmail.com

CCIM LUNCHEON STATE OF THE DEBT MARKETS PANEL

Speakers: Matt Franke, Q10 Kinghorn Driver; Elgin Weaver, Mercantil Bank; W. Greg Young, Grandbridge Real Estate Capital; Moderator: Gill Dolan, Greystone & Co.

Takeaway: Capital is abundant but after a decade of historically low interest rates, rates are beginning to rise, and with them wages…and inflation.

MODERATOR: GILL DOLAN GREYSTONE & CO.

• In recent months, the 10 year treasury rate has risen from 2.44% to 3.17%, a year ago it was 1.60%; in 1980 it was 15.80%-higher rates are here to stay, as treasuries follow short-term rates upward • Investors in past years have gotten used to lower returns, as lots of money has had trouble being ‘put to work’, with lots more on the sidelines looking for deployment • There is lots of competition among lenders in the different lending classes: banks, life companies, conduit lenders, and debt funds

MATT FRANKE Q10 KINGHORN DRIVER

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18

• Banks feel at a disadvantage because of the stringent regulation they are subject to • Life companies are very disciplined, and other lenders have been as well, and the result is that we are having almost no defaults / foreclosures; one of the panelists works for a firm which services 6,000 mortgages and only one is In default • Debt funds have the least regulation and therefore are not favored by the other competing lending classes • Lenders compete with interest rates and leverage (per cent of loan to value-”LTV”) although some lenders are more interested in proven and predictable cash flow level, prioritizing that over appraised values when underwriting prospective loans • Life companies may offer 60-65% LTV while some debt funds may

DECEMBER 2018

offer leverage as high as 85% but at higher mezzanine-like interest rates-on average leverage is 5% less than a year ago; leverage % varies also as to submarkets and asset class • Lenders favor developers with high quality reputations and established track records developing in proven markets • Lenders require debt coverage ratios of at least 1.25 • Lender sentiment is strong for Houston, which in their eyes excelled in moving on past Harvey • Creation of 115,000 jobs here in the last year is a very strong statement, especially for future multi-family projects, the development of which is heating up again as vacancy rates subside.

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REIMAGINING HOUSTON < Continued from Page 16

that makes the situation better for us in many ways, but worse for us in many ways because the challenges we face are much more nuanced and much more complicated than you might think.“ An example of flood mitigation offered by Fulton was raising houses, as many have done in the Meyerland area, which was impacted by all three of Houston’s recent floods. The process, however, is cost-prohibitive.

In some neighborhoods, he argued, the value of the home is less than the expense of raising it.

“When you talk about resiliency, we have to talk about vulnerable populations in the United States, and in a place like Houston, in a very particular way. How can we make sure that people in these neighborhoods have the assistance they need to bounce back?” he asked.

Of course, dealing with moving people out of the floodway wouldn’t be an issue if it hadn’t been allowed in the first place. It’s an oversimplification of the issue, to be sure. After all, most of Southeast Texas is considered flood-prone due to its low elevation.

However, steps can be taken now to ensure we don’t create additional problems in the future.

“They aim to capture rainwater and harness groundwater while, at the same time, reduce and stop flooding,” said Algamar. “Picture a city where it absorbs, it stores, it filters and it purifies this water like a sponge. In a sponge city, groundwater is recharged to a variety of green infrastructures, such as preserved floodplains, wetlands, retention ponds and sunken crops. Also, all the roads are permeable, so it absorbs the rainwater immediately.”

Beginning in 2015, China dumped $300 billion dollars into construction of 30 cities adopting these principles.

The goal is that, by 2020, those urban areas should be able to absorb and reuse at least 70 percent of rainwater.

We call that approach low-impact development in the U.S. Fulton said it is happening here to some extent.

Both Houston and Harris County have ordinances that encourage low-impact development, but little to no incentives to do so.

“It’s a lot more expensive to have to fix stuff after the fact, so we have to be able to make a coherent financial case for greater preparation and greater resource employment for the sake of resilience,” Ewing said.

“So you know, if you’re a developer, you’re a good guy and you feel like doing it, it’s OK to do it,” said Fulton.

“One thing that Houston has not done, even with Harvey, is get more aggressive about that kind of thing, partly because of our historic reluctance to engage in land use regulation and to tell property owners what to do.”

Resilience is the precise goal of the so-called “sponge cities” in China.

“This is where you get to the need for a true commitment,” Ewing added. “Because we still lean

Chegongmiao Station flooded by design

on the traditional engineering solutions, we don’t emphasize those other solutions. “We typically err on the side of the typical engineering solutions.”

Fulton suggested using the recently passed $2.5 billion flood control bond in that traditional way would result in little benefit.

“If we try to engineer our way out of this problem, the cost is something like $30 billion. So $2.5 billion is a drop in the bucket,” he said. “What that means is that we can no longer afford to build pieces of infrastructure, such as flood control, without creating any more investment. If we’re going to build a road, the road has to help solve the flooding problem. If we’re going build a park, the park has to help solve the flooding problem.”

Manila, Philippines - March 2013. Photo credit Shutterstock.com

22

DECEMBER 2018

The clear message from Ewing, Almagar and Fulton, though, was that change must be a priority of the community from top to bottom: municipalities to developers to residents. With a shared vision and learning from other cities with similar challenges, Houston could rise above the flood - structurally and financially.

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HOUSTON INDUSTRIAL MARKET CONTINUES TO SHINE Warehouse/Distribution Sector Drives Activity

Port continues to rise and the evolution of the retail market is increasing demand for space. Absorption for new construction will drive demand resulting in softness within poorly located aging product. Overall, the industrial market is poised for a strong remainder of the year, a trend likely to continue into 2019.

additions to supply in the face of business trends such rightsizing, telecommuting and hoteling;leasing

OFFICE MARKET SHOWS SIGNS OF IMPROVEMENT Absorption Turns Positive on Strong Job Growth activity is expected to continue to gain momentum. A full recovery is still down the road and will be measured and submarket driven; however, Houston has shown the ability to absorb largeblocks of space in a very short time. It is anticipated that well locatedClass A properties will recover first followed by the backfilling of value play submarkets. Over the near term, absorption should begin to trend in a positive direction with 2019 anticipated to create netpositive absorption annually and Q4 2018 remaining in the black.

HEALTHY ACTIVITY CONTINUES FOR DFW INDUSTRIAL MARKET Vacancies remain below marketâ&#x20AC;&#x2122;s historic average

Industrial Market to Keep Growing

OUTLOOK Office Outlook Shows Measured Improvement

The industrial sector looks to continue its hot streak as market fundamentals remain strong, activity at the 24

DECEMBER 2018

The Houston office sector is beginning to show its first signs of recoveryas job growth continues to make strides and the energy industry finds its long-term footing. While headwinds remain prevalent forthe sector with over 25% of the market listed as available and strong demand for new construction prompting

OUTLOOK Market Fundamentals Remain Strong In DFW The Dallas-Fort Worth industrial market continues to perform at a high level in 2018. The regionâ&#x20AC;&#x2122;s forecasted population growth lead many to predict

DFW OFFICE MARKET MAINTAINS STRONG PERFORMANCE

OUTLOOK Vacancy Rates Slowly Inch Up The overall office availability rate (all space marketed as available for lease, both direct and sublet) decreased 30basis points (bps) over the quarter, ending at 20.5%.

Construction Still Hot At 7.7 MSF that the Dallas-Fort Worth industrial market will continue to perform well throughout the remainder of this year, and throughout 2019, despite potential trade war concerns and rising interest rates.

