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Land Market Experts
Caldwell Brokerage Company experts weigh in on the NW Houston market
Modernizing in Missouri City Developers breathe life into long-vacant building
Texas Industrial Market Conditions Austin, Dallas, Houston
How this centex commercial property & environmental inspection firm became the go-to company to get deals closed. For more information see page 12.
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Downtown revitalization in Galveston County • Located inside the Federal Opportunity Zone • Creative incentives available from La Marque EDC • Tap into tourism of Galveston-Kemah-NASA • Seeking residential density, restaurants and grocery • Area is Laurel Street, from Bayou Road to Yupon Drive • Includes 1st Street, from Bayou Road to TX-3 • Walking/biking distance to library, police station, city hall
Call LMEDC Executive Director Alex Getty at 409-938-9258 for a tour.
GATEWAY TO THE GULF 2
LEAGUE CITY ±2.75 ACRES
2.75 acres (473’ of frontage along Enterprise Ave.)
Current Zoning: RMF 2: Multi-Family Residential Zoning allows for a maximum of 22 dwelling units per acre, with a maximum height of 42’, minimum lot width of 75’, and a minimum unit size of 850 sq. ft. Permitted uses include: MultiFamily, Condo, Duplex, Townhomes, Assisted Living, Continuing Care Facility, Disabled Group Dwelling, Emergency Shelter, Nursing Home, Bed and Breakfast Establishment, as well as Parks and Recreation Utilities:
Water: Enterprise Ave. / Water Capacity will need to be verified. Sanitary and Electrical: Northern Property Line Currently the site is approved for a Single Story, 48-unit, Memory Care Facility
No detention on site, property is in an HOA that requires some green space. Detention requirements will need to be verified based on project.
2018 ESTIMATED DEMOGRAPHICS within 3 miles
KRISTEN MCDADE Senior Director 713.469.4509 firstname.lastname@example.org
$107,255 AVG. HOUSEHOLD INCOME
$308,455 AVG. HOUSING VALUE
MATT DAVIS Associate Director 713.974.2407 email@example.com
© 2019 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
Sales & Leases 1-SE, 3, 5, 11, 15, 17, 19
Environmental 1-C/So, 22, 35 Financial 11, 23 Legal 11 Mapping 11 1031 Exchange 13
Events 7, 24, 26, 28, 36 Social 25, 27, 29 Bulletin 30-32
Modernizing in Missouri City 8-10 Teas Owned – Texsa Grown 12-14 Looking for Land: 16, 18 Texas Industrial Market 2ndQ 20, 21 RAY’S BUZZ CCIM August Luncheon 34
Letter from the Publisher
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PUBLISHER Ginger Wheless ginger@REDNews.com
EDITOR Margie Gohmert info@REDNews.com
am excited to announce that REDNews is now part of the larger REJournals brand! REJournals is organized under its parent company, Real Estate Publishing Corporation (REPC). Based in Minneapolis, Minnesota, REPC is headed by Jeff Johnson, CEO and Todd Phillips, CFO . The combined company is now publishing print news in sixteen states and hosting over 100 commercial real estate events per year. Prior to being acquired, REDNews and REPC partnered during the past year hosting several Texas CRE events. We are looking forward to producing many more successful Texas events, plus adding products, services, and marketing exposure for our Texas clients. On September 24th, we will be hosting the 2nd Annual Women in Real Estate Summit at The Briar Club; don’t miss out on spending an informative morning with a group of dynamic CRE Women. On November 22nd, we will have a Texas NET Lease & 1031 Summit, also at The Briar Club, so mark your calendar for both!
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MANAGING DIRECTOR Benton Mahaffey accounting@REDNews.com
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GRAPHIC DESIGN Corporate Imagination digital@REDNews.com
SALES Ginger Wheless ginger@REDNews.com
PRINT & DIGITAL DISTRIBUTION REDNews is directly mailed each month to
Our new company has plans to expand continuing education and networking events throughout Texas so look forward to hearing about more opportunities.
commercial real estate brokers, investors
And on a personal note, I’ve looking forward to my new role at the company as the Senior Marketing Director – Texas. Now I’ll have the opportunity to attend more events and enjoy more one-on-one time with all of you!
Texas Brokers: 8,150
All my best,
and developers throughout Texas and the US.
Texas Leasing/Tenant Rep: 6,232 Texas Investors: 4,979 Texas Developers: 4,710 Outside Texas Investors, Brokers, Developers etc: 26,387
TOTAL QUALIFIED ONLINE REDNews DISTRIBUTION: 50,458
REDNews has gone green using recycled paper. Thank you Midway Press! To subscribe to REDNews call (713) 661-6300 or log on to REDNews.com/subscription. 2537 S. Gessner, Ste. 126 Houston, TX 77063
2nd Annual Women in Real Estate Summit: Houston Tuesday, September 24, 2019 8:00 AM - 12:00 PM Program The Briar Club 2603 Timmons Ln, Houston, Texas 77027
More Information and Registration
Modernizing in Missouri City: Developers breathe life into long-vacant building
BY BRANDI SMITH
When the signs went up and the demo work started at 3634 Glenn Lakes Ln. in Missouri City, the calls of excitement began coming in, says Apurva Sanghavi. “It’s exciting and a testament to the demand,” he says. The 40,000-square-foot office building stands at the intersection of Highway 6 and FM 1092, which also serves as the entrance to Quail Valley, a master-planned community in the growing suburb southwest of Houston. Built in 1984, the building served the adjacent Memorial Hermann campus. 8
The hospital eventually moved closer to SH-99, as did the physicians who operated out of the Glenn Lakes building. “Then the building was severely damaged by Hurricane Ike,” explains Joseph Esch, the economic development director for the City of Missouri City. “It had been damaged and vacant ever since.” It sat empty for a decade, much to the ire of neighbors who had to pass it daily. Over the years, a number of potential buyers looked at the property, but never seemed to be the right fit -until Sanghavi came along.
“The core of it is just a really fun space to look at,” he says. “It has great bones.” A seasoned real estate investor who previously developed and sold a successful coworking space in Houston, Sanghavi was scouting opportunities for Harish Katharani, a healthcare entrepreneur who founded Southside Group of Companies. Katharani was interested in focusing his investments in real estate after recently stepping down from his 30year roles as president and CEO. “Because this is such an exciting undertaking, I felt like it would be a great marquee project for us
to get off the ground,” says Sanghavi. No stranger to the industry, Katharani previously built 7700 Main St. in Houston’s Medical Center, which served as the headquarters of his company for many years. “We were constantly looking for good opportunities and we came across this property. It clearly hadn’t been touched in many, many years,” Sanghavi says. Despite its obvious challenges, something drew Sanghavi and Katharani to the property. It had unique structural aspects and, location-wise, couldn’t get much better. “We did a little research and got in touch with the existing owners, the sons of the man who’d built it,” Sanghavi explains, adding that the sellers seemed to appreciate the experience he and Katharani had in developing properties. “Long story short, we negotiated a transaction and were able to successfully close on it.”
“We’re excited about seeing this office space coming on the market, especially because this is a property that has been vacant and damaged in Ike,” he says. “Now it’s coming back to useful purpose.”
That’s music to the ears of Missouri City leaders, including city councilman Floyd Emery.
