REDNews February 2017

FEBRUARY 2017

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE

HOUSTON 2017 Texas Office Market Forecast Interview with Managing Director Rand Stephens pages 8 & 9

AUSTIN DALLAS

Industrial | Office: 2016 Recap

Appraisal Disapproval:

SAN ANTONIO

how a Texas legislator is fighting for property tax reform

TWO LAND TRACTS KATY, TEXAS

±141 ACRES RARE ±141-ACRE LAND TRACT ON STOCKDICK SCHOOL RD., IDEAL FOR LARGE DEVELOPMENT Property has two access points on Stockdick School Rd. and one on Katy Hockley Cut-Off Rd. Property is NOT in flood plain Price: $90,000/acre

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

LAUREN GEARY Marketing Coordinator T: +1 346 444 8968 lauren.geary@berkadia.com

±21 ACRES ±21-ACRE LAND TRACT ON CLAY RD., BETWEEN PORTER RD. & KATY HOCKLEY CUT-OFF RD. Direct access from Clay Rd. Property is NOT in flood plain Price: $3.50 PSF

IN THIS ISSUE

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5

2017

43 COMMERCIAL REAL ESTATE FORECAST COMPETITION

FEBRUARY 17, 2017 8:00 AM - 12:00 Noon

Keynote Speaker:

Mark Dotzour, Ph.D. Location:

Norris Conference Center City Centre

Tickets:

$75 Members $100 Non-Members $1000 Table of 8

SPEAKERS

OFFICE

Moderator: Defender: Challenger:

Steve Burkett, CCIM, JLL Rich Pancioli, CCIM, CBRE

MULTI-FAMILY Moderator: Defender: Challenger:

RETAIL

Moderator: Defender: Challenger:

LAND

Moderator: Defender:

Challenger:

24

Greg Young, Grandbridge Real Estate Capital Ryan Epstein, Berkadia Matt Rotan, ARA

Debbie Adams, Edge Realty Partners Jason Baker, CCIM, Baker Katz Matt Reed, NewQuest Properties

Jane Page, CCIM, Lionstone Investments Kirk Laguarta, Land Advisors Organization Davis Adams, HFF

INDUSTRIAL

Register Now! www.ccimhouston.org

Market

Moderator: Defender: Challenger:

Reed Vestal, CCIM, Lee & Associates Tom Lynch, CBRE Rob Stillwell, CCIM, Newmark Grubb Knight Frank

Sales & Leases 2,3, ,7, 11, 13,16 – 19, 21 – 23, 25

Services

Environmental Services 30 Legal Services 41 Photography 19 Real Estate Loans 18 Surveying 44

Scoop

Events 32, 34, 36 Social 33, 35, 37 Bulletin 38-40 4

February 2017

Features

Forecasting 2017 8, 9 2016 Industrial/office Recaps 10, 12, 14, 15 Tarrant County 2017 Forecast 20 CIVIL FAIR PLAY Adopting Affordability 24 – 26 RAY'S BUZZ CCIM Houston/O’Connor Luncheon Recaps 42

±3.95 ACRES | HWY 35 & RICE DRYER RD.

PEARLAND, TX

±3.95 acres available for sale including the Rice Dryers/Silos just of North Main St. (Hwy 35) in Pearland, TX. Site is accessible from both Rice Dryer Rd and Halik St. This is a unique opportunity for creatives to utilize the varied potential of the Dryers/Silos. Uses are only limited to the imagination, potential uses may include storage for vehicles, boats or materials; repurposing for residential/mixed use; antique showroom and storage/ showgrounds; artist community uses (galleries, workspace, storage); farmer ’s market, special event and /or entertainment venue; unlimited possibilities!

Pricing: $4.95 psf LAND SERVICES TEAM KRISTEN MCDADE Senior Director T: +1 713 469 4509 kristen.mcdade@berkadia.com

LAUREN GEARY Marketing Coordinator T: +1 346 444 8968 lauren.geary@berkadia.com

February 2017

5

Letter from the Publisher

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE

PUBLISHER

Ginger Wheless ginger@REDNews.com

EDITOR

Margie Gohmert info@REDNews.com

STAFF WRITERS

Brandi Smith info@REDNews.com Janis Arnold janisarnold1@gmail.com Anna Demmler info@REDNews.com Anne Farrell Peterson info@REDNews.com

Dear Readers,

What’s your 2017 CRE crystal ball telling you?

Last year this time, responses were generally upbeat and positive for Texas commercial real estate in 2016 with the obvious exception of the Houston commercial real estate market.

According to Rand Stephens & Jeannie Tobin with Avison Young, slow and steady growth is expected this year for the Houston office market. They also speculated that Dallas-Ft Worth, Austin & San Antonio can continue to expect to be a landlord’s market and the industrial market will do well across Texas. (See pages 8 & 9) You can also find CBRE & REOC’s 4Q2016 office & industrial recaps on pages 10, 12,14, & 15.

Property taxes continue to be a thorny issue for property owners and it appears it became an even thornier issue for Mitch Zarsky when he appeared for his review hearings at the appraisal district. (see Civil Fair Play on pages 24 & 26) If you’ve had the same experience as Mitch, please contact Senator Paul Bettencourt who heads up the Texas Property Tax Reform & Relief Committee.

I hope you have a fabulous February and remember that February 14th is Valentine’s Day! Best Regards,

CONTRIBUTING WRITER

Ray Hankamer rhankamer@gmail.com

EMARKETING DIRECTOR

Rahul Samuel emarketing@REDNews.com

ART DIRECTOR

Tony Nelson digital@REDNews.com

ACCOUNTING

Benton Mahaffey accounting@REDNews.com

SALES

Ginger Wheless ginger@REDNews.com

PRINT & DIGITAL DISTRIBUTION

REDNews is directly mailed each month to commercial real estate brokers, investors & 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

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5909 West Loop South, Suite 135 Bellaire, TX 77401

6

February 2017

WE’VE GOT ACRES OF DEVELOPMENT OPPORTUNITY AROUND HOUSTON.

NEC of SAM HOUSTON TOLLWAY at HARDY TOLL ROAD 3 Pad Sites For Sale - 1.50, 1.38 and 2.66 Acres

• High visibility from Beltway 8. Two pad sites have Beltway 8 and one pad site has Hardy frontage

HUFFMEISTER RD AT BIRDCALL LN Land For Sale - 10.68

• Approximately 492’ of frontage on Huffmeister and 603’ of frontage on Birdcall

• Located near Bush Intercontinental Airport

• Approximately 17,000 cars per day on Huffmeister Road

• Utilities through the City of Houston

• Unrestricted. Utilities through MUD 202

• Cross access with adjacent properties

• Adjacent 8.93 Acres (outlined) also available

Contact: Keith Edwards, CCIM, SIOR

Contact: Keith Edwards, CCIM, SIOR

HIGHWAY 290 - CHAPPELL HILL, TEXAS

WORTHAM BLVD NEAR HIGHWAY 290

Land For Sale - 6.73 Acres

2 Tracts For Sale - 2.88 and 13.85 Acres

• Approximately 324’ of frontage along US Highway 290

• Two corner tracts on Wortham Boulevard and Wortham Center Drive

• At first lighted intersection on Highway 290 coming west from Houston • Great retail or commercial corner • One 4.73 Acre site and two 1 Acre Pad Sites

• Great regional location near Highway 290 and FM 1960 / Highway 6 • Excellent access from Highway 290 and FM 1960 • Will consider subdividing the 13.85 Acres

Contact: Keith Grothaus, CCIM, SIOR

Contact: Keith Grothaus, CCIM, SIOR

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7

Forecasting 2017: a preview of what is to come for office and industrial markets

BY BRANDI SMITH

“It’s certainly better than it was.”

That may not sound like a ringing endorsement, but Rand Stephens, Managing Director and Principal of Avison Young’s Houston office, is hedging his bets after a rough 2016.

“Just starting out in January 2016, oil went down to $28 a barrel. There were a lot of gloomy faces in Houston,” he says. “Houston is an incredibly optimistic place, but there is definitely an air of pessimism.”

Rand Stephens, Managing Director & Principal of Avison Young’s Houston office

Jeannie Tobin, Avison Young’s Regional Research Director Houston office

Outlook for office The low price of oil prompted corporate mergers, layoffs and, in some cases shutdowns, resulting in skyrocketing office vacancy rates. Per Avison Young’s Office Research Report, 38 million square feet of office space was available in the fourth quarter. Roughly 11.6 million square feet of that was in the form of sublease space. Examples include 262,000 square feet at Energy Center II offered by Worley Parson and another 380,000 square feet left behind by BG Group at 811 Main.

“Sublease tends to put downward pressure on the rental rates, but the buildings are still leased and they’re still paying rent,” Stephens says. “A lot of that sublease space is from oil and gas companies in the Energy Corridor.”

Stephens and Jeannie Tobin, Avison Young’s Regional Research Director, both predict slow and steady growth in the Houston office market in 2017.

“Going into this year, the construction boom is wrapping up, so we’re going to see less of an impact from new deliveries going forward,” Tobin says.

“The outlook is one of guarded optimism,” describes Stephens.

He says one signal the Houston office market is turning around will be the shrinking amount of sublease space.

“I do think that sublease space is going to remain high throughout 2017,” Tobin says.

“You’re really not going to see it disappear until really the energy market turns around and then it will be slow recovery in 2017.”

“It can go away in a hurry. Oil and gas companies can just say, ‘You know what?

We’re just taking that off the market. Now we’re going to occupy it,’” says Stephens. “I think we’ll start to see some declines in sublease space and that will be the first indicator that the office market is recovering.”

“I do think that sublease space is going to remain high throughout 2017,” Tobin says. “You’re really not going to see it disappear until really the energy market turns around and then it will be slow recovery in 2017.”

Stephens says, “Though oil prices still aren’t at the level they were a couple years ago, the energy industry has adjusted and reorganized in a way that will allow positive growth in the year to come.”

As much as Houston struggled in 2016, other metro areas of Texas boomed.

Avison Young expects that growth to continue.

In mid-2016, as total available space reached the highest rate recorded in the past two decades, new deliveries also flooded the already saturated market.

“Dallas, Austin and San Antonio have excellent economies,” Stephens says. “Dallas has one of the best in the country and so does Austin.”

“I would say that we bottomed out,” Stephens says.

The Metroplex, for example, saw its office vacancy rates drop to 14.7 percent and net absorption reach 1.6 million square feet by the end of 2016. Avison Young predicts vacancy rates will hold around 14.3 percent in 2017.