The construction activity for DFW decreased from the previous quarter but continues to show strong growth ending the quarter with 7.7 MSF of projects under construction.

Excerpts from Transwestern Marketview - Q3 2018

Source: Transwestern Research, Q3 2018.

TE! A E D , 2019 H E T 21 V A S CH

R MA

PRESENTED BY

For information please contact:

JACKIE BROWNING-OLSEN at (210) 804-1155 or email: JackieO@recsanantonio.com

Vacancy

10.7%

Under Construction

1,688,770 SF

Completions

552,850 SF

Net Absorption

418,432 SF

Avg. Annual Asking Rate

$10.07 PSF

ABSORPTION AND ASKING RATES REBOUND; DEVELOPMENT ACTIVITIY REMAINS ROBUST

AUSTIN INDUSTRIAL

predominately in Hays County with approximately

the quarter. With vacancy steadily floating around the

Overall activity in the Austin industrial market increased

790,000 sq. ft. of new construction underway in the

10% mark and asking rates near historic highs, developers

significantly quarter-over-quarter in Q3 2018 as absorption

southernmost portion of the Austin industrial market.

continue to read positively into Austin’s position during

levels crested 400,000 sq. ft., citywide average asking

The construction pipeline remains skewed towards

rates broke $10.00 per sq. ft., and developers brought to market an additional 552,000 sq. ft. of new product. While the delivery of this new product placed upward pressure on citywide vacancy rates, the under-construction pipeline remained over 1.6 million sq. ft. reflecting the vigorous

this late expansion state of the market cycle.

Despite the substantial level of positive net absorption

warehouse product, with 71% (approximately 1.2 million

in Q3 2018, year-to-date activity remains relatively low

sq. ft.) of the development pipeline dedicated towards

compared to the past three years of absorption activity

warehouse and distribution product.

in the market. Vacancy rates decreased 50 basis points from 10.7% in Q2 2018 to 10.2% in Q3 2018. Approximately

demand that exists for industrial product in Central Texas.

AUSTIN OFFICE

Historically, the Southeast submarket has seen the brunt

Absorption levels in the Austin office market rebounded

bringing the total amount of new activity currently under

of new development activity in the market. However,

in Q3 2018 from a relatively flat first half of the year,

development to 4.4 million sq. ft.

this past quarter’s development activity was located

cresting 575,000 sq. ft. of positive space demand during

Vacancy

9.7%

Net Absorption

276,491 SF

Avg. Asking Price

$5.62 PSF

200,000 sq. ft. of new construction kicked off in Q3 2018,

Excerpts from CBRE Marketview - Q3 2018

Under Construction

2,075,184 MSF

Source: CBRE Research, Q3 2018.

Deliveries

466,943 SF

BREAKING NEW GROUND: CONSTRUCTION PIPELINE EXPANDS SAN ANTONIO INDUSTRIAL Healthy Absorption Activity

The San Antonio industrial market experienced healthy market movement in the third quarter of 2018.

Marketwide Vacancy Under 10% The San Antonio market registered a slight uptick in

sq. ft. delivered this quarter in the Northeast and North Central submarkets. The construction pipeline continued to expand with a total of 16 projects amounting to over 2.0 million sq. ft. and with a 400,000 sq. ft. project breaking ground in Q3 2018.

Robust Employment Growth

Class A Space Is In Demand Marketwide Class A vacancy rates dropped 200 basis points (bps) quarter-over-quarter, compressing Class A availability to 12.7%.

Leasing Activity Raising The Bar Strong leasing activity in Q2 2018 and Q3 2018 pushed

vacancy going from 9.0% to 9.7% quarter-over-quarter.

San Antonio’s regional economy continued to thrive

year-to-date absorption from -152,788 sq. ft. in Q1 2018

Asking Rents Experience Decrease

while adding high wage jobs in Q3 2018 and keeping

to 33,395 sq. ft. at the close of Q3 2018.

the unemployment rate below the national average.

New Development Underway

Weighted average asking NNN rents for industrial (warehouse) space registered a slight decrease quarterover-quarter shifting from $5.79 to $5.62 per square

SAN ANTONIO OFFICE

the Northwest submarket at 12707 Silicon Drive.

San Antonio’s Emerging Tech Market

foot in Q3 2018.

New Spec Developments Underway

San Antonio’s emerging tech market is heating up in

Three speculative developments totaling 446.943

the Northwest and CBD submarkets.

26

One building amounting to 102,699 sq. ft. delivered in

DECEMBER 2018

Excerpts from CBRE Marketview - Q3 2018

Source: CBRE Research, Q3 2018.

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For further information, please contact our exclusive agent:

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civil fair play

Cashing in on an opportunity:

A deep dive into Qualified Opportunity Zones

BY BRANDI SMITH

I

n commercial real estate, part of achieving success is knowing what tools are available and how to use them. That can really apply to anything, from establishing connections with other CRE professionals, to improving your website, to learning about new programs.

A very recent example of the latter is the newly created Opportunity Zone program, created via the Investing in Opportunity Act that was part of the Tax Cuts and Jobs Act of 2017.

“Opportunity zones are census tracts made up of low income communities where the poverty rate falls below 20 percent of the area median income and the median family income falls below 80 percent of area median income of surrounding tracts,” explains Matt Davis, an associate for the Land Services team at Berkadia. “These census tracts, under certain conditions, are eligible for preferential tax benefits.”

WHAT ARE OPPORTUNITY ZONES? Earlier this year, governors around the country submitted their recommended zones to the U.S. Treasury Department. More than 8,700 qualified, including hundreds here in the Lone Star State.

“After an extensive analysis of Texas’ eligible tracts, and using a multi-step process to identify eligible areas in particular need due to chronic unemployment, lower population density, and significant economic disruptors such as natural disasters within the past two years, Texas designated 628 census tracts in 145 counties as Opportunity Zones,” according to a press release from the Office of the Governor.

Those tracts are spread all over the state and they offer, as the name suggests, an opportunity for investors, as well as the community in which they’re located.

“The goal of this program is to spur economic development in areas that need a push in that direction and I think that this program is going to do just that,” says Davis. “We have already seen a number of parties flocking toward these zones and trying to get their hands on tracts. The zones make areas that investors would not typically consider moving into more desirable.”

While the program may seem perfectly suited for those in the commercial real estate industry, its parameters are such that anyone can take advantage of it.

28

DECEMBER 2018

“The zones were designed to attract capital from inside the real estate community and outside of it. Nearly all capital gains from any source can be invested into an Opportunity Zone Fund,” Davis says, clarifying that, per the IRS, an Opportunity Zone Fund is “an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a QOZ.”

WHAT SETS OPPORTUNITY ZONES APART? The “what” of a QOZ is simple enough, but the question of “why” is better explained by CPA Rick Westerfield of Briggs & Veselka Co. “This is maybe the most dynamic, and the most amazing tax benefit, that I’ve seen in my career,” he says.

He offers the example of an individual selling off stock with a very large gain. Ordinarily, that would be taxed at a rate of 23.8 percent.

“This is an opportunity for you to take that gain and invest it in a vehicle that allows for not paying tax on 15 percent of that gain and not paying tax on the appreciation of that investment from the time you invest,” Westerfield explains.

While the program shares similarities with IRC Sec. 1031, there are some significant differences that, he believes, gives QOZs the edge, including how you handle money from the sale of an asset.

