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WHAT IS SALE-LEASEBACK? In a sale-leaseback transaction an owner sells their property and then immediately leases it back from the buyer as part of the same transaction.

FOR MORE INFORMATION: As the seller you get to keep the profits from the sale and then remain in the property as a Tenant. This is a great way to obtain operating cash for your business.






Features Locked in with Lane Property Tax Advocates: Expertise saves money, headaches in property tax process For many, fully understanding one’s property taxes—let alone challenging an assessment—can be a daunting task. It can be costly, too, without the proper guidance.


The siren’s call: What it took to get Amazon to come to Austin Recently, Amazon announced that it would occupy a 3.8-millionsquare-foot picking facility in Pflugerville, Texas, putting this Austin-area town on the map for other big businesses. But what did it take to entice the e-commerce giant to ink the deal?


Looking in on the Legislature: What CRE needs to watch in the 2021 session Nearly two years after their last meeting, Texas state lawmakers are gathering in Austin for the 87th Legislature’s regular session. There are already numerous proposed bills that could have implications for Texas CRE professionals.


“Dallas is a powerhouse”: Multifamily experts on Texas’ hottest markets All across Texas, cities are swelling with the influx of new residents. As more and more people decide to migrate here, the impact on the Austin, Dallas-Fort Worth and other markets’ multifamily sectors has been staggering.


One year with COVID-19: The pandemic’s temporary and permanent impacts on CRE Last March, the world shut down in response to the novel coronavirus, COVID-19. Here we take a look at what ramifications this once-in-a-century event has had on the retail, office, multifamily and industrial sectors.


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Letter from the Editor Astonishingly, it has only been a year. At this point in 2020, regular news readers would have heard of “COVID-19” or, perhaps, the “novel coronavirus.” But it wasn’t a household name in the U.S. just yet. It was a foreign affair, not much different from a mudslide in Brazil or a typhoon in Indonesia. Certainly troubling and concerning—one’s heart went out to those impacted—but not much of a worry for the typical American. Well, it was to be a concern for the typical American, just as it would be for every global citizen. COVID-19 has upended families and disrupted markets all over the world in ways that we are still struggling to comprehend…and will be dealing with for years to come. When the first lockdowns came last March, a publicist reached out and asked me what I was looking for. Did I need experts on office space to see how the pandemic would impact this sector? What about rents for multifamily properties? Retail, hotel, industrial? Yes, yes, I said. I’m happy to speak with these experts. But in my mind, I naively told this publicist, we’ll only cover the pandemic’s impact on real estate for a couple of weeks. Maybe a month. After that, it will be a line item at the end of each article. A postscript or an afterthought. Eventually, we’ll have to get back to reporting on the real news of commercial real estate. This wasn’t my first economic downturn. In a previous life, I had the misfortune to launch a real estate magazine in the midst of the global housing market meltdown. I learned from that experience (or I thought I did, anyway) that these sorts of disruptions can send their roots deep into the market, and that excising them took incredible will, patience and time. It was a momentary lapse into magical thinking, I believe. I wanted, as we all have, for the pandemic to be over and done with. That desire clouded all reason and I pretended—for that’s what it was—that this little episode would soon be behind us. I’ve probably written close to 150 articles since mid-March of 2020, and I can’t think of a single one that failed to mention COVID-19. For a fleeting moment, speaking with that publicist, I allowed myself the luxury of profoundly ignoring the ramifications that the virus was soon going to have on all of us.


NATIONAL PUBLISHER Mark Menzies menzies@rejournals.com

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ADVERTISING & CONFERENCE SALES Ginger Wheless  ginger@REDnews.com Tressa Mogas Barzilla tressa.barzilla@rejournals.com Jeff Johnson  jeff.johnson@rejournals.com

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Now, with the multiple vaccines making their way through the population, we finally have hope that a “return to normalcy” is imminent. It will take some time still, and post-pandemic “normalcy” will take a much different form than in pre-pandemic times. But I can finally see, albeit hazy and off in the distance, the point at which every real estate article doesn’t have a “COVID’s-impact-on-xyz” premise at its heart.

Outside Texas Investors, Brokers,

Eventually, we can get back to discussing cap rates and property taxes, design trends and demand drivers, sector performance and submarket strengths. And COVID? It will be a postscript, an afterthought thrown in at the end of the occasional article.

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Locked in with Lane Property Tax Advocates: Expertise saves money, headaches in property tax process BY BRANDI SMITH classes on negotiation, appraisal and real estate trends, throughout the year to stay sharp and keep ahead of the game.

If you’ve never done battle with your local appraisal district over the value of your property, you’ve likely saved yourself from a huge headache, but alternately missed out on a huge opportunity to save yourself a significant amount on property taxes. “If you are not aggressively protesting your value and pushing for appeals on your property, you are not Michael Lane managing your tax base appropriately and are most likely paying more than your fair share in property taxes,” said Hunter Lane, vice president of Lane Property Tax Advocates. The company got its start in 2009 when founder Michael Lane, who at the time had more than 20 years of appraisal experience, attended a hearing with the Harris County Appraisal Review Board. “Like the majority of property owners, he left frustrated as he had been denied a correction for his hearing,” Hunter said. “He then decided something needed to be done with the current property tax system and founded Lane Property Tax Advocates.” The full-service property tax advisory firm has experience in all facets of commercial real estate. It boasts a team of tax professionals with more than 100 years of combined experience. “We have a great group of established individuals who come to work every day looking to progress and have no fear of taking on great resistance in order to achieve success,” Hunter said. He adds the staff actively seeks out the empowerment of education, such as

Hunter Lane

“Our group is relentless and takes their real estate knowledge to heart. Never settling, but always looking to learn and gain an edge,” said Hunter. “We are highly qualified real estate professionals equipped with all the necessary tools to handle a client’s commercial real estate needs.”

Above all, though, Lane Property Tax is a family-owned business that holds on to its core family values, such as integrity, loyalty and pride. “We are honored when clients choose us because we do know that they have a choice. Once you’re onboard with Lane you are not just a client to us, you are a part of our family,” Hunter said. Founder and CEO, Michael Lane, is a designated member of The Appraisal Institute (MAI), state-certified general appraiser, real estate broker and a senior property tax consultant with more than 30 years of experience in commercial real estate consulting and valuation. His passion for his career helped kickstart his son Hunter’s. “When I was a kid riding in the car with him, he would always point out buildings that he worked on. By the time I got out of college, I felt like I was halfway there,” said Hunter.

“The sooner we have authority, the more proactive our team can be— building a case for the property, visiting the property and taking pictures, allowing time to get all substantial evidence needed for a successful correction” 8

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That keen interest is vital when navigating the tricky waters that constitute the property tax appeal process. “It is challenging. Most appraisal districts set their guidelines to how they see fit and this puts the owner at an unfair disadvantage because a mass appraisal system has significant flaws in estimating market value,” said Hunter. “If those flaws are not being taken seriously, then you as a property owner are being taken advantage of.” Having a wide range of data and a system designed to fight the guidelines of the state and appraisal districts highly improves the odds of achieving a strong correction. That’s why Hunter encourages property owners to contact a property tax firm in the first quarter of the year. “The sooner we have authority, the more proactive our team can be—building a case for the property, visiting the property and taking pictures, allowing time to get all substantial evidence needed for a successful correction,” Hunter said. All too often, property owners believe they can make it through the process on their own, realizing too late that a level of expertise is needed to deal with the appraisal district.

against their rising property taxes is best served in the hands of the Lane team. This area of expertise is what our team does on a daily basis. Further, we are available to our clients 24/7.” For more information about working with Lane Property Tax Advocates, visit lanepropertytax.com.