Esch says he see the new life breathed into 3634 Glenn Lakes as another positive sign of the continued growth and development in Missouri City. “When you look at the city itself and you see this tremendous investment that’s going on in all corners of the community, it proves what we as a city already believed,” he says. “We hope this will spur even more investment and office space near it.” “We are excited to help drive a large impact to the business community in Missouri City and have been working closely with city officials to find many opportunities for us to redevelop and grow our real estate investments in the market,” says Katharani.
“I have championed the City’s economic development efforts for years and as a part of that effort have also worked for a long time to support the opportunities for the redevelopment of this property,” Emery says. “The renovation of this property is great for the community and I am thrilled to be able to support this development. I look forward to the new businesses that will locate here. I see this project as the latest inAshley a long list of Strickland examples of our economic development successes.” Emery got high praise from Esch for his support for this project. “He’s been a tireless advocate for this project and, really, for overall development and redevelopment throughout the city,” Esch says, adding that other council members are also supportive of the economic development efforts. Continued on Page 10>
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Modernizing in Missouri City: < Continued from Page 9
The next step for the property: bring the decadesold office building into the modern era. When it’s complete, the space will boast modern finishes and features to attract top business tenants to occupy the space.
there’s also been interest from medical users, such as dentists, though no one has committed at this time. “So it’ll be an aspect of executive suites and the rest of it will be filled with more traditional business-service type tenants.”
“We’ve already gutted it to the studs,” Sanghavi says.
Along with being located at a prime intersection along a busy highway, the property also boasts a two-acre parking lot.
The goal, he explains, is to offer traditional business-professional office space, though they may earmark some space for coworking as well. “We’re doing some homework right now to see if it’s feasible in that market. It looks like it’s going to be, though,” says Sanghavi, who mentions
Harish Katharani Apurva Sanghavi
“We’ve already started getting a lot of activity and interest,” Sanghavi says. The plan now is to break ground on the majority of work in September with pre-leasing getting started by the end of the year. The goal is to start moving
tenants into the space in Spring 2020. Says Sanghavi: “That would be a great situation for us.” It’s already a great situation for Esch, who has waited years for someone else to see the opportunities the vacant property held. “I am surprised it took a decade to get it done, but I think those things happen for a reason,” he says. “We’re just excited to get it moving forward.” For more information about 3634 Glenn Lakes, contact Apurva@thesanghavigroup.com. n
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Texas-grown, Texas-operated: How Savvy Inspections became the go-to commercial inspection company
Years later, cheap labor made its way from the border to Austin, and he saw the sign on the wall again. The combination of competing and bidding on construction contracts against cheap labor companies, plus headaches of dealing with the ineptitude of the City of Austin enticed him to make another change. Construction was no longer on the table. What different business could he open that incorporated his experience and knowledge? When the light went off in 2003, he founded Savvy Inspections. He targeted what he knew best, commercial buildings. Then in 2007, he added environmental services to the company that was recommended one day by a lender he met at a meeting. “I never found that guy again to thank him, as now, the environmental side of the business is three quarters of our yearly portfolio.”
Steve Medina, the president of Savvy Commercial Inspections, grew up in a low-income El Paso neighborhood, quickly learning he wanted a better life for himself and future family. At 19, he enlisted Steve Medina in the Navy in 1989 and was deployed to an F-18 fighter squadron launching, recovering and maintaining fighter aircraft on the flight deck of the aircraft carrier USS Independence. The dangerous duty of a 19-year-charged with the responsibility of a $50 million aircraft and the safety of its pilot aboard a moving ship with launching and landing aircraft around him was a big part of what he is today. He was discharged at 21 years old, then went to work for an electrical utility company and made a name for himself as a fast learner and hardworking leader. Medina decided to leave El Paso because of cheap labor wages, relocating to Austin in 1996, where 12
his work ethic stood out among crews during the tech boom. “Companies would advance me to foreman because I had a knack for being resourceful with what tools and men I had to work with. I took risks and tended to get the project finished ahead of schedule,” he said. “But I was also stubborn. Even though I was ex-military, I didn’t like taking orders. I wanted something more rewarding.” When the boom in Austin began to slow, Medina saw the writing on the wall and decided to go into business for himself. “I couldn’t get a business loan anywhere, as I had little assets and barely a pot to piss in, so I sold the only thing I owned, my beloved 1988 custom Harley Davidson,” he remembers. “it gave me the small capital to start a small electrical contracting business, which later developed into a commercial construction business.”
16 years later, Savvy Commercial Inspections is still around and has expanded its reach of services throughout the state, specializing in commercial property inspections, Phase I & II environmental site assessments, as well as remediation. “I think outside the box. That’s why we’re the go-to inspection company now,” says Medina.
“When we inspect a property, we come with solutions, not problems. “We believe everything in a building can be repaired, and there’s no such thing as a deal killer.” His team has the know-how, thanks to their background in construction & engineering, something that is a must for anyone Medina brings on at Savvy. He trains every inspector and has high expectations of them. “My team knows I expect high quality of our services. Pay them what they deserve, and they’ll put pride in their work. For building inspections, I only hire inspectors with hands-on experience in construction or skilled trades,” says Medina. “someone who knows how buildings and their systems work." The company is Texas-grown and Texas-operated, staffed with Texas educated, Texas bred people. “When I’m looking at hiring an engineer, I scan their resume and licenses closely. If I see anywhere that says Berkeley, California, I’m throwing that one in the trash. If I suspect they’re environmental
activists, that resume goes in the trash, too,” Medina emphasizes. “I hire engineers with common sense and solutions, not someone filling their activist portfolio or showing off on Facebook.” That’s important when it comes to the environmental site assessments. Delivering a fair Phase I Assessment is of utmost importance.
Savvy does not recommend Phase II assessments unless they absolutely have to. “Don’t get me wrong, I love my planet and there’s plenty of properties that need calling out, but I will not betray my clients and the people who refer us. I want that client to call on us again.”
Continued on Page 14>
Texas-grown, Texas-operated: < Continued from Page 13
“If a property is contaminated, we’ll clean it up, usually before the date I quoted,” he says, stressing that Savvy is all about efficiency, right down to the report his inspectors write. All reports are also reviewed for accuracy by Medina before they’re released to the client. “The big environmental company reports are typically 200-300 pages long, loaded with pages of definitions and disclaimers that are a waste of paper and ink to our clients, so I cut that waste in half. Customers and lenders are mostly interested in the executive summary, not the history of asbestos and lead paint.” “I’m very hands-on. When it comes to underground fuel tank removals and remediation, I’ll get in the pits. My boots don’t stay clean,” he says. “Even though we’ve already been paid, I continue calling TCEQ until we get that closure letter the client and lender have been waiting nervously for.” Medina’s mind doesn’t stop there. He believes brokers and bankers deserve more resources to get their job done smarter and more efficiently. He teaches a CE course in Austin on Environmental Risks on how to quickly find these risks with free online tools. He’s also recently started developing an app called Property Data Wizard. This app will allow professionals to search a property by typing the address in a search bar. The search 14
produces a wealth of information such as age/size of building, size of lot, date of last remodel, age of roof, age of mechanical equipment and a list of
Inspections earn an A+ rating with the Better Business Bureau. Public reviews on BBB’s website applaud the “great company” with “great people”
“If a property is contaminated, we’ll clean it
up, usually before the date I quoted,” he says,
stressing that Savvy is all about efficiency,
right down to the report his inspectors write. building permits associated with that property, not to mention permits that have not been closed, which can prohibit a certificate of occupancy. “Some say I’m giving away business secrets and creating competition. I think the opposite. If I can help a client, broker or banker with their job, it makes my job easier when they come to me with some of that work already done,” says Medina. That willingness to go the extra mile isn’t lost on Medina’s clients, who have helped Savvy
who have “great customer service.” Savvy’s described as “very reliable,” “great to work with,” “very professional, attentive” and “flexible in scheduling.” As one client wrote: “Don’t use anyone else in the state.” Reading through those, Medina humbly says, “Reviews like those is what it’s all about. It’s the fuel that keeps us truckin.” For more information about Savvy Inspections, visit SavvyInspections.com. n
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Looking for land:
Caldwell Brokerage Company experts weigh in on the NW Houston market BY BRANDI SMITH Here at REDNews, we’ve written at length about the development boom in the communities west of Houston, such as Waller County. In the past few years, that area has exploded with growth, a movement perhaps ignited by the construction of the Daikin Texas Technology Park in Waller.
