REDNews Magazine - March 2020

MARCH 2020

THE TEXAS COMMERCIAL REAL ESTATE NEWS SOURCE

2020 REDNews Awards Houston Finalists • Pages 23-28

Boutique Office Building Bella Piazza For more information, see page 19

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LET’S GET STRAIGHT TO THE POINT. Waypoint Business Park is Houston’s Newest Industrial Development in Missouri City.

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Clarion and 4M Investments are proud to introduce Waypoint Business Park to the southwest Houston industrial submarket. The project sits on over 60 acres of land and at completion will be home to over 800,000 square feet of state-of-the-art office/ warehouse product. With frontage and immediate access to Beltway 8 (including 8 146 three curb cuts), Highway 90 and Gessner Road, Waypoint offers unmatched ingress/ egress, allowing users to optimize their distribution patterns throughout southwest MONT BELVIEU 90 Houston and the greater Houston MSA.

George Bush Intercontinental Airport

CYPRESS

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Phase I delivers February 2020 and consists of four buildings totaling 708,944 square feet and designed to accommodate users ranging from 10,000 to 290,373 square 10 330 610 feet under one roof. Additionally,14614 acres are available for built-to-suit with direct frontage along Beltway 8 which BAYTOWN is great option for corporate users searching for 225 superior visibility and access. At Waypoint, users can take advantage of freeport PASADENA 8 exemptions and potential tax incentives available from Fort Bend County and Missouri City.

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45 information, please reach out to Matteson Hamilton or Justin Robinson For35 leasing with Stream Realty Partners at 713.300.0300.

PEARLAND

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SPRING STUEBNER TWO LAND TRACTS SPRING, TEXAS 77389

SITE

Tract 1: ±4.52 acres at the NEC of Spring Stuebner Rd. and Roseville Dr. with two curb cuts on Spring Stuebner.

• Detention provided off site; Utilities available • Easy access to I-45, Grand Parkway, and Hardy Toll Rd.

Tract 2: ±3.16 acres at the NWC of Spring Stuebner Rd. and Meadow Hill Dr. with one curb cut on Spring Stuebner

within 3 miles

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

75,261

POPULATION

$

2019 ESTIMATED DEMOGRAPHICS

• Contact Broker for pricing $107,218 AVG. HOUSEHOLD INCOME

$

$266,407 AVG. HOUSING VALUE

MATT DAVIS Associate Director 713.974.2407 matt.davis@berkadia.com

© 2020 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 servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage 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

IN THIS ISSUE

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20

16 23

Year

12

ren

hes Corp

erprises Ltd

ÍGeneral Contractor of the Year Market Sales & Leases 1–3, 5, 7, 15, 19 Arch-Con Corporation

Year

cture

Angler Construction

Services

Theresa Terrell

Transaction Awards

Environmental 30, 43

Property Tax Management 17 1031 Exchange/DST 13

ÍMost significant Lease Transaction Conn’s Rankin Road

C

Scoop

Events 32, 34, 36, 44 Social 31, 33, 35, 37 Bulletin 38–40

Features

Property Management Summit 8, 10, 22 Reveling in Retail 12–14 Current Net Lease Market in Texas 16–18 Cedar Hill, Texas 20

ÍMost Significant Sale Transaction

ds

The Woodlands at the Waterway 4

MARCH 2020

SWN Sale/Leaseback Micha Van Marcke Retail Transaction

RAY’S BUZZ CCIM January Luncheon 42

OUR FINAL FOUR GROCERY HOTEL RESTAURANT RETAIL

I-45 FRONTAGE. Tap into the Galveston-Kemah-NASA tourism market.

Federal Opportunity Zone & residential infill tracts.

15.33 percent city population growth since 2010.

New schools, new neighborhoods, coastal lifestyle and citywide revitalization.

Full court press for triple double deals

GATEWAY TO THE GULF

Letter from the Publisher

THE TEXAS COMMERCIAL REAL ESTATE NEWS SOURCE

PUBLISHER Ginger Wheless ginger@REDNews.com

Dear Readers,

I

NATIONAL PUBLISHER

n this issue Brandi Smith interviewed some of our clients that attended the ICSC Red River States Conference & Deal Making Conference this past January in Fort Worth. The consensus from the group was that retail in Texas is alive and well. All are anticipating a good year for retail!

Mark Menzies menzies@resummits.com

We’ve also included in this issue recaps from our Net Lease & 1031 Exchange Summit last December, as well as our January Property Management Summit. Both were well attended and chocked full of knowledge and insights from industry professionals.

Brandi Smith info@REDNews.com

EDITOR Margie Gohmert info@REDNews.com

STAFF WRITERS Janis Arnold janisarnold1@gmail.com Ray Hankamer rhankamer@gmail.com

MANAGING DIRECTOR Benton Mahaffey accounting@REDNews.com

EMARKETING DIRECTOR Sarah Evans Carter emarketing@REDNews.com

We’re excited to be hosting our first annual Commercial Real Estate Awards Program on March 12th at the Briar Club. On pages 23 - 28 of this issue you’ll find a list of all the nominees. The winners will be announced at the Awards Program on March 12th, so be sure to mark your calendar and attend. We have several other exciting networking events scheduled; the morning of March 12th in Austin is our Austin Forecast Summit, on March 20th in Dallas will be our Multi-Family Summit and on March 26th we’ll be celebrating Women in Real Estate with Clink! Houston which includes cocktails at The Briar Club.

GRAPHIC DESIGN Corporate Imagination digital@REDNews.com

SALES Frank Biondo frank.biondo@rednews.com Ginger Wheless ginger@REDNews.com

PRINT & DIGITAL DISTRIBUTION

Next month’s issue will focus on the Texas Vacant Land/Development Market, plus we will be hosting our Dallas Forecast Summit on April 22nd and Houston Capital Market’s Summit on April 24th.

REDNews is directly mailed each month to

Have a great March and a wonderful Spring Break!

Texas Brokers: 8,150

Best Regards,

Texas Investors: 4,979

commercial real estate brokers, investors and developers throughout Texas and the US.

Texas Leasing/Tenant Rep: 6,232 Texas Developers: 4,710 Outside Texas Investors, Brokers, Developers etc: 26,387

FINALISTS ANNOUNCED

TOTAL QUALIFIED ONLINE REDNews DISTRIBUTION: 50,458

Ginger Wheless

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.

2537 S. Gessner, Ste. 126 Property Awards:

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Houston, TX 77063

Urban Multifamily (Market Rate, incl. condo)

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Suburban Multifamily (Market Rate, incl. condo) Office

MARCH 2020

Retail / Restaurant Hospitality Medical Property Redevelopment / Reuse / Historic

www.rednews.com/awards

March 12, 2020

Infrastructure Interior Design – Housing / Retail / Rest. / Hospitality Interior Design – Office / Industrial / Corporate

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Senior Housing

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Industrial / Manufacturing / Science

Property Management Summit: 1/21/20 RECAP BY RAY HANKAMER

Managing the Property Management Business

Moderator: Rob Bridges, Avison Young; Greg Jones, Cushman & Wakefield; Connie O’Murray, JLL; Brett Williams, Transwestern

Rob Bridges, Avison Young

Greg Jones, Cushman & Wakefield

• More sophisticated management services are being requested by tenants; more tech, more advisory, even fundamentals are being pushed to a higher level •M anagement services must become more sophisticated as tenants’ businesses become more specialized

•M anagement employees are changing as Gen X and Millennials replace retiring Boomers; Boomers have been harder-working, while young employees are interested in more work-life balance; younger workers are more comfortable with tech; 60% of boomer managers are nearing retirement

• I f tenants and landlords request more robust and varied services, how are management companies to price that? Sometimes it pays off to give more without increasing the fees to retain loyalty to your property management group, but customers are usually willing to pay more if they see they are getting more •P roperty management services are in danger of becoming a ‘commodity’, so how to differentiate your company from competition? Should fees be lowered or quality and quantity of services be increased? Don’t just get cheap on your fee-quality delivery of service matters the most

•Y our customer needs to be profitable and he needs to realize you do too.

Manager controls value of the property so his goals are aligned with owner’s. Low fees and low service can lead to lower eventual rents or sales price for the real estate asset •M anagement companies need to have excellent people and sell that to the owner; it is worth the investment to ‘have a better mouse trap’ •M anagement needs to always be aware of what and how its competitors are managing competing buildings; also aware of capital markets and get input from brokers who are familiar with all the other buildings in the market. Property manager input should be comprehensive, including budget recommendations, tenant mix, capital management, i.e. input on everything that has impact on the value of the property

Connie O’Murray, JLL

Brett Williams, Transwestern

• T here is a bigger picture than what goes on at the property premises; manager should be a ‘big picture’ advisor to his owner

• Big challenge for management companies is to find and recruit top new talent, train the talent, and then retain the talent; this is a human process and cannot be replaced by ‘tech’; too much tech is impersonal and sterile; the personal approach attracts the best people; poaching your competitors’ people is hand to hand combat, and it is always going on; where to look for potential employees…? Some are looking at hotel industry trained managers, who have similar skill sets to real estate managers

• T he top people are constantly being hit on by multiple employers, so once you have a good employee it is paramount to retain him/her; many in young work force are not willing to work as hard as those they are replacing; we can’t always cave in to younger associates’ demands and sometimes a non-collaborative new employee cannot stay on the team; your younger management people can often communicate better with young recruits, and older employees need to work to stay relevant in this fast-moving game

• E xisting employees need to learn mentorship to the new ones, and learn how best to impart knowledge to the younger generations; many young new employees think they ‘should start at the top’ and don’t want to work their way up over time; management firms need to have their corporate cultures in shape or else they will bleed good employees over time; often an employee does not leave a firm but leaves the employees in a firm • Veterans can make good employees, since they know discipline

• T he good property manager collaborates with the other in-house groups: brokers, investment sales, etc., to be aware of the big picture; a manager needs to be in the larger community to be successful; join industry groups and work on committees; learn to be a team player; collaborate with your fellow professionals even though they may work for a competitor-use each other as information and problem-solving sources when you have a problem Continued on Page 10>

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MARCH 2020

WE BUILD THIS BUSINESS. CONNECTIONS. DIVERSITY. SUCCESS. CREW Houston is advancing the commercial real estate industry’s most talented and connected business professionals.