Real Estate Council of Greater Fort Worth Visit our website for more info: RECouncilgfw.com

We want you to become a member of REC! Become a member of REC of GFW and see for yourself how each month we offer new and relevant ways to keep you connected and Informed on all things Commercial Real Estate.

“The county appraisal district makes it very difficult to break the barrier of correcting your property taxes. It can be so confusing just down to the information required as supporting evidence,” said Hunter.” It's just so in depth and it’s difficult for the average person to understand, read and critique all the flaws in the documentation required by the district.” Add to that the fact that government deadlines at each point in the process cannot be missed or corrected and it’s easy to understand why the Lane team, whose tagline is “Unburden Your Business,” is so valuable. “We found very early on that the property tax system is a grueling process. Our clients have businesses to run; the need to consistently attend property tax hearings, appeal and correct values is unwarranted,” Hunter said. “We are hopeful our clients put the burden of trying to understand the best defense MARCH 2021


The siren’s call: What it took to get Amazon to come to Austin BY MATT BAKER

A rendering of the new Pflugerville Amazon facility

It was codenamed “Project Charm.” But this initiative was less cloak and dagger and more big market swagger—this was the move to bring e-commerce giant Amazon to Pflugerville, Texas, located in the fastest-growing market of the past decade, Austin. Bringing Amazon to Pflugerville was no small task—one spearheaded in part by Amy Madison, CEcD, EDFP, executive director of Pflugerville Community Development Corporation (PCDC). As she sees it, this project is a huge win for the area, bringing significant capital investment, new technology and needed employment to the local workforce. Securing a location for the Seattle-based e-tailer was a mammoth endeavor, one that began with early talks more than a year before the final announcement last summer. Madison said the “Project Charm” codename was apt as the company looked at three sites before it settled on a site owned by the Timmerman family near Pecan Street and SH 130. “It turns out, the third time really was the charm,” Madison said. The fulfillment center should be operational before the 2021 holiday season, bringing with it 1,000 new full-time jobs. Employees will work alongside Amazon robotics to pick, pack and ship small items to customers such as books, electronics and toys. Seefried Industrial Properties is developing the project for Amazon, which will 10

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contribute $250 million in investment over the course of its minimum 10-year term. Jones|Carter is serving as civil engineer, SMBH, Inc. as structural engineer and Dialectic Engineering as MEP engineer. The footprint of the building is 820,000 square feet—quite sizable by the standard of new, Class A Amy Madison industrial warehouses. However, the Pflugerville facility will rise four-and-a-half stories, giving Amazon an incredible 3.8 million square feet of operational space. The pandemic has had an outsized impact on the industrial sector, especially for e-commerce companies such as Amazon. Shelter-in-place orders led to a skyrocketing usage of online shopping, often by first-time users. This kicked an already hot sector into a new gear. That said, the pandemic nevertheless had a huge impact on the project. Negotiations may have changed in tenor, but they never stalled. According to Madison, there were some concerns that this megadeal could fall through at the last minute due to COVID-19. “Amazon is a big enough company that they can very easily change their mind, as Continued on Page 12>


< Continued from Page 10

we’ve seen them do elsewhere,” said Madison. “But we all worked collaboratively to get the deal done.” One sweetener that helped close the deal was a $3.8 million economic development performance agreement greenlit by PCDC and the Pflugerville City Council. This financial support will cover off-site road infrastructure enhancements, including intersection improvements at FM 685 and Pecan Street. According to Pflugerville Mayor Victor Gonzales, the deal “shows that Pflugerville is the new frontier in Central Texas. Pflugerville’s connectivity via the SH 130 corridor is a prime location for business expansion.” That’s a hope that Madison shares—that this project will send a signal to other industrial operators that Pflugerville is not only open for business, but the right location to plant a flag and reach more consumers. “It really put us on the map in a significant way,” said Madison. “To have this happen and then Tesla right on its heels, we’re looking toward a really strong year.”


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Electric car manufacturer Tesla announced last year that it will build its fourth U.S. factory in Travis County, Texas, five minutes away from the Austin airport. The facility will be used to manufacture its Cybertruck consumer pickup model as well as a long-haul commercial semi-truck model. Construction of that factory will require an estimated $1 billion; the county and local school district have agreed to $60 million in tax incentives over the next decade to bring the project to fruition. These two deals show that companies are bullish on the ever-growing Austin market. Amazon alone has already opened or announced several other projects in Central Texas. The company cut the ribbon on two facilities last September—a delivery station in Round Rock, Texas, and a sortation center in Kyle, Texas. It is also building a 1-million-square-foot fulfillment center in San Marcos, Texas, that is scheduled to open around the same time as the Pflugerville facility. Amazon, which has pledged to invest more than $700 million to provide upskilling training for 100,000 U.S. employees, currently employs more than 20,000 Texans. It and the PCDC will collaborate with job boards such as Workforce Solutions Capital Area to recruit workers for the Pflugerville facility.


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Looking in on the Legislature: What CRE needs to watch in the 2021 session BY BRANDI SMITH

“The saying goes ‘No man's life, liberty or property are safe while the Legislature is in session,’ and it’s true.” Reid Wilson

Nearly two years after their last meeting, Texas state lawmakers are gathering in Austin for the 87th Legislature’s regular session. For 140 days, they will debate, discuss and ultimately decide on measures of importance to Texans. “The saying goes ‘No man's life, liberty or property are safe while the Legislature is in session,’ and it’s true,” said Reid Wilson. If anyone would know, it’s Wilson, preeminent land use attorney and chairman of Wilson Cribbs + Goren, one of the go-to real estate boutiques in Texas. Along with being a Fellow of the American College of Real Estate Lawyers (ACREL) and one of few practicing real estate attorneys holding the Counselors of Real Estate designation (CRE), he’s also currently serving as the chair of the Real Estate Probate and Trust Law section of the State Bar of Texas (REPTL), the bar’s largest section. “This session, REPTL’s presenting several bills to the Legislature on what we call ‘good government,’ such as cleanup, clarification and updates of real estate statutes,” Wilson said. “We say that REPTL is the keeper of Texas real estate statutes and we want to make them clear, up-to-date and unambiguous, benefiting our attorney members, the industry and the public.” For example, one bill changes provisions in the Landlord and Tenant section of the Texas Property Code. When it comes to certain tenant-made repairs, current text dictates repair services found in the Yellow Pages! “I think we can all agree that we no longer should reference Yellow Pages in our state statutes,” said Wilson. Beyond those minor tweaks, Wilson said he doesn’t see many proposals that could have a profound impact on the Texas real estate industry. That could change, though, since lawmakers are still organizing the Legislature, appointing committees and their chairs, and filing new bills daily. “It remains to be seen how this Legislature will play out because it’s going to be a strange session,” said Wilson. “Lawmakers are dealing with COVID, but we 14