“It was a great project,” he says. “It’s fulfilling to see what it’s done for the area -- not only Waller County, but Harris County too.”
“That was a game-changer for the area,” says Keith Edwards, Senior Vice President of land brokerage at Caldwell Brokerage Company.
The Daikin deal, while significant, is one of many Caldwell Brokerage has closed in the northwest quadrant of the Houston metro area. “We have sold thousands of acres along US290 and throughout Northwest Houston,” says Edwards.
His team helped negotiate that 491-acre land deal. Boasting 4 million square feet under one roof, Daikin’s facility employs approximately 4,000 people today, but that number is expected to grow to roughly 7,000, according to Edwards.
Caldwell Development’s slate of master-planned communities is proof of that. Several of them -- including Bridlecreek and Towne Lake -- are located very near the freeway, while many others are nestled between US-290 and SH-249.
Continued on Page 18>
PRIME DEVELOPMENT SITE IN HEIGHTS/WASHINGTON DISTRICT! 1.6 Acres at I10 & Studemont with great frontage & visibility Close Proximity to CBD/Heights/ Montrose
Jeff Trevino 713-829-2140 â€˘ Jeff@jefftrevino.com PLANNED MIXED-USE DEVELOPMENT
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The information contained herein, while based upon data supplied by sources deemed reliable, is subject to errors or omissions and is not in any way warranted by Duncan Realty Company, LLC or by any agent, independent associate or employee of Duncan Realty Company, LLC. This information is subject to change without notice.
With all utilities 3 hard corners available Good exposure Divisible for many uses Retail, restaurant, apartments, medical/ offices, hotel, self storage and more
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Looking for land: < Continued from Page 16
Boardwalk Towne Lake
he adds, explaining the challenges for residential developers.
“We’ve been doing business in this area for nearly 30 years and often hear of opportunities before they hit the market,” says Edwards. “Developers and homebuilders look to us to find the best sites.” Caldwell Brokerage Company currently has several large development tracts available, including 563 acres in Waller, 585 acres in Magnolia, and 649 acres in Montgomery adjacent to Blue Jack National Golf Club. Edwards notes that land prices overall are on the rise. That’s supported by data from the Real Estate Center at Texas A&M University. An acre averaged $2,735 in Texas in 2018, compared to about $1,700 in 2010. As a result, finding affordable land is another obstacle for home builders, especially since industrial developers are helping drive up prices.
“We’re seeing a lot of growth in Magnolia, too, right now. With the new Aggie Expressway extending SH-249 and Grand Parkway, activity in the Magnolia market has increased,” Edwards says. “As far as the northwest market goes, we are the experts. We sell more land than anyone in the northwest part of Harris County, in Waller County and off the 290 corridor.” The region appeals to Edwards and Caldwell because of the availability of developable land, something that’s becoming increasingly rare. The solution for many developers is to look further from the metro core, which comes with its own challenges, per Edwards. “The farther out you go, you often find a lack of utilities. You’re not in a municipal utility district, so you have to annex into one,” 18
“Pricing on industrial land is the highest I’ve ever seen,” says Edwards. “In some cases, they’re paying more than multi-family developers.”
He attributes part of that surge to the boom in last-mile distribution development. Online retailers are looking for faster and more convenient ways to deliver their goods to consumers, which means adding more distribution hubs. Edwards points out that industrial projects run into many of the same dilemmas as residential builders. Because of the increased challenges in finding the right property for the right project, it’s more important than ever to have the right team who knows the local market. Caldwell Companies, including Edwards and his staff, can be an excellent addition to that team. Adds Edwards: “We’re the experts.” n
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delivered. This means that over 1.5 million square feet across 26 buildings has come to market since the start of the year, and 33 buildings with roughly 1.5 million square feet remain under construction. While the majority of these developments are smaller in scale, pre-leasing overall is lagging significantly, with nearly 56.7% of the square footage set to arrive without a tenant in place. This metric remains a must watch in 2019 to ensure that supply continues to balance tenant demand in the market.
Overall, the average leasing transaction for the quarter registered 8,200 square feet. This represents a nearly 74% increase from the prior MARKET ANALYSIS quarter. The top six leases signed during the quarter account for roughly 35% of all the leasing activity in the market during the quarter. In terms of large scale lease transactions, FedEx, Home Depot and Asking Rent and Availability Western Industries all took spaces of approximately 85,000 square feet $12.00 or greater during the second quarter. The move by Western Industries 12% allows for the company to expand as it expects to grow from 75 employees to 145 over the next ten years.