In Q3 alone, Houston saw more than a million square feet added via projects including BHP Headquarters (560,000 square feet), West Memorial Place II (385,532 square feet) and Wildwood Corporate Centre II (201,618 square feet). Stephens, though, says it could have been worse.

“After the Great Recession, acquisitions and development have been underwritten and financed much more conservatively,” he says. “That conservative financing really gives owners and investors sustaining power that they need when you hit a downturn.”

“Dallas is a very attractive place for investors right now because it’s established itself as a place that avoids the boom and bust behavior and also shows years of substantial growth,” says Tobin.

The company’s North America, UK and Germany Forecast says, “Many large tenants are opting to expand into new space in an effort to attract and retain a talented workforce. The space left behind is quickly being backfilled, causing vacancy to remain relatively stable even as new

construction continues to be delivered to the market.”

“Highly landlord-favorable” is how Avison Young describes Austin. The third quarter of 2016 saw the Texas capital rebound into positive absorption with a vacancy rate hovering around 8.5 percent.

“Should tightening occupancy carry through 2017, rental rates and new construction are expected to sustain year-over-year growth,” the Forecast reads, predicting office vacancy to increase to 10.8 percent in 2017.

San Antonio celebrated similar growth: decreasing vacancy rates (9.1 percent) and increasing absorption (roughly 700,000 square feet). In 2017, Frost Tower, the city’s first new high-rise building in 30 years is expected to break ground and Avison Young reports 250,000 square feet of the tower have already been preleased.

“The new tower could mark the beginning of the revitalization of San Antonio’s urban core,” the 2017 Forecast says.

Outlook for industrial While Houston’s west side took a hard hit in the office sector, industrial development on the east side took off.

“There are a lot of companies that are here because they buy chemicals and they buy refined products that they use in manufacturing. They’re here to buy those raw materials, make something, then ship it out around the world,” Stephens says. “Those kinds of companies have been doing great because cost of their raw materials are down.”

Proof is in the numbers: though 13.9 million square feet of industrial space (including Daikin’s 3.9-million square foot manufacturing campus) was delivered in 2016, the market has maintained a 95 percent occupancy rate. In 2016, more than 8.7 million square feet of industrial was absorbed.

“The industrial market has done incredibly well over the last couple years,” says Stephens. “We’ve seen great opportunities on the east side of Houston. A lot of our clients who are third-party logistics companies have expanded to accommodate the growth.”

Sublease space is also an issue when it comes to industrial. In fact, Avison Young

reports the amount available more than doubled from 2.4 million square feet in Q4 2015 to 5.2 million square feet in Q4 2016, though the most of that space is in North or Northwest Houston.

The industrial market is doing well across the state of Texas as population growth continues at a record pace.

“There are some pockets of the industrial market that are struggling and will take a little while to recover. Quite a few crane-served buildings were recently built for the energy industry with the assumption that they would be preleased quickly, but they weren’t,” Tobin says. “The activity on the east side is more than compensating for those little pockets that aren’t doing so well.”

The industrial market is doing well across the state of Texas as population growth continues at a record pace.

In Dallas, Avison Young credits population boom to a “demand in industrial users.”

The company’s 2017 forecast points to e-commerce suppliers as examples of users who have DFW in their crosshairs. In 2016, the region recorded the highest quarterly absorption in 10 years even as construction levels reached historic highs.

“The Dallas metro area has world-class transportation access via air, rail and road, making the city an ideal location for warehouse and distribution properties,” the report says, predicting a slight uptick in vacancy rates from 2016’s 5.6 percent to 5.8 percent in 2017.

San Antonio, meanwhile, is working to position itself as a distribution hub with considerable success. Absorption rates increased in 2016, a trend Avison Young expects to continue in 2017. The company also anticipates industrial vacancy rates around 5.6 percent, down from 2014’s 6.4 percent.

Compared to its neighbors along I-35, Austin’s industrial market is moving along quite slowly, though the city added 1.8 million square feet of industrial space in 2016.

“Austin’s industrial market faces a growing challenge from a declining employment rate in the manufacturing sector and the threat of industrial space being redeveloped for mixed-use and creative office space,” Avison Young’s 2017 Forecast explains.

The company expects the industrial market there to stay tight, averaging 4.4 percent vacancy in 2017. l Avison Young was a winner of Canada’s Best Managed Companies program in 2011, 2012, 2013 and 2014 and re-qualified in 2015 to maintain its status as a Best Managed Gold company

Dallas/Fort Worth, TX *Excerpt from CBRE Marketview Q4 2016.

2016 Industrial Recap

2016 Top Deals Developments Most active industrial submarkets in DFW. • South Dallas – 7,975,685 sf • Great Southwest/Arlington – 5,3339,264 sf added • North Fort Worth – 4,500,511 sf Leases • NFI (1.1 million sf) – 501 W Danieldale Rd., DeSoto, TX • Bed Bath and Beyond (800,000 sf)– 2900 S Valley Pkwy, Lewisville, TX • Mission Foods (766,000 sf) – 2401 2404 W Pioneer Pkwy, Grand Prairie, TX Sales • 15001-15201 Heritage Pkwy, Fort Worth (1,583,400 sf); Buyer: Heitman • 5600 Mark IV Pkwy, Fort Worth (1,440,000 sf); Buyer: Transpacific Development Co What’s Projected for Industrial in 2017?

*“Limited land availability in DFW’s infill sub-markets has driven developers to South Dallas where land was once plentiful and relatively expensive. Despite the increase in vacancy due to large available speculative deliveries, brokers expect these spaces to be snapped up quickly as there are still limited options for tenants – specifically in the 500,000 sq. ft. and higher space segment.”

Source: Lauren Paris, Sr. Research Analyst, Miller Hamrick, Research Coordinato, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

2016 Office Recap 2016 Top Deals Developments • Legacy West – 7200 Bishop Rd, Plano, TX; Developer: The Karahan Companies • Cypress Waters – 3211 Scotch Creek Rd, Coppell, TX; Developer: Billingsby Company • Wade Park – Frisco, TX 75034; Developers: Thomas Land & Development, and Greenstone Properties The Music Factory – 3008 E Pioneer Pkwy, Arlington, TX; Developer: Ark Group of North Carolina Leases • J.C. Penney (150,000 sf) – Plano, TX; (sale/leaseback) • AmerisouceBergen (300K sf) – The Offices at Austin Ranch, Carrollton, TX What’s Projected for Office in 2017?

*”... the brisk pace of new development does appear to be leveling… with less than 6.7 million sq.

ft. underway and is now the lowest since 2014. Another sign the new development cycle is slowing down, fewer than five buildings delivered in the current quarter totaling just more than 350,000 sq. ft., making it the lowest square footage of deliveries in a full three years… Larger leases signed in Q4 2016 indicate forward-looking momentum.”

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February 2017

Source: Lauren Paris, Sr. Research Analyst, Miller Hamrick, Research Coordinato, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

• Environmental Protection Agency @ Renaissance Tower (229K SF) – Dallas, TX Sales • State Farm Campus (2,262,902 sf) – 300 N Coit Rd, Richardson, TX; Buyer: Corporate Properties Trust (Transwestern Investment Group & Mirae Asset Global Investments combined) • J.C. Penney Campus Sale (The Campus at Legacy West) (1.8 million sf) – Plano, TX; Buyer: Dreien Opportunity Partners

Manufacturing/Distribution Facility Available For Lease Located in the Big Spring Airport/Industrial Park, with direct access to runways, rail service, and Interstate 20, this property has extraordinary logistical opportunities.

1600 W. 1st Street, Big Spring, Texas, 79720 • "Crossroads of West Texas" • Located on the Ports-to-Plains Corridor linking Mexico with Canada • Direct Access to Runway, Rail Service & I-H 20/US 87 Truck Relief Route, Big Spring, TX • New Relief Route will have 2 entrances (1 on West & 1 on Southwest) • Warehouse Space: 125,700 sq. ft • Office Space: 7,400 sq. ft

SITE

• • • • • • •

Manufacturing Space: 79,200 sq. ft Systems Room Space: 5,000 sq. ft Storage Space 1: 2,500 sq. ft Storage Space 2: 3,000 sq. ft Total Space: 222,400 sq. ft Ceiling Height: Avg. 38 ft clearance # of Loading Docks: High: 6, Low: 1 floor level door, 1 ramp

Contact: Terry Wegman Phone: 432-264-6032 terrywegman@bigspringtx.com www.bigspringtx.com

February 2017

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Houston, TX *Excerpt from CBRE Marketview Q4 2016.

2016 Industrial Recap

2016 Top Deals

Developments Most development in Northwest and Southeast Houston.

• White Oak Industrial Park in the Northwest – 2915 N Main St. Houston, TX; Developer: Adkisson Development • Cedar Port – Borusan Rd., Baytown, TX; Developer: Clay Development • Ameriport – Ameriport Pkwy, Baytown TX; Developer: National Property Holdings • Bayport Industrial Parks in the Southeast – Pasadena. TX; Developer: Carson Companies • KTN – Houston, TX; Developer: Clay Development • Stafford Grove Industrial Park – Stafford. TX; Developer: Crow Holdings Leases The biggest leases were in Cedar Port and Ameriport Industrial Parks. Below are businesses who signed new leases.

• Ikea (300k to 500k sf range) – Houston, TX; New lease • Palmer Logistics (300k to 500k sf range) – Houston, TX; New lease • OHL (300 to 500k sf range) – Houston, TX; New lease What’s Projected for Industrial in 2017?

*“… the worst of the downturn is now behind Houston, and the road to a steady recovery has begun.”

Source: Brad Smith, Research Analyst, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

2016 Office Recap

Sales Overall transaction volume down to $630M this year, as compared to last year’s $2B. However, the following helped drive sales activity.

• DRA Advisors – Houston, TX • Lincoln Property Co. – Houston, TX • Stonelake Capital Partners – Houston, TX • IPT – Houston, TX

2016 Top Deals Developments • 609 Main, Houston, TX (1,056,658 sf) in the CBD – Developer: Hines; Q1 2017 • Amegy Bank Building (380,000 sf building) – 1717 West Loop South (West Loop/Galleria submarket), Houston, TX; Developer: Hines; Q1 2017 Leases • ABS (326,800 sf) – Springwoods Village Pkwy, Houston, TX; North submarket; New lease • United Airlines (237,708 sf) – 609 Main, Houston TX; CBD; New lease • Lockton (127,875 sf) – 3657 Briarpark, Houston, TX in the Westchase District; New lease

What’s Projected for Office in 2017?