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also have a new speaker, so there’s a transition. Everyone is kind of trying to figure out who’s on first, who’s on second.” Here’s a quick review of bills under consideration and Reid’s take on them: HB 1101 - Relating to mandatory sales price disclosure in real property sales; providing a civil penalty “This bill would require a seller to declare the sales price of a property for taxation purposes,” Wilson said. “This comes up almost every session, but has never passed, and is unlikely to pass this session.” SB 314 - Relating to notice requirements for leased residential property, manufactured home lots or commercial property located in a flood zone “This bill would require a landlord to disclose whether a property has flooded in the past or is in the 100-year flood plain,” said Wilson, adding that it’s about consumer protection, and a vestige of the Harvey flooding in Houston. HB 948 - Relating to the authentication and recording of instruments conveying real property “This one has little probability of success,” Wilson said. “It’s mandating a physically imprinted seal for any notarization. It’s old news, especially since we’re moving away from paper documents anyway, and the new news is the possibility of remote notarization.” HB 216 & SB 43 - Relating to residential mortgage loans, including the financing of residential real estate purchases by means of a wrap mortgage loan; providing licensing and registration requirements; authorizing an administrative penalty “Wraparound mortgages are a minor area of real estate law, but these bills are an effort to regulate them, in a way similar to our regulation of contracts for deed,” said Wilson, adding that this bill is aimed to protect naïve consumers

who have reduced or no access to legal assistance. HJR 8 - Proposing a constitutional amendment authorizing the legislature to provide that the appraised value of a residence homestead for ad valorem tax purposes is the market value of the property for the first year that the owner qualified the property for a homestead exemption or, if the owner purchased the property, the purchase price of the property “Though it is Republican-sponsored, I think this has very low likelihood of passing,” Wilson said, explaining that the proposed constitutional amendment would freeze a home’s appraised value at the amount for which it was purchased. “It would be a tremendous shift to the tax burden from residential real estate to commercial real estate because you would artificially reduce the values of all homesteads.” HJR 43 - Proposing a constitutional amendment providing that a residence homestead is not subject to seizure or sale for delinquent ad valorem taxes “Were this to pass, you could never lose your house because you haven’t paid your taxes,” said Wilson. “I expect there will be a lot of subtle opposition to this bill. Seniors are already protected, and local governments will be very protective of their tax revenue streams.” While those bills’ passage would directly impact Texas real estate, Wilson adds he’s keeping an eye on a not-as-obvious related topic: marijuana legalization.

“I could see smaller buildings—say, 50,000 to 200,000 square feet—to find a good use if the marijuana industry was legalized.”

“There are at least eight bills dealing with the legalization of marijuana in Texas, whether it’s broadening medical access, decriminalizing possession or permitting recreational use of the drug,” he said. Over the years, Wilson has watched many such proposals from lawmakers perish, so he doesn’t expect a different outcome for this year’s batch. However, if the federal attitude toward marijuana changes and the drug were to become legalized nationwide, he predicts benefits for the commercial real estate industry as a whole. “Retail landlords are desperate to fill space,” said Wilson. “Maybe these dispensaries don’t go in a Class A space, but marijuana purveyors would be able to fill some of the vacancies we’re seeing in retail.” On the land front, he points out marijuana has proven to be a high-value crop in Colorado, adding, “There’s a lot of money to be made.”

Once grown, the crop would need to be processed and distributed, requiring industrial facilities, too. “Right now, the industrial industry is enamored with anything from 500,000 square feet and up,” Wilson said, “but I could see smaller buildings—say, 50,000 to 200,000 square feet—to find a good use if the marijuana industry was legalized.” Again, that’s a big IF, he stresses, and one he doesn’t expect to come out of the Texas Legislature. But, as that old saying points out, who knows what could happen while the Legislature is in session?

MARCH 2021


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One year with COVID-19: The pandemic’s temporary and permanent impacts on CRE BY BRANDI SMITH

“American consumers’ savings are up, and people are thirstier than ever to get back out and socialize, shop and see friends and colleagues for meals and drinks and concerts.”

Terry Ohnmeis

Ian Anderson

Ken McCarthy

John Carr

March 2021 marks one year since the World Health Organization declared the COVID-19 outbreak a global pandemic, triggering a domino effect that has had a profound impact on Americans’ daily lives, as well as the commercial real estate industry. REJournals spoke to experts in the retail, office, multifamily and industrial fields to reflect on how each sector responded to the challenges posed by the pandemic and their expectations going forward.

RETAIL | “... everyone is so hungry ...” “Retail, more than other sectors of commercial real estate, offers its share of volatility and requires those of us who work in the sector to react and evolve quickly,” said Terry Ohnmeis, director at Cushman & Wakefield. He describes the industry as being at a peak in terms of occupancy, rent growth and overall vibrancy in the first quarter of 2020. Retail being “more nuanced” than other property types, Ohnmeis acknowledges some locationally challenged malls, but generally, if Class A space became available in “A” and “A+” locations, he said it instantly had a dozen offers on it. “This run actually extended longer than many thought it would and left us wondering when it would end and why,” Ohnmeis said. “Still, no one thought it would be a pandemic until the reality of COVID-19 hit.”


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Ben Fuller

Jeanette Rice

James Breeze

When it did, deals were completely sidelined for the first six to 12 months. Ohnmeis and his colleagues at Cushman & Wakefield worked with landlord and tenant clients on what to expect with reopening and how to reopen safely. “With essential services that could not close like grocers and owners of groceryanchored retail, we worked through how to operate safely in this environment, for both employees and customers, and maintain supply chains,” said Ohnmeis. “It’s an understatement to say that restaurants were—and still are—challenged, but quality operators who could pivot and heavily rely on delivery and carry out were in much better shape than those who could not.” Since the third quarter of 2020, activity has surged and Ohnmeis said Cushman & Wakefield’s retail teams are as busy as they’ve ever been. Closing deals is more intensive and volatile, he said, but adds that there are a number of opportunistic retailers and investors active in the market. “Well-capitalized retailers were able to take advantage of quality spaces left vacant as a result of the pandemic,” Ohnmeis said. “Similarly, proven restaurants with successful menus, delivery and carry out operations are evaluating options and closing deals.” Continued on Page 20>

or, in the worst-case scenarios, laid those workers off as revenue tanked. “Unfortunately, there is little demand right now, and we are showing record-low levels of office-leasing activity across the country,” Anderson said. “We can’t overlook either that we’re also in a recession, and the economic impact has caused severe distress in some industries. As a result, we are seeing rising vacancies of office space and downward pressure on rents. This will ultimately be one of the most severe office downturns on record.” If there’s any silver lining, it’s that Anderson predicts we are at or near the bottom of the trough in terms of office leasing activity and demand for office space. “As COVID cases decline, more people become vaccinated, and warmer temperatures arrive, we expect more decisions to be made by clients based upon more certainty in the future,” he said.


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Looking ahead to life beyond the pandemic, he anticipates a retail boom. “American consumers’ savings are up, and people are thirstier than ever to get back out and socialize, shop and see friends and colleagues for meals and drinks and concerts,” said Ohnmeis. “Pre-pandemic, the term ‘experiential’ was almost a cliché, but everyone is so hungry now for personal interaction and travel.” As successful retailers have always demonstrated, he adds, the optimism, resilience and adaptability inherent in retailers and investors leaves us well positioned for recovery.

OFFICE | “… only a matter of time …” “The pandemic has affected the U.S. office market like never before. It has caused a generational reassessment of both how we work and the existential need for office space,” said Ian Anderson, CBRE head of Americas office research. “More concretely, it has emptied out offices of their occupants like we have never seen. Physical occupancy of offices is its lowest on record.”

McCarthy echoed that, adding, “It’s only a matter of time before the pace of growth accelerates again. We expect the recovery in the U.S. to continue through 2021, with strength backloaded in the second half of the year.” Both experts agree that, though the pandemic could have long-term effects on the office sector as a whole, it will not eliminate the need altogether. “What we will see is a new workplace ecosystem with a number of roles. The workplace will no longer be a single site but an ecosystem of different locations and experiences to support convenience, functionality and well-being,” said McCarthy. “Balancing social distancing and density with lower office-based headcount will likely not affect current footprint sizes, and offices will continue to thrive but in new ways.” He expects the purpose of the office will be to provide inspiring destinations that strengthen cultural connection, learning, and bonding with customers and colleagues and foster creativity, collaboration and innovation.