JOIN US crewhouston.org

Property Management Summit < Continued from Page 8

Best Practices in Marketing, Leasing, Maintenance & Operations Moderator: Joel Bracewell, Colliers; Paula Bruns, Colvill Office Properties; Sarah Sutton, Hines; Kelly Wheeler, Transwestern

Joel Bracewell, Colliers

Paula Bruns, Colvill Office Properties

•S trengthen your relationships between your landlords and tenant reps; older buildings have ‘personalities’ and disclosures to prospective tenants are often necessary; however, older buildings often have details that tenants like, so don’t be afraid to show them off; work with tenant reps and brokers to learn what they and their tenants are looking for in a building; let your owner know what other buildings are offering as amenities; learn what your colleagues are doing, even in markets in other states; there is always something to be learned; attend trade shows and meet out of town managers •R ealize and cater to the needs of all tenants, small, medium, and large; evaluate the deals you lose and why you lost them; learn from lost deals; educate your landlord on cost-effective changes he might make to better attract tenants; maintain relationships with all your vendors and service companies, from HVAC to TI buildout contractors; make sure your brokers

Sarah Sutton, Hines

Kelly Wheeler, Transwestern

and their tenants understand your building’s operating expenses, historical and future; understand fully your building; learn about your leasing prospect in advance so you can gear the showing to his specific needs

• Show off special amenities to out of town tenants such as downtown tunnel system, commuting/transit opportunities, etc.; consider spec buildout in low-occupancy buildings for tenants looking for a quick move-in….this works best is smaller spaces from 2,000-3,500 SF; spec buildouts attract more prospective tenant tours

• P reventative maintenance extends the life of your building systems; keep tenants happy all through lease term, not just before renewal time-consider early renewals before tenant thinks to start shopping around for a move • Respond daily to the little things that go wrong in a building; the onsite manager needs to always stay connected to the tenant

Why Good Management Is Important Once Again

Moderator: Janet Shipley, CBRE; Cindy Magouirk, Granite Properties; Kaci Hancock, REIS Associates

Janet Shipley, CBRE

Cindy Magouirk, Granite Properties

• A good manager listens, is pro-active, is a good communicator with ALL levels of people day to day, from janitor to owner; he/she cares about people, is resourceful when confronted with diverse daily challenges, and knows where to go for solutions by knowing a wide variety of specialized sources

•A manager must be on his/her toes at all times, always learning, even through failures; be knowledgeable about the portfolio of buildings and how it fits in with the competition and the market; a property manager is an asset manager and is the landlord for the landlord

•A manager must work closely with brokers and leasing agents to know what is expected from the buildings under management, what the tenants want; a manager must manage as if he/she was owner of property 10

MARCH 2020

Kaci Hancock, REIS Associates

• A manager must be a good leader and good coach, and empower those who report and treat errors by underlings as a teaching moment; the tenants will evaluate your professionalism as well as your boss and your owner; manager must show integrity to earn respect from all the spectrum of surrounding professionals, and not expect rank and file employees to do something the manager would not do him/herself; a manager must respond immediately, and constantly re-prioritize the daily focus; treat every client as if it is the ‘only’ client; the manager must know the owner’s objective: increased ROI through ongoing operations or through prospective sale?

Continued on Page 22>

WE BUILD THIS BUSINESS. CONNECTIONS. DIVERSITY. SUCCESS. CREW Austin is advancing the commercial real estate industryâ&#x20AC;&#x2122;s most talented and connected business professionals.

JOIN US crewaustin.org The CREW Network Convention is coming to Austin, Sept. 15-17, 2020.

For sponsorship opportunities, please contact Elena Cutshall: ecutshall@pagethink.com

Reveling in retail:

Attendees share their takeaways from ICSC’s Red River States Conference

BY BRANDI SMITH

Nathalia Naipaul, XAG Group

Each year when Rafael Tapia attends ICSC’s Red River States Conference, he goes in with the goal of having as many face-to-face meetings as he can.

As the executive director of the Alamo Economic Development Corporation in Alamo, Texas, he’s working to bring new retailers to his community.

“ICSC allows for one-on-one meetings with these contacts, which creates a sort of familiarity,” Tapia says.

Just five minutes from McAllen on the Texas border, Alamo is quickly becoming one of the most vibrant cities in South Texas. The area boasts a robust economy, low cost of living, as well as a skilled and bilingual workforce.

“Since 2014, the city has seen at least an estimated $21 million of private investment in commercial projects,” Tapia says.

The list is impressive for a city its size. A fast food franchise and Goodwill recently opened locations in Alamo. Also of note: the relocation of a small distribution company into a new 12,000-squarefoot facility, the establishment of a 130-bed, 51,000-square-foot skilled nursing facility and the repurposing of a 97,000-square-foot facility for distribution.

“Alamo offers plenty of opportunity for growth,” emphasizes Tapia.

South Texas overall continues to grow at a very steady, stable and sustainable rate, according to 12

MARCH 2020

Randy Summers, Davis Equities

Bob Ayoub, MIMCO

Randy Summers, CCIM, managing broker of Davis Equity Realty.

“There is still lots of land to develop on and with the Rio Grande River being our southern border, we can only move and develop north,” he says.

“As new roadways are being planned and built, growth opportunities will abound.”

In the next five years, Summers predicts “nothing but good.”

“Although there has been a lot of negative focus on South Texas due to the immigration issue, it has brought a lot of attention as to how vibrant the market really is and the opportunities that are here,” he says. “With Space-X, the final passing of USMCA, continued higher education and medical growth, the coming together of the four counties to form one MPO to speak with one voice on transportation issues, the next 5 years should be really busy.”

Summers believes the next step in that growth is getting the Rio Grande Valley designated as one MSA instead of the three that overlap. That, he says, will put South Texas in the top 100 MSAs and open many more doors of opportunities.

Those doors are already opening, according to Tapia.

“Over the past 12 to 24 months, the City of Alamo, as well as other small communities around it, have attracted the attention of name brand chains.

I am talking about sister communities of 6,000 attracting a Jack in the Box or a second Subway to

Rafael Tapia, Alamo EDC

their community when the community is already served by a Whataburger and Dairy Queen. For our area, this is probably the result of Walmart adding locations in the region,” he boasts. “Alamo is currently looking at five national brand projects to call the city home. This includes three fast food chains, a full service restaurant and a car wash.

There is also a potential for the city to host a 14acre commercial development.”

That information is incredibly valuable for professionals from other segments of the industry, especially as retailers start to look at smaller markets.

“I have enjoyed meeting the economic development committees for smaller growing towns, to review potential growth and gauge opportunities for development and partnership,” says Nathaliah Naipaul, CCIM, director of investments and leasing for XAG Group.

Developers, like El Paso-based MIMCO, Inc. have the same intent when attending ICSC events: finding potential partners for whom they can develop product.

“We have a great track record of doing lots of deals with the same tenant, so our focus is finding a newcomer to the market to build that new relationship,” explains Bob Ayoub, MIMCO’s chief public relations officer. “We have so much presence in the El Paso market that we can probably satisfy a majority of their needs when they’re coming here.”

But ICSC’s Red River States Conference is about more than just networking; it’s an opportunity to learn from industry experts what the future holds for retail and commercial real estate.

“I was impressed with how optimistic everybody was,” Ayoub says. “Generally all the retailers that we talked to had plans for expansion. A lot of the neighborhood retailers with whom we work, such as AutoZone, Dollar Tree and Dollar General, all had expansion plans.”

“Everything we’re building is filling up,” says Ayoub.

He attributes that to steady growth in West Texas, a market that has changed dramatically in the past 20 years.

“There’s just a lot of different components to the El Paso economy that are all working well and they’re all moving forward in a very solid fashion,” Ayoub says, citing construction of

the new William Beaumont Army Medical Center complex at Fort Bliss, expansion at The University of Texas at El Paso and cross-border manufacturing.

It’s a dynamic market that can still offer affordable housing and reasonable development costs, allowing companies like MIMCO to continue building steadily.

Continued on Page 14>

He adds some retailers hadn’t expanded in the El Paso market for years. They add several stores, Ayoub explains, then won’t come back for three to four years.

“Several of those kinds of tenants are in the market, looking at new places to develop,” he says.

“So we’re pretty confident we’re going to have a pretty good year this year.”

From West Texas to South Texas, ICSC attendees say the message was clear: retail is alive and well.

“For our area, retail seems to be entering an expansion phase. Our community was able to have some really good meetings at Red River this year,” says Tapia.

As that expansion happens, though, it comes with challenges.

Summers explains that higher development costs are causing developers to be cautious and make sure the market rents can support the costs.

“This is having the effect of smaller footprint centers being developed,” he says, adding, “Even though there has been some considerable backfill in some retail centers and large boxes, those spaces are being absorbed, creating need for new retail in certain markets.”

Most of the new construction will be in the form of neighborhood retail centers and single-tenant construction, Summers predicts.

“We’re still looking for shopping centers to buy in all our markets,” Ayoub says. “That’s probably the toughest thing for brokers right now and I think that’s pretty consistent for everybody across the state.”