*“Decline in sublease availability is expected to continue as energy companies re-evaluate their space needs as the energy industry begins to show signs of improvement… Rising rig counts and oil prices could mean the worst is behind us… That along with higher – and steadier – commodity prices during the second half of year, and an office construction cycle finally winding down, next year will be one more characterized by a low but positive rebound for landlords… We estimate it could require another three to five year in CBD and possibly longer for West Houston for vacancy to subside to more historic averages.”

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February 2017

Source: Angie Bauer-Hamilton, Research Team Lead, Cammie Moise, Sr. Research Analyst, Elizabeth Ballentine, Research Coordinator, Kortney Debner, Research Coordinator, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

Sales • Spear Street Capital, Houston office (over 1 million sf) – Houston, TX in the CBD and Katy Freeway submarket • 4300-4550 Dacoma St. (547,031 sf) – Houston, TX near NW submarket; Buyer: Williamsburg Enterprise/Fidelis Realty

OFFICE SPACE Halbouty Center 5100 Westheimer FOR LEASE Houston, TX 77056

FORT BEND COUNTY-GREATER HOUSTON AREA

Located Between Future Grand Parkway and Major Hwy 36 Expansion Rosenberg

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Long Point

For More Information: CENTRAL BUSINESS DISTRICT

Janae Evans, SIOR 713-621-3999 Janae@evtex.com

Robyn Berry 713-629-5535 Robyn@evtex.com

Evtex Companies 5100 Westheimer, Suite 155 Houston, TX 77056

The information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinion, assumptions or estimates used are for example only and do not represent the current future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial, and legal advisors. You and your advisors should conduct a thorough independent investigation of this property to determine the suitability of the property for your needs.

• Located in growth area of HWY 36, FM 762, Segment C of Grand Parkway extension • 226 acres on FM 361 with 3,000 ft. of frontage.

• Near Richmond, Rosenberg, Needville and Pleak with current and upcoming residential and commercial development

• Reduced! $11,900/Acres • Major Hwy 36 expansion corridor expansion underway • Possible Owner Financing with access to the Port of Freeport

Seth Showalter 713-269-4908 seth@firstwarrantyrealty.com

Prime Storage Terminal & Pipeline Hub Two permitted, ready-to-develop sites on 700+ acres near the Port of Corpus Christi, TX The ±552-acre Ingleside Terminal features ±2,434 feet of waterfront designed for two Aframax ship berths on La Quinta Channel (45foot draft, permitted for 52 feet.)

The ±158-acre San Patricio Aggregation Hub site is located ±18 miles from Ingleside Terminal site via a pipeline right-of-way partially acquired.

For more detailed information, including obtaining a confidentiality agreement and offering schedule, please contact John Littman 713.963.2862 Kelley Parker 713.963.2896 Tim Thomas 713.963.2837 or Coe Parker 713.963.2825.

February 2017

13

AUSTIN, TX

*Excerpt from CBRE Marketview Q4 2016.

2016 Industrial Recap 2016 Top Deals Development • 500 W 2nd St. (500,436 sf) – Austin, TX; CBD Submarket; Developer: Trammell Crow Co. Leases • Triple Play Services, Inc (179,200 sf) – Austin, TX; Property: Northeast Crossing • Dormae Products, Inc (127,574 sf) – 9313 McNeil Rd, Austin, TX; Property: 150 Precision • Daryl Flood Relocation, Inc (104,146 sf) – 15833 Long Vista, Austin, TX Sales

• Tech Ridge Portfolio (1,023,122 sf) – Austin, TX; Buyer: Stockbridge Capital Group LLC (SF) – Far Northeast submarket • Offices at Braker Portfolio (592,143 sf) – Austin, TX; Buyer: World Class Capital Group – Hays County submarket

What’s Projected for Industrial in 2017?

• Kramer Portfolio (296,781 sf) – Austin, TX; Buyer: Adler Kawa Real Estate Advisors – North submarket

*“… strong demand in the market has pushed rents to new highs, with the citywide average asking rate increasing $0.05 per sq. ft. to a new high of $0.85 per sq ft. and 2017 is expected to be just as active… The Southeast Austin remains the most attractive submarket for developers, with 12 projects currently being constructed there.”

Source: Luke Goebel, Research Coordinator, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

2016 Office Recap 2016 Top Deals Development • Commerce Center South (447,970 sf) – 5810 Comsouth, Austin, TX; Southeast Submarket; Developer: Van Trust and St. Croix Leases • IBM (199,000 sf) – 11501 Burnet Rd, Austin, TX (Northwest submarket); Renewal • Home Depot (199,000 sf) – 11301 McCallen Pass, Austin, TX (East Submarket); New lease Sales • Austin Centre (617,044 sf) – 701 Brazos, St., Austin, TX; Buyer: Sidra Austin LLC, (affiliate of Sidra Capital in the United Arab Emirates) What’s Projected for Office in 2017?

*“…expect robust demand coupled with increasing property values and utility costs to continue this drumbeat into 2017 and beyond…. A $720 million bond…to alleviate traffic conditions in Austin by encouraging residents to utilize alternative means of transportation… With the bond passage, Austin has primed itself for another expansionary year in 2017… Developers and investors clearly remain optimistic about the future of the office market and the influx of new companies requiring space.”

14

February 2017

Source: Luke Goebel, Research Coordinator, Robert C. Kramp, Director, Research & Analysis, E. Michelle Miller, Research Operations Manager

• One Eleven Congress Plaza (548,823 sf) – 111 Congress Ave., Austin, TX; Buyer: Cousins Properties (Atlanta, GA) • One American Center (503,951 sf) – 600 Congress Ave., Austin, TX; Buyer: Trust for the Benefit of Ann Chiles Graham

San Antonio, TX 2016 Industrial Recap

*Excerpt from REOC Marketview Q4 2016.

2016 Top Deals

Development • Dollar General Distribution Center (900,000 sf) – San Antonio, North East submarket; Distribution Warehouse; Owner-Occupied; Complete 1Q 2016 • Titan Industrial Park – O’Reilly Auto Parts (388,000 sf) – San Antonio, North East submarket; Complete 2Q 2016; Distribution Warehouse; BTW for O’Reilly Auto Parts • Carrier Building-16407 Applewhite (850,000 sf) – San Antonio, South submarket; Under Construction; Owner Occupied; 3Q 2017 Completion • I-35 Logistics Center (397,000 sf) –New Braunfels; Under Construction; Distribution Warehouse; 1Q 2017 Completion

What’s Projected for Industrial/Office in 2017? *Barring any unforeseen shocks to the U.S. economy, the outlook for the greater San Antonio market remains clearly positive. Both the office and industrial markets are expected to maintain their steady performance in 2017 as job growth continues to drive the local economy.

Source: Kim Gatley, Senior Vice President and Director of Research at REOC San Antonio

Leases • Largest sale was a single building investment trade of 1.26 MSF property • HEB Grocery (384,250 sf) – 5711 FM 78, San Antonio; North East submarket • Steves & Sons (96,044 sf) – Port San Antonio, 711 Davy Crockett; North West submarket Sales Overall transaction volume down to $630M this year, as compared to last year’s $2B. However, the following helped drive sales activity • Amazon Fulfillment Center (1,260,000 sf) – San Antonio; North East submarket; Buyer: Circle Industrial • 9651 Westover Hills Blvd (382,581 sf) – San Antonio; Far West submarket; Buyer: TowerJazz Texas, Inc

2016 Office Recap 2016 Top Deals Development • Vista Corporate Center (150,735 sf) – San Antonio, North West submarket; 5-story; Delivered 4Q 2016 • Pond Hill (72,400 sf) – San Antonio, North West submarket; 3-story; 40% leased; Delivered 1Q 2016 • SSFCU Corporate Campus (270,000 sf) – San Antonio, North West submarket; Construction; 100% Owner Occupied facility • Landmark One (164,351 sf) – San Antonio, North West submarket; 4-story; Est Completion 1Q 2017 Leases • USAA’s Vista Corporate Center (157,400 sf)– San Antonio; North West submarket • USAA’s Westridge Two La Cantera (129,000 sf) – San Antonio; North West submarket • Lockton (127,875 sf) – 3657 Briarpark, Houston, TX in the Westchase District

Source: Kim Gatley, Senior Vice President and Director of Research at REOC San Antonio

Sales • The Pyramid Building (218,696 sf) – San Antonio; North Central submarket; Buyer: Taurus Investment Holdings • Milam Building (210,851 sf) – San Antonio; in the CBD; Buyer: February 2017 15 Weston Urban

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19

B

Todd Burnette JLL

Stephen Coslik The Woodmont Co.

David Cooke City of Fort Worth

Tony Crème HIllwood Properties

Brandon Gengelbach Drew KIle, Institutional Jack Ratkin Fort Worth Chamber Property Advisors Ratkin Title

Matt Montague JLL

The Real Estate Council of Greater Fort Worth held its Tarrant County 2017 Forecast on January 19th. The above were presenters at the event and the following are excerpts from the presentation. You can find the full presentation at www.recouncilgfw.com.

National Rank by Metro Five-Year Millennial Apartment p Demand Growth* Propensity to Rent**

20-34 Year Old Population Growth

Atlanta

70.1%

161,300

113,100

Metro

Potential Demand Growth

Dallas-Fort Worth

71.3%

141,000

100,600

Houston

70.9%

131,500

93,200

Phoenix

69.8%

108,400

75,700

Orlando

72.9%

77,900

56,800

Charlotte

64 0% 64.0%

87 900 87,900

56 300 56,300

Austin

73.5%

69,300

51,000

Las Vegas

73.4%

67,000

49,200

Washington, D.C.