MULTIFAMILY | “... cities will have to work hard …”

That’s a stark difference from March 2020 when he said the U.S. office market was underpinned by a sense of optimism as it enjoyed an ongoing economic expansion and growth in office-using jobs.

Though retail and office have taken considerable hits during the pandemic, the multifamily sector exhibited resiliency, according to John Carr and Ben Fuller, directors of Cushman & Wakefield’s Sunbelt Multifamily Advisory Group.

“Leasing volumes in the first quarter of 2020 were on a par with previous years as was absorption,” said Ken McCarthy, Cushman & Wakefield economist. “So, as the pandemic hit, the national office market was healthy, with some pockets of substantial construction.”

“Agencies stayed active, providing debt for new transactions. While lenders required increased reserve requirements for new loans, investors also began underwriting more conservatively from March to May,” said Fuller, adding that underwriting started to loosen up, as did lenders, allowing the marginal price dip to bounce back.

That changed quickly as employers sent employees to work at home if possible 20

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“Cities will have to work harder to rebuild and maintain the kind of vibrant, exciting urban centers to keep attracting business and residents to the urban cores.” “The Sunbelt will permanently benefit as jobs and capital continue to migrate aggressively into the region,” Carr said.

Additionally, while demand typically falls dramatically as vacancy quickly rises during a recession, Jeanette Rice, CBRE Americas head of multifamily research, said this time was different in part due to the federal stimulus including enhanced unemployment, eviction moratoriums, the nature of job losses and the healthy market conditions prior to COVID.

INDUSTRIAL | “... robust demand for space …”

“Vacancy rates have risen only by 50 basis points year-over-year as of Q4. Rents are down—4.2 percent nationally,” said Rice. “If San Francisco, San Jose and New York were taken out of the equation, the year-over-year decline would be only -1.3 percent.”

The pandemic that created so many challenges within other property types generated the best possible scenario for industrial: massive demand that led to the highest rental rate annual growth ever posted, 8.3 percent.

She said Class B and C product held up the best, but suburban product also sustained well. Rice attributes that to many urban residents, working from home or moving in with families or friends or to lower-cost suburbs. “Many of the renters who left the urban core for the suburbs (for reasons of cost, lifestyle, space) will stay. Millennials continue to age and move into life stages that are better suited for suburban living,” said Rice, suggesting that could be a lasting impact of the pandemic on the multifamily sector. She also anticipates increased focus on excellent Internet service, flexible coworking space and larger units as more people work from home. “For 15 to 20 years, the renaissance of America’s urban cores was a key theme to the multifamily sector—and indeed for the entire commercial real estate industry,” Rice said. “While our research indicates that COVID is a temporary challenge to this theme, it has exposed more fully some of the issues that need to be better addressed such as aging infrastructure, cost, homelessness. Cities will have to work harder to rebuild and maintain the kind of vibrant, exciting urban centers to keep attracting business and residents to the urban cores.” The city-to-suburb population shift happened on a broader scale, too, as populations migrated from states such as New York to the Sunbelt region driven by COVID regulations and job opportunities. “Companies expanded relocation efforts and appreciate the lower cost of living, as regulatory issues burdened the coastal markets. The urban core will outperform over the next five to seven years, as America’s youth will want to spend their early careers in the urban core,” said Fuller. “Single-family rentals will survive post-pandemic, as millennials want more space and autonomy but lack the ability to purchase a home. This is reflected by development equity and sponsors flocking to the space.”

“The U.S. industrial market was on solid ground in March 2020 with steady (although not record-breaking) transaction volume, 39 consecutive quarters of positive absorption, historically on-average rental rate growth and a record low vacancy rate of 3.9 percent,” said James Breeze, CBRE global Head of industrial and logistics research. For a brief slowdown in March and April, it looked as though industrial’s streak of positive net absorption might have come to an end, but—in Breeze’s words— “the market roared back with massive transaction volume that created a record amount of positive net absorption in Q4 of 105 million square feet.” Developers, he said, became bullish on the long-term positive effects of COVID-19 on e-commerce sales and completed 264 million square feet of new development. At year-end, a record 327 million square feet was under construction. “Despite massive development, the overall vacancy rate is only 4.6 percent, which is 30 basis points higher than the all-time record low,” said Breeze. “We are seeing robust demand for space in all size ranges, but most so in warehouse/ distribution centers of 100,000 square feet and larger. Occupiers are moving into larger facilities to better service the growing online consumer base and to ensure that inventory levels do not deplete like they did at the onset of COVID-19.” He anticipates occupiers will need to expand their distribution capabilities to catch up as consumers continue to buy goods online post-pandemic. “This, along with holding safety stock onshore, will be long-term drivers that came from the effects of COVID-19 on the American consumer,” Breeze said.

MARCH 2021


“Dallas is a powerhouse”: Multifamily experts on Texas’ hottest markets BY BRANDI SMITH

“Folks are sort of getting off the sidelines and buying and selling again, which is great.” The thing about Texas is people want to live here. Proof is in the numbers. For the past several years, the state has been at or near the top of U-Haul’s annual migration report, a breakdown of the states on the receiving end of the most one-way moves. When they get here, those folks have to find a place to call home, a certainty that has helped the multifamily industry flourish. “Texas is a right-to-work state. It has a lower cost of living compared to states such as California or New York. There’s no state income tax. Someone can have a very high quality of life here at a bargain compared to some other markets,” said Jon Krebbs, managing partner of The Multifamily Group, a commercial real estate brokerage firm based in Dallas. “As long as there are jobs being created, you’re going to see a lot of activity from apartment developers and a lot of demand from apartment buyers.” That demand pushed sales volume for The Multifamily Group to record levels in 2019, the firm’s highest-grossing year ever. Things were looking up in early 2020 as well. “The uncertainty that hit in March killed several of our deals that were either under contract or under letters of intent,” Krebbs said. “Everybody hit the brakes for a couple months.” Mark Allen, executive managing director, Greystone Investment Sales Group, attributes that pause to investor concern about rent collection. “After rent collections were proven stable, the challenge shifted to buyers finding deals as the demand far outpaced the supply on the market,” Allen said. While sales slowed, they never stopped completely. The new environment created a number of obstacles, but firms like Greystone, The Multifamily Group and Avid Realty Partners pressed forward. “On the operational side, we've seen fewer tenants leaving, fewer tenants moving in and less turnover,” said Craig Berger, Avid Realty Partners’ founder and CEO. “We also observed that, due to financial hardships, folks 22

MARCH 2021

Jon Krebbs

Mark Allen

Craig Berger

moved back in with family or brought roommates, so the number of people renting consolidated a bit.” The response by many properties, he said, was to offer concessions—such as reduced rent or a rent-free month—to drive occupancy and stay full. Meantime, multifamily pricing went up due to lower interest rates ramping up purchase power. “You're discounting cash flows at a lower interest rate, so that makes asset prices go up,” Berger said. “We were doing virtual tours while trying to educate our owners about prospects. Buyers still had to go in every unit, and we had to make sure everyone was outfitted with personal protective equipment when they did. It was a logistical challenge to get the due diligence done,” said Krebbs, who added that his firm would consider 2020 a successful year based on its completed transactions in Texas, Oklahoma and Arkansas. “Like all multifamily brokerages, we had to get as creative as possible to help buyers and sellers close out transactions during the stay-in-place orders,” Allen said. “Multifamily owners had to adapt from an operational perspective. Whether they were communicating with residents differently, altering their marketing strategy to fill vacancies or shifting their maintenance work order operating procedures, 2020 wasn’t without its challenges.” Challenges or not, Greystone made the best of the situation. Allen said his team’s sales volume and number of transactions increased from 2019. “I’d likely attribute that to continuing to work hard through stay-in-place orders and continued maturity of our team,” he said. The lessons learned in 2021 are now being carried into 2021 as the market gets closer to normal. “Folks are sort of getting off the sidelines and buying and selling again, which

“Dallas is a Fortune 500 and Fortune 5,000 powerhouse. Because so many companies and people are moving to cities like Dallas or Austin, those are the places where I want to invest my money. I know there will be future growth.” is great,” said Berger. Though Texas as a whole is a promising market for multifamily investors, two cities stand out as offering exceptional opportunities.