Demand is there. A recent report revealed El Paso retail occupancy is hovering around 94 percent.

MARCH 2020

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Reveling in retail: < Continued from Page 13

“We just added a shopping center to a large 35-acre development. Out of the 35 acres, we’re down to three pad sites and one 1,200 sf in the shopping center. That development has really done well,” says Ayoub. “We’re also developing a 12-acre site at the corner of Kenworthy and Transmountain near a Super Walmart in Northeast El Paso. We have several pad deals that we’re negotiating at a small strip center there.”

What MIMCO is developing now, though, is filling up differently than it did even a few years ago.

“In years past, we had probably a little or no medical in our shopping centers.

Today, there’s medical in centers of any size. Even our smaller neighborhood centers have tenants like massage therapists or optometrists,” Ayoub says.

“There’ll be some medical component in just about every one of our centers.”

Another trend he’s seen in El Paso, which has been observed throughout Texas, is that there’s a shift from traditional retail to more service- or experiential-based retail.

segment has also responded similarly, showing growth, but on a smaller scale.”

She also points out that as the community gets more diverse, commercial developments have sprung up that cater to those specific segments of the population.

“A prime example of this is the Katy Asian Town Center, which is anchored by the H Mart, a Korean grocery chain,” Naipaul says.

While Katy and communities southwest and west of it, such as Fulshear and Brookshire, are the current focus of developers looking to take advantage of the population boom, XAG Group has its eye on development to the south.

“We are currently developing a 10-acre plot on the corner of Bryan Rd and FM 2977 in Rosenberg. This is surrounded by approximately 13,000 homes that are built and 1,000 that are under-construction or will be built in the near future,” says Naipaul. “Our development currently includes a site that will be occupied by a Chevron gas station and we are in the process of completing construction on a 20,000-square-foot retail center, with national tenants like Domino’s Pizza, Anytime Fitness Gym, other restaurants and service-oriented tenants, which has almost been completely leased out.”

as the community gets more diverse, commercial developments have sprung up that cater to those specific segments of the population.

“Most of our centers have very few retailers from which you’ll carry out a bag,” explains Ayoub. “Many tenants have a service component: hair, nails, barbershops, tax, insurance. In conjunction with that, we have a lot of restaurant users of every size in our centers.”

It’s something Naipaul has noted, serving the communities west and southwest of Houston.

“We are seeing a transitional shift to the service and entertainment businesses and a noticeable decrease in e-commerce type businesses,” she says.

Like El Paso, the vacancy rate around Katy, Texas is near 6 percent, indicating a strong retail sector. It’s driving industrial growth as well, as retailers scramble to serve the growing community. Bel Furniture, Rooms to Go, Amazon Distribution Center, Domino’s Supply Chain Supply and American Furniture Warehouse have all built major store and warehouse-type branches west of Houston.

“These are associated with an increase in population. As people move closer to fill job roles, that propels retail growth,” says Naipaul. “As a result of this, mixed-use facilities are also showing major growth. The fitness market

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MARCH 2020

The company also owns a 25-acre plot on FM 359 adjacent to Foster High School, which it would like to see developed as a multi-family, office and retail mixed-use site.

Those are opportunities Naipaul was able to share with fellow attendees of ICSC’s Red River States Conference.

“ICSC has also been hugely responsible for allowing me to establish a multitude of new relationships with developers and other commercial vendors, giving us the ability to join and collaborate on in-flight and future developments,” she says.

Tapia echoes that, saying, “ICSC remains, in my opinion at least, as the one of the best platforms for EDCs in terms of recruitment of commercial development and retail. I base this in terms of total time allowed for deal making, number of events and quality of the events. For small communities with limited staff and budgets, an ICSC membership is essential for understanding the private sector.”

He’s looking forward to next year, which will be his 11th time attending, when the event is slated for the end of January. It will be another valued opportunity for him to connect with the nearly 4,000 registered professionals and help boost Alamo’s growth.

“Each year, our business recruitment efforts, which are leveraged with meetings at ICSC, are beginning to bear fruit,” says Tapia. n

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Woodland Park Enterprises

Current Net Lease Market in Texas and around the United States

Gavin Kam, Net Realty Advisors

Brad Motley, Trinity REIS

Doug Colquitt, STNL Real Estate

The following is an overview from REDNews Texas Net Lease & 1031 Summit which was paneled with single-minded experts, focusing on the net lease market in Texas and around the United States. It’s a segment of the industry that has evolved considerably over the past two decades, according to Net Realty Advisors partner Gavin Kam. Back in 2001, Kam said he had just started at Marcus & Millichap, joining as a retail agent.

“One day, the office manager came up to me asked, ‘Have you ever heard of triple net deals?’

Of course, I said, ‘No.’ He handed me a list, some research and instructions, then said, ‘Why don’t you take a look at this list and start calling?’” recalled Kam. Nineteen years on, it’s clear those phone calls paid off. His company, Net Realty Advisors, specializes mostly in multi-tenant investment sales. Kam told the summit’s attendees that he’s watched net leases go from a tool used institutionally by retailers to something more developers and brokers are utilizing.

“The market was not as efficient as it is today,” said Kam. 16

MARCH 2020

Emily Crockett, Vaquero Ventures

Vincent Knipp, Marcus & Millichap

“ … in a perfect world …”

While net leasing is increasing in popularity, it’s not something about which the casual investor typically has much education. In acquiring a net-lease asset, the goal is for the investor to be actively involved as little as possible. The lease should protect cash flow for 10 to 20 years, while preventing the property owner from covering much of the expenses.

Brad Motley, Trinity REIS partner, laid out the three priorities investors should consider when entering a net lease. First, he said, review the rent schedule. Next, consider the length of the primary term, which is the lease time guaranteed before the tenant has renewal options. Finally, outline the landlord responsibilities.

“In a perfect world, you want to sign a lease where the tenant takes over all expense items such as property taxes and insurance,” said Motley.

That can be tricky, according to attorney Emily Crockett, COO of Vaquero Ventures.

“Tenants have gotten smarter and more sophisticated in the past eight years I’ve been

solely focused in real estate and working on leases,” she said, adding that tenants want landlords to take on more liability and responsibility.

As a result, Crockett said preserving the triple-net nature of the lease is becoming more complicated and has created issues even with national tenants.

“I would say that there’s a lot of heavy negotiating around the word ‘controllable’ in a venue,” said Crockett.

Tenants, she asserted, want controllable expenses to be very limited, whereas landlords want controllable expenses to cover anything that isn’t utilities: trash, recycling, snow and ice removal and the like. Landscaping costs, Crockett pointed out, have gone up significantly over time.

“To cap the increase on what would be considered controllable from a third party, we pushed for our controllables to really be limited just to management fees. We feel like that’s something that we can control quite a bit more than thirdparty utility costs and vendors, et cetera,” she said. “Those are the items that we fight the most about because the tenant wants the controllables to be everything and, of course, we want

them to be as little as possible. We try to come to some sort of reasonable accommodation to limit it just to a management fee cap essentially.”

deal really makes sense, it’s just because it had a 20-year lease and it was in Dallas-Fort Worth.”

Changes to access, visibility and signage have also become hot-button issues recently, Crockett said. Tenants are asking for the ability to get out of a lease if anything changes in that regard, even if it’s something beyond the landlord’s control, such as a road closure.

Cap rates are just one factor that dictate the value of a net-leased property.

Another topic that tenants are focusing on is exclusivity. They often want the lease to outline what the landlord cannot do on any adjacent property or even property within a certain mile radius.

Crockett emphasized too the importance of doing your due diligence on the front end of negotiations as a means of protecting your investment. She said you should get current financials at the beginning of the process.

“When we’re buying assets, we look at the guarantee and then the assignment, making sure that the net worth of what you’re buying and that credit is going to stay there regardless,” she said.

As all of this is negotiated and reviewed, our panel agreed that it’s taking longer to close these deals.

“The majority of the buyers are well represented by counsel and are doing an extreme level of due diligence, which results in extensions,” explained Crockett. “There’s more handholding and educating buyers.”

“I’d say the best part about cap rates being low has been we feel like they’re now predicting. Even 18 to 36 months ago, your values weren’t very predictable. Now we have a stabilized market,” said Doug Colquitt, CEO of STNL Real Estate. “That allows you to go out and know where you need to buy in order to create a spread or create opportunity from a non-opportunistic point, which is how I put it.”

That has helped high-profile new development be more aggressive, but it’s made some investors pump the brakes, too.

“I think that there’s probably some hypersensitivity in the private market for some things that don’t check all the boxes,” Motley added. “For that stuff, you’re having to really adjust pricing.”

“... move quickly …”

The lender with whom you choose to work can also influence the impact of a deal. After all, that’s who underwrites the credit and, in the most basic terms, the location.

Continued on Page 18>

Good counsel, she added, takes note of issues raised by buyers and incorporates them into future leases.

“Sometimes they are things that we may not have had anybody else raise or thought was going to be an issue,” Crockett said. “A lot of it is just institutional knowledge and then incorporating that into your next deals as much as you can to make those transactions go for some movement.”

“... create opportunity … “ The fact is, our panel agreed, that an educated client is the best client. Sometimes that requires being honest with them about the reality of the market.

“If you want property in Dallas, that’s going to cost more than in Maine,” Motley said, adding that real estate is cyclical. “We get more squeezed, then it levels out as everyone understands how those numbers have shifted and changed. We have to show our clients that this is where that value is if you’re going to be there.”

“I would agree with you,” said moderator Vincent Knipp, senior managing director of investments for Marcus & Millichap. “For any really good credit national tenant with a long-term lease and a major market like DFW, I don’t think I’ve seen any adjustment in cap rate and I think that there’s a lack of supply with really good product. Oftentimes you can still see another record price. We sold a Chick-Fil-A at a 3.75 cap.