“In a 1031, if I sell real estate for $5 million, I have to put that $5 million in an intermediary, locate another property I want to buy and put all that five million dollars in,” he says, elaborating about how QOZs differ. “If I had paid $2 million for that land that I sold for $5 million, in the Qualified Opportunity Zone, I get to keep my $2 million and only have to invest the $3 million gain.”

Westerfield also outlines the key differences between QOZs and IRC Sec. 1031.

Another element of the QOZ that differentiates it from other stimulus programs is its self-certification. The vehicle to invest in a QOZ must be either a partnership or corporation and the fund itself files a form with its tax return to self-regulate.

“That’s unique and very interesting,” says Westerfield.

“There’s no complicated and expensive filing with the government to maintain your qualification. There’s no annual cost to file some third-party compliance forms and no fee with some agency to prove that you meet the qualifications.”

That’s not to say it’s not perilous, he adds. It’s still a concern, as it would be if you were audited for your personal return and you find out you’re not compliant.

“Someone is going to have to prepare the tax returns for these entities and offer assistance in the certification, Westerfield points out.

HOW DO OPPORTUNITY ZONES WORK? If investing in an Opportunity Zone is something that interests you, there are several things to keep in mind.

The most important of those being the program is fairly new and evolving.

“There is more known now with the new regulations that came out than there was a month ago, but there are still some unknowns,” says Westerfield. “This is clearly something that I think requires continued monitoring.”

Some guidelines that are clear now include that you cannot buy and hold unimproved property, according to Davis.

“The property must be substantially improved,” he points out.

Likewise, there is a strict time frame within which those purchases and improvements must be made. The property must be acquired after Dec. 17, 2018.

“The investment window for QOZs ends in 2028 and the last day to take advantage of the incentives is Dec. 21, 2047,” says Davis.

Like Westerfield at Briggs & Veselka Co., Davis and the rest of the Berkadia team are closely watching as the details of QOZs firm up.

“Our goal is to keep our clients updated on the latest information related to the rules and regulations. In addition, we want to be sure that our clients are educated on where the Opportunity Zones are located within the City of Houston and the opportunities that are available within the QOZ boundaries,” says Jennifer Ray, director of

KRISTEN MCDADE

MATT DAVIS

JENNIFER RAY

RICK WESTERFIELD

Berkadia’s Houston Multifamily Investment Sales team. “Houston’s Downtown is located within the zone and presents a tremendous opportunity for investors with funds to invest large amounts of money in a highly desirable part of the city.”

WHERE ARE TEXAS’ OPPORTUNITY ZONES? Interested parties have untold options, as the zones are spread all over Texas.

For example, there are 53 in North Texas, including the Deep Ellum and Pleasant Grove neighborhoods in Dallas. In Houston, Downtown and Midtown are garnering attention.

“Investors are gravitating to those areas, which have already been in the midst of gentrification,” says Kristen McDade, Berkadia’s senior director of the Land Services team. “Redevelopment is already occurring, which makes a play in these areas feel less like pioneering.”

While those areas may be the most obvious for investors to jump into, the sheer number of tracts where the tax incentives will be available means there is a wide array of options.

“From a land broker perspective, we are working to identify opportunities in all of the zones. Investors are approaching us daily to find interesting sites in the QOZs,” McDade adds. In addition, notes Westerfield, “This is also a tremendous opportunity for QOZ management companies to form, be experts in the field, and oversee QOZ construction projects. CRE professionals are well equipped to fill this niche.”

It will take a number of years to determine whether the government’s new stimulus effort is as effective as intended, but it will take far less time for CRE professionals to learn how to wield the latest tool in their toolbox.

TO VIEW MAP: • https://www.cdfifund.gov/Pages/Opportunity-Zones.aspx • Under Opportunity Zones, Click the link in the second bullet referencing a Map of all designated QOZs. (Second Bullet) • Once the map has loaded, you can either zoom in to Texas and navigate the map that way OR you can search using the search box in the upper right corner of the screen

TAX BENEFITS & ISSUES Opportunity Zones: Purpose

The Internal Revenue Code Sec. 1400Z-2 was written to encourage economic growth and investment in designated distressed communities (Qualified Opportunity Zones, “QOZ”) by providing Federal income tax benefits to taxpayers who invest in businesses located within these zones (Reg-115420-18).

Qualified Opportunity Zones (QOZ) vs. IRC Sec. 1031 • Ability to Receive Cash – Reinvestment of Capital Gain Only (QOZ) vs.Total Proceeds (1031) • Permanent Tax Exclusion (QOZ) vs. Temporary Deferral (1031) • No Identification Date Requirement for Investment (QOZ) • No Like-Kind Property Requirement (QOZ) • Not Real Estate Specific (QOZ)

Sec. 1400Z-2 Opportunity Zones: How? • The Simplified “How” • Step 1: Qualified taxpayer incurs a capital gain • Step 2: Taxpayer elects deferral treatment (anticipated via Form 8949) and reinvests the gain into a Qualified Opportunity Fund (QOF) • Step 3: The QOF invests more than 90% of it’s assets in Qualified Opportunity Zone property (QOZP) which is located within a Qualified Opportunity Zone (QOZ).

Sec. 1400Z-2 Opportunity Zones: Why? • The “Why” • Potential 8 Year Deferral of Capital Gain • Permanent Exclusion of up to 15% of the Original Capital Gain • Permanent Exclusion of 100% of the Gain to be Recognized from the QualifieD Investment

DECEMBER 2018

29

SCOOP The following pages contain a calendar of Texas CRE events, networking photos, and deals/announcements. For more updates, log on to REDNews.com present present

present

Save the Date to Hear From Top Industry Pioneers Office • Industrial • Retail • Multifamily • Hospitality • Brokerage Service Company • Development & Investment Where Do The Pioneers See The NEW Save the Date to Hear From Top Industry Pioneers Opportunities Evolving?

January

16

he Date to Hear From TopOffice Industry Pioneers • Industrial • Retail • Multifamily • Hospitality • Brokerage 2019

• Industrial • Retail • Multifamily •Lessons Hospitality •Service Brokerage Company & Investment Learned From Their Past • Development For More Information, Location, Speakers and Registration: Service Company • Development & Investment www.resummits.com/DALLAStrailblazer Success and Failures January January January Where Do The Pioneers See The NEW ioneers See The NEW Do Not Miss This Opportunity to Hear ities Evolving?

Opportunities From TheseEvolving?

Industry Titans 2019 2019 2019 Sponsorship Opportunities Available, Contact: ed From Their Past For More Information, Location, Speakers and Registration: For More Information, Location, Speakers and Registration: Jeff Johnson | Real Estate Summits | 952-405-7780 Lessons Learned From Their| jeff.johnson@resummits.com Past For More Information, Location, Speakers and Registration: www.resummits.com/DALLAStrailblazer www.resummits.com/HOUSTONtrailblazer and Failures Ginger Wheless | REDNews | (713) 661-6300 | Ginger@rednews.com

s Opportunity to Hear e Industry Titans

ities Available, Contact:

16

Success and Failures

16 18

www.resummits.com/DALLAStrailblazer

January

18

January

Central South Texas Do Not Miss This Opportunity to HearNorth Texas 2019

These Location, Industry Titans For From More Information, Speakers and Registration:

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Southeast Texas

CENTRAL SOUTH TEXAS

DECEMBER

2018 1 SATURDAY

CBA Austin - RE Challenge Sponsorships [8:00am - 11:00am]

3 MONDAY

REDNews Newsletter [4:00pm]