68.5%

64,800

44,400

Salt Lake City

57.9%

60,300

34,900

U.S. Total

67.9%

, , 1,139,000

774,000 ,

* 2017-2021 ** Based on 2015 American Community Survey Sources: Marcus & Millichap Research Services, U.S. Census Bureau

Todd Burnette, JLL

Industrial

2017 Trends

2017 Predictions

Industrial

 National investors looking at Fort Worth as major market; not secondary

 Deliveries will outpace absorption 2-1

 Industrial d l is preferred f d product d type

 Spec construction continues, esp 500K+

sub 5% trades  Cap rates still very aggressive; seeing sub-5%

 Vacancy rate will increase, but stay below 7%

 Increased flow of foreign money as “safe haven”

 More redevelopment of obsolete real estate

 E-commerce driving user & shipper demand

Stephen Coslik, The Woodmont Company

Drew KIle, Institutional Property Advisors

6

2016

PROJECT WINS Company

Area

Product

Calcomp

Blue Mound

Aviation

C&S Propeller

Everman Alliance

Logistics

Parker Products

Lake Worth

Food

Parker Hannifin

Mercantile

Motion Tech

F b k Facebook

Alli Alliance

D t C t Data Center

Totals

Tony Crème, HIllwood Properties

$ 388 M

$250 0 M $668 M

$689 M $1 1.6 B

$1.4 4 B

• • • • • • • • • •

February 2017

David Cooke, City of Fort Worth

Trinity River Vision Walsh Ranch N New A Arena Clearfork Alliance Stockyards Frost os Tower o e Waterside FWJRB – F-35 Crystal Springs

Retention

50

18,000

15

$5,200,000

67,700

200

347

$17,500,000

90,000

30

100

$25,200,000

250,000

525

TBA

1 500 000 1,500,000

100

$48,900,000

1,950,700

395

Major Projects

Multifamily

David Cooke, City of Fort Worth 20

New Job

FORT WORTH UPDATE

2016

2015

$252 M

$199 M M $624 M

641 M $6 B $1.15 B 2014

$114 M $499 M

$1.5 B

$871 M

2013

2012

$435 M $ $80 M

$4 463 M $77 M $1.24 B

Residential

$818 M

2010

Commercial

2011

$235 M $74 M 2009

$5 569 M B $1.18 B

$1 B

2008

$479 M M

$186 M M

76 M $87 $1 B 2007

160 M $1 $1.2 B $1.1 B $850 M

$580 M $

$0

2006

$500,000,000

2005

$1,000,000,000

$151 M

Annual Value of Total Construction

$1,500,000,000

25,000

Brandon Gengelbach, Fort Worth Chamber

FORT WORTH UPDATE

$2 000 000 000 $2,000,000,000

$500,000

Sq. Ft

 I move to Fort F W Worth h

CY Issued Building g Permit Valuation Trend

$2,500,000,000

$500,000

Expansion p

Tony Crème, HIllwood Properties

$3,000,000,000

Aviation

Ryder System, Inc Ryder System,

Investment

• American Airlines Headquarters • Champions Ch i Ci Circle l • Tarleton State Campus • New Medical School • Left Bank • Facebook • 2014 Bond Projects

David Cooke, City of Fort Worth

972

February 2017

21

Contacts: Anderson Smith & Eric Walker

Birnh am Wo od s

NEC of Birnham Woods Dr & Grand Pkwy - Spring, TX

Dr

Birnham Woods Marketplace

SITE

wy

d an

Pk

Gr

LA MARQUE CROSSING NWC I-45 & FM 1764 La Marque, Texas Contacts: Connor Lynch & Anderson Smith

Proposed

T e n a nFebruary t R2017 epresentation

22

|

Leasing

|

Investment Sales

ANCHORED RETAIL FOR LEASE Gleannloch Retail SEC of Boudreaux Rd & Champion Forest - Spring, TX

Gleannloch Forest Dr

Contacts: Connor Lynch & Eric Walker

Ch am pi on s

Fo re st

D r

SITE

Gr an dP kw y

Shops at Spring Village SITE

SEC of Spring Stuebner Rd & Holzwarth Contacts: Connor Lynch & Brad Ryan

|

Development

February 2017 281.816.6550 | capitalrp.com

23

civil fair play

Appraisal Disapproval:

how a Texas legislator is fighting for property tax reform Mitch Zarsky

BY BRANDI SMITH

Mitch Zarsky says he could hardly believe it when he heard his own words parroted back to him during a recent Harris County Appraisal District hearing.

“I can remember when the gentleman called me about this space,” Zarsky says, referring to a ministorage facility he owns. “He acted like he was an individual interested in leasing a space for personal storage.”

Zarsky says the potential tenant appeared to be a third party used by HCAD to gain information about properties, which was now being used against him out of context.

“What he was trying to say was that the property's obviously worth more because it only has one vacancy in the entire property, which is not true,” says Zarsky. “The bottom line is I had several vacancies, but only had one at that time that I was looking to rent.”

“That's very underhanded and it's not a fair way to do business,” Zarsky says. “ Zarsky, president of Zarsky Industries, owns roughly 15 properties across the state, ranging from what he

describes as the “little mini-storage” that was the topic of his HCAD hearing up to one property valued at more than $9 million.

“Government shouldn't be in that business tricking taxpayers,” Bettencourt says.

Though Zarsky and HCAD eventually settled on a property value, which Zarsky calls “reasonable, but a little on the high side,” Zarsky is unnerved a government agency would use a third party to execute such a deceptive tactic.

“That's very underhanded and it's not a fair way to do business,” Zarsky says. “These third parties are not part of the county government; they can basically say whatever they want. They're providing the information they find out to the county, but they are not directly connected to the county, so there's no checks and balances there.”

REDNews reached out to Sen. Paul Bettencourt (R-Dist.

7) to find out whether he’s heard any stories similar to Zarsky’s. Bettencourt, who’s been a champion of property tax reform, was startled by Zarsky’s experience.

Paul Bettencourt

“Government shouldn't be in that business tricking taxpayers,” Bettencourt says. “We actually asked

the appraisal district and they claim that they don't have people doing that. They do have people who will call from the office, but they don't act like third parties. However, the fact that the information was repeated in a hearing means that somebody got it to the appraisal district.”

Just as Zarsky does, Bettencourt believes there needs to be a set of checks and balances for Texas appraisal districts. If Senate Bill 2, the “Texas Property Tax Reform and Relief Act of 2017,” passes this session, checks and balances will be put into place.

In Dallas-Fort Worth, Bettencourt says the average home’s value shot up 22 to 24 percent in just two years.

“We want to create a property tax administration advisory board at the Comptroller's office that will oversee all the appraisal districts because different districts can have completely different attitudes.

There's no place to complain about appraisal review board members or about operations in the districts,” says Bettencourt. “You can complain to the licensing board about somebody's license, but you can't complain how you were treated or how you were treated differently from one county to the next.”

Bettencourt, a former Harris County tax assessor, completed a statewide property tax hearing tour last year to learn about issues concerning property owners.

“The primary thing was that property taxes are rising two-and-a-half or three times faster than Texans' personal income,” he says. “That means that every year, home and business owners get further behind, because taxes grow faster than their income.”

24

February 2017

Continued on Page 26

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February 2017

25

civil fair play

Continued from Page 24

In Dallas-Fort Worth, Bettencourt says the average home’s value shot up 22 to 24 percent in just two years. The number is 20 percent in San Antonio. Austin, he says, has seen three years of 12 percent increases. But the largest increase can be seen in Texas’ largest city.

“The average home in Harris County has actually seen a taxable value increase of 36 percent and that's after exemptions. That's off the charts,” he says. “When I was a tax assessor, I never thought I'd ever even be talking about numbers this high.”

That is on the residential end. Bettencourt says the cost to commercial owners has also been extreme.

“Commercial businesses are looking at double-digit increases, on average, every year unless they protest,” he says.

Protest is something with which Zarsky is all too familiar. He says he spends weeks each year fighting appraisal districts’ valuation of his properties.

“I had a property that just kept going up 15 to 20 percent every single year, even though the property was in the same exact condition it was several years back.

I brought that to the appraisal district’s attention, and the chief appraiser said, ‘Well, that's the way it works,’” Zarsky says.

He suspects most property owners suffer the increases for a few years, believing they will slow down eventually.

“It's just too much trouble to fight it,” Zarsky says. “As a result, three or four years down the road, their taxes have increased 50 to 60 percent. It's too late for them to do anything about it because it's already increased beyond the point that they can bring them back down to where they actually should be.”

Bettencourt says it is imperative the state act now to ensure its taxpayers are not faced with this kind of burden year after year.

“There's a device called a rollback rate, which is a technical term that basically allows some latitude by the jurisdictions to raise taxes. We want to cut that in half so that it slows this rate of growth by half,” says Bettencourt. “After that point, there should be an automatic election. If taxing jurisdictions want to get more money, they need to go to the public and get a vote.”

Bettencourt says SB 2 has the support of many of his fellow legislators, most importantly Lt. Gov. Dan Patrick.

26

February 2017

“The lieutenant governor formed the Senate Select Committee on Property Tax Reform and Relief, then put us on the road to seven cities. We heard testimony from 321 witnesses and visited with many of the estimated 2,150 attendees,” says Bettencourt. “I want to thank Senators Creighton, Hancock, Lucio, Perry, Van Taylor and Uresti, as well as the several other senators who joined the committee periodically, for their participation."

Bettencourt hopes backing will help SB 2 pass, despite what he calls “substantial opposition” from Texas Municipal League and the Texas Association of Counties.

Bettencourt adds: “Somebody's got to stick up for the taxpayers.”l

“…brokers and sellers are intentionally leaving pricing out of their ads and instead are stating ‘call for pricing’ for fear the ads will become evidence in an HCAD hearing. This causes their ads to lose traffic and impact over those that post pricing. Many brokers and end users searching for properties won't call on ads without listed sales prices as it takes considerable more time when they are scanning for potential investments.

Mitch Zarsky

In addition, when supposed interested parties call on ads, sellers are cautious to not quote pricing and have chosen to quote general sales that have taken place in the area until a LOI is received and the potential buyer can be verified.

It makes the whole process of selling a property like being the doorman at a speakeasy. No one becomes comfortable discussing price until the buyer can be trusted/verified.”