We sold an In-N-Out at a 3.8 cap. And it’s not necessarily because the

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MARCH 2020

17

Current Net Lease Market < Continued from Page 17

“Go out and identify some of these opportunities where you’ve got an above-market return and rates as low as 3.7 percent or 3.8 percent. Look at the spread there if you can pick up a property at a 7.5 cap,” said Colquitt. “Ten years ago, you didn’t see that sort of spread. Because you still have the credit behind the lease, you can borrow money at ridiculously low rate.”

He added that his company, STNL Real Estate, has tried to align with trusted brokers who know what STNL does and how it performs. Then they bring in opportunities that fit in that wheelhouse.

“We established those relationships over time so they know we’re able to move quickly and we do what we say we’re going to do. Then we can underwrite small credit or challenging credit that most people aren’t going to go chasing after,” Colquitt explained.

That knowledge can influence whether you pursue a short- or long-term lease, each of which has its value in the net lease market.

Colquitt lauded long-term leases as an opportunity to pay down the principal owed on a property.

“If you have a corporate tenant that signs a 15year lease, now you can go out and get a 10-year loan because you have a corporate guarantee,” he said. “That mitigates a lot of your risks when that lease comes up.”

As investors educate themselves about different options available, some of our panelists suggested 1031 exchanges are starting to provide competition. The biggest source of competition, however, may come from the institutional investors who dominated the net lease market.

These days, they’re willing to do smaller deals and pay a market cap rate.

As the real estate industry and investors embrace net leases as a passive investment option, Colquitt said clients are clearly dividing themselves into two fields.

Dollar Stores was offered up as an example of that kind of opportunity. Right now, Colquitt said, they’re the highest-grossing stores in the country.

Motley said it’s up to individual firms how they handle that competition. In his case, Trinity REIS has decided to avoid it all together.

“Family Dollar already has a network of stores in any market, so they can predict themselves. You can go out now and buy one. It’s 7.25 to 7.5 cap,” he said. “You can borrow at 3.8 percent. Then over ten years, you can reduce your principal. You look at what your residual value is from that property in ten years and all the cash will be collected.”

“The difference for us is that we don’t have to place capital, as REITs do. Your bigger institutions have to place capital,” he said, before offering his key to success. “We’ve proven that we can be patient. We just take a slow and steady approach versus having to place our investors capital.”

Not every investor can be convinced of that, though, which is why it’s also important to be cognizant of the buyer’s profile and what that individual considers a safe investment.

“... our job is to …”

“I think buyers have learned how to factor risk into a deal better,” said Kam.

18

MARCH 2020

Looking ahead to 2020, we asked our panelists to offer up their analysis and predictions. It’s a mixed bag in many ways, lifted by a strong economy, limited by the available opportunities.

“Our economy is like a flight landing. As it’s coming in from a really high altitude, it’s taken a slow approach into the landing,” said Motley.

“There are no signs of a recession looming, so I think from an investment perspective, that provides some predictability.”

He added that he doesn’t foresee banks or the Fed changing their tune about increasing interest rates. Motley is concerned about the results of the presidential election because the winning candidate will shape the economy from that point.

“I’ve heard people are scratching their head about how to invest through that,” he said.

Due to the ideal financial conditions, Colquitt has concerns about finding deals that make sense, a point on which Knipp agreed.

“Even from a cap rates perspective, there’s more demand for smaller assets just because they’re portable. It’s hard to find something under $2 million,” he said. “Because construction costs, land prices and rents have gone through the roof, that eventually gets passed onto the landlord in terms of rent.”

As the real estate industry and investors embrace net leases as a passive investment option, Colquitt said clients are clearly dividing themselves into two fields.

“The first type is more sophisticated. They’ve got a triple net portfolio and they know their criteria, whether by tenant, by market or demographics. Our job is to go out there and filter through the properties on the market (or off market) and find them opportunities,” he said. “The second type of buyer is the individual 1031 a lot of times. We’re trying to help them make decisions. Much of that involves coaching them, filtering the market.”

As such, the role of a net lease professional is ever more valuable than it has been in years past, as is a skilled qualified intermediary who can guide you through the process of a 1031 exchange. n

BOUTIQUE OFFICE BUILDING

TOTAL 80,000 SF COMING SOON – DELIVERY 1ST QUARTER 2021 LOCATED ON SW CORNER OF WESTPARK TOLLWAY & KATY GASTON ROAD

The Bella Piazza Building 24200 Via Mazzini Way – Richmond, Texas

Building features a 20,000 sq. ft. event venue and modern concept executive suites.

Approximately 30,000 sq. ft lease space available.

Leasing Info:

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Cedar Hill, Texas is the place “where opportunities grow naturally.”

REDNews: We know Cedar Hill just started another exciting new project.

What can you tell us about the Hotel & Convention Center?

Cedar Hill: Cedar Hill’s Aloft Hotel & Convention Center project broke ground in October 2019 with anticipated completion date of Spring 2021. The development will host 12,000 square feet of meeting room and 1,400 square feet of pre-function space, alongside 136 Aloft hotel rooms, with indoor/ outdoor reception area and a pool patio area for relaxing.

Cedar Hill, Texas is the place “where opportunities grow naturally.” Once the county seat of Dallas County, the city of roughly 50,000 has historic roots with an eye to the future. Its city leaders and economic development team work closely with residents to maintain the community’s exceptional quality of life. REDNews recently caught up with Cedar Hill leadership for a Q&A about what’s new in the Dallas community.

REDNews: How would you describe Cedar Hill?

Cedar Hill: Over the past three decades, robust growth has made Cedar Hill the prime location for development opportunities. Located in a beautiful natural environment with Joe Pool Lake and Cedar Hill State Park, Cedar Hill is the top choice for those who want big-city amenities with a small-town ambiance. Planners, economists and site selectors alike identify Cedar Hill as one of the brightest spots for economic development in Texas, offering numerous advantages for businesses relocation. That includes being 20 minutes from downtown Dallas, 30 minutes from DFW Airport and 40 minutes from downtown Fort Worth. Other assets include the Cedar Hill Business Park located near US Hwy 67 with rail access from BNSF, the business-friendly environment with ample workforce of more than one million in a 30-minute commute, maintaining low taxes, affordable cost of living and quality education, as well as more than 3 million square feet of retail and Class A office space.

REDNews: When we last spoke to city leaders in Cedar Hill in late 2019, your focus was on downtown revitalization. Founded in 1846, Cedar Hill’s history is evident in its downtown core, which is the heart of the city.

The Economic Development team, in cooperation with city leaders, was working to incorporate the historic buildings into the future of Cedar Hill.

Since that last conversation, what kind of progress has Cedar Hill made?

Cedar Hill: Exciting steps toward revitalization of the area were taken during our Downtown Complete Streets Study. The process steered collaboration with stakeholders and the community to develop a design plan for the downtown core. Now that the plan is completed, it will provide a blueprint on such things as where and how sidewalks, lighting, signage, infrastructure, parking, landscaping and streets will be improved. All to make a great experience for new developers entering the market.

20

MARCH 2020

The $25M project will be constructed on the eastern side of Hillside Village, a 610,000-square-foot open air, lifestyle shopping center, to interact closely with those existing retailers and provide further foundation on enhanced entertainment presence in the area.

Becoming a premier location in the region, the center will enhance our booming tourism industry with new options among corporate events, expos, seminars, workshops, reunions, gatherings and more.

REDNews: It sounds like Cedar Hill is full of opportunities for developers and retailers. What else should they know about the city?

Cedar Hill: Cedar Hill Next is the current Comprehensive Plan update project for the City. During recent kickoff events dubbed “Planapalooza,” we engaged the community in various activities to gain more ideas about what the future could look like for Cedar Hill. While the planning horizon for a Comprehensive Plan is typically 20 to 30 years, it’s important to review and update the plan in the interim to ensure the vision described in the plan is still the vision residents have for the community. The City’s existing Comprehensive Plan was adopted in 2009. Since that time, many of the plan’s goals have been completed and new opportunities have been presented. With extensive public participation, residents will create a playbook for the City that outlines the steps needed to achieve the community’s vision. It’s been a very exciting start to 2020!

REDNews: How is Cedar Hill Economic Development helping bring in new businesses?

Cedar Hill: Fortunately, the City of Cedar Hill is well-positioned and continues building great advantage on opportunities arising from North Texas’ booming growth. Established in 1994, the Cedar Hill Economic Development Corporation (EDC) is funded through a dedicated portion of sales tax revenues and is dedicated to retaining, expanding, and attracting business and industry to Cedar Hill. The Cedar Hill City Council, in partnership with the EDC, has consistently held strategic planning sessions to set out goals, map out strategies to guide economic development in the City, and monitor progress towards these goals.

For more information about opportunities in Cedar Hill, contact the team at CHEDC@cedarhilltx.com or by calling (972) 291-5132. n

WE BUILD THIS BUSINESS. CONNECTIONS. DIVERSITY. SUCCESS. CREW San Antonio is advancing the commercial real estate industryâ&#x20AC;&#x2122;s most talented and connected business professionals.