The issue of inflation is an important one that helps distinguish multifamily from other CRE investments.

“In Dallas, we had an influx of new and existing residents from states with much more government control and restrictions, and less affordability,” Allen said. “Texas is a very business-friendly state relative to many others across the country; you can get twice the size of house in Texas for a fraction of the cost, and pay no state income taxes. Also, we have a very diverse economy and very low unemployment metrics relative to other Texas and U.S. cities.”

“In multifamily, you can keep pace with inflation. If the market is hot, it's a free market. Your leases are typically a year, so you can go out and rent apartments at market rates that could be well in excess of 1.5 percent to 2 percent growth that you're seeing in net lease properties,” Berger said. “So as inflation heats up, multifamily apartments tend to be a tremendous hedge against that inflation.”

“Dallas is a Fortune 500 and Fortune 5,000 powerhouse,” said Berger. “Because so many companies and people are moving to cities like Dallas or Austin, those are the places where I want to invest my money. I know there will be future growth.”

Everything is bigger in Texas, including the opportunity for multifamily investment as more and more people make the move to call the Lone Star State home.

Prices certainly reflect the increased interest in those in-demand markets, but Krebbs and the Multifamily Group have their eye on the San Antonio area. “In Houston, Austin or DFW, you’re looking at $90,000 to $100,000 a unit for a Class-C property,” he said. “But in San Antonio, the rents just aren’t as high, so you can still get a property for about $65,000 a unit.” Krebbs notes that, like other Texas cities, San Antonio is a steadily growing market, drafting off the winds of Austin and its location in the middle of the state. “At The Multifamily Group, we don't see any headwinds to multifamily investing in Texas,” he said. “There's just too much job growth.” That’s just one of the fundamentals that remains strong, setting up 2021 as an incredible time to buy multifamily in DFW. Allen also points to the spread between treasuries and cap rates being the widest since the “Great Recession.” “Investors sitting on the sidelines the last three to four years because prices are too high have missed out on an incredible opportunity of growth,” he said. “There was $4 trillion on the sidelines last year, so there’s plenty of pent-up demand still. With the discussions on further fiscal and monetary stimulus, a declining U.S. dollar, and inflation in the short term, I only see the market going one way in 2021 … up!”

advertiser index Forum CRE, LLC............................................................................................... 3 Gordon Partners............................................................................................ 16-17 The J. Beard Real Estate Company............................................................ 7 La Marque....................................................................................................... 5 National Environmental Services, LLC...................................................... 31 North Texas CCIM.......................................................................................... 19 Phase Engineering......................................................................................... 28 RSB Environmental....................................................................................... 2 The Real Estate Council - Greater Ft. Worth........................................... 9 Worth & Associates....................................................................................... 13

MARCH 2021


REDnews Property Management Summit BY RAY HANKAMER Takeaway Summary from three panels: During “the year of COVID,” property management has had to layer on numerous protocols focusing on health and cleanliness in managed properties, whether retail, office or other. Technology has stepped up just in time to facilitate virtual showings of buildings, automated planning/scheduling for preventative maintenance and other duties. Keeping in touch with employees working remotely has been key, staying in touch not just on business issues but also “water cooler conversation” issues about family and any built-up stress levels. Collecting rents has been challenging and close interaction with tenants and their business challenges has been key to professional representation of building owners in these uncertain times. Close coordination among all the in-house “teams” in the property management organizations has been important to staying in touch with pop-up problems and managing them. Panel 1: A View from the Top: Managing the Property Management Business Moderator: Kaci Hancock, REIS Associates. Panelists: Taryn Sims, Wulfe Management Services; Connie O’Murray, JLL; Bill Brownfield, Brownfield & Mayerhofer, Inc. • Do what you must to keep existing tenants happy; meet the needs of the property owner; develop and maintain relationships with brokers, capital market people and other industry professionals in property management • Keep in mind that new business may come from newly acquired buildings, lenders foreclosing buildings or new-built buildings • Always be focused on increasing revenues and decreasing expenses: Management 101; follow what your competitors are doing so you know the “market” • Property management is growing to include more and more responsibilities, such as tax protest, insurance management at policy renewal time, and installation of the latest technology, especially with the new demands for cleanliness due to COVID • Depend on vendors and contractors’ expertise to help your maintenance chiefs access the latest tricks of the trade at the lowest cost, and at the earliest moment, to ensure your tenants know you are at the top of your game • Don’t be shy about adding administrative fees to tenants/landlords for vital services you perform that were not anticipated when you were hired or when leases were signed; look to maximize all income, including parking fees, and remember that your building’s value is based on a multiplier of NOI • Lease formats have evolved from a majority Base Year Lease to majority Triple Net Lease; abstracting fairly and honestly each individual tenant lease in your building is important when it come times to compute building operating expenses at year end, and who is responsible for them • There are numerous issues to consider when calculating escalation and sometimes conflicts, such as when landlords deem some expenditures necessary today to lower future operating expenses; property managers must be aware of each individual lease’s economic terms


MARCH 2021

• In Houston, office buildings are approximately 75% leased but only 36-38% actually occupied, with many employees working remotely; in New York City 90% work remotely [partly due to impossibility of social distancing in high-rise elevators and mass transit into the city] • When considering add-on fees, landlord and manager need to keep in mind that prospective tenants consider total rent paid under a lease and not just base rent; in 2020 all buildings experienced higher expenses in cleaning and security • Managing and growing your property management team should take as much of your time as just managing your buildings; draw new hires form internal promotion, from up and coming newbies to the industry, and from employees of competitors who are seeking to switch; even look outside of CRE to hospitality and other industries where facilities maintenance and management are central to an employee’s work; recruit from high schools and colleges and provide a professional “ladder” for entry level personnel • Train your team ongoing; property management firms provide a lot more services to their landlord clients today than they did in years gone by; if the landlord asks for extra services not anticipated or included in original contract, do not forget to bill extra for them • As a manager you should strive to be more than just a custodian of a building— how can you build value for your client’s building? • Property management is a collaborative endeavor, and you should strive to maintain relationships with your fellow professionals, even though they may be competitors • Encourage professional achievement through the various courses from IREM, LEEDS, CCIM, CSM, CRM, etc.; highly educated people on your management team help attract new tenants and these credentials back up the recommendation from existing tenants to new tenants to your building • In these intense times of the pandemic, some clients are demanding weekly meetings from their property managers instead of the previous standard of monthly meetings; managers should know details of the viability of their tenants’ businesses, retail or office, to predict their survival and the ongoing viability of leases, and thus cash flow to landlord; today property managers are more involved than ever before with their tenants’ day to day problems Panel 2: Why Good Management Is Important Once Again Moderator: Kaci Hancock, REIS Associates. Panelists: Sheryl Green, Camden Property Trust; Lori Bryant, CBRE; Chase Crawford, Granite Properties. • Good management of a property must include maximized ROI, good budgeting, collected rents, preventative maintenance and timely repairs; a good asset manager is always looking at the bigger picture, i.e. the positioning of his building in his immediate competitive set; ameliorating the financial investment of his client (the building) through strategic management is the final goal of property management; knowing the competition is key for the asset manager to make capital improvement (not just maintenance) suggestions to ensure the building remains competitive