- Mitch Zarsky

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Editorial Calendar 60,000+ Print/Digital Distribution + Over 200 Newsstands Throughout Texas. *REDNews will have additional magazines at these events

Month

Market Focus & Sub Focus

January

Vacant Land / Texas Development Opportunities Texas Economic Development

February

Office Medical/Industrial Trends & Hot Spots

March

Retail/Vacant Land/Texas Development Texas Economic Development

Ad Deadine

*Bonus Distribution

Dec 11, 2016

Jan 12, 2017

- RECA KnockOut Night - CCIM Forecast Competition - BOMA Southwest Region Conference

Feb 13, 2017

- CCIM & CREW Austin Real Estate Summit - Real Share Houston

April

Vacant Land/Industrial Industrial Hot Spots

Mar 11, 2017

May

Retail/EDCs/Vacant Land Texas Economic Development

Apr 12, 2017

June

Industrial/Office Medical Trends Medical Hot Spots

May 12, 2017

July

Land, Mixed Development/Texas Development Opportunities Texas Economic Development

Jun 10, 2017

August

Retail Recap Texas Economic Development Land/Texas Development Opportunities

Jul 12, 2017

September Texas Economic Development

Aug 12, 2017

October

Retail/EDCs Texas Economic Development

Sep 12, 2017

November

Industrial Office Service/Land Industrial Hot Spots

Oct 12, 2017

December

Vacant Land/Retail ICSC Recap Texas Economic Development

Nov 11, 2017

28

February 2017

- Texas A&M Land Markets Conference - BOMA Dallas Trade Show - RECon Las Vegas - Real Share Austin

- Retail Live! Austin - NTCAR Expo - TABB State Conference - Texas A&M MCE - ICSC Texas - Real Share Dallas - Land Advisor Symposium

Valentine’s Day – a great occasion for letting you know how much we appreciate you!

800 419 8881 • www.PhaseEngineering.com

February 2017

29

CRE Brokers, Join Us For a Complimentary Lunch & Learn Come Hear About Insurance Solutions for Environmental Challenges in Real Estate Transactions and How to Qualify Your Environmental Consultant to Get Your Deal Closed ENVIRONMENTAL INSURANCE can reduce your exposure to financial loss from historical usage of owned facilities, non‐owned disposal sites, transportation risks and even terrorism. The majority of property and casualty policies do not insure pollution risk, leaving the environmental insurance policy as the sole means to recover loss and expense caused by environmental issues.

We will provide you with an overview of creative solutions using environmental insurance that enable lenders, buyers and sellers to overcome environmentally based obstacles impacting real estate transactions.

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The purpose of using a qualified consultant is to ensure that environmental risks are fully understood by the purchaser, lender and environmental insurance company when underwriting property loans. During a CRE transaction, we can help answer environmental due diligence questions and help get your deal closed!

Featured Speakers: John Butler VP, Environmental Practice Leader HUB Environmental

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BOMA AUSTIN: bomaaustin.org BOMA SAN ANTONIO: bomasanantonio.org CBA: cbaaustin.org/ CCIM: ccimtexas.com CREW AUSTIN: crewaustin.org CREW SAN ANTONIO: crew-sanantonio.org CTCAR: ctcaronline.com IREM AUSTIN: iremaustin.org IREM SAN ANTONIO: iremsanantonio.org

CENTRAL SOUTH TEXAS

February RECA

CREW San Antonio

February 9

February 8

KnockOut Night

Networking Luncheon 11:30am – 1:00pm Judge Nelson Wolff

6:30pm - 11pm

1 Wednesday CREW Austin: Communications Committee

2 Thursday

7

Tuesday

February 16 Monthly Membership Luncheon & TOBY Awards 11:15am - 1pm

13 Monday

CCIM Central Texas: Real Estate Summit with CREW – 7am – 11am CREW Austin: Real Estate Summit 7am – 11am

15 Wednesday

REC – San Antonio: Federal Reserve Update with Blake Hastings – 7:30am CBA Austin: February Luncheon – 11:30am – 1pm

ULI San Antonio: ULI/SA Management Committee Planning Session – 8am – 1pm CREW Austin: Special Events Committee 11:30am BOMA San Antonio: BOMA Open Committee Meeting – 11:45am IREM San Antonio: Board & Committee Chair Bonding Event – 4pm – 6pm ULI Austin: HCD Meeting - Invitation Only

16 Thursday

CTCAR: Property Information Exchange “Floodplains 101” – 7:30am – 9am BOMA Austin: February 2017 Monthly Membership Luncheon & TOBY Awards – 11:30am – 1:15pm TABB Austin: Chapter Meeting – 11:30am – 1pm

21 Tuesday

IREM San Antonio: Past President’s Social – 4pm – 6pm BOMA Austin: Texas BOMA Advocacy Day, Tuesday, February 21 to Wednesday, February 22

22 Wednesday

ULI Austin: Monthly Breakfast Series – Mayoral Panel – 7:30am – 9am CREW Austin: Membership Committee 11:30am CREW Austin: Community Outreach Committee – 11:30am CTCAR: CE Course: “Building Measurement 101” – 2:30pm – 4:30pm BOMA Austin: Texas BOMA Advocacy Day, Tuesday, February 21 to Wednesday, February 22

23 Thursday

BOMA Austin: Seminar: Emerging Professionals – Public Speaking – 11:30am

24 Friday

ULI San Antonio: Lone Star Brewery District Preview Tour – 3pm – 5pm

28 Tuesday

*TABB San Antonio: Chapter Meeting – 11:30am – 1pm

IREM Austin: Board Meeting – 11:30am – 1pm Committee Special Event – Emerging Professionals – Dutch Lunch 11:30am CREW San Antonio: Networking Luncheon with Judge Nelson Wolff 11:30am – 1:00pm

Thursday CTCAR: TREC Legal I & II for CRE Course – 8am – 5pm

IREM San Antonio: Chapter Luncheon at The Argyle – Panel Discussion – 11:30am – 1pm RECA: KnockOut Night – 6:30pm – 11:30pm CBA Austin: Knock Out Night After-Party – 10:30pm – 2am CTCAR: Legal Update prior to TAR Winter Meeting

32

BOMA

– 8am – 9am CBA Austin: Board Meeting – 11:30am – 1pm CREW Austin: Community Outreach Committee 11:30am RECA: City of Austin Policy & CodeNEXT Committee Meeting – 12pm – 1pm ULI San Antonio: Webinar: Placemaking & Town Center Dev Case Study – 12pm – 1pm

8 Wednesday BOMA Austin:

9

RECA AUSTIN: reca.org REC SAN ANTONIO: www.recsanantonio.com RETAIL LIVE: retaillive.com TABB AUSTIN: www.tabb.org/austin_chapter.php TABB SAN ANTONIO: www.tabb.org/san_ antonio_chapter.php ULI AUSTIN: austin.uli.org ULI SAN ANTONIO: sanantonio.uli.org

February 2017

*Members Only

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.

CENTRAL SOUTH TEXAS

January

SOCIAL

CBA AUSTIN JANUARY JUNCHEON L to R: Carolyn Schwarz, Ronald McDonald House Central TX, Patrick Ley, ECR, Jayme Knight Nelson, HFF, Zach Ellis, Colliers

CREW AUSTIN JANUARY LUNCHEON Top: 2017 CREW AUSTIN BOARD OF DIRECTORS L to R: Jennifer Seay (New Member of the Year), Art + Artisans, Eleanor “Cacki” Chote Jewart, Husch Blackwell, Marcy Phillips (Member of the Year), AMLI

CREW SAN ANTONIO JANUARY LUNCHEON Top: L to R, Beverly Fortner, Bobbi Girardeau, Amanda Weinand

IREM SAN ANTONIO

L to R, Brandey Wimberley Orsag, Guest Speaker, Kimberly Britton, EPI Center

JANUARY LUNCHEON Top: L to R, Madlyn Lane, Secretary, Kimberley Morgan, Regional VP Region 7 Committee Members: L to R, Jason Ruple,Welcome/ Registration, James Stewart, Programs, Tiffany Korbell, Membership & Candidate Guidance, Sally Flanagan, Special Programs, Natalie Smith, Education, Amanda Gladstone, Bowling 2017 Board of Directors: L to R, Sally Flanagan, Amanda Gladstone, Madlyn Lane, Donna Schmidt, Lyndsay Walbran, President, Steve Rodgers, Tiffany Korbell, Ginger Millert L to R: Amy Siebert, Kimberley Morgan, Regional VP Region 7

CTCAR JANUARY LUNCHEON L to R: Houston Police Chief Art Acevedo, CTCAR President Pamela Madere at the Chief’s swearing-in ceremony on November 30, 2016

CTCAR 2017 BOARD OF DIRECTORS February 2017

33

BOMA DALLAS: bomadallas.org BOMA FORT WORTH: bomafortworth.org CORENET NORTH TEXAS: northtexas.corenetglobal. org CREW DALLAS: crew-dallas.org CREW FORT WORTH: crewfw.org/ IREM DALLAS: irem-dallas.org IREM FORT WORTH: www.fortworthirem.org

NORTH TEXAS

February

CREW Fort Worth

North Texas CCIM

REC GFW

February 8

February 16

Joint CREW Dallas/ CREW Fort Worth Industry Luncheon

Luncheon

2017 YLC Breakfast Club

8:30am – 5:30pm

11am – 1pm

1 Wednesday BOMA Fort Worth: GAC Meeting - 11:30am – 12:30pm

*CREW Fort Worth: Treasury Committee Meeting 1pm

2 Thursday

IREM Fort Worth: Lunch & Rodeo – Ft. Worth Stock Show – 12pm – 3pm ULI North Texas: 2017 Kickoff Happy Hour – 5:30pm – 7pm

6

Monday

North Texas CCIM: CI 101 - Financial Analysis – 8:30am – 5:30pm Monday, February 6 to Thursday, February 9

7

Tuesday

BOMA Fort Worth: February 2017 Luncheon – 11:30am – 1pm Revival: What’s Different This Time? – 7:30am – 9:30am CREW Dallas: Joint CREW Dallas/CREW Fort Worth Industry Luncheon – 11am – 1pm CREW Fort Worth: Joint CREW Dallas/CREW Fort Worth Industry Luncheon 11am – 1pm

16 Thursday

North Texas CCIM: Luncheon, Dr. Jim Gaines, Texas A&M REC Economist – 11:30am – 1pm BOMA Dallas: BOMI Course: Leasing & Marketing for Property Managers – 5pm – 8pm *CREW Fort Worth: Membership Appreciation Shopping Event – 6pm

21 Tuesday

BOMA Dallas: 2017 Advocacy Day 8am – 4pm Tuesday, February 21 to Wednesday, February 22 ULI North Texas: WLI Hosts Leadership and Learning Series – 5:30pm – 7pm

22 Wednesday

REC Dallas: High Net Worth & Family Office Forum – 7am

23 Thursday

*BOMA Dallas: Board of Directors Meeting BOMA Dallas: Young Professionals: Bring Your Boss Happy Hour NTCAR: Broker Responsibility Legal I & II – 8:30am -5:30pm REC GFW: 2017 Panther Day Competition – 11:30am – 7pm TABB DFW: Chapter Meeting – 11:30am – 1pm NAIOP NT: Comedy Night – 6:30pm – 10:00pm

24 friday

ULI North Texas: New Member Welcome Coffee 8am – 9:15am NTCAR: Broker Responsibility Legal I & II - 8:30am – 5:30pm

28 Tuesday

BOMA Fort Worth: Board Meeting 12pm – 1:30pm

5pm – 9pm *CREW Fort Worth: Membership Committee Meeting – 12pm IREM Dallas: Power Hour – 11:30am REC GFW: 2017 YLC Breakfast Club – 7:30am – 8:30am

34

ULI North Texas: Young Leader Networking Coffee 7:30am – 8:15am

February 2017

*Members Only

7:30am – 8:30am

*CREW Fort Worth: Communications/PR Committee Meeting – 10am – 10:30am *CREW Fort Worth: Programs Committee Meeting 11:45am – 1pm

Thursday BOMA Dallas: Networking Event: Dart Tournament –

10 Friday

February 9

14 Tuesday

8 Wednesday ULI North Texas: February Breakfast Forum_Deep Ellum

9

NAIOP: northtexasnaiop.com NT CCIM: chapters.ccim.com/northtexas NTCAR: ntcar.org REC DALLAS: recouncil.com REC GFW: recouncilgfw.com TABB DALLAS/FT WORTH: tabb.org/dallas_ ft_worth_chapter.php ULI NORTH TEXAS: northtexas.uli.org

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.