JOIN US crew-sanantonio.org

Property Management Summit < Continued from Page 10

•A manager must understand the budget and what are the allocations and why, and to understand that the budget is ‘the playbook’; the property condition must be re-examined ongoing in light of competition and owner’s goals, as well as in light of tenant needs

•P rofessional societies such as BOMA, CCIM, and IREM are valuable assets to your industry, and the successful manager participates and uses what they have to offer to set him/herself apart from fellow professionals; a manager learns to lift others up as he/she has been lifted up •A successful manager is active in the community; a successful manager mixes with the generations and shows all a high level of commitment to the industry; a successful manager knows how to control costs, manage bidding by service providers, and balance between quality, service, & price,

especially when considering repositioning of a building; a manager is on call 24/7 and informs tenants in advance of anything which may be adverse to their smooth business operations, such as severe weather events

• A successful manager maintains emergency response vendors and keeps them on call at all times; several restoration companies need to be available to you when a hurricane or other extreme event strikes your property; files must be in duplicate, electronic and paper, and not kept in the basement where it may flood!

• T he good manager trains staff in advance on how to react in an emergency; embrace technology but don’t let it de-personalize your life or your relationships with your clients or tenants; always poll your tenants before adding a new tech process-they may not want to use it

Tenant Improvements & Building Upgrades

Moderator: John O’Donnell, WaterLogic; Shane Cawood, Hartman Income REIT; Brad Kovach, Moody Rambin

John O’Donnell, WaterLogic

Shane Cawood, Hartman Income REIT

• R eturn on investment (ROI) always needs to be taken into account before any expenditure; but what to include in ROI evaluation: man hours spent, level of new cost efficiency achieved; other? A thorough ROI investigation always turns up important information; every time you spend a dollar consider ROI on it; what is the payback? 3-5 years is ideal, longer, not good; consider spending on items which increase tenant satisfaction but which have a reasonably short payback to owner, such as temperature management systems that tell a tenant ‘this building owner cares about me’; but how will the dollar spent on amenities increase occupancy, revenue, & profit?

•S avings in operating expenses increases cash flow and, at the same time, increases the value of the building when sold; ask yourself: will a given expenditure add value to the bottom line?

•O ften adding amenities is not an expensive proposition, such as adding natural light to lobby or elevator lobbies by putting in glass; also natural light can often be accessed to reception areas of built-out lease spaces, adding freshness and openness to the space; one amenity is adding co-working space, with small huddle rooms, and conference rooms available to all building tenants, which saves them the money of adding a little used conference space to their own lease space; make common areas light and airy; make sure you build out your building so your prospective tenants will think it represents them well; consider adding outdoor spaces; landlords used to budget 3% to this type of common area amenity and now the allocation is up in the 12% range, to attract today’s tenant; wi-fi throughout building’s public spaces is much appreciated in today’s market; other shared amenities can include coffee bars and copiers 22

MARCH 2020

Brad Kovach, Moody Rambin

• In tenant buildout, be careful in promising move-in dates, since permitting is taking longer; consider recycling your old building materials; LEED compliance is important to large institutional tenants, but not so much to smaller tenants; be very detail conscious in all tenant buildout and involve your building engineer, who may be aware of issues missed by your contractor and/or architect; be sure to be aware of all potential surprises which could set back your delivery date to the tenant and delays which could interrupt his work flow; be sure to have a good TI contract which protects all parties upon move-in, and after; be sure you match your TI contractor with the size and quality level of the particular space buildout; make sure tenant has full buy-in on new space and all details to avoid disputes later; if a problem arises, try to find a reasonable solution; tenants are hard to come by these days; always include contingencies in your construction contracts

• Track historical buildout costs so you can better evaluate contractor bids and tenant requests; if a tenant wants to supply its own TI contractor, be sure to anticipate all possible areas of conflict and address them up front through negotiation-the landlord does not need to give up control here; don’t forget soft costs that may be left out of contractor agreement, such as locksmiths, signage, etc.

• Consider improving the areas which give prospective tenants first impressions of your building, such as elevator lobbies, common areas, etc…. you want to create an environment in and around your building which is comfortable and attractive; tenant turnover can indicate outmoded common areas; consult your brokers about what other buildings are offering in their common areas, and match or better them n

The REDNews 2020 Real Estate Awards: Houston

Category Finalists Ashley Strickland

March 12, 2020 The Briar Club

2603 Timmons Ln, Houston, Texas 77027 4:30 PM Cocktail Reception 6:00 PM Program

For Information on tables and sponsorships, please contact: Ginger Wheless 713.661.6350 ginger@rednews.com

Frank E. Biondo 248.670.2691 frank.biondo@rednews.com MARCH 2020

23

Buffalo Heights

Property Awards ÍMultifamily (Market Rate, incl. condo) Lakeside Row - The Residences Camden McGowen Station Buffalo Heights Pearl Marketplace at Midtown

Egrets Landing, Sugar Land

ÍOffice The Cannon The Cannon

Egrets Landing, Sugar Land

24

MARCH 2020

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

AC Hotel Houston Downtown

ÍRetail / Restaurant Buffalo Bayou Brewing Company Garden Oaks 365 The Village at Riverstone The Market at Springwoods Village Lockwood Business Park – Building 2

ÍIndustrial / Manufacturing / Science

ÍMedical Property Grand Parkway Pediatric Dental Office

IDI West Little York Lockwood Business Park – Building 2

Buffalo Bayou Brewing Company

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

Grand Parkway Pediatric Dental Office

ÍInterior Design The Cannon Crawford Law McDermott International Houston Trust DCR Midtown Collection

Bravery Chef Hall

ÍRedevelopment / Reuse / Historic Individual Awards

AC Hotel Houston Downtown The Cannon Midtown Collection

ÍInfrastructure Buffalo Bayou Park Christine Allen Nature Park

Paul Layne

Anthony Tarantino

ÍExecutive of the Year Paul Layne, The Howard Hughes Corporation Jim Casey, Trammell Crow Company Edna Meyer-Nelson, The Richland Companies Anthony Tarantino, Tarantino Properties, Inc. Bravery Chef Hall

26

MARCH 2020

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

ÍBroker of the Year

ÍWoman of the Year

Brandon Clarke, CBRE

Edna Meyer-Nelson, The Richland Companies

Reed Vestal, Lee & Associates – Houston

Lispah Hogan, Newmark Knight Frank

Micha Van Marcke, Edge Realty Partners LLC

Stephanie Swanson, Transwestern Jill Nesloney, Lee & Associates Tami Pearson, Waterman Steele Real Estate Advisors

Micha Van Marcke

Reed Vestal

ÍMortgage Broker / Banker of the Year Greg Young, Grandbridge

Jill Nesloney

Edna Meyer-Nelson

ÍProperty Manager (Individual)

Jeff Stein, CBRE

Janet L. Shipley, CBRE Sarah Sutton, Hines Stephanie Swanson, Transwestern Shane Cawood, Hartman Income REIT

ÍEmerging Leader of the Year Ashley Casterlin, Davis Commercial Micha Van Marcke, Edge Realty Partners LLC Janie Colin Rodriguez, Tarantino Properties, Inc. Jeff Stein

Stephanie Swanson

Taucha Hogue, Newmark Knight Frank

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

ÍReal Estate Lawyer of the Year Abe Goren, Wilson Cribbs + Goren Theresa Terrell, The Howard Hughes Corp Mason L Mote, Williamsburg Enterprises Ltd

ÍGeneral Contractor of the Year Arch-Con Corporation Mason L Mote

Theresa Terrell

Angler Construction

ÍArchitect / Engineer of the Year Ashley Frysinger, Kimley-Horn Jake Donaldson, Method Architecture

Transaction Awards ÍMost significant Lease Transaction

ÍDeveloper (Individual)

Conn’s Rankin Road

Steve Radom, Radom Capital, LLC

Company Awards ÍBrokerage Firm Lee & Associates – Houston Newmark Knight Frank

28

ÍMost Significant Sale Transaction The Woodlands at the Waterway SWN Sale/Leaseback Micha Van Marcke Retail Transaction Houston: Weiser Airpark

MARCH 2020

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

Lifetime Achievement Award ÍJohn Walsh

Event Emcee ÍBrandi Smith

Award Judges ÍPat Duffy

ÍPaul H. Layne

Managing Director

CEO

Colliers International

The Howard Hughes

Houston

Corporation

ÍJohn D. Hammond

ÍReid Wilson

President, CEO

Chairman of the Firm

Riverway Title

Wilson Cribbs + Goren

Company

REDNews Awards • March 12, 2020 • www.rednews.com/Awards

SCOOP The following pages contain a calendar of Texas CRE events, networking photos, and deals/announcements.

For more updates, log on to REDNews.com

MARCH 2020

31

CENTRAL SOUTH TEXAS

MARCH

2020

2 Monday

Texas Independence Day

REC Austin - Regional Update in Dripping Springs *Members Only [12:00pm - 1:00pm]

11 Wednesday

CBA Austin - Luncheon with Mason Rathe, LiveOak Venture Partners [11:30am - 1:00pm] REC Austin - Mayoral Luncheon [11:30am - 1:00pm]

REDNews Newsletter [4:00pm]

3 Tuesday

CCIM South Texas - Luncheon with CREW [11:30am - 1:00pm]

12 Thursday

REDNews - Austin CRE Forecast Summit @ Riverplace Country Club [8:00am - 12:00pm]

IREM San Antonio - Joint Economic Luncheon [11:30am - 1:00pm] IREM San Antonio - Income/Expense Lunch and Learn [12:00pm - 1:00pm]

4 Wednesday

ULI Austin - March Coffee Chat (Central) [8:00am - 9:00am] BOMA Austin - Ethics is Good Business Short Course [8:00am - 5:00pm] IREM San Antonio - Luncheon [11:30am - 1:00pm]

BOMA Austin - Membership Committee Meeting *Invitation Only [11:30am - 12:30pm] CTCAR - Property Information Exchange & Lunch: "Hacking Happens - Cyber Security 101" [11:30am - 1:00pm] REC Austin - Advocates Workshop *Members Only [4:30pm - 6:00pm]

CTCAR - Property Information Exchange & Breakfast: "Title Insurance" [7:30am - 9:00am]