Austin’s economy continued to expand in the second quarter. The Sublease jumped dramatically during theinsecond quarter.period The metro arearates added approximately 26,100 jobs the 12-month average sublease rate is at a record high of $11.41/SF, a $2.20/SF RENTAL RATES ending in April. Unemployment continues to drop with rates currently at Excerpts from 2Q19 Austin Industrial Market $6.00 6% increase from the first quarter. Additionally, the current sublease rate The most recent quarter of 2019 saw 628,085 square feet of negative 2.3%. Austin’s 2.5% growth places it among the fastest-growing large is a $1.00/SF higher than it was a year ago. In the Georgetown/Round The average asking rental rate for available industrial space continued absorption, reversing the positive trend seen throughout 2018 and the metropolitan areas in the U.S. Professional and business services tied Rock, Northwest, and Southwest Hays submarkets, the sublease rates the $3.00 to trend upward, ending at $10.65/SF for the quarter. Additionally,3% start of the year. The only positive uptake occurred in the Central, with activities in terms ofwell growth the 12-month period; havefinancial climbed north of $15.00/SF, overover the direct asking rates, thus 2Q14 2Q15 2Q16 the same 2Q17 2Q18 rates are up $0.77/SF from time in 2018. Six of the2Q19 eight Georgetown/Round Rock, and Northeast submarkets and was offset by both sectorsthe grew bydiscount 4.5%. According to the Austin Chamber of eliminating price in sublease space. major submarkets tracked by NKF had total asking rents that exceeded NNN Avg Ask ing Rent (Price/SF) Vacancy (%) negative absorption in the remaining submarkets tracked by NKF. Commerce’s analysis of the Current Employment Statistics (CES), the market average for the quarter. Of those six submarkets, four had Austin’s wholesale industry grew by 7.7%, making it the fastest-growing rates greater than $1.00/SF higher the market average, led by the CONSTRUCTION industry in the metro. Moody’s Analytics noted that the metro is CURRENT CONDITIONS AVERAGE ASKING RENT BY SUBMARKET NetCentral Absorption (SF, Millions) submarket with $13.40/SF. It remains true that the more a CURRENT CONDITIONS advancing steadily with growth concentrated in business services and submarket has in terms of locational strength relative to transportation In addition to recent deliveries, 33 buildings nearly 1.5 Average Asking Leasing activity continues its downward trend,representing despite a slight uptick1.5 for manufacturing. In theRent short($/SF) term, the analytics firm foresees the tech arteries and rooftops, the stronger the submarket will be in terms of Leasing activity continues its downward trend, despite a slight uptick for million square feet are currently underway. The five year quarterly the quarter industry driving growth with major players such as Apple making both leasing and rental rates. 1.0 Current 12 Month 2Q18 the quarter average remains at nearly 1.7 million square feet of new space as the Quarter massive investments in the market. In the long term, the city’s Change well0.5 upward trend in construction continues. These the projects to Rental rateslabor continued to trend in an upward direction, at a Sublease rates jumped dramatically during the second quarter. The The average asking rate climbed upward, ending quartercontinue at $10.65/SF educated force, concentration tech firms and albeit business-friendly $12.64/SF $12.21/SF ê Northwest of 0.0 focus on the Austin industrial market’s demand for research and pace. Overall were up $0.08/SF from first quarter 2019 average subleaseThe rateaverage is at a record $11.41/SF, a $2.20/SF askinghigh rateofclimbed upward, ending the quarter atslower $10.65/SF environment should rents produce above-average growth. The Austin industrial market saw a rise in vacancy rate during the $13.40/SF $11.88/SF é Central development space as well as e-commerce solution spaces. The and now stand at $6.01/SF market wide. In an indication of the varied increase from the first quarter. Additionally, the current sublease rate -0.5 Southeastsecond Austin accounts largest portion of development quarter for of the 2019. Market-wide, vacancy at is 1.1 8.6%, with only three majority the under aretotal expected to deliver by is a $1.00/SF higher than it was a year ago. In the Georgetown/Round desirability of the submarketsNorth within the DFW industrial market, six $11.08/SF $11.06/SF éof millionof square feet ofconstruction the 1.5 millionbuildings square foot Southeast Austin accounts for the largest portion of development at 1.1 -1.0 of the submarkets registering above the average. Rock, Northwest, Hays2Q17 submarkets, 2Q18 the sublease rates year end, emptying out the current pipeline. vacancy Projects expected to market be the nine submarkets tracked by NKF reported NNN asking rents above 2Q14 2Q15 and Southwest 2Q16 2Q19 million square feet of the 1.5 million square foot total é East $12.91/SF $8.10/SF During thesquare quarter, new buildings totaling 393,800 greater than 100,000 feettwelve upon completion include Park 35 and square feet have climbed north of $15.00/SF, well over the direct asking rates, thus the overall market average. In the DFW Airport submarket, the NNN eliminating the price discount in sublease space. delivered. Thisinmeans that over 1.5 million the Park 183 development the Southeast submarket, andsquare Hays feet across 26 $11.91/SF $10.58/SF submarket, é Southeast asking rate is above $7.00/SF while in the South Stemmons MARKET SUMMARY MARKET buildings has comeHays to market sinceThe the remaining start of the Logistics Park inANALYSIS the Southwest submarket. fiveyear, and 33 the average rate is edging toward $8.00/SF. The North Fort Worth Current Prior Year Ago 12 Month buildings tobuildings the Park 183 add over 720,000 square under withdevelopment roughly 1.5 will million square feet remain submarket accounts for the greatest variance in NNN asking rate from MARKET Quarter ANALYSIS Quarter Period Forecast VACANCY BY SUBMARKET Rent and submarket Availability feetAsking to the construction. Southeast when they deliver in October. Park 35, are smaller in AVERAGE ASKING RENT BY SUBMARKET While the majority of these developments last quarter, with the average rate dropping almost $0.60/SF.
AUSTIN MARKET INDUSTRIAL MARKET $9.00
AN OVERSATURATED MARKET LOOMING FOR AUSTIN INDUSTRIAL
2Q19 DALLAS INDUSTRIAL MARKET
DALLAS 2Q19 DALLAS INDUSTRIAL MARKET INDUSTRIAL MARKET
Inventory 91.6 MSF 91.2 MSF 88.7 MSF which broke ground in the second quarter, will addsignificantly, an additional with nearly 56.7%Total scale, pre-leasing overall is lagging of Average Asking Asking Rent Rent ($/SF)and Availability 12%
$12.00 305,000 square feet to the Austin Industrial market.
Vacancy Rate This metric
é the square footage set to arrive without a tenant in place. Current 12 Month 2Q18 remains a must watch in 2019 to ensure that supply continues to Quarterly CURRENT CONDITIONS Quarter Change Net Absorption -628,085 128,403 222,383 é $12.00 9% Rental rates continued to trend in an upward direction, albeit at a balance tenant demand in the market. ê Northwest $12.64/SF $12.21/SF
RELATIVELY STEADY IN THE SECOND QUARTER
moderate showing withfrom the purchase 155,545 square rates are up $0.77/SF the same of time in 2018. Six offoot the eight Commerce Center South from AEW Capital. Terms of the sale were major submarkets tracked by NKF had total asking rents that exceeded undisclosed. DRA Advisors also served as the seller for 2535 the market average for the quarter. Of those six submarkets, four had Ridgepoint Dr. The 81,000 square foot property in the East submarket ratespurchased greater than higher the market average, led by the was by $1.00/SF Boyd Watterson. Terms of the sale were Central submarket with $13.40/SF. It remains true that the more a undisclosed. submarket has in terms of locational strength relative to transportation arteries and rooftops, the stronger the submarket will be in terms of ECONOMY both leasing and rental rates.