5 WEDNESDAY

REC San Antonio - Annual Government Affairs Update *Members Only [7:30am - 9:30am] REC Austin - RECA 101 [8:00am - 9:00am] CREW Austin - Lunch â&#x20AC;&#x2DC;n Learn * Members Only [11:30am 1:00pm] ULI San Antonio - Holiday Mixer [5:30pm - 7:30pm] CBA Austin - Holiday Party [6:00pm - 9:00pm]

6 THURSDAY

10 MONDAY 11 TUESDAY

12 WEDNESDAY 32

BOMA Austin - Board of Directors Meeting REC Austin - LDC Wrap Up Holiday Party *Invite Only [5:30pm - 7:30pm]

REDNews Newsletter [4:00pm]

REC Austin - Annual Awards & Membership Meeting Luncheon [11:00am - 1:00pm] CREW San Antonio - Holiday Luncheon [11:30am - 1:00pm] IREM Austin - Holiday Party [11:30am - 1:00pm] CCIM Central Texas - Christmas Party [6:00pm - 10:00pm] CREW Austin - Holiday Party [6:00pm - 9:00pm] CTCAR - Holiday Party [6:00pm - 9:00pm]

CREW San Antonio - Holiday Party [5:00pm - 7:00pm] REDNews January Issue Deadline [5:00pm] DECEMBER 2018

13 THURSDAY

ULI Austin - Coffee Chat (Central) - Learn how to get involved with ULI [8:00am - 9:00am] BOMA Austin - Holiday Monthly Membership Luncheon [11:30am - 1:30pm] IREM San Antonio - Holiday Party [11:30am - 1:00pm]

14 FRIDAY

BOMA Austin - TOBY Entries 2018

17 MONDAY

REDNews Newsletter [4:00pm]

19 WEDNESDAY

ULI Austin - Monthly Breakfast Series [7:30am - 9:00am]

20 THURSDAY

TABB Austin - Luncheon [11:30am - 1:00pm]

24 MONDAY

REDNews Newsletter [4:00pm]

25 TUESDAY

Christmas Holiday

26 WEDNESDAY

TABB San Antonio - Luncheon [11:30am - 1:00pm]

31 MONDAY

REDNews Newsletter [4:00pm]

The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDNews.com.

BOMA AUSTIN: bomaaustin.org/ BOMA SAN ANTONIO: bomasanantonio.org CBA: cbaaustin.org/ CCIM CENTRAL TEXAS: ccimtexas.com CREW AUSTIN: crewaustin.org

CREW SAN ANTONIO: crew-sanantonio.org CTCAR: ctcaronline.com IREM AUSTIN: iremaustin.org IREM SAN ANTONIO: iremsanantonio.org

whatâ&#x20AC;&#x2122;s going on

RECA reca.org RECSA: recsanantonio.com/ RETAIL LIVE: retaillive.com TABB AUSTIN: tabb.org/austin_chapter.php

TABB SAN ANTONIO: tabb.org/san_ antonio_chapter.php ULI AUSTIN: austin.uli.org ULI SAN ANTONIO: sanantonio.uli.org

CREW Austin Vo lunteers Ann Richards Sc hosting a CRE Careeer Day at hool for Young Leaders

CREW San Antonio Attendees at the CREW Convention in San Diego CA

2018 National

REC San Antonio Weitzman Chairman Herb Weitzman with (L.) RECSA Executive Director Matha Mangum & (R.) RECSA President Laurie Griffith of Texas Capital Bank

rio serves up a serve Cathy Coneway, CTCAR Ping Pong Social Rome Del Rosa from 1031 Exchange Teresa Person & Kendra

ULI Austin Young Leaders

at Butler Park Pitch & Putt DECEMBER 2018

33

NORTH TEXAS

DECEMBER

2018 3 MONDAY

REDNews Newsletter [4:00pm]

North Texas CCIM Chapter

12 WEDNESDAY

BOMA Fort Worth - Allied Council Committee Meeting *Invitation Only [11:00am - 1:00pm] REDNews January Issue Deadline [5:00pm]

4 TUESDAY

ULI North Texas - Annual Holiday Party: The Epic Deep Ellum [5:30pm - 9:00pm]

TREC Dallas - Dallas Catalyst Project Bus Tour [10:00am 2:00pm] BOMA Fort Worth - Holiday Party [12:30pm - 3:00pm] CCIM North Texas - Holiday Service Project [4:00pm 6:00pm]

13 THURSDAY

Greater Dallas Planning Council - Urban Design Awards [5:30pm - 9:30pm]

5 WEDNESDAY

17 MONDAY

REDNews Newsletter [4:00pm]

19 WEDNESDAY

ULI North Texas - Tarrant County Multi-Group Party [5:00pm 8:00pm]

24 MONDAY

REDNews Newsletter [4:00pm]

25 TUESDAY

Christmas Holiday

CREW Dallas - Holiday Awards Luncheon [11:30am - 1:00pm]

27 THURSDAY

TABB Dallas - Luncheon [11:30am - 1:00pm]

REDNews Newsletter [4:00pm]

31 MONDAY

REDNews Newsletter [4:00pm]

Greater Fort Worth Association of Realtors - SCR Breakfast: Dr. Mark Dotzour [7:30am - 9:30am] ULI North Texas - Breakfast Forum: “Caution: Legislative Change Ahead” [7:30am - 9:30am] CREW Fort Worth - Luncheon: Ice Ice Baby [11:00am - 1:30pm]

6 THURSDAY

ULI North Texas - Holiday Party [5:30pm - 9:00pm]

7 FRIDAY

ULI North Texas - Winter New Member Coffee - Tarrant County [8:00am - 9:00am]

10 MONDAY

IREM Fort Worth - Holiday Luncheon w/ Silent Auction & 2019 Officers [11:30am - 1:00pm]

The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDNews.com.

34

DECEMBER 2018

BOMA DALLAS: bomadallas.org BOMA FORT WORTH: bomafortworth.org CCIM NORTH TEXAS: ccimconnect.com/ ccimnorthtexas CORENET NORTH TEXAS: northtexas.

corenetglobal.org CREW DALLAS: crew-dallas.org CREW FORT WORTH: crewfw.org GFWAR: gfwar.org IREM DALLAS: irem-dallas.org

what’s going on

IREM FORT WORTH: fortworthirem.org LADIES IN CRE: ladiesincre.com NAIOP: northtexasnaiop.com NTCAR: ntcar.org SCR: scr-fw.org

UNTexas Howard Fuerst, CCIM – Dr. John Baen

the la Committee Members at BOMA Dallas Foundation Gand Gala 2018 James Bo

– Debi Carter, CCIM

s UNTexas at 2018 NT CCIM Sporting Clay

and his wife, Awardee, Herb Weitzman, ULI North Texas 2017 Visionour 2018 Vision Award honoree, Roger lon Donna Weitzman, with of Ceremonies, Michael Ab Staubach, and our Master REC Fort Worth 2018 Cowtown Poker Run

TABB DALLAS/FORT WORTH: tabb.org/dallas_ ft_worth_chapter.php TREC DALLAS: recouncil.com REC GFW: recouncilgfw.com ULI NORTH TEXAS: northtexas.uli.org

ULI North Texas 2018 Vision Awards Mr. and Mrs. Staubach

DECEMBER 2018

35

SOUTHEAST TEXAS

DECEMBER

2018 3 MONDAY

CCIM Houston/Gulf Coast - CI 101: Financial Analysis [8:30am - 5:00pm]

12 WEDNESDAY

REDNews January Issue Deadline [5:00pm]

REDNews Newsletter [4:00pm]

CCIM Houston/Gulf Coast - Chapter Holiday Party [6:00pm 9:00pm]