• The asset manager needs strong analytical and negotiating skills to deliver signed leases to his landlord which are profitable for him; the facility/property managers must focus on health and safety of tenants; one thing a lease negotiator can do is to spread any concessions in rent through the rent term, so as not to leave a gap in lease income upfront on a given lease; know when not to cut costs when doing so will be detrimental to overall competitiveness of the building • Landscaping and janitorial are the first things a prospective tenant sees on a tour, so all managers and various teams must coordinate to make sure the first impression of the building is a good one • In the time of COVID, the building should appear as equal or more attractive and safer a workplace than the tenants’ employees’ homes; convey to your tenants that you are looking out for them and their health and safety • Be attuned to energy audits and other pro-active steps to take advantage of the latest in technology and “deals” offered by service providers; bid out insurance policies; remember that preventative maintenance is the least costly maintenance in the long run • The asset manager should keep in touch with lenders to reinforce their faith that building is in good hands and that everyone involved will benefit financially from the professionalism in the management of the building • Consider adding touchless technology in bathrooms, elevators and with hand sanitizer dispensers, and with door openers as well, when possible; harness the expertise of attorneys, vendors, consultants and other experts available to management companies to enhance the delivery of excellent service to all buildings in your portfolio; look at your building through the eyes of the tenant rep broker showing your building to a prospect; explore the latest technology for clean air, improved ventilation and consider adding usable features such as common conference rooms with video feeds available to even the smallest tenants in your buildings; voice activated controls are coming • Operating buildings “post pandemic” may not be too different for a while following the arrival of the vaccine; where possible, create outdoor spaces for de-stressing and even work; facilitate space for delivery drop-off of food and other items for tenants; create collaborative spaces with Wi-Fi • As an overall management strategy, always try to “be out in front” instead of “leading from behind” by trying to put out fires after they have occurred; let tenants know in these stressful times that as landlord’s rep, you are all in this together • Stay very connected with your employees who are working remotely; reassure and support them and above all, listen to them via Zoom or telephone check-up calls to them; keep your finger on their pulse since you cannot see them in person at the office; be aware and empathetic with the stresses they are encountering by working from home; we must eventually return to mostly office work, since collaboration— in person—is irreplaceable to building company culture; work-life balance has been thrown out of kilter in this past year; encourage employees to exercise, meditate, walk or whatever necessary to keep in balance Panel 3: Best Practices in Marketing, Leasing, Improvements, Maintenance, & Operations Moderator: Kaci Hancock, REIS Associates. Panelists: Stephanie Sides, Sembera-Transwestern; Shane Cawood, Hartman Income REIT; Peggy Rougeou, Tarantino Properties.

• Critical to keep tenants happy is through constant communication; circulate latest information to them from city, county, local officials re COVID; this is a good time to strengthen relationships with tenants; increase “little touches” with tenants—remember the mint on the pillow in hotel rooms; circulate satisfaction surveys among tenants and hold building managers accountable if negative surveys come back to the home office; remember that many new tenants come from satisfied existing tenants • Always pay your tenant rep on time—he lives by commissions; half at lease signing and half at move-in, or whatever your deal with him is…the quickest way you can earn disfavor is to not pay him/her • The leasing and management teams must work together to ensure great showing to new tenants; virtual tours of building are key to attracting out-of-town prospects, and these “tours” can include drone shots of building from way above, showing how the building sits on the street re access, visibility, etc. • The building’s maintenance team is often unsung but very important re tenant comfort and safety issues; the tenant sees them daily and watches their attention to cleanliness and safety issues, including especially well-serviced and clean bathrooms • Leasing agents need to be careful to not “overpromise” services the property manager cannot deliver—close coordination required here • Every building needs its own unique marketing plan; confirm with landlord what your marketing budget is; it is not cheap to advertise, whether with CoStar, LoopNet, or other online vehicles; direct mail has become a thing of the past—no one reads it; your email marketing package should include professional photography and precise floor footprints with accurate dimensions; keep aware of what concessions (if any) your competitors are offering • Be open to forbearance on rent for tenant who has a light at the end of the tunnel— it is expensive to bring in a new tenant, with lease commissions and TI costs, when you could have kept your existing tenant • COVID has required substantial expenses which could not have been budgeted in advance • If you are considering capital improvements, now may be a good time, as many general contractors are hungry; your GC can offer excellent free advice to your architect on affordability of finishes and other techniques, to save your landlord money • Systematize your preventative maintenance with written schedules to be followed on monthly, quarterly and annual basis, as recommended by equipment manufacturers; this is of course preferable to a catastrophic and sudden building shutdown due to a major system failure; encourage and reward your maintenance chiefs for pro-active money-saving suggestions • Tenant space is reverting back to less common area space and more private offices, but with landlord providing some common spaces for use by smaller tenants, such as community kitchens, meeting rooms, employee lounges and entire “shared amenity” floors • Some older buildings have HVAC systems which cannot accommodate upgrades such as highly effective filters which zap the virus

MARCH 2021


2021 Dallas Office Summit BY RAY HANKAMER Takeaway/Summary: Overall signals are highly positive for the Dallas office market moving forward, with sub-lease and new space being absorbed by organic growth and by companies flocking into the Metroplex from other states. New development has slowed as lenders require higher equity, albeit largely without personal recourse, but should return to previous levels as COVID-19 threat is brought under control and vacancies in existing buildings are absorbed. Companies, their employees and their interior designers are still evaluating what post-COVID-19 interior layouts will look like with regard to work-from-home versus having a dedicated desk in the office. Dallas attracts companies because of lower cost of living and lower taxes, and easier lifestyle. Very strong entrepreneurial growth is predicted as COVID-19 fears are allayed by vaccines and by peoples’ short memories. Market Update: COVID-19 Office Report Moderator: Sharon Morrison, ESRP. Panelists: Alex Coe, CRESA; Nick Lee, NAI; Jeremy Duggins, Cawley. • Long-term sub-lease space, especially furnished, is being gobbled up; leasing slowed in early- and mid-2020 but in 4th quarter things started picking up; tenants looking for “deals” • As sub-lease and other vacant space absorbed, new development— currently slow—should pick up; existing sub-lease space is attractive to companies eager to get started immediately in business • Suburban low-rise buildings are getting much more attention than CBD high-rise with elevators; suburban office space attractive due to its proximity to employees’ homes, and therefore shorter commute; communities north of Dallas are the most popular; there are no topographical boundaries to Dallas expansion, which tends to keep homes and other facilities affordable, although high-income employees from other states buying homes in Dallas are driving up home prices; staggered work schedules lessen traffic congestion at the normal rush hours, making longer commutes shorter time-wise • Lots of new companies are moving to Dallas, due to lower cost of living, lower taxes and more convenient commutes—also available energetic labor pool, as college grads stay in Texas • Absorption was good before COVID-19, and now companies coming here from other states are adding to that demand; Fortune 500 companies are temporarily cautious about leasing new space, but smaller companies are ready to get back to work now that vaccine is out, especially since TI and other landlord concessions are more generous than before COVID-19 • Flexible space is popular, as companies wait and see what the work26