REDNews April Issue Deadline [5:00pm]

16 Monday

BOMA Austin - Communications Committee Meeting *Invitation Only [11:30am - 12:30pm] REDNews Newsletter [4:00pm]

5 Thursday

BOMA Austin - Joint Luncheon with AAFAME [11:30am - 1:00pm] ULI Austin - Women's Golf Outing [8:00am - 9:00am]

17 Tuesday

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

6 Friday

ULI Austin - Housing + Access: Rethinking the Built Environment [7:30am - 3:30pm]

19 Thursday

BOMA Austin - Emerging Professionals Committee Meeting *Invitation Only [11:30am - 12:30pm]

9 Monday

ULI Austin - Young Leader Members Happy Hour [5:30pm - 7:30pm] CCIM Central Texas - C101: Financial Analysis for Commercial Investment Real Estate [9:00am - 12:00pm] REDNews Newsletter [4:00pm]

10 Tuesday

CREW Austin - Dress for Success/Handbags for Hope Clothing and Handbag Drive [11:30am - 1:00pm] CREW Austin - Luncheon: Construction [11:30am - 1:00pm] CCIM Central Texas - Networking Social & Happy Hour [5:30pm - 7:30pm]

32

MARCH 2020

23 Monday

REDNews Newsletter [4:00pm]

25 Wednesday

CTCAR - Luncheon [11:30am - 1:00pm]

26 Thursday

BOMA Austin - Energy Efficiency Program Workshop [1:00pm - 4:00pm]

30 Monday

REDNews Newsletter [4:00pm]

31 Tuesday

REC Austin - Events & Communications Committee Meeting *Members Only [12:00pm - 1:00pm]

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

REC San Antonio - Main Event XXIX - Fight Night [6:30pm - 10:00pm]

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

RECA reca.org RECSA: recsanantonio.com/ RETAIL LIVE: retaillive.com STCAR: www.stcar.org 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

whatâ&#x20AC;&#x2122;s going on

IREM Austin's 2020 Candidate Guidance

for the Property Management industry BOMA Austin promoting important legislation #BOMAAdvocacy

CTCAR has been

nominated for

Texas REALTORS Achievement Aw ' Lehman Governmental Affa irs ard!

Committee

CCIM Central Texas Scholars hip Winners Mason Crane and Hani Shaf i!

CCIM South Texas: 2020 Chapter Board MARCH 2020

33

NORTH TEXAS

MARCH

2020

2 Monday

18 Wednesday

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

19 Thursday

CCIM North Texas - Luncheon with the Former Mayor of Frisco, Maher Maso [11:30am - 1:00pm]

20 Friday

REDNews - Multifamily Summit: Dallas [8:00am - 12:00pm]

23 Monday

REDNews Newsletter [4:00pm]

TREC Dallas - Young Guns Casino Night [7:00pm - 11:00pm]

25 Wednesday

BOMA Dallas - Medical Office State of the Union [8:00am - 2:00pm]

BOMA Dallas - CSC: Toiletry Drive Participation Sign-Up [8:00am - 9:00am]

26 Thursday

NTCAR - Q2 Membership Meeting [7:30am - 9:00am]

Texas Independence Day REDNews Newsletter [4:00pm]

3 Tuesday

BOMA Fort Worth - Luncheon [11:00am - 1:00pm]

4 Wednesday

CREW Fort Worth - Luncheon [11:30am - 1:00pm]

5 Thursday

6 Friday

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

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

9 Monday

REDNews Newsletter [4:00pm]

10 Tuesday

IREM Dallas - Luncheon with Dr. John Baen [11:30am - 1:00pm]

11 Wednesday

IREM Fort Worth - Luncheon [11:30am - 1:00pm]

12 Thursday

REDNews April Issue Deadline [5:00pm]

16 Monday

REDNews Newsletter [4:00pm]

17 Tuesday

30 Monday

CCIM North Texas - CI 102: Market Analysis for Commercial Investment Real Estate [8:00am - 5:00pm] REDNews Newsletter [4:00pm]

BOMA Dallas - Luncheon Sponsored by Guard Texas [11:30am - 1:00pm] REC of Fort Worth - Member Get Together [5:00pm - 7:00pm]

34

BOMA Fort Worth - Spring Fling/Boat Cruise [5:00pm - 8:00pm]

MARCH 2020

31 Tuesday

BOMA Fort Worth - Board Meeting [12:00pm - 2:00pm]

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

whatâ&#x20AC;&#x2122;s going on

Fun-loving me

GFWAR pres ents

Greenbriar El

ementary Sc

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

Swearing In CCIM North Texas' 2020 Boar

Awards Dinner! mbers at the BOMA Dallas

a donation to

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

mbers working ULI North Texas Me

CREW Fort W or th represen hool!

ting at the W

d

Strategic on their 2020-2022

inter Leadersh

ip Summit in

MARCH 2020

Plan

Santa Clara,

CA! 35

SOUTHEAST TEXAS

MARCH

2020

2 Monday

Texas Independence Day REDNews Newsletter [4:00pm]

3 Tuesday

BOMA Houston - BAC PAC Sporting Clays Tournament [10:00am - 4:30pm]

4 Wednesday

IREM Houston - Outreach Committee Meeting *Invitation Only [8:30am - 9:30am] CREW Houston - Luncheon: Panel Discussion - "Reducing Operating Expenses" [11:30am - 1:00pm]

17 Tuesday 19 Thursday

FBSCR - Monthly Meeting [8:00am - 9:00am] IREM Houston - Public Policy Committee Meeting *Invitation Only [11:30am - 1:30pm]

HRBC - Breakfast with Lieutenant Governor Dan Patrick [7:00am - 8:30am] BACREN - Luncheon [10:30am - 1:00pm]

23 Monday

REDNews Newsletter [4:00pm]

CCIM Houston/Gulf Coast - 2020 Mentor Program/Kick Off Event [5:30pm - 8:30pm]

24 Tuesday

IREM Houston - Golf Committee Meeting *Invitation Only [11:30am - 1:30pm]

9 Monday

REDNews Newsletter [4:00pm]

25 Wednesday

BOMA Houston - Foundations of Real Estate Management [8:00am - 4:00pm]

10 Tuesday

CORENET Houston - Breakfast Meeting [7:30am - 9:00am]

26 Thursday

BOMA Houston - Board of Directors Meeting *Invitation Only [11:30am - 1:30pm]

5 Thursday

IREM Houston - Networking Committee Meeting *Invitation Only [11:30am - 1:30pm]

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

11 Wednesday 12 Thursday

C.R.E.A.M. The Woodlands - Luncheon [11:30am - 1:00pm]

IREM Houston - Executive Council Meeting *Invitation Only [3:30pm - 4:30pm]

CCIM Houston/Gulf Coast - Luncheon [11:30am - 1:00pm]

REDNews - 2020 CLINK! Toast to Women in CRE @ Briar Club [5:30pm - 7:30pm]

IREM Houston - Luncheon: Blueprints & BBQ [11:30am - 1:00pm] REDNews - 2020 Awards @ Briar Club [4:30pm - 8:00pm]

30 Monday

REDNews April Issue Deadline [5:00pm]

16 Monday

36

REDNews Newsletter [4:00pm]

MARCH 2020

IREM Houston - Management Plan Skills Assessment [8:00am - 5:00pm] REDNews Newsletter [4:00pm]

31 Tuesday

ACRP Gulf Coast - Happy Hour [5:00pm - 7:00pm]

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.

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

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A handful of HRBC's Advisor y Board Members gathered to discuss the upcoming 202 0 political season

MARCH 2020

37

CENTRAL SOUTH TEXAS AUSTIN, TX

MIXED-USE PROJECT UNDERWAY The first phase of the 87,500 sf Old Gin Pforum is underway at 310 E. Pecan Street which will have retail & office space.

The project will include two four-story, mixed-use buildings & parking garage.

BOSTON CONSULTING LEASES SPACE Culture13,000 Map sf Boston Consulting Group leased at 300 W. Sixth Street in order to expand their digital practice. The company also has offices in Houston & Dallas.

HOTEL PORTFOLIO SOLD Los Angeles-based JRK Property Holdings purchased a portfolio of five Marriott-branded hotels which includes 602 hotel rooms for $65 million in south Austin from Maryland-based RJL Lodging Trust. The hotels include a Marriott, Courtyard, Residence Inn, Springfield Suites & Fairfield Inn & Suites. JLL represented the seller.

Source: Uplandscorporatecenter.com

2ND PHASE OF UPLANDS CORPORATE CENTER UNDERWAY

SOUTHWEST RESEARCH BUYS 260 ACRES

116,985 SF OFFICE CAMPUS SELLS Commemorative Brands Inc sold the 116,985 sf office campus on 27.5 acres located at 7211 Circle S Road. ECR & Kucera Company handled the transaction.

Champion Site Prep, Inc, a site development & excavation company, is developing a new headquarters facility on 18 acres at I35 & CR 143. The company received an economic development incentive for $500,000 from Georgetown EDC.

HARKER HEIGHTS, TX 417,000 SF RETAIL CENTER SELLS

Austin has approved a public utility district for Austin Green, which is a 2,122 acre proposed project located at SH 130 & Harold Green Road.

GroundWork Development, the project developer, estimates a 30-year buildout with an estimated cost of $6.6 billion. The Austin Green development proposes 12,000 homes/apartments, 600,000 sf of office space, 300,000 sf of light industrial space, 150,000 sf of medical/dental space, 708 acres of open space & a 3-acre fire station.

BULL CREEK MARKET SELLS The 27,040 sf Bull Creek Market located at 6203 N. Capital of Texas Highway was sold to an undisclosed buyer. Resolut RE represented the seller & Floyd Real Estate represented the buyer.