4 TUESDAY

CORENET Houston - Holiday Party [5:30pm - 8:30pm]

13 THURSDAY

IREM Houston - Holiday Party [6:00pm - 10:00pm]

5 WEDNESDAY

CREW Houston - Holiday Party & Sponsor Appreciation [5:00pm - 7:00pm]

17 MONDAY

FBSCR - Breakfast Meeting *Members Only [7:30am - 9:30am]

18 TUESDAY

ACRP Holiday Party

24 MONDAY

REDNews Newsletter [4:00pm]

25 TUESDAY

Christmas Holiday

27 THURSDAY

TABB Houston - Chapter Meeting [11:30am - 1:00pm]

31 MONDAY

REDNews Newsletter [4:00pm]

ULI Houston - Young Leader Holiday Party [5:30pm - 8:00pm]

7 FRIDAY

CORENET Houston - Golf Tournament [9:30am - 2:00pm] BOMA Houston - 2018 Annual Awards Extravaganza [11:00am - 1:30pm] CREN Gulf Coast - Luncheon [11:00am - 1:00pm]

10 MONDAY

NAIOP - Lunch with Craig Hall [11:30am - 1:00pm]

11 TUESDAY

CORENET Houston - Emerging Leaders Speed Mentoring Event [5:00pm - 8:00pm]

REDNews Newsletter [4:00pm]

REDNews Newsletter [4:00pm]

FBSCR - Monthly Meeting [8:00am - 9:00am]

CREN Gulf Coast - Happy Hour [4:30pm - 7:00pm]

CREMM - Holiday Party [5:00pm - 8:00pm]

The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDNews.com.

36

DECEMBER 2018

ACRP: acrp.org BACREN: bacren.us BOMA HOUSTON: houstonboma.org CCIM HOUSTON: ccimhouston.org CETA: cetalliance.com

CORENET HOUSTON: houston.corenetglobal.org C.R.E.A.M.: creamtx.com CREN: crengulfcoast.com CREW HOUSTON: crewhouston.org FBSCR: fbscr.com

GREATER HOUSTON PARTNERSHIP: houston.org HAA HOUSTON: haaonline.org HRBC: houstonrealty.org HREC: houstonrealestatecouncil.org IREM HOUSTON: iremhouston.org

NAIOP: naiophouston.org O'CONNOR & ASSOCIATES: poconnor.com SIOR: sior.com TABB HOUSTON: tabb.org/houston_chapter.php ULI HOUSTON: houston.uli.org

what’s going on

n Gulf CCIM Housto

Party Coast Holiay

2018

CREMM Members at Appreciation on Octo Speed Networking & Membership ber 25th Hosted at PMRG’s offices

IREM Houston SEARCH Homeless Services President and CEO Thao Costis accepts $6,000 check from 2018 IREM President, Stephanie Swanson, CPM with Transwestern DECEMBER 2018

37

CENTRAL SOUTH TEXAS AUSTIN, TX

NO.

3

“TECH TOWN INDEX” Computing Technology Industry Association (CompTIA) ranked Austin in the number three spot on their 2018 “Tech Town Index. https://www.aitp. org/blog/aitp-blog/2018/10/23/techtown-usa-20-cities-it-pros-will-want-tocall-home/

CBRE RANKS AUSTIN #6 IN THEIR 2018 TECH 30 REPORT Austin was ranked #6 among the Tech-30 markets for overall office net absorption & is considered to be a growth leader market in the US due to its overall tight office market & high potential for job strength in the tech market. https://www.cbre.us/ research-and-reports/Tech-30-2018

AUSTIN PUBLIC PARCEL OPEN FOR REDEVELOPMENT The City of Austin has opened requests for proposals on a former Home Depot & car dealership at 906 E. St. Johns Avenue & 7211 N. I-35 & also for the Austin Energy property located at 6909 Ryan Drive.

Affordable housing plans will be requested for a former rehabilitation center located at 1215 Red River Street & a parking garage next door at 606 E. 12th Street. http:// www.austintexas.gov/page/city-ownedproperty-sale AUSTIN MUNICIPAL COURT NEGOTIATES NEW LEASE Austin Municipal Court initially planned to relocate to 96,000 sf at ZydecoDevelopment’s MetCenter II & has now approved a new authorization for the same size space at Bergstrom Tech Center located at 6800 Burleson Road. If the new lease is finalized, they will be relocating from 700 East 7th Street.

GLL SELLS 313,716 SF OFFICE BUILDING Munich, Germany-based GLL Real Estate 38

DECEMBER 2018

Partners GmbH sold Las Cimas II & III, 313,716 sf office buildings located at 807 & 905 Las Cimas Parkway to Boston-based Rockpoint Group LLC. HFF handled the transaction.

ZYDECO STARTS PHASE TWO OF METCENTER Zydeco Development Corp has started on the second phase of its 550-acre MetCenter Campus located on Metropolis Drive. The development will total 410,000 sf in four different buildings when completed

developed at 1310 E. Whitestone Blvd

by Aquila Commercial to be called CrossCreek Land. It is scheduled for completion early 2020.

EL PASO, TX SECOND ALAMO DRAFTHOUSE IN EL PASO A second Alamo Drafthouse is being developed in El Paso by Triple Tap Ventures. It will be located in Monteverde, a 30-acre mixed-use development located at Loop 375 & Pellicano Drive & is scheduled to open in early 2020.

ELGIN,TX

MICRO-APARTMENTS Transforming discounted hotels into micro-apartments in Austin Texas.

DISCOUNT HOTELS TRANSFORMED INTO APARTMENTS The Austin Suites Hotel located at 8300 N I-35 & the Econo Lodge Austin hotel located at 6911 N I-35 are being transformed into nearly 500 microapartments. The buyer is reportedly Austin-based Artesia Real Estate & the sale was brokered by CBRE. WEWORK LEASES MORE SPACE JLL’s Austin office negotiated a new threefloor office lease for WeWork at Westview located at 316 West 12th Street. JLL’s leasing team of Kevin Kimbrough, Coulter & Travis Rogers represented the landlord & Austin Trees, Jake Ragusa & Will Douglas with JLL represented WeWork.

BUDA, TX CAPELLA COMMERCIAL BUILDS 70,000 SF SELF-STORAGE FACILITY Public Storage will manage the 580-unit, 70,000 sf self-storage facility located at the corner of I-35 & W. Goford Road which is being built by Capella Commercial.

CEDAR PARK, TX AQUILA DEVELOPING 63,297 SF OFFICE PROJECT A 63,297 sf office project is being

ONEPOINTE SOLUTIONS RELOCATES TO 50,000 SF Research lab furnishings company, OnePointe Solutions relocated its headquarters from Austin to 50,000 sf at 1112 Swanson Blvd in Elgin. The company has sixty employees & plans to add 50 jobs by the end of 2018.

bulletin MERITAGE HOMES LEASES 16,000 SF OFFICE SPACE Worth & Associates leased 16,000 sf to Meritage Homes in their new 77,000 sf Inwood Village building located at 2722 Bitters Road. The building is scheduled for completion in April 2019.

OKIN INVESTING $22 MILLION IN US HQ Prague-based OKIN Business Process Services will establish an American operation at Brooks, a 1,300 acre mixeduse community located at SE Military Drive & Old Corpus Christi Road for an investment of more than $22 million and a creation of 1,400 jobs.

ST. CROIX CAPITAL BUYS UNIVERSITY BUSINESS PARK Tryperion Partners sold the 85,000 sf University Business Park located on 8.3 acres at 12400, 12450 & 12460 Network Blvd to St. Croix Capital Companies.