MARCH 2021

from-home protocols will be as COVID-19 recedes; landlords are having to be more flexible as tenants are undecided about interior layouts; some aspects of “work-from-home culture” will remain after COVID-19, but in general return to office work should accelerate due to perceived need for worker collaboration; the younger employees are the most eager to return to the office; the eventual mix between open co-working spaces and private offices is in flux • The industrial market is on fire, and with it comes demand for office space outside of but near to the warehouse facility • Trend is to higher quality, built out spaces, with trends towards “touchless” where possible • Dallas has had 74 corporate relocations with 91 more currently proposed, and more lining up every week; local pro-business climate is credited with this phenomenon plus availability of “fantastic” local labor pool; in addition, out-of-state companies think neither Dallas nor Texas are likely to experience a full shut-down; some high-end tenants are looking to switch from renting to buying their own building, so they can occupy 100% and control the environment of the building, including ingress and egress; single-tenant buildings can efficiently utilize a higher percent inside the building envelope, with fewer “lost” public amenity areas • Some corporate relocations are of small headquarters and legal domicile for tax purposes only, and large numbers of employees don’t necessarily follow the move of the legal HQ to Dallas • Flexible work schedules relax some pressure on developers for parking, since lease premises will not be fully occupied by workers going forward • Some young workers are moving to Dallas without jobs, solely on the realization that long-term employment prospects will be good Investment Sales, Financing, & Development Update Moderator: Chris McCluskey, VanTrust Real Estate. Panelists: Grant Pruitt, Whitebox Real Estate; Steve Modory, Champion Partners; Chris Murphy, Newmark, • Investment sales volumes are down in the largest markets in the state, with Austin having the biggest fall-off, down 85%; Houston is down 70%, with shrinking oil & gas occupancies; and Dallas is down about 50% in office investment sales; panelists are optimistic that second half of ‘21 will pick up with lots of activity • Interest rates are as low as they have ever been, although COVID-19 fears Continued on Page 30>


CENTERPOINT PROPERTIES 800 Town and Country Blvd., Suite 500 Houston, TX 77024 Website: centerpoint.com Key Contacts: Danielle Radtke, dradtke@centerpoint.com Services Provided: CenterPoint Properties is an innovator in the investment, development and management of industrial real estate and multimodal transportation infrastructure. CenterPoint acquires, develops, redevelops, manages, leases and sells state-of-the-art warehouse, distribution and manufacturing facilities near major transportation nodes. Our experts focus on large rail, port and trucking infrastructure assets. Company Profile: CenterPoint Properties continuously reimagines what’s possible by creating ingenious solutions to the most complex industrial property, logistics and supply chain problems. With an agile team, substantial access to capital and industry-leading expertise, we provide our customers with a competitive edge and ensure their success—no matter how great the challenge.

BROKERAGE FIRMS FRANKEL DEVELOPMENT GROUP 5311 Kirby Drive, Suite 104 Houston, TX 77005 P: 713.661.0440 Website: Under Construction Key Contact: Bruce W. Frankel, President, brankel@frankeldev.com Services Provided: Frankel Development Group offers over 33 years of experience and expertise in the retail real estate business. Services include tenant representation, shopping center/project leasing, investment sales, land sales, and development services. Company Profile: Headquartered in Houston, Frankel Development Group provides comprehensive brokerage services for its clients throughout Texas with an emphasis on the Houston MSA. The company represents over 25 "best-in-class" retailers and restaurants, 15 property owners, and possesses a skillset and depth of experience unmatched in the marketplace. Notable Clients/Transactions: Notable retailers include Orangetheory Fitness, Burkes Outlet Stores, UBREAKIFIX, Escalante's Fine Tex-Mex & Tequila, Three Dog Bakery, Fred Astaire Dance Studios, Pump it Up, WaveMax Laundry, and Rush Cycles.

FRIEDMAN REAL ESTATE 34975 W. Twelve Mile Road Farmington Hills, MI 48331 P: 888.848.1671 Website: friedmanrealestate.com Key Contacts: David B. Friedman, President/CEO; Gary Goodman, Sr. Managing Director-Brokerage Services Services Provided: Friedman offers a full range of real estate services including commercial and multifamily property and asset management, tenant and landlord representation, investment and loan sale advisory, space planning, design and construction and a unique platform of lender-focused bankruptcy, receivership and distressed asset services. All services are provided in-house, though a single point of contact, which guarantees that clients receive the most timely and efficient service available in the marketplace. Company Profile: Founded in 1987, Friedman Real Estate is one of the largest privately held commercial real estate organizations in the nation; currently managing over 16M SF of commercial space and more than 21,000 apartment homes located throughout the country. Friedman’s commercial brokerage team has over 800 current listings with $20 billion in closed transactions. Recent Transactions: Friedman Real Estate recently sold the 2,953 square foot retail-restaurant space on Imperial Valley Drive in Houston Texas. Friedman’s Neha Abassi advised the seller in the transaction.

For advertising opportunities in this section, please contact Susan Mickey at smickey@rednews.com or 773.575.9030

CONSTRUCTION COMPANIES/GENERAL CONTRACTORS ALSTON CONSTRUCTION COMPANY 1300 W Sam Houston Pkwy S, Suite 225 Houston, TX 77042 P: 713.904.2899 10440 North Central Expressway, Suite 720 Dallas, TX 75231 P: 214.363.0551 Website: alstonco.com Key Contact: (Houston) Nick Dwyer, Director of Business Development, ndwyer@alstonco.com (Dallas) Brittany Schneider, Director of Business Development, bschneider@alstonco.com Services Provided: Alston offers a diverse background of design-build experience, general contracting and construction management of industrial, commercial, healthcare, retail, and municipal projects. Company Profile: Alston Construction is celebrating 35 years of excellence in 2021, and we believe our success comes from being a true partner. With 21 offices nationwide, we have market knowledge throughout the country, which provides clients with the best building methods and materials available. Our goal is to provide quality, cost efficient projects that leave a positive experience for our clients and their communities. Notable/Recent Projects: Park 249 - 817,920 SF LEED tilt-wall warehouse facility park including interior finishes for Amazon in Houston, TX; McKinney National Business Park – 150,000 SF warehouse/distribution tilt-wall facilities in McKinney, TX; Restaurant Depot – 59,565 SF preengineered metal retail building with cold storage in Pasadena, TX; Valley View Lane Warehouse – 160,000 SF warehouse/distribution facility in Farmers Branch, TX

CADENCE MCSHANE CONSTRUCTION 5057 Keller Springs Road Suite 500 Addison, TX 75001 P: 972.239.2336 F: 972.239.1214 Website: cadencemcshane.com Key Contact: Will Hodges, President, whodges@cadencemcshane.com Services Provided: Cadence McShane Construction Company offers over 30 years of experience providing design-build, construction management at risk, preconstruction and general construction services on a national basis. The rm’s diverse expertise includes specializing in the Education, Multifamily, Senior Living, Commercial and Industrial market sectors. Company Profile: Headquartered in Dallas, Texas with regional offices in Austin, Texas, Houston Texas, and San Antonio, Texas, Cadence McShane Construction Company provides comprehensive construction services on a local, regional and national basis for a wide variety of market segments. The firm is the builder of choice in the state of Texas and its surrounding region as it deploys a culture of relentless service with an entrepreneurial spirit that originates from inside of each individual and helps constantly deliver reliable results of excellence. Notable/Recent Projects: Hermosa Village Apartments –Leander, TX – 238 modern farmhouse inspired garden-style units, offering one- two- and three- bedroom options.

DEVELOPERS PROLOGIS 2021 McKinney Ave., Suite 1050 Dallas, TX 75201 P: 847.420.8321 Website: prologis.com Key Contact: Kate Rutherford, Regional VP, krutherf@prologis.com Services Provided: Prologis provides approximately 1,600 real estate professionals worldwide with extensive local market knowledge and development expertise to meet complex logistics and distribution requirements. Customers include third-party logistics providers, transportation companies, retailers and manufacturers. Company Profile: Prologis, Inc. is the global leader in logistics real estate with a focus on highbarrier, high-growth markets. As of September 30, 2019, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 797 million square feet (74 million square meters) in 19 countries. Prologis leases modern logistics facilities to a diverse base of approximately 5,100 customers principally across two major categories: business-to-business and retail/online fulfillment.