NORTH TEXAS

January

SOCIAL

NTCAR, CCIM, SIOR 2017 BROKERS FORECAST

Located at Frontiers of Flight Museum Picture courtesy: North Texas CCIM Chapter

CREW DALLAS

Top: L to R, Lynn Drummond (Chapter Service Award), KeyBank Real Estate Capital, Courtney Emich Spellicy (Rising Star Award ), AECOM, Nicole Hayes (Outstanding New Member Award), Walter P Moore, Tracie Gaber Frazier (President's Award), KDC Real Estate Development & Investments, MaryBeth Kelley Shapiro (CREW in the Community Philanthropic Excellence Award), Republic Title Commercial Mentoring Mixer: Home of MaryBeth Shapiro.

L to R, Beth Lambert, Michele Wheeler

REC GFW FORECAST 2017

February 2017

35

ACRP: acrp.org BACREN: bacren.us BOMA HOUSTON: houstonboma.org CCIM HOUSTON: ccimhouston.org CETA: cetalliance.com CORENET: houston.corenetglobal.org C.R.E.A.M.: creamtx.com CREN: crengulfcoast.com CREW HOUSTON: crewhouston.org FBSCR: fbscr.com

SOUTHEAST TEXAS

February

CETA

GREATER HOUSTON PARTNERSHIP: houston.org HREC: houstonrealestatecouncil.org IREM HOUSTON: iremhouston.org NAIOP: naiophouston.org O'CONNOR & ASSOCIATES: poconnor.com SIOR: www.sior.com TABB GROUP: www.tabb.org ULI: houston.uli.org

CCIM Houston

February 21

IREM February 10

February 17

Broker Breakfast 2017

Commercial Real Estate Forecast Competition

8am – 11am

February Luncheon 11:30am - 1pm

8am – 12pm

1 Wednesday Great Houston Partnership: Greater Houston Day

Reception - 6pm – 9:30pm CREW Houston: 2017 Luncheon – High Speed Train 11:30am – 1pm

3 Friday

8

CREN: Luncheon 11am – 1pm Great Houston Partnership: Global Houston Celebration for the Big Game! 6pm – 9pm Great Houston Partnership: Pro Football Hall of Fame Luncheon – 10:30am – 1:30pm

16 Thursday

*Great Houston Partnership: Membership 101 9am – 10:30am BACREN: Monthly Luncheon Tax Protest Update, Pat O’Connor - 10:30am – 1pm: CORENET: February Lunch Meeting 11am – 1pm IREM Houston: Networking Meeting 3:30pm

17 Friday

CREN: Marketing Session 7:30am – 9am CCIM Houston: Commercial Real Estate Forecast Competition 8am – 12pm

21 Tuesday

CETA: Broker Breakfast 2017 8am – 11am FBSCR: Monthly Breakfast Meeting 8am – 9am IREM Houston: IREM MNT 402 Two Day Course - 8am – 5pm ULI Houston: Leadership Luncheon – View from the Top: Achieving Inclusive leadership in the Real Estate Industry - 11am – 2pm

23 Thursday

IREM Houston: IREM MNT 402 Two Day Course 8am – 5pm TABB Houston: Chapter Meeting 11:30am – 1:30pm

24 friday

CREN: Happy Hour 4:30pm – 7pm

28 Tuesday

ACRP: Kick-off to Cook –Off

Wednesday C.R.E.A.M.: February Luncheon - 11am – 1pm

9 Thursday

*IREM Houston: Fashion Show Committee Meeting -11:30am

10 Friday

IREM Houston: February Luncheon with Elizabeth Barbour - 11:30am – 1pm

13 Monday

Phase Engineering: Lunch & Learn: Insurance Solutions - 11am -1pm IREM Houston: Public Policy Meeting 11:30am

15 Wednesday O’Connor & Associates: Multi-Family Forecast – 11:30am – 1pm

36

February 2017

*Members Only

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.

SOUTHEAST TEXAS

January

SOCIAL

HAA

2017 BOARD MEMBERS ANNUAL BUSINESS MEETING AND HPF DONATION

CREN

LUNCHEON Top: L to R, Viren Khemsara, Mario Goncalves, Caroline J. Moore L to R: Debbie Sheets, Jessica Inman, Rebecca Haass Photos by PlusCorp

CCIM HOUSTON JANUARY LUNCHEON

C.R.E.A.M. LUNCHEON

Top: L to R: Laura Dumas, Katherine Wilcox, Wendy Lambie, Maria Lausell

CREW

LUNCHEON

L to R, Donna Carnahan, Derik Wilcox, Bill Dampier

Top: L to R, Jennifer Spencer, Julie Gauthier, Anne Kniffen

L to R, Gloria Amezcua, Andrea Shiloh, Serena Chu

L to R: Matthew (Doc) Dantzer, Jennifer Horan, Allyson May

L to R, Bobbie Bozarth, Susan Kinkaid, Allison Biediger, Katherine Guest

L to R: Dr. Elena Bakina, Linda Crumley, Brandi Jones

Photos by PlusCorp

L to R: Aron J. Harris, Ulises Zavala, Jose M. De Leon Photos by PlusCorp

Top: L to R: Meghan Allen, Eric Drymalla, Peggy Rougeou, Susan Annoura

L to R, Greg Young, D’Etta Casto-DeLeon Photos by PlusCorp

February 2017

37

CENTRAL SOUTH TEXAS bulletin

AUSTIN, TX CLINIC DEVELOPMENT Baylor Scott & White Health plans to open a pair of urban clinics, one a 6,000 sf clinic at 200 E. Cesar Chavez St. & the other a 10,000 sf clinic at 2608 Brockton Dr. MIXED-USE RESIDENTIAL RETAIL DEVELOPMENT Paydar Properties of La Jolla, CA, in partnership with Michigan RV Resort LLC purchased the 31,327 sf 2711 W. Anderson building on 2.7 acres for the purpose of demolition and construction of a multi-family, mid-rise development and retail construction. The transaction was handled by JLL.

Source: buildingatx.com

AUSTIN, TX LAND REDEVELOPMENT Austin-based Endeavor Real Estate Group will lead redevelopment planning for 305 S. Congress Ave, the former home of the Austin-American Statesman. The 18.9 –acre site is on the south shore of Lady Bird Lake just south of downtown.

Brad Maples has been promoted to Principal with Trammell Crow’s Austin Office.

CREW Austin Board of Directors

IREM Austin Board of Directors

38

February 2017

RETAIL LEASE Lache Fitness leased 5,800 sf at Corporate Center III located at 8868 Research Blvd. Rob Merritt & Barret Espe of Retail Solutions represented the landlord. Hannah Douglas of St Croix Capital Realty Advisors represented the Tenant.

RETAIL SALE/LEASE RD Management LLC, a New York company, purchased the Shops at Tech Ridge and the adjacent vacant Super Target store located at 12901 N I-135 (504,153 sf total).

The buyer also plans on leasing 78,000 sf of Floor & Decor’s 171,000 sf property next door at 13001 N. I-35.

BAY CITY, TX

OFFICE DEVELOPMENT Stonelake Capital Partners and HPI Real Estate Services & Investments have broken ground on Domain Tower, an 11-story 310,000 sf Class-A office building located at 10721 Domain Dr. Sam Houston, Richard Paddock, & J.D. Lewis of HPI Real Estate Services & Investments are responsible for leasing Domain Tower.

MULTI-FAMILY SALE Innovative Multi-Family Investments LLC purchased Shadow Bay Apartments, a 232-unit multifamily community located at 1700 Baywood Drive. Jim Hurd of Houston Income Properties brokered the transaction.

OFFICE LEASE Supreme Lending leased 11,743 sf at Austin Oaks Travis Building, 3520 Executive Center Drive. Matt Frizzell & Tom Rhea with Peloton Commercial Real Estate represented the landlord. Jake Ragusa with JLL represented the tenant.

ANNEXATION Under a proposed agreement, Converse will annex three square miles of unincorporated acreage along I-10 over a multi year period, & a 2.2 square-mile piece of San Antonio as part of a boundary adjustment. Both cities must adopt an interlocal agreement that will formally set the annexation plan in motion.

OFFICE SALE 9015 Mountain Ridge LLC purchased the 34,432 sf Houston Building at 9015 Mountain Ridge drive near U.S. Hwy 183 & Capital of Texas Hwy. Todd Gold & Kimberly Gatley with REOC Austin represented the seller, 9015 Partners LLC. OFFICE SALE – LEASEBACK Atchley & Associates, LLP purchased a 14,800 sf office building at 1005 La Posada. The sale-leaseback allows Atchley to occupy a portion of the building before its lease expires.

W. Gaines Bagby of CBRE represented the buyer.

OUTPATIENT CLINIC SALE Cullinan Properties purchased the 275,000 sf Austin VA Outpatient Clinic located at 7901 Metropolis Drive. Ryan Butler, Brad Moulder, & Anne Perrault of Stan Johnson Company represented the seller & developer, Cullinan Properties.

James McGrade of HPA Realty, Inc represented the buyer.