38

MARCH 2020

Southwest Research Institute purchased a total of 260 acres near its existing campus to develop more facilities. The purchase includes 180 acres at 103 Callaghan Road & 80 acres south of US 151. The company now owns 1500 acres with 2.3 million sf of lab space, test facilities, workshops & offices and employs approximately 3000.

The three-story, 124,405 sf second phase of Uplands Corporate Center is currently underway at 5301 Southwest Parkway. Estimated completion is fourth quarter 2020.

CHAMPION SITE BUILDING NEW FACILITY

AUSTIN GREEN PUD APPROVED

DICK’S SPORTING GOODS BUILDING STORE Dick’s Sporting Goods is building a 60,000 sf store in space previously occupied by Toys R Us & Babies R Us located at San Pedro Crossing at 125 NW Loop 410.

GEORGETOWN, TX

Source: Maps4news.com

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Direct Retail Partners re-acquired the 417,167 sf Market Heights Shopping Center located at 201 E. Central Expressway that they originally developed from Cole REIT Advisors IV, LLC. JLL handled the off-market transaction.

PFLUGERVILLE, TX

Source: City of Pflugerville

LAKESIDE MEADOWS REZONED Pflugerville City Council has approved the rezoning of 419 acres for a mixed-use project on the east side of SH 130 called Lakeside Meadows. The project is being developed by Kerby Ventures & will include a corporate office campus, office warehouses & 941 residential units including 441 single-family & 500 multi-family units.

ROUND ROCK, TX 41-UNIT OFFICE BUILDING UNDER CONSTRUCTION Trinity Texas Builders is constructing a 41-unit office building at 1000 Gattis School Road. Construction is expected to be completed in 2021. Trinity Texas Realty will be handling leasing.

SAN ANTONIO, TX

MIXED-USE TOWER PLANNED Source: City of Pflugerville

AMAZON DISTRIBUTION FACILITY Pflugerville City Council has approved a 3.8 million sf distribution & logistics facility near SH 130 on 94 acres at 2000 E. Pecan Street. Plans include 43,000 sf of office space, 780,552 sf of warehouse space, 3 million sf for robotics & parking for 1,706 cars.

Austin-based Weal Development LLC is proposing to build an eightstory, mixed-use tower on 1.3 acres at 422 East Nueva Street. The project will have 252 one-three bedroom apartments & co-working/restaurant space on the first level.

Source: Hospitalitynet.org

DREAM SAN ANTONIO HOTEL PROPOSED New York-based Dream Hotel Group is planning to construct a luxury, 217-room hotel at 107 E. Martin Street. The 25-story boutique hotel will be the centerpiece of a large mixed-use development that will have office space & private residences. Construction will reportedly begin in 2021 with completion in 2023.

SCHERTZ, TX 409,685 SF DISTRIBUTION CENTER SELLS HPI Real Estate Services & Investment purchased a vacant 409,685 sf distribution center located at 1150 Schwab Road along the I-35 corridor.

NAI Partners represented the seller.

NORTH TEXAS ADDISON, TX PRESTONWOOD PLACE RENOVATION/ EXPANSION Northwood Retail, the owner of 133,000 sf Prestonwood Place retail center, located at Belt Line & Montfort, is adding 50,000 sf of office space to the center & a 15,000 sf park. Renovations are expected to be completed early 2021.

ALLEN, TX

HEADQUARTERS FACILITY UNDERWAY Billings Productions Inc is building a 50,000 sf headquarters & manufacturing center in Watters Creek Center.

Completion is set for late 2020.

AMARILLO, TX

HOSPITAL BECOMES SENIOR LIVING CENTER A portion of the 119-year old, 565,000 sf St. Anthony’s Hospital located at the southeast corner of Polk & Amarillo Blvds is being transformed to an affordable senior-living center. The hospital board has applied for a housing tax credit program.

COPART INC BUYS OFFICE BUILDING Blue Fortress Holdings LLC, an entity associated with Copart Inc, purchased the 400,000 sf office building occupied

by Copart Inc, located at 14185 N. Dallas Parkway. The seller was Dallas-based Pillar Income Asset Management.

LAKE HIGHLANDS VILLAGE SELLS Dallas-based limited partnership, JAH Realty, LP purchased the Lake Highland Village shopping center which includes three buildings with 100,000 sf located at 9090 Skillman Street. Weitzman represented the seller.

OFFICE TOWER UNDERWAY KDC & Miyama USA Texas are teaming up to build a 30-story office tower with 450,000 sf, ground-level retail space & parking for 1000 cars overlooking Klyde Warren Park on Woodall Rodgers Freeway. The building is expected to be completed within 24 – 28 months.

DENTON, TX

BROOKFIELD OPENS DALLAS OFFICE

Source: Alliance Architects

1.2 MILLION SF PROJECT UNDERWAY Dallas-based developer, Ironwood Realty Partners, along with its partner, Indianapolis-based, Scannell Properties, has broken ground on the first phase of a 1.2 million sf industrial park located off Western Blvd near Denton Enterprise Airport.

Source: 42floors.com

HISTORIC BUILDING CONVERSION TO MICRO-HOTEL Sova Hospitality plans to convert the 90-year old, three-story building located at 2105 Commerce Street into a 39-room micro-hotel. The hotel will open Summer 2020 with a lobby bar & saunas.

FORT WORTH, TX

MESQUITE, TX

AMAZON LEASES 465,450 SF

980,000 SF INDUSTRIAL PARK UNDERWAY

Amazon has leased 465,450 sf at 1511 NE Loop 820 in Hunt Southwest’s Interstate Crossing development. Nearly two-thirds of Amazon’s sixteen facilities in Texas are located in the Dallas/Fort Worth area.

MACFARLAN BUYS 170,000 SF BUILDING

Urban Logistics Realty & a private equity fund advised by Crow Holdings Capital are building a 980,000 sf master-planned industrial park at the northeast corner of I30 & I635 which will consist of five Class A buildings. Completion is set for third quarter 2020.

MacFarlan Capital Partners LP purchased a three-building, 170,000 office & industrial campus located at 14501 North Freeway. The property is fully leased to Galderma Laboratories.

RETAIL CENTER SELLS

VANTRUST STARTS NEW PROJECT

MIDLOTHIAN, TX

FRISCO, TX

VanTrust Real Estate has broken ground on The Offices Three, a 210,000 sf, six-story project located at the southeast corner of Cowboys Way & Hickman Road. Completion is scheduled for late 2021.

Retail Value, Inc. sold the 180,522 sf retail center, Marketplace at Towne Center, to an undisclosed buyer. The center sits on approximately 20.5 acres located at the northwest corner of US80 & I625. JLL represented the seller.

JMJ BUILDING LUXURY HOTEL/ RESIDENCE

DALLAS, TX

Brookfield Properties is opening its first office in Dallas in 4,591 sf at PwC Tower, located at Woodall Rodgers Freeway & Pearl Street.

bulletin

EL PASO, TX OFFICE BUILDING BECOMES APARTMENT PROJECT A 13-story office building located at 300 E. Main Street is being converted into an 80-unit apartment complex which will include one & two-bedroom units ranging from 700 sf to 1000 sf. The building will also include shared work spaces & 12,000 sf of retail space.

JMJ Development has purchased 4.5 acres at the corner of Dallas North Tollway & John Hickman Road for the construction of a 28-story, 231-room luxury hotel with 90 branded residences, a high-end restaurant and retail space. It is scheduled to open in 2024.

IRVING, TX

1320 WEST WALNUT HILL BUILDING SOLD Walnut Hill McArthur LLC purchased the 19,952 sf office building located at 1320 West Walnut Hill from Walnut Hill Property, LP. The seller was represented

by Stream Realty & Henry S. Miller represented the buyer.

KELLER, TX

38-ACRE MIXED USE PROJECT PLANNED Realty Capital Management is planning a 38-acre mixed-use development along US 377 & Mount Gilead Road to be called Center Stage. The development will include 57 single-family homes, 475 apartment units & retail & restaurant space.

Source: Hanover Property Company

HANOVER BUYS 966 ACRES Hanover Property Company purchased 966 acres located at the northeast corner of Highway 287 & Walnut Grove Road, about 30 minutes south of downtown Dallas, for the development of a $950 million master-planned development which will include 2,000 single family homes, 160 townhomes, 26 acres of commercial & 42 acres of industrial projects. Pre-development is underway & homes will be available by early 2022.

PLANO, TX MEDICAL CENTER EXPANSION Children’s Medical Center Plano is planning a 300,000 sf expansion of its campus on Preston Road which will boost the center’s bed count from 70 to 240. Completion is expected by 2023.

MARCH 2020

39

SOUTHEAST TEXAS Peter Mainguy has been promoted to senior managing director & market leader for CBRE’s Houston office.

DEER PARK, TX WHOLESOME SWEETENERS LEASES 349,050 SF Sugar Land-based Wholesome Sweeteners has leased 349,050 sf of industrial space for a new distribution & packaging facility at Victory Commerce Center located at 2851 E. Pasadena Blvd.

The tenant was represented by JLL & the landlord was represented by Dallas-based Crow Holdings Industrial.

KM REALTY BUYS BUSINESS PARK

Houston-based A&C Plastics has started construction on a 112,000 sf expansion at 6135 Northdale. Upon completion in the first quarter of 2021, the facility will total 275,000 sf.

Houston-based KM Realty Investment Trust purchased the 36,150 sf Morton & Fry Business Park located at 19909, 19911 & 19915 Morton Road from Houston-based Reliant Commercial.