Average Asking Rentpositive, with $10.65 $10.61 to 5.6 million $9.88 square feet é Absorption remains an overall increase slower pace. Overall rents were up $0.08/SF from first quarter 2019 $13.40/SF $11.88/SF é Under Construction$9.00 1.5 Central MSF 2.0 MSF 2.7 MSF ê
and now stand at $6.01/SF market wide. In an indication of the varied
Vacancy Rate (%)
© NEWMARK KNIGHT FRANK | 2018
INVESTMENT ACTIVITY 12%
12 Month Change
desirability of the submarkets within the DFW six Overall under totals 32.0 million feet withmarket, almost 40% $11.08/SF $11.06/SF éof North The mixed results that started the year off for the Dallas-Fort Worth Deliveries (SF) construction 393,800 1.0square M industrial 294,531 é $3.00 3% the nine submarkets $6.00 tracked by NKF reported NNN asking rents above pre-leased industrial extended through to of the second quarter. Thesquare The most recent quarter 2019 saw 628,085 2Q14 market 2Q15 2Q16 2Q17 2Q18 2Q19 feet of negative $12.91/SF $8.10/SF é East the overall market average. In the DFW Airport submarket, theRESEARCH NNN | 1 © NEWMARK KNIGHT FRANK 2018 downward trend in| leasing activity that began at trend the start of 2019 has absorption, reversing the positive seen throughout 2018 and Leasing the activity continues to trend downward at 8.7 million square feet $10.58/SF submarket, é 9.5% 6.3% é NNN Avg Ask ing Rent (Price/SF) Vacancy (%) Southeast Georgetown asking rate is above $7.00/SF while in$11.91/SF the South Stemmons 3% steadily gained asThe the year on. In the second quarter, startmomentum of the year. only goes positive uptake occurred in the Central, for the quarter $3.00 The Dallas-Fort Worth metroplex continues to see strong the average rate is 2Q14 edging toward2Q15 $8.00/SF. The North Fort 2Q17 Worth 2Q16 2Q18 2Q19 leasing activity fell to 8.7 million square feet.Northeast This marked a 17.6 Georgetown/Round Rock, and submarkets and was offset by RELOCATIONS ANDaccording EXPANSIONS economic growth, to the Federal Reserve Bank of submarket accounts for the greatest variance in NNN asking rate from Net Absorption percent drop from the(SF, priorMillions) quarter, and remaining a nearly 40 submarkets percent decrease Avg Ask ing Rent (Price/SF) Vacancy (%)Dallas. Unemployment in both Dallas and Fort Worth dropped negative absorption in the tracked by NKF. MARKET ANALYSIS last quarter, with the average NNN rate dropping almost $0.60/SF. year-over-year. The market’s nearly 9 year streak of positive absorption The Dallas-Fort Worth area acontinues to be attractive to out-of-state 3.0% in both metros, 20-year low. Across the U.S., 1.5 © NEWMARK KNIGHT FRANK | 2018 RESEARCH | 2 Asking Rent and Availability continued during the second quarter, and the 5.6 million square feet companies looking tolevels expand footprint within Texas. Wilmer, CONSTRUCTION unemployment felltheir to 3.6%, a five-decade low. In Low interest INVESTMENT ACTIVITY 1.0 Net Absorption (SF, Millions) absorbed marked a turn from the overall decrease seen in prior Ace Hardware to double its factor size, adding square feet toas rates areplans believed to be the driving450,000 home sales in DFW, 0.5 $6.50 8.0% quarters. New construction has picked up since 2017, with 32 its existing 450,000 square foot Homebuilding facility. Construction wastoplanned for existing-home sales rose. continues be a main Large scale property In addition to recent deliveries, 33 Q1 buildings representing nearly 1.5 1.5 sales were less prevalent in the second quarter 0.0 second quarter with completion by second quarterto2020. The company, million square feet square of projects Whileunderway. the amountThe of new factor in the overall economy but is unlikely see activity like its made a strong showing with the purchase of 510,000 million feetunderway. are currently five year quarterly $6.00Lexington Realty1.0 7.0% basedmid-2018 in Illinois,peak. expects to addfor70both jobssingle-family at the facility. New York based construction could be cause for a combination of strong Permits and multi-family -0.5 average remains at concern, nearly 1.7 million square feet ofprenew space as $5.50 thesquare feet at 3737 Duncanville Rd from AEW Capital. Terms of the sale 0.5 In the Northeast Dallas submarket, The Shiloh company, Rent the Runway announced it will open a 300,000 square $5.00were undisclosed. have fallen over the last six months. Employment growth in the leasing and build-to-suit for the projects should alleviate too much -1.0 upward trend in construction continues. These projects continue to foot fulfillment center in Arlington this summer. Thecontinues fulfillmenttocenter 2Q14 2Q15to the market. 2Q16 During2Q17 2Q18 2Q19 6.0% Industrial DFW market remained solid in April, as Dallas gain for $16.9 million. Realty purchased vacant stock arriving seconddemand quarter, 5.7 Excerpts fromTA2Q19 Dallas Market 0.0 changed hands focus on the Austin industrialthe market’s for research and $4.50Distribution Center will add 500 to the arearate. and However, looks to result in faster shipping jobs atjobs a 4.0% annual Fort Worth shed jobs at foot facility from Huntington Industrial Partners. million square feed was delivered while rates saw solution little development space as wellvacancy as e-commerce spaces. The $4.00the 248, 700 square -0.5 times 0.8%. for theData online clothing rentalofretailer. from the Bureau Labor Statistics indicates the $3.50 5.0% change. At majority 6.3%,SUMMARY vacancy ticked down slightly from first MARKET of therates under construction buildings arequarter expected to deliver by 2Q 14 2Q 15 2Q 16 2Q 17 2Q 18 2Q 19 -1.0 Leisure/Hospitality and Mining/Logging/Construction sectors indicating ayear steady stream ofCurrent demand from tenants. Prior Year Ago 12 Month end, emptying out the current pipeline. Projects expected to be
DALLAS MARKET INDUSTRIAL MARKET y
Large Infinite scale property sales less prevalent in the second Electronics Inc.,were based in Irvine, California, is addingquarter a second 3.4% 3.1% é Central Lexington Realty made a strong with the of double 510,000the facility in Lewisville at 301showing Lenora Lane. Thepurchase expansion 9%3737 9.2% 3.7% é squarecompany’s feet at Duncanville Rd from AEW Capital. Terms of the sale Southwest space from 80,000 square feet to 160,000 square feet were undisclosed. the Northeast submarket, The daily. Shiloh and will allowInInfinite to fulfill Dallas over 500 more orders 7.3% 4.3% é Northwest Distribution 6% Center changed hands for $16.9 million. TA Realty purchased 5.8% 5.2% the 248, 700 square foot facilityEast from Huntington Industrial Partners. é ECONOMY