MARCH 2021


Cushman & Wakefield selects new Executive Managing Director, to lead the firm’s Office Tenant Representation practice.







1 IREM Houston Feb 2021. 2 Central Texas Commercial Association of Realtors Recognizes CTCAR President Bob Springer for Outstanding Service. 3 North San Antonio Chamber of Commerce with BOMA San Antonio and Unique Human Resources. 4 IREM Houston Volunteers Landscaping. 5 IREM Houston Volunteering at Food Bank. 6 North Texas CCIM 2021 Board of Directors Swearing In.

Cushman & Wakefield announced today that the commercial real estate services firm has selected Robbie Baty, Executive Managing Director, to lead the firm’s Office Tenant Representation practice. “Robbie has evolved into a leader within the Dallas office, distinguishing himself as one of Cushman & Wakefield’s top-producing brokers annually,” said John O’Neill, President of Cushman & Wakefield’s Central Region. “As a mentor for emerging brokers within the firm, Robbie has shown commitment to supporting growth of next generation talent. His passion, transparency and positive attitude make him the right choice for this important position.” Within Cushman & Wakefield, Baty has been consistently recognized as a top producer and received many accolades including the firm’s Deal of the Year award, Emerging Broker of the Year award and Client Service award. Within the industry, Baty has received the NAIOP North Texas Office Broker of the Year award; Dallas Business Journal’s “40 Under 40” award, “Top Brokers” award and “Rookie of the Year” award; and Bisnow’s “35 Under 35” award. Baty has been included on the D CEO Power Broker list from 2013 to 2020. “I am honored to lead our Office Tenant Representation team,” Baty said. “With many companies and people relocating to Dallas, all eyes are on the city as a commercial real estate hub, and we are well poised to capitalize on that momentum. I look forward to building a best-in-class culture of collaboration, enhancing our team members growth within the organization and recruiting high performers to grow our team.” Baty has 16 years of office tenant representation experience, specializing in helping clients with their headquarters strategies, which include site selection, build to suits, negotiations of municipal incentives, building leases and purchases. A top achievement in 2020 included serving as a leader of a team that orchestrated four separate transactions with 12 different companies to move Denbury’s headquarters into 104,841 square feet at Legacy Union One. Additionally, two client build-to-suits spearheaded by Baty broke ground in 2020: PGA of America’s new 106,000-square-foot headquarters building in Frisco, Texas, and Transplace’s 150,000-square-foot Center of Excellence in Rogers, Arkansas. Baty works with multiple non-profit organizations, including Big Brothers Big Sisters, where he has been a Big Brother to his Little Brother, Dameon, for the last 12 years and is a former board member. His community involvement also includes serving on the Executive Committee of the Alumni Board for his alma mater, St. Mark’s School of Texas; 12 years of active involvement with the Touchdown Club, which benefits Rise School of Dallas for children with developmental delays; and regularly volunteers to deliver Meals On Wheels. He is also a member of the Cotton Bowl Council for the Cotton Bowl Athletic Association, recently serving with the organization at the AT&T Stadium food drive that fed over 9,000 families.

MARCH 2021


Dallas Office Summit < Continued from Page 26

have resulted in cautious lenders; LTVs have dropped to 50-55% maximum debt available; non-recourse is the norm with these levels of equity; lower debt has resulted in fewer foreclosures of office buildings as owners are better able to ride out market shocks; lenders favor existing relationships and it is harder now for new developers to get a project up and started, raising equity and finding debt • Most attractive markets for office are now Uptown and suburban enclaves like Allen, Plano, McKinney, Frisco—all northern suburbs; young single workers are drawn to Uptown • Large existing master developments are moving forward, but new developments are largely on hold, except if self-sponsored by well-heeled developers; in this climate, some large, older buildings are being repurposed, but this is very expensive because these buildings need to be finished out to compete with brand new buildings; 100% spec new buildings are not happening right now; pre-leasing is fixed a requirement to get a new office development out of the ground • Most tenants and landlords and developers are avoiding making longterm decisions based on current market conditions, which are in such flux; smaller tenants with up to 20,000 occupied SF are itching to go back into the office, while larger employers are more hesitant for legal liability reasons • It is hard for developers to make money on small one-story or two-story buildings so there are fewer of them • As existing space is absorbed, the pressure will mount to bring new space out of the ground • Even with COVID-19 threats diminishing, there may be a slight trend to making all new buildings “healthier and more germ free,” just as LEED standards have been increasingly adopted by developers; one day there may be “COVID-certified” buildings • COVID-19 will remain in the back of peoples’ minds with respect to offices and public transit, just as 9/11 did in terms of personal security in public places; because of COVID-19, we can expect increasing high-tech in office buildings—restrooms, elevators, etc. • So far COVID-19 language is not being added to leases, and insurance claims and payments because of COVID-19 are still fuzzy in the law, since many regard COVID-19 affliction in the “force majeure” category • Timely construction and renovation have been interrupted on occasion by crews getting sick, making it more difficult for landlords and owners to make firm predictions on occupancy of space How COVID Has Impacted Tenant Improvements Moderator: Todd


MARCH 2021

Phillips, RE Journals. Panelists: Cherrie Wysong, Gensler; Rachel Rouse, HOK. • Interiors and their design are at the forefront of today’s discussions; there has been a radical adaptation in the last twelve months from 100% working in office to almost 100% working now from home in some companies; what the new norm will be remains to be seen, so tenants building out space now are leaving their options open with regard to mix of private versus open workspace layouts • Work-from-home will remain on some basis, but in-person client meetings are crucial, especially if your firm finds out your competitors are starting to do it; traditionally interiors professionals need to display proposed interior finish materials to their clients for their approval and this is challenging to do online • In addition, interior designers must also go in person to construction sites to supervise some installations—doing this by facetime is not convenient • The “year of COVID-19” has brought some “super-cool” tech tools to the forefront, however, and some of these may remain in use as COVID-19 restrictions fall away • Firms have found that using tech has been cost-effective in many instances, such as replacing expensive travel to the client’s town, with associated air and hotel costs • Connecting personally with clients and assessing their needs and the kind of space that will work for them personally is one of the big challenges for the interior designer, and this is a bit more difficult if the client is six feet away and wearing a mask, or if the only contact is online; matching the client with the interior product that is right for him is the ultimate goal of all successful interior professionals • Companies will have to adapt to and respect what will be a wide range of health beliefs going forward in the real world; companies and the workspaces they create will have to take this wide range into account, respecting the individual’s health and safety fears • Current thinking is to provide non-dedicated desks to employees whose work is mainly digital, and who wish to continue to spend significant hours continuing to work from home; if work-from-home subsides, these desks and work areas can easily be converted to dedicated desks for the employees • A year from now there is likely to be big relaxation on current spacing “requirements;” plastic panels and six-foot distance markers on floors will go away, but people who have become used to the COVID-19 protocols may continue to remain a little distant from coworkers • We are headed into a vibrant new era, and business will be fun again


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2021 SAVE THE DATES! March: 2021 Rio Grande Valley Economic Forecast & Market Update March: National Critical Capital Markets Update 2.0. April: Houston 2021 CRE Forecast Summit April: Dallas-Fort Worth 2nd Annual Texas Net Lease & 1031 Summit


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