CONVERSE, TX

LEANDER, TX VACANT LAND SALE NE Carneros LP purchased 15.4 acres at West Bagdad Rd. & Marsala Circle in Leander. Doug Devine with Premas Commercial Realty Group represented the seller, Emmet & Sally Hawkes.

Kurt VanderMeulen with REOC Austin represented the buyer.

NEW BRAUNFELS, TX INDUSTRIAL SALE 71 Express Partners LLC, a New Braunfels company, purchased a 28,840 sf industrial property at 3030 E. State Hwy 71 east of Austin-Bergstrom International Airport. Clinton Sayers with Sayers Real Estate Advisors represented the seller. Ryan Wilson with ECR represented the buyer.

PFLUGERVILLE, TX HOSPITAL DEVELOPMENT Baylor Scott & White will build a hospital located at 2600 E. Pflugerville Pkwy. The property is a 148.88-acre rezoned tract of land at the northeast corner of Pflugerville Parkway and SH 130.

INDUSTRIAL SALE Timbertown Austin LLC purchased a 33,138 sf industrial building at 15607 Grand St. Mark Milstead with REOC Austin represented the seller, Century Street Joint Venture.

SAN ANTONIO, TX INDUSTRIAL LEASE Wisenbaker Builder Services, Inc leased 58,000 sf at Interstate Business Park - Building 5 at 6903 NE Loop 410. Cavender & Hill Properties, Inc. represented the landlord, Rio Pas Investments, Inc. Ryan Boozer with Stream Realty Partners represented the tenant.

MULTI-FAMILY DEVELOPMENT Encore Enterprises is a new 339-unit multifamily complex along the river located at 451 S Main St. It will be Encore’s second apartment developing in the San Antonio market.

OFFICE LEASE Stream Realty Partners leased 14,207 sf of office space at Lockhill Crossing to Santikos Enterprises, LLC. Brian Young & Hanna Rochelle of Stream Realty Partners have aggressively been marketing the Stream owned project. Within the last 6 months, Stream has signed over 36,000 sf in new leases.

OFFICE SALE A mystery buyer has purchased the five-story Burns Building located at 401 E. Houston St. in downtown. The 58,000 sf building was built in 1912 and is valued at $4 million.

OFFICE SALE Preferred Real Estate Investments purchased 151 Technology – a 122,093 sf, two-building office complex on 15 acres at 1560 Cable Ranch Rd. from Corporate Office Properties Trust. Peloton Commercial Real Estate will lease and manage the property.

DALLAS, TEXAS INDUSTRIAL SALE

Avistone, LLC purchased Northgate III, a 155,494 sf industrial portfolio located at 11805-11829, 1184511895 Forestgage Drive & 12021, 11999 & 11969 Plano Road at the northwest corner of Forest Lane & Plano Road. Lizzy Blake of Colliers International represented the buyer.

OFFICE LEASE

Dallas Morning News leased the 90,000 sf old Dallas Central Library. Phil Puckett & Jeff Ellerman of CBRE, & A.H. Belo CFO Katy Murry, represented the Morning News. Russ Johnson of Peloton Commercial Real Estate, & Michael VanHuss of Commerce Statler Development LLC, represented the landlord, Centurion American Development Group.

OFFICE LEASE

Matthews Real Estate, a Californiabased company, plans to open its 8,338 sf office in Dallas’ Preston Center submarket at 8300 Douglas Avenue. Todd Noonan of Stream realty Partners represented the real estate investment firm & Ruth Griggs of PegasusAblon represented the landlord, Lionstone Investments.

OFFICE LEASE

Ricks Kiss Architects designed the project.

FARMERS BRANCH, TX INDUSTRIAL SALE

HRK Properties purchased the 145,000 sf building at 13737 & 13757 N Stemmons from an undisclosed seller. Keenan Cook with Mercer Company represented the buyer.

FORT WORTH, TX OFFICE SALE

MG Ventures purchased the historical 42,000 sf O.B Macaroni Co. Building at 108 South Fwy.

FRISCO, TX OFFICE/WAREHOUSE DEVLEOPMENT

Frisco-based IT service provider Skinny IT plans to build a 130,000 sf office/warehouse in Frisco Park 25 which is located at the northwest corner of Preston Road & Rockhill Parkway. Construction is expected to be completed July 2019.

GRAPEVINE, TX

Avison Young partnered with LiquidSpace to find a flexible lease for Salesforce.com. The lease encompasses 18,172 sf at The Centrum, a class “A” office building in the Oak Lawn/Turtle Creek submarket.

INDUSTRIAL SALE

DALLAS/ FORT WORTH AIRPORT, TX

RETAIL SALE

INDUSTRIAL SALE

Sealy & Co. has acquired a 167,797 sf business park near the Dallas/ Fort Worth International Airport.

MULTIFAMILY SALE

Alamo Manhattan sold its uptown 208-unit luxury lofts called Routh Street Flats to The Kislak Organization. Team Mozer with George Smith Partners arranged the acquisition financing through Connecticut General Life Insurance Co. Moran & Co. Southwest represented the sellers, Alamo Manhattan.

MULTI-FAMILTY / RETAIL DEVELOPMENT

StreetLights residential is developing an over 400-unit apartment & shopping center development across the street from the Inwood/Love Field DART rail station off Maple Ave. Looney

Apex Cargo International has leased 21,875 sf located at 1250 Mustang Dr from DFW Global Logistics Center 2 LLC. Turner Petersen with Mercer Company represented Apex JAH Realty, L.P. announced the acquisition of Vineyard Marketplace, a 121,228 sf shopping center located at Glade Rd. & Hwy. 121. Ethan Slavin & William Rosatti with JAH will handle the leasing. Jim Batjer & Ryan Shore of HFF represented the seller, Curo Enterprises, LLC.

GRAND PRAIRIE, TX INDUSTRIAL DEVELOPMENT

Continental Tires plans to expand its facility (Grand Lakes 4003) by 282,507 sf, giving the industrial space more than 1 million sf.

Duke Realty’s Randy Wood has represented the landlord & developer in the deal.

HUTCHINS, TX INDUSTRIAL DEVELOPMENT Core5 Industrial Partners plans to construct a 754,897 sf class A

distribution/manufacturing facility which will be located on two adjacent sites in Hutchins, Texas totaling 41.53 acres of industrial land. NAI Robert Lynn’s John Leinbaugh & Matt Elliot along with Wicker & Associates’ Brent Wicker & Randy Church represented Core5.

IRVING, TX OFFICE SALE

Colombia Property Trust sold its CVS Health Tower, a 12-story, 315,000 sf office building at 750 W. John Carpenter Fwy. to Piedmont Office Realty Trust for $51 million.

PLANO, TX

NORTH TEXAS

bulletin David Aldrich received the 2016 Charles D. Tandy Commercial Realtor Award by The Society of Commercial REALTORS.

Dirk Goris has been named CBRE’s vice chairman.

HIGHRISE RESIDENTIAL SALE High Street Residential & Principal Real Estate Investors are developing a 25-story, 372,734 sf residential tower within Legacy Tower Center.

OFFICE CAMPUS SALE

J.C Penny has sold its Plano campus at 6501 Legacy Drive for more than $400 million.

Ryan Reid has been named CBRE’s vice chairman.

OFFICE LEASE

NTT Data, a Japanese-based IT company, has leased 126,715 sf in Legacy West at 7950 Legacy Drive.

The company planned to move its North American headquarters after it purchased Plano-based Dell Services for $3.1 billion November 2016.

Shane Strickland has joined Paladin Partners as a Partner.

ROCKWALL, TX RETAIL/RESTAURANT DEVELOPMENT

PegasusAblon has acquired The Harbor in Rockwall, with plans to upgrade the 130,000 sf retail and restaurant lakefront property.

Randy Fleischer of JLL helped source debt for the acquisition on behalf of PegasusAblon.

Tommy Tucker & Time Axilrod of Shop Cos. represented the seller.

PegasusAblon hired Steve Ewing & Edge Realty to lease The Harbor, with CBRE to lead the property management.

Trace Fielding has joined Paladin Partners’ industrial brokerage team.

John Costello has joined Paladin Partners Retail & Office Brokerage team.

WESTLAKE, TX OFFICE LEASE

Goosehead Insurance is leasing 62,000 sf of office space & will later make the move to the 1.2 million sf Solana Campus business park. Jeff Eckert, Blake Shipley, Jay Bailey & Frank Taylor of JLL represented the landlord, Equity Office Properties.

February 2017

39

SOUTHEAST TEXAS bulletin Matt Squire has joined MacDougall & Company as Vice President | Brokerage & Acquisitions for industrial and retail properties.

Brett Dishman has joined Boyd Commercial, LLC/CORFAC International, & will focus on industrial leasing in Southwest Houston.

CROSBY, TX VACANT LAND SALE

Tractor Supply Co. of Texas bought 3.46 acres at the intersection of Hwy 90 & FM 2100 for a new Tractor Supply store.

The seller was represented by Joe E. Evans & Janae Evans, SIOR of Evans Properties.

CYPRESS, TX RETAIL SALE

Lone Star Partners sold 20,988 sf at the Rock Creek Plaza, located at 14034 & 14044 Grant Rd. Josh Jacobs & Burdette Huffman of EDGE Capital Markets represented the seller. Mark Kalil & Associates, Inc. represented the buyer.

HOUSTON, TX INDUSTRIAL LEASE

2017 Executive Board Directory

President Trey Miller, CCIM Boxer Property

MULTI-FAMILY / RETAIL DEVELOPMENT

President Elect Blake Willeford, CCIM Grandbridge Real Estate Capital 2200 W. Loop South, Suite 600 Houston, TX 77027 713.993.1363 bwilleford@grandbridge.com Treasurer Jane Nodskov, CCIM ICO Commercial 2333 Town Center Drive, Suite 300 Sugar Land, TX 77478 713.417.2337 jnodskov@icotexas.com Secretary Paula Bruns, CCIM Colvill Office Properties 5847 San Felipe, Suite 600 Houston, TX 77057 713.260.0272 paula@colvilloffice.com Past President Gary Martin, CCIM Wells Fargo Bank 1000 Louisiana, 7th Floor Houston, TX 77002 713.319.1166 gary.martin2@wellsfargo.com Director At Large Evelyn Ward, CCIM Transwestern 1900 West Loop South, Suite 1300 Houston, TX 77027 713.270.3352 evelyn.ward@transwestern.net Director At Large Greg Barra, CCIM Boyd Commercial 2200 West Loop South, Suite 525 Houston, TX 77027 713.599.3406 gbarra@boydcommercial.net

40

6614 Dixie Properties, LLC leased 28,800 sf to Diverse Metal Products, LLC. Chris Caudill & Jake Wilkinson of NAI Partners represented the landlord.