2Q15 2Q16 2Q17 2Q18 2Q19 gained the most jobs during the month of April, with 4.9% and RELOCATIONS 2Q14 AND EXPANSIONS Quarter Quarter Period Forecast greater than 100,000 square feet upon completion include Park 35 and NNN Avg Asking Rent (Price/SF) Vaca ncy (%) 4.7% growth, respectively. Although corporate relocations to the AsTotal the Dallas/Fort Worth market remains a highly desirable distribution Inventory 91.6 MSF 91.2 MSFSoutheast 88.7 MSF é and Hays the Park 183 development in the submarket, DFW metroplex will continue, they are unlikely to be of the The Dallas-Fort Worth area continues to be attractive to out-of-state MARKET SUMMARY hub, proximity to DFWPark Airport, Stemmons Freeway and other majorThe remaining five Logistics in 8.6% the Southwest Vacancy Rate 7.8% Hays submarket. 6.7% é blockbusterASKING proportions of recent looking toMillions) expand their footprint within Texas. In Wilmer, CURRENT CONDITIONS AVERAGE RENT BYquarters. SUBMARKET Netcompanies Absorption (SF, CURRENT CONDITIONS transportation arteries are key for developers and occupiers when Current Prior Year Ago 12 Month buildings to the Park 183 development will add over 720,000 square Ace Hardware plans to double its size, adding 450,000 square feet to Over the next 12 to 18 months, the DFW industrial market could Quarterly Net Absorption -628,085 128,403 222,383 é Quarter Quarter Period Forecast looking at site selection. Aswith a result, seven of the tracked 12 35, Absorption remains positive, an overall increase to nine 5.6 million square feet feet to the Southeast submarket when they deliver in October. Park Average Asking Rent ($/SF) experience a continuation of the record growth and prosperity of its existing 450,000 square foot facility. Construction was planned for Absorption remains positive, 91.6 with an overall91.2 increase million square feet Average Asking Rent $10.65market$10.61 $9.88 submarkets in the DFW industrial currently have 2.0 million or additional Total Inventory MSFto 5.688.7 MSF é years. However at the sameCurrent recent time the owners, developers which broke ground in the second quarter, will add é an completion by second quarter MSF 2020. The company, 10 second quarter with 12 Month 2Q18 greater square feet of construction Additionally, of thoseê Quarter Change andé users of the industrial space that is in the market must expects to add 70 jobs at the facility. based Under Construction 1.5 MSF 2.0 MSF 2.7with MSF 305,000 square feet tounderway. the Austin Industrial market. Overall under construction totals 32.0 million square feet almost 40% 7 based in Illinois,Vacancy Rate 8.6% New York 7.8% 6.7% seven, the North Fort Worth, South and South Stemmons Overall under construction million square feet with almost 40% vigilant remain to ensure that the $6.89 market does$6.43 not swing into Runway announced it will totals open a32.0 300,000 square The thatDallas, started off for the Dallas-Fort Worth company, Rent the pre-leased éa Northeast Dallas Deliveries (SF) mixed results 393,800 1.0 the M year294,531 é 5 Quarterly Net Absorption -628,085 128,403 222,383 é submarkets all register greater than 4.0 million square feet of new downturn as a result of over development and slowing demand. foot fulfillment center in Arlington this summer. The fulfillment center pre-leased industrial market extended through to the second quarter. The $6.55 $6.03 é Northwest Dallas 2 will add 500 jobs to the area and looks to result in faster shipping Leasing activity continues toOverall, trend downward 8.7 millionmarket square feet product currently underway. the DFWatIndustrial has | 1 of 2019 has Average Asking Rent $10.65 $10.61 $9.88 é downward trend in leasing activity that began at RESEARCH the start formillion the quarter Leasing activity $7.87 $6.10 é South Stemmons 0 times for the online 32.0 square feet of space under construction as of the second clothing rentalcontinues retailer. to trend downward at 8.7 million square feet steadily gained momentum as the year goes on. In the second quarter, 2Q 14 2Q 15Under 2Q 16 2Q 17 18 19 1.5 2Q MSF 2.02QMSF 2.7 MSF ê for theConstruction quarter quarter. Nearly forty percent of the under construction product has $6.38 $6.04 é South Ft. Worth leasing fell tototaling 8.7 million squarefeet feet. This marked a 17.6 MARKET ANALYSIS been pre-leased andactivity 19 buildings 5.7 square delivered Deliveries (SF) 393,800 1.0 M 294,531 é $7.31 $5.48 é DFW Airport percent drop from the prior quarter, and a nearly 40 percent decrease MARKET SUMMARY MARKET ANALYSIS during the quarter. Asking year-over-year. Rent and Availability The market’s nearly 9 year streak of positive absorption Current Prior Year Ago 12 Month © NEWMARK KNIGHT FRANK | 2018 RESEARCH | 1 Quarter Quarter Period Forecast Asking Rent and Availability continued second quarter, and fell thefor 5.6themillion square feet AVERAGE ASKING Demand from tenants isduring on thethe decline as leasing activity RENT BY SUBMARKET AVAILABILITY BY SUBMARKET $6.50 8.0% 878.1 MSF 870.2 MSF 849.9 MSF é second quarter in a row, down toa only million square feet across seen 500 in prior Total Inventory absorbed marked turn8.7 from the overall decrease $6.00 © NEWMARK KNIGHT FRANK | 2018 Average Asking ($/SF) Availability $6.50Rent 8.0% Rate (%) transactions. In termsNew of large scale leaseshas signed, Systemax Inc.Q1 signed quarters. construction picked up since 2017, with 32 Availability Rate 6.3% 6.5% 6.0% é $5.50 7.0% Current 12 Month Current 12 Month for 489,804million square square feet while Petmate leasedunderway. 468,300 square feet, both $6.00 feet of projects While the amount of new 2Q18 2Q18 $5.00 Quarterly Net Absorption 5.6 MSF 4.5 Quarter MSF -412,642 ê Change Quarter Change in the Southconstruction Dallas submarket. Blackfor & Decker leased 425,000 $5.50 7.0% couldStanley be cause concern, a combination $4.50 6.0% of strong pre$6.89 $6.43 é 7.0% 3.6% é Average Asking Rent $6.01 $5.93 $5.28 é Northeast Dallas North Ft. Worth square feet in the Fort Worth market. Staton Wholesale renewed its lease $5.00 $4.00 leasing and build-to-suit for the projects should alleviate too much for 200,000 square feet on Simonton Avenue in Farmers Branch, one of $6.03 é 4.3% 4.4% ê Under Construction Northwest 32.0 MSF 31.2$6.55 MSF 28.7 MSF é Dallas Northwest Dallas $4.50 6.0% $3.50 5.0% quarter, 5.7 vacant stock arriving to the market. During the second the few 2Q renewals of2Qthis This 14 15 size. 2Q 16 diverse 2Qmix 17 indicates 2Q 18 the market 2Q 19 has a $7.87 $6.10 é 4.6% 4.4% é Deliveries (SF) 5.7 MSF 5.8 MSF 7.4 MSF é South Stemmons South Stemmons $4.00 million square feed was delivered while vacancy rates saw little healthy pool of tenants, despite falling activity. $3.50 5.0% $6.38 $6.04 é 4.6% 4.8% ê South Ft. Worth South Ft. Worth change. rates ticked down slightly from first quarter NNNAt Avg6.3%, Asking vacancy Rent (Price/SF) Vaca ncy (%) 2Q 14 2Q 15 2Q 16 2Q 17 2Q 18 2Q 19 indicating a steady stream of demand from tenants. $7.31 $5.48 é 7.8% 5.7% é DFW Airport DFW Airport
RELATIVELY STEADY IN THE SECOND QUARTER
© NEWMARK KNIGHT FRANK | 2018
Net Absorption (SF, Millions) As the Dallas/Fort Worth market remains a highly desirable distribution
RESEARCH | 1
NNN Avg Asking Rent (Price/SF)
Vaca ncy (%)
with f both Comm Austi indus advan manu indus mass educa enviro
I f c a
T e D 3 u r e f m h D j 0 L g 4 D b O e r a r d
marking the first time in 30 quarters that market vacancy exceeded 6%. Leasing activity appears to wane a bit at 4.7 million square feet. However, this softening could be a transitionary period as demand for the newly developed products come to materialize.