LAKE AUSTIN, TX JONATHAN COON’S LAKEFRONT TRACT GETS APPROVAL Austin City Council has approved rezoning of Jonathan Coon’s 144.8 acre Lake Austin tract located near the Pennybacker Bridge as a mixed-use development including up to 325,000 sf of commercial space, 64 residential homes & a 25-acre city park. https://www.bizjournals.com/austin/ news/2018/10/09/jonathan-coons-lakeaustin-development-earns-key.html

LAREDO, TX STROS PARTNERS BUYS 1.3 MILLION INDUSTRIAL PORTFOLIO Southern CA-based Stros Partners purchased a 1.3 million sf, muti-tenant, 8-building industrial portfolio for $88 million from Cardinal Industrial. The properties include 11302 A/B/C East Point Drive, 417,418 & 505 Union Pacific Blvd & 11909& 11921 Hayter Road.

SAN ANTONIO, TX COMET SIGNS EXPANDS TO 166,000 SF San Antonio-based Comet Signs leased 166,000 sf at 5003 Stout Drive located the corner of I-10E & I-410E. They relocated from a 50,000 sf warehouse at 253 W. Turbo Drive. RFM Commercial represented the tenant.

WALMART HAS AN OUTSIDE-THEBOX VISION FOR THE FUTURE

Hat Creek Burger Company opened a new location at a pad site outside of a Temple, Texas Walmart Supercenter in September. The retail giant has big plans for the land surrounding its big-box stores, and Hat Creek Burgers has been cited as a representative example of its reimagined future.

TEMPLE,TX WALMART OUTSIDE THE BOX VISION Walmart has a new concept of a Town Center at some of their locations that is being tested in Temple. Hat Creek Burger Company opened on a pad site outside Walmart & the retailer has plans for additional land surrounding its big-box stores. https://www.bizjournals.com/ austin/news/2018/10/31/walmart-has-anoutside-the-box-vision-for-the.html

NORTH TEXAS

bulletin

AMARILLO, TX

FLOWER MOUND, TX

FRISCO, TX

$6.5M TRAILING FACILITY Contagion Athletics is constructing a 37,000 sf, $6.5 million training facility at 8210 W. Amarillo Blvd. The facility will have a full upstairs tract, half a football field with artificial turf, fitness machines & weights & a café with a retail clothing section. Contagion will be relocating from their present space when the building is complete fall 2019.

FORMER KOHLER DISTRIBUTION CENTER BECOMES THIRTY-ONE-GIFTS Ohio-based direct-sales company, Thirty-One Gifts, is relocating its national distribution center to the Lakeside Business District which is located at 951 S. Garden Ridge Blvd. The 651,000 sf distribution center was formerly occupied

by Kohler. Thirty-One Gifts will create 650 jobs when it opens April 2019.

RYAN COS. & INVEST GROUP DEVELOPING THREE OFFICE BUILDINGS Ryan Cos. & Invest Group Overseas plan to develop more than 900,000 sf in three office buildings in the $799 million mixeduse Gate development located on the Dallas North Tollway, just south of Lebanon Road.

ARLINGTON, TX

FORNEY, TX

PIONEER CROSSING RETAIL CENTER SELLS An international buyer has purchased the 105,832 sf Pioneer Crossing retail center located at 2540 E. Pioneer Parkway. The center is anchored by Floor & Décor.

Jared Aubrey & Michael Austry with CBRE handled the transaction.

1.2 MILLION SF PROJECT FIREBALL DEVELOPMENT The city of Forney has rezoned 102 agricultural acres along US 80 east of CR 212 for industrial development. The development named Project Fireball will include 1.2 million sf of build-to-suit warehouse &distribution space for Ohiobased Goodyear Tire & Rubber Company.

DALLAS, TX 150,000 SF CENTRAL MARKET TO ANCHOR UPTOWN BUILDING KDC is teaming up with Central Market to anchor their 19-story high rise located at McKinney & Lemmon avenues. Phase One of KDC’s development will include 500,000 sf of office space over 16 floors & more than 150,000 sf for retail & restaurants, including Central Market. The project is expected to be completed first quarter 2022.

BILLINGSLY BUILDING 420,000 SF OFFICE Billingsly Company plans to build two spec office buildings totaling 420,000 sf at 3401 & 3501 Olympus Blvd in Cypress Waters, a 1,000 acre, mixed-use development.

BAYLOR SCOTT & WHITE 300,000 SF OFFICE CAMPUS Baylor Scott & White will occupy 300,000 sf in the 3700 block of Elm Street in Deep Ellum. KDC is building the project which is scheduled to open in 2020.

The city will build a new road that will connect US 80, Gateway Blvd & CR 212. Goodyear will employ 160 full-time employees.

DALLAS/FORT WORTH, TX

XTO ENERGY BUILDING TO BE REDEVELOPED The Fort Worth city council has approved redeveloping the former XTO Energy building located at 714 Main Street into a 232-room Kimpton hotel. The fourstar hotel will have 10,000 sf of meeting space, a 3,100 sf restaurant, & a 3,100 sf penthouse bar.

6

IT OFFICE CAMPUS BEING DEVELOPED Developer T2V Properties LLC is building an office campus called Irving IT Park which will be designed for “up-and-coming IT companies”. Phase one will include a three-story building located at 1410 Westridge Circle North. Sam Kilaru & Vinay Vattikuti, business partners & T2V co-founders, plan to occupy the third floor with their other companies, Yasmesoft & Vendithera.

PROLOGIS DEVELOPING DFW MUSTANG PARK Prologis is constructing a three-building industrial park covering 60 acres on Mustang Drive near SH 121. The project is known as DFW Mustang Park & will include a 401,280 sf warehouse & a 429,720 sf building on land leased from DFW International Airport. A 145,058 sf building will be developed by an investment subsidiary of Holt Lunsford on an adjoining property.

FORMER DALLAS MORNING NEWS PROPERTY SOLD Developer KDC is partnering with Dallas restaurateur & businessman, Mike, Hoque, to buy the former home of the Dallas Morning News located at Young & Houston streets. They are paying $33 million for the 7.2 acres site. Plans for the property have not been announced.

“TECH TOWN INDEX” NO. Computing Technology Industry Association (CompTIA) ranked Dallas-Fort Worth in the number six spot on their 2018 “Tech Town Index. https://www.aitp.org/ blog/aitp-blog/2018/10/23/tech-town-usa20-cities-it-pros-will-want-to-call-home

IRVING, TX

CHASE INDUSTRIES LEASES 172,120 SF Cincinnati-based Chase Industries leased 172,120 sf in Building 1 located at 5350 Frye Road in Libery Park GSW. Kurt Griffin, Nathan Orbin & David Eseke with Cushman & Wakefield represented the landlord & Colliers International represented the tenant.

LEWISVILLE, TX MARY KAY OPENS 453,000 SF FACILITY Mary Kay Inc has opened its new Richard R. Rogers Manufacturing & Research Development facility at 2613 Denton Tap Road. The facility has more than 453,000 sf & will house 700 employees which consolidates the company into one location.

PLAINVIEW, TX (HALE COUNTY) 239 NEW WIND TURBINES Xcel Energy is adding 239 wind turbines in their Hale Wind Project to be built over 190 acres of land. The project will employ 20 fulltime employees & will generate enough electricity to power 184,000 homes. It is scheduled for operation in 2019.