9700 W. GULF BANK SELLS Transwestern Commercial Services negotiated the sale of the 245,319 sf Brookhollow West Business Park located at 9700 W. Gulf Bank. The seller was NIP Owner I LLC & the buyer was Earhart Chenault LLC.

US CORPS OF ENGINEERS LEASES SPACE

HOUSTON, TX

Source: Google Earth

FRANK LIU BUYS EAST END COFFEE PLANT Frank Liu with Lovett Commercial has purchased Farmer Brothers coffee facility located at 235 N. Norwood.

The facility is situated on six acres & the building is 281,615 sf. The price was $10 million & the coffee plant has a three-year lease. Redevelopment plans for the property are still being determined.

TECHNIPFMC SUB-LEASING 400,000+ SF

Source: 2900 Weslayan

MADISON MARQUETTE SELLS OFFICE BUILDING Madison Marquette sold the 136,698 sf 2900 Weslayan office building located at the corner of Weslayan & West Alabama to Houston-based Griffin Partners.

INTERRA BUYS OFFICE BUILDING Sun Life Assurance Company Canada sold the 114,474 sf office building located at 10235 West Little York Road to Interra York Centre. David Carter with Colliers represented the seller.

40

MARCH 2020

Michael Dender has joined Avison Young’s office leasing team.

A&C PLASTICS EXPANDING

GALVESTON, TX

The 14, 120 sf building located at 7707 Harborside has been leased to the US Corps of Engineers. The transaction was handled by Joel Dalak of TIG.

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TechnipFMC has hired Philadelphiabased Binswanger & Houston-based Avison Young to sub-lease their 462,717 SF of industrial & office space located at 1777 Gears Road.

The property includes 256,767 sf of industrial space & 105,950 sf of office space.

INDUSTRIAL/OFFICE CAMPUS SOLD CA-based private investment fund, Redwood Property Investors III LLC, purchased the former 32-acre Exterran Energy Solutions campus located at 12001 N. Houston Rosslyn Road. The property includes 301,127 sf of industrial office & manufacturing buildings. Clay Pritchett & Zane Carman with NAI Partners represented the buyer & Mark Nicholas & Richard Quarles with JLL represented the seller.

TRISTAR ALLIANCE BUYS STERLING PLAZA Houston-based Tristar Alliance Properties purchased the 102,292 sf Sterling Plaza office building located at 10101 Southwest Freeway from Mykawa Hso Limited Partnership. Tristar was represented

by Lee & Associates & the seller was represented by O’Connell Realty.

FIDELIS REDEVELOPING BROOKHOLLOW CAMPUS Houston-based Fidelis Realty Partner has completed demolition at Exxon Mobil Corporation’s former Brookhollow campus located at Hwy 290 & Dacoma Street.

Construction of a 200,000 sf shopping center, Brookhollow Marketplace, is currently underway with opening expected Fall 2020.

RHONE BRITTMOORE BUYS INDUSTRIAL BUILDING

Denver-based EverWest. JLL represented the seller.

KATY, TX

LAND TEJAS BUYS 1,039 ACRES Land Tejas, along with CBA Land Capital LP, purchased 1,039 acres on Clay & Pitts Roads a few miles north of I10 & west of the Grand Parkway. Plans for the property include a residential community with 3,000 homes.

RICHMOND, TX

CJ DEVELOPMENT BUYS 42.67 ACRES CJ Development has purchased 42.67 acres at the corner of Grand Parkway 99 & West Bellfort which they will combine with 15 acres already purchased for the development of Grand Center at Long Meadow Farms retail center. JLL represented the seller & the buyer was represented by NewQuest Properties.

WELCOME GROUP CONSTRUCTING OFFICE WAREHOUSES Welcome Group is building an office/ warehouse at 2323 S. Sam Houston Parkway W which will include 19,870 sf of warehouse space & 3,234 sf of twostory office space. They are also building a 42,596 sf building at 4500 W. Green Road which will include 38,264 sf of warehouse space & 4,332 sf of office space.

Construction is expected to be completed this year.

WEBSTER, TX

Switzerland-based Rhone Birttmoore Logistics purchased the 111,530 sf industrial building located at 11330 Brittmoore Park Drive from Nabors Drilling Technologies USA Inc. Clay Pritchett & Zane Carman with NAI Partners represented the buyer & Jeff Peden, Scott Miller & David Cook with Cushman & Wakefield represented the seller.

ORR COMMERCIAL SELLS BAY AREA PLAZA

GRIFFIN PARTNERS BUYS CONCOURSE AT WESTWAY

RICHLAND BUYS CORPORATE CENTRE

Houston-based Griffin Partners purchased the two-story, 130,223 sf office building, Concourse at Westway, located at 4700 West Sam Houston Parkway North from

Houston-based Orr Commercial sold Bay Area Plaza, a 72,569 sf retail center & flex industrial space located on Bay Area Blvd & SH 3. The project includes 45,269 sf of retail space and 37,300 sf of flex industrial space. JLL handled the transaction.

The Richland Companies has purchased the 49,793 sf Corporate Centre located at 16969 Texas Avenue. Richland also owns Bay Plaza Office Complex which is across the street from this property.

advertiser index Berkadia........................................................................................................ 3 City of Seabrook.......................................................................................... 7 CREW Network Austin...............................................................................11 CREW Network Houston............................................................................9

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EVELYN RUBENSTEIN JCC HOUSTON

erjcchouston.org

32nd Annual ERJCC Charity Golf Tournament Underwritten by

Monday, April 27, 2020 Check-In & Lunch: 11:00 AM Shotgun Start: 1:00 PM BlackHorse Golf Club

La Marque Economic Development Corporation................................. 5 Lane Property Tax Advocates..................................................................17 National Environmental Services..........................................................43 Phase Engineering.....................................................................................30 Realty1 Partners.................................................................................... 1, 19 Stream Realty.............................................................................................. 2

For information or to reserve your spot, contact Michelle Frankfort at 713.595.3212

The Real Estate Council - Greater Ft. Worth....................................... 41 OTHER SIGNIFICANT SPONSORS:

REDNews; Wilson, Cribbs+ Goren; Colliers International; First American Title Company National Commercial Services; Fidelity National Title National Commercial Services; Frost Bank; Title Houston Holdings; Butler-Cohen; Duplantis Design Group; South Texas Surveying Associates; Craddock Massey, LLP; Hirsch & Westheimer, P.C.; Phase Engineering; Tellepsen Builders; Chicago Title Houston

Woodland Park Enterprise...................................................................... 15

MARCH 2020

41

ray’s buzz

BY RAY HANKAMER rhankamer@gmail.com

CCIM January Luncheon-Speaker: Patrick Jankowski, Sr. V.P. Greater Houston Partnership Takeaway: Rumors of a slowdown in the Houston economy are true, but it is mainly due to the oil & gas industry going through one of its predictable and regular down cycles. We will continue to grow, but at a slightly less robust rate.

Patrick Jankowski

Bullets-General:

• “ Houston” is defined at a nine county region: Harris and the counties touching it, plus Austin County.

•V ehicle sales are down, but reasons are blurry-cars are more expensive, they last longer, consumers are hesitant to sign big car loans, etc.

•P urchasing manager index suggests some contraction

• In all of these counties 1/3 to 2/3 of workers commute to another county for their jobs-hence this bloc of counties is considered an economic unit…AND this points to ongoing traffic congestion in the region

onstruction is seeing some slowdown •C

• The national and international economies are not slowing down and their influence on Houston is rising to complement and even supplant the shrinking importance to us of O&G

• T he outlook is not bright for quickly shrinking the office building vacancy glut, which stands at almost 24%, with low and slow absorption

• Our economy will receive little or no help from the O&G industry in next 5-10 years, as companies in this sector have been cutting back sharply; the shale fracking slowdown has arrived • Houston can expect steady 2% growth ongoing, which is what we have had over the last 20 years • More and more in almost every sector our local economy is tied to the world economy; many countries worldwide are seeing their rates of growth pick up; 80% of world economic activity is in just 20 countries [out of about 200], and the outlook internationally is greater than what is being reported • Overall businesses continue to hire, signaling a confidence in the future-net business investment continues to grow • Our local and national economies are based on consumer spending, which is about 2/3 of all spending…not just retail, but spending on many other consumer goods • U.S government tariffs are a possible negative ‘wild card’ to our national and local economies

Bullets-Houston:

•H ouston has sustainable job growth projected at $60 oil: service industries will benefit, such as health, personal services, engineering & architecture, hospitality & restaurant, equipment repair, etc.; in the decade of the ‘90s we added 500,000 jobs • J ob growth will slow from 65,000 per annum to perhaps 48,000 this year, but that is still impressive growth

42

MARCH 2020

• I t might be said that our economy now is comparable to that of the 1990s, i.e., a readjustment to previous overheating

•M ulti-family may be heading for a period of rising vacancy, resulting from slowing job growth and exuberant building •A s we wean ourselves away from O&G as the prime mover in our local economy, we need to look to new technology, such as when Compaq computer burst onto our local scene, creating 17,000 jobs and going from zero to Fortune 500 in just five years

Bullets-Looking to the Future • No net job losses

• Home sales will not weaken •E nergy companies will continue their consolidation; investment capital has dried up for exploration and production; rig counts are down from 1,931 at their peak to 800 but some of this is due to new rigs being way more efficient •O nline retail will continue to grow, with some of the growth at the expense of brick and mortar stores •G overnment employment will remain high but it should be remembered that 2/3 of all government jobs in Houston are in the different local, county, and state educational institutions •B ottom line: Houston will continue to grow in the ‘20s • T he consensus is building towards carbon neutrality but demand for hydrocarbons will remain strong for the foreseeable future, and not just for transportation but for many other uses; our challenge is to manage the transition to newer fuels for transportation

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