some moderation. Crude spot prices averaged $52.52 per barrel during What to Watch
looking to the area near and in the Inner loop as prime locale in their logistics chain. As a result of the envigored appetite for proximity to the urban ANALYSIS core; the CBD industrial submarket saw an increase in MARKET leasing activity, rental rate growth and drop in vacancy. The submarket saw leasing demand in tune of 304,180 square feet with an average Asking Rent and Vacancy leasing size of 19,000 square feet. Over the past 10-years the submarket has leased approximately 14 million square feet of $8.00 8% industrial with a quarterly average of 350,000 square feet per quarter. $7.00 In the quarter the submarket absorbed 220,711 square feet of space 7% $6.00 and vacancy dropped to 4.1%, bringing it below the 10-year average 6%of 4.5%. Rental rate responded positively to the activity inching up 3.3% $5.00 over the quarter to $7.75/SF NNN. 5%
the second week of June, down approximately 19.6% from the same period last year. Natural gas prices averaged $2.64 per Million British Houston’s economy continued expand, 86,200 the in Thermal Units in May, a drop ofto5.7% fromadding the year prior. jobs This in decline 12-month ending in April, a for 2.8% gain.ofHouston ranked third price whileperiod somewhat unpleasant some the firmswas in the Energy among theit country’s largest metropolitan areas infirms termswho of job Corridor; is a bolster to Houston petrochemical arecreation rapidly The market currently holds approximately 13.8 million square feet of in the 12-month period,tobehind the New York metro area and Dallas producing. According the Greater Houston Partnership, Houston space under construction. While down from the prior quarter due to metroplex. The manufacturing industry exhibited the highest growth exported $28.3 billion worth of refined petrochemical products in the deliver, the figure is still substantially greater that the 10-year rates the period, a 6.6%Gulf increase. Employment 2018.over Overall, the Houston Coast area is home in to all 10other refineries average seen in the market of 8.3 million square feet. Rental rates major sectors within the metro area trended upward except for the that process approximately 2.6 million barrels of crude per day, have softened this quarter, dropping by approximately 69 basis information sector, which shed 800 jobs, contracting by 2.5%. accounting for roughly 26.7% of the nation’s refining capacity.The As a points. The dip in rental rates is likely a result of increased space unemployment rate dropped to 3.2%, the second consecutive month result, industrial development on the Southeast side of Houston has Excerpts from 2Q19 Houston Industrial Market in which Houston’s unemployment hassquare trended below the construction from deliveries coupled with a reduced leasing demand. remained robust with over 2.6 million feet of new $4.00 4% national average. On the petrochemical front the industry’s feed stock continues to underway in the quarter, as tenants make sure that they are poised to While leasing demand slows across the market, the Northwest $3.00 remain relatively affordable as crude oil and natural gas prices exhibit 3% caterHouston to the petrochemical driven market. The CPI recorded an increase in consumer prices of submarket continues to account for the lion’s share of activity, with 1Qsome 14 1Q 15 1Q 16spot prices 1Q 17averaged1Q$52.52 18 19 moderation. Crude per1Qbarrel during approximately 1.8%, slightly below the national average of 2.0%. roughly 1 million square feet over the quarter. The North submarket the second week of June, down approximately 19.6% from the same NNN Avg Asking Rent (Price/SF) Vacancy (%) However, the food and energy sectors did show greater growth as is not far behind, accounting for 950,000 square feet of the period last year. Natural gas prices averaged $2.64 per Million British compared with the national levels. Looking ahead, the Houston area overall 3.8 million square feet of activity. Roughly 323 deals Thermal Units in May, a drop of 5.7% from the year prior. This decline in appears poised to continue its expansion. The local PMI, a barometer occurred over the quarter for an average transaction size of price while somewhat unpleasant for some of the firms in the Energy forAVERAGE economic activity in the region, a level of 58.7 in April. CURRENT CONDITIONS ASKING RENTrecorded BY SUBMARKET NetCorridor; Absorption (SF, Millions) it is a bolster to Houston petrochemical firms who are rapidly CURRENT CONDITIONS 12,068 square feet. The average transaction size represents a Although down from the six-year high of 64 recorded in March, this is producing. According to the Greater Houston Partnership, Houston 26% drop from the prior quarter. 7.5 still indicative of growth. Continued strength seen in rental rates and positive absorption; rental Average Asking RentMoody’s ($/SF) Analytics forecasts above-average exported $28.3 billion worthstrength of refined petrochemical products in Continued seen in rental rates and positive absorption;growth rentalfor the metro area. In the May 2019 report, the Houston metro ratesleasing remain demand at $7.19/SF 6.0 While was a bit abated this over the quarter, the Current 12 Month 2018. Overall, the Houston Gulf Coast area is home to 10 refineries rates remain at $7.19/SF area is projected to add 72,200 jobs in 2019, an effective of 2Q18 growth Quarter Change that process approximately 2.6 million barrels of crude per day, Northwest submarket continued to showcase a strong allure and 2.3%. Furthermore, Moody’s Analytics construes this growth as being Houston’s market ends thethesecond quarter of 2019 4.5 accounting for roughly 26.7% of the nation’s refining capacity. As a Leasing activity at 4.7 industrial million square feet, 36% below 5-year average. demand. The submarket saw approximately 134 leasing deals $7.57/SF é Southwest $7.80/SF primarily driven by the manufacturing and IT industries with support activity at 4.7 million square feet, 36% below the 5-year average. displaying healthy fundamentals. Overall, the market absorbed 3.0 2.27 result, industrial Leasing development on the Southeast side of Houston has transacted over the second quarter totaling 1.64 million square feet. coming from residential construction. $7.23/SF é North $7.22/SF milliontosquare feetmarket of space, a 1.1% increase prior quarter. 1.5 The remained robust with over 2.6 million square feet of new construction when compared the overall the figure accounts forthe 38.8% Vacancy market rate exceeds 6.0% overall across the square market feet of inventory, driving an delivered 5.32 million underway in the quarter, as tenants make sure that they are poised to of the market’s leasing volume. Despite, the relatively healthy leasing $7.03/SF é Northwest $6.97/SF 0.0 Vacancy rate exceeds 6.0% overall across the market to the1Qpetrochemical driven market. in was vacancy. the market was recorded at 6.2%, 1Qcater activity theincrease submarket a bit ofVacancy a laggardincompared to others on 14 15 1Q 16 1Q 17 1Q 18 1Q 19 $5.81/SF é CBD $7.75/SF marking the first time in 30 quarters that market vacancy exceeded
HOUSTON MARKET INDUSTRIAL MARKET
HOUSTON INDUSTRIAL REMAINS ON A HEALTHY PATH