PLANO, TX PILLAR COMMERCIAL & ARTEMIS BUY LINCOLN LEGACY II The 130,000 sf Lincoln Legacy II building located at 5810 Tennyson Parkway has been sold to Pillar Commercial & Artemis Real Estate Partners. Jack Crews & Brad Enloe with JLL handled the transaction.

TEXARKANA, TX HOUSING MARKET SHOWS 20.7% INCREASE Texarkana homes sales increased by 20.7% over 2017 for 227 single-family homes sales in third quarter 2018. Median price increased by 1.4% to $139,000. http:// txktoday.com/news/texarkana-home-salesvolume-median-home-prices-increasethird-quarter-2018/

ROANOKE, TX

FORT WORTH, TX

MARY KAY INC. OPENS DOORS TO NEW RICHARD R. ROGERS MANUFACTURING / R&D CENTER

CHARLES SCHWAB DOUBLING REGIONAL HQ Last year financial services giant Charles Schwab built a $100 million office campus on 70 acres near SH 114 & SH 170. The company recently filed plans for a second 617,000 sf phase of the development that will add two more office buildings. Upon completion the Schwab campus will have approximately 1.2 million sf of work space.

DECEMBER 2018

39

SOUTHEAST TEXAS center during the first quarter of 2019.

CONROE, TX ANNOUNCEMENT Avison Young has acquired GVA, a real estate advisory business, which is a subsidiary of Toronto, Canada portfolio company Apleona Ltd.

93 Acres Sold on FM 1485 Rausch Coleman purchased 93 acres on FM 1485 from Thomas Hunter, Deborah Weisinger, Diana Robertson & John Weisinger. Jeff Lokey with NewQuest Properties represented the buyer & Tommy Hunter with Jacobs Properties represented the seller.

HOUSTON, TX KIRBY COLLECTION HAS 6,300 SF REMAINING Thor Equities Group, the developer of Kirby Collection on Kirby Drive, recently leased 11,000 sf to Dakota, a high end restaurant & lounge which leaves 6,300 sf remaining to be leased in the 1 million sf development.

BAYTOWN, TX JSW USA BREAKS GROUND ON 111ACRE PLATE MILL FACTORY JSW USA is building a $500 million plate factory on 111 acres located in the company’s 700-acre campus on McKinney.

Upon complete the factory will be the most technologically advanced & eco-friendliest of any of this type plant in the world.

Construction is expected to take between 18 – 24 months.

BEAUMONT, TX CBL PROPERTIES REDEVELOPING FORMER MACY’S Chattanooga, Tenn-based CBL Properties is redeveloping the former Macy’s at the 110,000 sf, former Macy’s at the Parkdale Mall located at 6175 Eastex Freeway. The redevelopment will include the addition of a Dick’s Sporting Goods, Five Below & a home furnishings store. The anticipated opening is spring 2019.

BROOKSHIRE, TX 603 ACRES SELLS AT FM 529 & FM 2855 A 603 acre tract of land located at FM 529 & FM 2855 reportedly sold to an undisclosed buyer. DMRE represented the undisclosed seller in the transaction.

CLEAR LAKE, TX GORDON PARTNERS BUYS UNIVERSITY PLAZA Houston-based Gordon Partners purchased the 96,000 sf University Plaza located at Bay Area Blvd & Space Center Drive. The company will renovate the 40

DECEMBER 2018

C&M MOVING & STORAGE LEASES 35,610 SF C&M Moving & Storage leased 35,610 sf at 1345 Tellepsen Drive. Ryan Fuselier & David Buescher with JLL represented the tenant & Steve Hazel with Insite Realty represented the landlord, Billingsley Company.

TRI STAR FREIGHT LEASES 81,295 SF Tri Star Freight Systems leased 81,295 sf at 4545 Eastpark Drive. Zack Taylor & Doyle Toups with Moody Rambin represented the landlord & Griffin Rich with Newmark Knight Frank represented the tenant.

WAVE ELECTRONICS EXPANDS LEASE Wave Electronics, Inc expanded their lease to 36,746 sf at 8648 Glenmont. Eric Lestin with CBRE represented the tenant & Logan Greer with Insite Realty represented the landlord, Eastgroup Properties.

BUFFALO REAL ESTATE SELLS 14,717 SF WAREHOUSE Justin Patchen with Buffalo Real Estate handled the sale of a 14,717 sf warehouse at 2305 Eleanor Tinsley Way off I45 near the University of Houston. The buyer was Mike Spratt who was represented by Patchen & the seller, HOU Properties, was represented by Ryan Neyland with Davis Commercial.

bulletin WASTE MANAGEMENT PRE-LEASES 248,000 SF Waste Management has preleased 248,000 sf over nine floors in Capitol Tower, the 35-story office tower being constructed at 800 Capitol Street. The building is now 72% leased & is expected to deliver in 2019.

PORTER, TX

PHOENIX TOWER BUILDING PARKING GARAGE Parkway Property Investments LLC is building a 600-space parking garage annex at Phoenix Tower located at 3200 Southwest Freeway. The eight-story garage will adjoin the tower’s existing eight-floor garage & is expected to be completed in late 2019.

SEABROOK, TX

JERSEY VILLAGE, TX CITY BUYS 23.34 ACRES The City of Jersey Village purchased 23.34 acres located at Hwy 290 & Jones Road from Jones Road Holding, Ltd. Darin Gosda with CBRE represented the seller.

KATY, TX ODEN HUGHES BUYS 11.63 ACRES Austin-based Oden Hughes LLC purchased Reserve F, Block 3 which includes 11.63 acres in the Grand Crossing Development near I10 & Grand Parkway for the development of an apartment project. Darin Gosda with CBRE represented the seller in the transaction.

Atlanta-based Davis Development reportedly purchases 14 acres to the north on the Grand Parkway near Clay Road.

Dosch Marshall Real Estate was involved in both transactions.

KELSEY-SEYBOLD BUYS 5.5 ACRES Kelsey-Seybold purchased 5.5 acres at 25553 US 59 just north of Northpark Drive for the development of a new Kingwood Clinic. The three-story clinic will be approximately three times the size of its previously leased location which was damaged during Hurricane Harvey.

SEABROOK MARINA RESTAURANT Construction of a new restaurant facility with a 320-boat dock has been completed on Clear Creek Channel.

SPRING, TX

HEWLETT PACKARD PRE-LEASES 568,000 SF Hewlett Package Enterprises plans to break ground fourth quarter 2019 on a 568,000 sf, two-building campus in Springwoods Village located at the southwest corner of East Mossy Oaks Road & Lake Plaza Drive.

SUGAR LAND, TX

IMPERIAL MARKET PROPERTY SOLD IN FORECLOSURE SALE The historic Imperial Sugar factory property which was slated for redevelopment into an 850,000 sf mixeduse development was sold to SLP-90A Ltd at an October 2nd foreclosure auction.

LA PORTE, TX SKILLED NURSING HOME ON 7 ACRES Smithers Merchant Builders purchased 7 acres at Underwood Road & West Fairmont Parkway from Methodist Retirement Communities for the development of a 120-room skilled nursing facility. Emil Wulfe with Wulfe & Company represented the seller & Greg Williams with Qualified Properties represented the buyer.

PASADENA, TX PARK 225 SELLS TO THE MERITEX COMPANY The 121,520 sf multi-tenant Park 225 located at Hwy 225 & Beltway 8 sold to The Meritex Company. The development provides access to the Houston Ship Channel as well as Barbour’s Cut & Bayport Container Terminals.