February 2017

PMRG has purchased 330 Main along the rail line from Midtown Redevelopment Authority & plans to build a tower with 36 apartments, 14,390 sf of retail space & a 521-space parking garage.

OFFICE LEASE

Diamond McCarthy leased 23,420 sf in the Houston Center 2 tower located at 909 Fannin St. Anthony Fritsche of Fritsche Anderson Realty Partners represented Diamond McCarthy.

Debbie Wilson & Marilyn Guion represented current owner, JP Morgan Chase & Co.

OFFICE SALE

Spear Street Capital purchased a 3-building portfolio including 5 Houston Center, 580,875 sf, located at 1401 McKinney. The seller was Columbia Property Trust.

OFFICE LEASE

Parkway, Inc & Vroom have leased 24,934 sf for a full floor in Building Four of CityWestPlace.

Clary H. Groen & Foresite Retail Advisors represented Vroom in the transaction. J.P Hutcheson & Rachel Williams led the team for Parkway.

RETAIL LEASE

Zayed’s Mediterranean Grill (6,000 sf), Social Status (2,000 sf), & Norway-based Cubility AS (1,500 sf) are expected to open in Houston’s City Centre, located at Interstate 10 & Beltway 8. The developer is Houston-based Midway Cos.

RETAIL SALE

Edifis Group purchased two shopping centers in the New Forest Crossing development located on East Sam Houston Parkway. The shopping centers, 13 miles from downtown Houston, are leased at 100% occupancy.

HUMBLE, TX VACANT LAND SALE

Lee & Associates sold 14.8835 acres at 1907 W. Lake Houston Parkway. Reed Vestal & Taylor Schmidt of Lee & Associates represented the undisclosed buyer. Bill Wheless of Wheless Properties represented the seller, 1951 Interests, LP.

LAKE JACKSON, TX RETAIL REDEVELOPMENT

Sears at Brazos Mall will be renovated to fit in four new tenants. Owner of the mall, AC Brazos Mall Partners, will spend $8 million to renovate the former 97,000 sf Sears. Max Weiswerg with Illinois-based North Shore Properties Group is in charge of retail leasing.

LEAGUE CITY, TX RESIDENTIAL DEVELOPMENT

Empire Continental Land, a Canadian developer that recently launched a home building unit in Houston, has started its sixth Texas community. The company will develop 206 acres west of Texas 146 & north of FM 646 in League City for a 540-home community with homes on 50foot wide lots.

MISSOURI CITY, TX INDUSTRIAL LEASE

Tire Universe leased 42,430 sf at its Gateway Southwest Industrial Park, located on a 36-acre parcel at the interchange of Beltway 8 and U.S 90 Alternate. Sandy Kee of Kee Commercial Realty represented Tire Universe.

Ed Bane & Jon Michael of Bridge Commercial Real Estate represented the co-development team.

RICHMOND, TX RETAIL LEASE

Total Wine & More signed a lease for 34,950 sf within the Shops at Bella Terra retail center located at 5458 W. Grand Parkway South. Courtland Richardson & Mark Sondock of Stream Realty Partners represented the landlord, Invesco.

ROSENBERG, TX VACANT LAND SALE

BGM Land Investments purchased 549 acres from Rocksprings Capital. The property is southeast of the Hand Road/FM 2218 intersection on the northeast side of Pleak Road. The property was marketed by James Kadlick, Chris Hutcheson & Matt Herring of McAlister Real Estate.

SEALY, TX VACANT LAND SALE

Sika Corporation purchased a 40 acre tract of land for development of a new manufacturing facility near the intersection of FM 3013 and FM 3538. Joe E. Evans & Janae Evans of SIOR of Evans Properties represented the seller.

Vicki Gessler of BHGRE (Gary Greene) represented the buyer.

SPRING, TX OFFICE LEASE HP Inc. preleased 378,000 sf of office space at Springwoods Village, a 2,000 acre mixed-use community in north Houston.

Patrinely, USAA Real Estate Co., & CDC Houston will develop the new HP campus which will house 2,400 employees.

Brandon Clarke, Charles Gordon, Alexander Somerville, Ryan Roth, & Andrew Zeplain of CBRE represented HP. JLL’s Chrissy Wilson & Patrinely Group’s Dennis Tarro represented the landlord.

STAFFORD, TX OFFICE SALE

Stone Mountain Properties bought the office building located at 12603 Southwest Freeway (143,211 sf). The building has undergone $1.5 million in improvement since 2013. Bill McGrath & Peter Wall of Landpark Advisors represented Stone Mountain.

ADVERTISER INDEX A. A. Realty Company 25 Avison Young 1 Berkadia 2,3, 5 Big Spring EDC 11 Caldwell Companies 7 Capital Retail Properties 22, 23 CCIM Houston 43 Cushman and Wakefield 13 Evtex Companies 13 First Warrantly 13 Greenberg & Co. 19 Hankamer Commercial Brokers, LLC 19 Levcor, Inc. 18 Phase Engineering 29, 30 PlusCorp Photography 19 RBF Credit Union 18 Showalter Law 41

classifieds & index Signorelli 21 Sotheby's 27 Tarantino Properties Inc 16 University of Houston 18 WA Development 17 Windrose 44

In Next Month's Issue...

Eminent Debate Update

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281-341-5577 • Info@ShowalterLaw.com February 2017

41

ray’s buzz

BY RAY HANKAMER rhankamer@gmail.com

O’Connor Office Forecast

Speakers: Chadd Bolding, Colliers International; Ryan Bishop, Stream Realty Partners

Chadd Bolding

Ryan Bishop

Takeaway: Although office vacancies have not reached the all-time highs attained during the ‘80s Oil Depression in Houston, they have come close. The consensus is that we ‘hit bottom’ in 2016, but that the recovery will be long and slow, providing financial heartburn for landlords and good opportunities for tenants.

• • • • • • • •

Oil supply and demand worldwide is expected to return to equilibrium in 2017, which should result in rising prices…which will help Houston Houston office vacancies have increased from 9% to 22% in approximately two years

Atlanta, Dallas, and Denver all have vacancies as well-in the 1623% range

Half of oil and gas bankruptcies have been in Houston’s CBD, with Westchase, the Energy Corridor and North Belt not far behind…not all bankruptcies have rejected their leases…yet Much of the sublease space is very attractive Class A space, with offerings of low rates, long term leases (five years +), and other concessions…very hard for new buildings to compete

Because of the slowly rising but uncertain rate environment, many landlords are hesitant to quote rates 3-4-5 years ahead Memorial City, the Inner Loop, Sugar Land, and The Woodlands have remained in the high occupancy zone, largely because they are mixed-use developments, which are in vogue at the moment

We can expect increasing merger & acquisition activity among the

• • • • • •

oil & gas companies, and the accompanying consolidation may throw more sublease space on the market

There are private equity firms supporting new small company startups, and these are taking advantage of cheaper sublease space Brokers are optimistic as more tenants are starting to make decisions-gray clouds are behind us and blue skies are ahead

Jobs drive absorption and Houston continues to gain jobs, although on average they are lower paying jobs than oil & gas jobs $60-$65 bbl prices are needed for Houston’s O&G community to stabilize, get their balance sheets in order, and to consider growing / hiring again The new 35 story Fertitta building in the Galleria, which will come online during this downturn, is expected to do well since it is a mixed-use development, with retail, hotel, multi-family, and office There has been a massive flight from Greenspoint office buildings and the future for re-leasing them ranges from uncertain to grim, and may hinge on a huge tenant coming in with other companies following it-a significant renovation may be required in the meantime

CCIM Luncheon

Speaker: Patrick Jankowski, Economist-Greater Houston Partnership Takeaway: The worst of the oil price recession / downturn is over, and recovery is underway.

It will be slow and will be tied to price of oil. Industry needs to get over $60 per barrel to begin hiring.

• 67,500 high paying jobs lost in oil & gas sector were replaced by growth in medical, hotel, restaurant, construction, and other service industries, albeit at lower pay scale, so in last two years we have had a net gain of about 10,000 jobs • Organic growth in Houston is about 65,000 per year (births over deaths) so in ten years we will have 650,000 more people under ten years old! This affects schools, medical, and other sectors.

• In-migration depends on job growth, but that is expected to also resume

• If Houston were a country, we would have the 25th economy in the world at $500 billion per year

• Most of the return of drilling activity has been in the Permian Basin in West Texas 42

February 2017

Patrick Kankowski

• Rig efficiency improvement means that fewer rigs can drill more wells-new rigs can even ‘walk’ from one drill site to another, avoiding the need for trucks to transport them

• Big chemical plant construction is tailing off, as are construction jobs in East Houston • Future job growth will be in sectors that service growing population, such as government, education, retail, healthcare, and restaurants & bars…construction will fall, then level off • Houston has caught the eye of international investors, and the Greater Houston Partnership is getting a record number of inquiries

2017

COMMERCIAL REAL ESTATE FORECAST COMPETITION

FEBRUARY 17, 2017 8:00 AM - 12:00 Noon

Keynote Speaker:

Mark Dotzour, Ph.D. Location:

Norris Conference Center City Centre

Tickets:

$75 Members $100 Non-Members $1000 Table of 8

SPEAKERS

OFFICE

Moderator: Defender: Challenger:

Steve Burkett, CCIM, JLL Rich Pancioli, CCIM, CBRE

MULTI-FAMILY Moderator: Defender: Challenger:

RETAIL

Moderator: Defender: Challenger:

LAND

Moderator: Defender:

Challenger:

Greg Young, Grandbridge Real Estate Capital Ryan Epstein, Berkadia Matt Rotan, ARA

Debbie Adams, Edge Realty Partners Jason Baker, CCIM, Baker Katz Matt Reed, NewQuest Properties

Jane Page, CCIM, Lionstone Investments Kirk Laguarta, Land Advisors Organization Davis Adams, HFF

INDUSTRIAL

Register Now! www.ccimhouston.org

Moderator: Defender: Challenger:

Media Sponsor

Reed Vestal, CCIM, Lee & Associates Tom Lynch, CBRE Rob Stillwell, CCIM, Newmark Grubb Knight Frank February 2017

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February 2017

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