TEXAS CITY, TX

LAND TEJAS EXPANDS LAGO MAR WITH CRYSTAL CLEAR LAGOON Land Tejas plans to build a 70-acre mixeduse entertainment center in Lago Mar, their 2,033 acre master planned community, which is located along I45 in Texas City.

The entertainment center will include the largest Crystal Clear Lagoon in Texas.

THE WOODLANDS, TX

THE J. BEARD COMPANY SELLS PAD SITE FOR EGYPT LAND DEVELOPMENT Lindsey McKean with The J. Beard Company sold a 60,000 sf pad site at Westgate Crossing at the northeast corner of Research Forest & Egypt Road to SGK Plastic. The buyer plans to build a 10,000+sf state-of-the-art aesthetic surgery center & spa retreat on the property.

advertiser index AA Realty Company ............................... 20

11 Asset Preservation ................................. 23 Bearden Investments .............................. 15 Berkadia ................................................ 2, 3 BHHS/Anderson Properties .................. 15 Caldwell Companies ............................... 18 City Bank ................................................. 44 CRESA ........................................................ 23 Equity Secured Investments ................. 10 Greenberg & Co. ...................................... 11 KW Signature .......................................... 10 La Marque Economic Development Corp ........... 7 M Kidd Properties, Inc. ......................... 20 McCord Development, Inc. ................... 21 National Environmental Services ........ 43 Newmark Knight Frank ........................... 27 Parkside Capital, LLC 1 - SE Texas, 12, 13 Phase Engineering ................................ 30 Real Estate Summits ................................ 5 Showalter Law Firm ............................... 27 Texas CRES, LLC ....................................... 23 The J. Beard Real Estate Company ......... 17 The Real Estate Council - San Antonio ...... 25 Thomas Hitchcock Interests ................... 27 UNT College of Business 1 - North Texas, 8, 9 AlphaTech International, Inc. .................

DECEMBERT 2018

41

ray’s buzz

BY RAY HANKAMER rhankamer@gmail.com

Dr. Mary Ann Reynolds Wilkins, STEWART TITLE, VP/SENIOR BUSINESS DEVELOPMENT OFFICER RN: Mary Ann, in September REDNews sponsored an event called “Women in Real Estate” in which prominent Houston women panelists told their stories about their entry and professional growth in the formerly men’s world of commercial real estate (CRE). Most of them began their careers in CRE, but you had a successful career in education in Fort Bend County, and after retiring from that, you were convinced to begin in CRE, an industry which was completely new to you. Can you tell us a little about your first career and how you came to join Stewart Title?

MARW: My first career was in public school education where I served as a music teacher for nine years and then—after completing two Master’s Degrees and a Doctorate in Education, I moved into the world of Public School Administration in the Richardson and Fort Bend Independent School Districts. Upon moving to Houston, I served in the Administrative and Superintendency ranks in Fort Bend ISD for 15 years. As the Interim Superintendent for FBISD, I had the challenge of leading the education of 50,000 students and challenging 5,000 employees to commit to Exemplary work in their respective roles. I also served as an Adjunct Professor for graduate students at HBU and the University of Houston campuses. Upon retirement, I joined the Balfour Company (known for class rings and robes) serving as their motivational speaker on the topic of “Teacher Heroes” for their high school accounts in 25 cities across America. During that same year I received a call from an Executive of the Stewart Title Company inviting me to join the company as Vice President and Senior Business Development Officer for Commercial Sales. I accepted and in this role I call on top executives in financial lending institutions, law firms, major developers, commercial real estate brokers, and people of influence that can direct business to me through their friends and colleagues. Over the years, many have asked how I made the transition from education to sales and my response is that most careers deal with the concept of selling something and “Sales is a Relationship Business” regardless of what you are selling. I am very blessed to have developed lifelong friends in education and in the corporate world and working at Stewart Title remains my “Dream Job”.

RN: Once you joined Stewart and ‘learned the ropes’, what strategies did you use to become known to the decision makers who were doing land transactions and buying title insurance?

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DECEMBER 2018

MARW: For the first many years, I joined virtually every commercial real estate organization, served on numerous Boards, attended breakfast, lunch receptions, dinner meetings, golf tournaments, served on commercial panels, and have done motivational speaking on the topics of “Manager Heroes” and “Selling You Way To The Top!” I laugh about being a lot like paint when I am seeking new clients. I try to cover the world of commercial real estate and do the best job possible of representing my company.

RN: What advice can you give to women who come up against the “good ol’ boy” system in CRE? Did you hit this barrier and how did you personally cope with it?

MARW: When I first started with Stewart Title as a Business Development Officer, I had the advantage of having worked with business leaders for many years while serving in the Superintendent ranks of FBISD. That, along with my experience of chairing the board of trustees for FBISD, Serving as the first Chairman of the Board for Methodist Hospital in Sugar Land, Speaking for National Conferences, and Serving as an Adjunct Professor prepared me to be very comfortable in speaking with any CEO or high ranking executive. In addition, my Father, who was my lifetime hero, was a “good ol’ boy” and I learned well from him early on how to speak their language in an authentic genuine way. Many of my clients will be my lifelong great friends and several of them might be classified as “good ol’ boys!”

My advice to women who come up against “the good ol’ boy system” is to never sell yourself short on your innate talents, speak with confidence, dress professionally, take advantage of every leadership opportunity, refine your communications skills and always be well prepared when meeting with potential customers. I also recommend researching any commonalities that you might share with the “good ol’ boy” that you are meeting with and to speak to those commonalities in your initial meeting and, more times than not, you will win their business and their friendship.

RN: CRE is a relationship business, and people do business with who they know, and like, and trust. How would you counsel women in CRE to first make, and then maintain their important relationships? You are known for starting early in the morning and then being seen sometimes deep into the evening at charity balls and other social functions where you are rubbing shoulders with potential clients. How do you balance your person-

al life with your business life?

MARW: I have never been successful at achieving a balance in my personal and business life so I am not qualified to give anyone advice on this topic. However, I will share some advice on this topic from one of America’s most admired women, Barbara Pierce Bush. She said, “At the end of your life, you will never regret not having passed one more test, not winning one more verdict or not closing one more deal. You will regret time not spent with a husband, a friend, a child or a parent.” I believe that to be very wise advice!

RN: Stewart is the one of the world’s largest title companies. Can you tell us a bit about the size and scope, plus any recent awards you have won?

MARW: Stewart (NYSE: STC) has approximately 7,000 offices and affiliates throughout the United States and a presence in 30-40 foreign countries. The focus of my work is in the United States, especially in Texas, and we at Stewart can open or close any of our client transactions in the United States from the 6th floor of our National Headquarters located at 1980 Post Oak Blvd. In 2016, I was very fortunate to be recognized as the Top Producer in the U. S. but the problem with being on top is that you have nowhere to go but down! There are many talented business development officers in our company performing at a very high level! Fortunately, I continue to be in the President’s Club as one of the top five producers in the U.S. and every morning when I put my feet on the floor, I commit to work toward excellence in everything I do. However, a major factor in any success I have enjoyed is that I have had great mentoring and support from my supervisor Mr. Jeff Whetzel, the Vice President of Houston Commercial Sales and Stewart Morris Jr., Senior Chairman of the Stewart Title Guaranty Company. I subscribe to the thought that “having more than one mentor is important, then it’s like having your personal board of directors.”

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POSTMASTER: PLEASE EXPEDITE TIME SENSITIVE MATERIAL 5909 West Loop South, Suite 2537 S. Gessner, Suite 135, Bellaire, TX 77401 Houston, TX 77063

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