the grounds of absorption. The Northwest submarket negatively MARKET ANALYSIS absorbed 198,391 square feet ofappears space, rental ratesaalso exhibited a square feet. 6%. Leasing activity to wane bit at 4.7 million decline of 2.2% quarter to $6.97/SF NNN. Vacancy alsoperiod as demand this softening could be a transitionary MARKET Asking However, Rentover and the Vacancy inched up by points to 7.3%.products come to materialize. for30 thebasis newly developed
MARKET ANALYSIS SUMMARY
Current Prior Year Ago AVERAGE ASKING RENT BY SUBMARKET
$3.00 1Q 14
While leasing demand was a bit abated this over the quarter, the 1.5 Northwest submarket continued to showcase a strong allure and 0.0 demand. The submarket saw approximately 134 leasing deals 1Q 14 1Q 15 1Q 16 1Q 17 1Q 18 1Q 19 transacted over the second quarter totaling 1.64 million square feet. when compared to the overall market the figure accounts for 38.8% of the market’s leasing volume. Despite, the relatively healthy leasing MARKET SUMMARY activity the submarket was a bit of a laggard compared to others on Current Prior Year Ago 12 Month the grounds of absorption. The Northwest Quarter Quarter Periodsubmarket Forecastnegatively absorbed 198,391 square feet of space, rental rates also exhibited a Total Inventory 584.5 MSF 578.7 MSF 568.5 MSF é decline of 2.2% over the quarter to $6.97/SF NNN. Vacancy also Vacancy Rate 6.2% points 5.9% ê inched up by 30 basis to 7.3%. 5.2% Quarterly Net Absorption
MORE INFO RECouncilGFW. com
Over the quarter 38 properties traded hands with a total volume Average Asking Rent of $280.9 $7.19 $6.97 ê 3.36 million estimate million.$7.24 That was approximately square feet of 13.9 industrial placing anMSF averageêprice of Under Construction MSF space 15.8 MSF 13.0 $111/SF. The total volume represents a 30% decline on a Deliveries (SF) 5.3 M 3.3 M 2.2 M é year-over-year basis, while the average price is a notable 28% gain in asset price for the market. RESEARCH | 1
© NEWMARK KNIGHT FRANK | 2018
Total Inventory Vacancy Rate
6.2% 2,276,840 $7.19 13.9 MSF 5.3 M
LAND LOANS / CONSTRUCTION LOANS ALL PROPERTY TYPES $100K TO $10 MILLION CLOSE IN 5 DAYS
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RESEARCH | 2
T S E L A RE
12 Month Change
IAL C R E M OM C M R E T S N A O SHORTL ATE
© NEWMARK KNIGHT FRANK | 2018
t. % ng n
Vacancy Rate (%)
CBD NNN Avg Asking Rent (Price/SF) Vacancy (%) the Northwest While leasing demand slows across the market, $3.00 submarket continues to account for the lion’s share of activity, with 1Q 14 1Q 15 $6.01/SF 1Q 16 $5.19/SF1Q 17 1Q 19 RESEARCH é | 11Q 18 South roughly 1 million square feet over the quarter. The North submarket NNN Avg Asking Rent (Price/SF) Vacancy (%) Net Absorption Millions) is not far(SF, behind, accounting for 950,000 square feet of the overall 3.8 million square feet of activity. Roughly 323 deals 7.5 occurred over the quarter for an average transaction size of © NEWMARK KNIGHT FRANK | 2018 Net Absorption (SF, Millions) 6.0 12,068 square feet. The average transaction size represents a 4.5 26% drop from the prior quarter. $7.75/SF
© NEWMARK KNIGHT FRANK | 2018
VACANCY BY SUBMARKET
Asking Rent and Vacancy Period Forecast Quarter Quarter $8.00 the quarter 38 properties traded hands with a total volume 8% Over The market currently holds approximately 13.8 million square feet of Total Inventory 584.5($/SF) MSF 578.7 MSF 568.5 MSF é estimate of $280.9 million. That was approximately 3.36 million 7% Average Asking Rent $7.00 space under construction. While down from the prior quarter due to $8.00 square feet of industrial space placing an average price of Current 12 ê Month Vacancy Rate 6.2% 5.9% 5.2% $6.00 6% the 10-year the deliver, the figure is still substantially greater that 2Q18 Quarter Change $111/SF. The total volume represents a 30% decline on a $7.00 average theaverage marketprice of 8.3 Quarterly Net Absorption 2,276,840 1,414,063 1,389,891 é $5.00 5% Rental rates year-over-year basis,seen whileinthe is amillion notablesquare 28% feet. $7.57/SF é Southwest $7.80/SF $6.00 have softened this quarter, dropping by approximately 69 basis gain $4.00 in asset price for the market. 4% Average Asking Rent $7.19 $7.24 $6.97 ê points. The dip in rental rates is likely a result of increased space $5.00 3% Under Construction from1Qdeliveries coupled 1Q with a reduced leasing demand. 15 1Q 16 17 1Q 18 1Q 19
Year Ago Period
12 Month Forecast
RESEARCH | 1
Direct Private Lender 512-732-8338
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SCOOP The following pages contain a calendar of Texas CRE events, networking photos, and deals/announcements. For more updates, log on to REDNews.com
CENTRAL SOUTH TEXAS
REDNews Newsletter [4:00pm]
REDNews Newsletter [4:00pm]
ULI San Antonio - Mentorship Sunrise Social [8:30am - 9:30am]
REC San Antonio - WeWork [7:30am - 9:30am]
REC Austin - Christmas in October Committee Meeting *Members Only [12:00pm - 1:00pm] ULI San Antonio - Insider's Tour: The '68 Apartments at Hemisfair [5:30pm - 7:30pm]
BOMA Austin - District Cooling Plant Tour @ Mueller [10:00am - 12:00pm]
CCIM Central Texas - Commercial Real Estate Negotiations [8:30am - 5:00pm]
CREW Austin - Luncheon: UT Football Operations [11:30am - 1:00pm]
18 Wednesday 19 Thursday
CREW Austin - Golf Adventure Registration Open! [10:00am - 8:00pm]
STCAR - Board of Directors Meeting *Invitation Only [10:30am - 11:30am]
CCIM Central Texas - Networking Social and Happy Hour [5:30pm - 7:30pm]
CCIM Central Texas - Golf Tournament at Flintrock [11:00am - 7:00pm] ULI San Antonio - Leadership Luncheon: Designing a Healthy Destiny with Density [11:00am - 1:00pm] BOMA Austin - Emerging Professionals Meat and Mingle Dutch Lunch [11:30am - 12:30pm]
BOMA Austin - Membership Luncheon "Meet the New AFD Chief" [11:30am - 1:30pm] BOMA Austin - BOMI Course: Refrigeration Systems and Accessories [6:00pm - 9:00pm]
REC Austin - RECA 101 [8:00am - 9:00am] CCIM Central Texas - Candidate Portfolio Workshop [11:30am - 12:30pm]
CBA Austin - Luncheon [11:30am - 1:00pm]
TABB Austin - Luncheon [11:30am - 1:00pm]
REDNews Newsletter [4:00pm]
CCIM Central Texas - CI 104 Course [8:30am - 5:00pm]
BOMA Austin - AAFAME Vendor Expo [10:00am - 2:00pm] CTCAR - Shooting at The Range for TREPAC [3:00pm - 7:00pm]
CTCAR - Commercial Real Estate Negotiations [8:30am - 5:00pm]
CREW Austin - Members Orientation [10:30am - 11:30am]
IREM San Antonio - Bowling Tuornament [3:30pm - 6:00pm]
STCAR - Annual Membership Meeting and Luncheon [12:00pm - 2:00pm] REDNews Newsletter [4:00pm]
ULI Austin - Breakfast: Alternative Energy [7:30am - 9:00am] CTCAR - Luncheon [11:30am - 1:00pm]
CTCAR - Property Information Exchange [7:30am - 9:00am]
TABB San Antonio - Luncheon [11:30am - 1:00pm]
CTCAR - Texas REALTORS Conference in Fort Worth [8:00am - 5:00pm]
CREW Austin - *Members Only Dine Around [12:00pm - 1:30pm]
REC Austin - RECA Exchange [8:00am - 10:30am] ULI Austin - Coffee Chat (Central) [8:00am - 9:00am]
IREM Austin - Trends 2019 [3:00pm - 6:00pm] CREW San Antonio - CREWtini 2019 Around the World [4:30pm - 8:30pm] REDNews October Issue Deadline [5:00pm]
BOMA Austin - BEEP (BOMA Energy Efficiency Program) Module 1 and 2 [1:00pm - 4:00pm] REC Austin - Regional Update in Cedar Park *Members Only [12:00pm - 1:00pm] REDNews Newsletter [4:00pm]
The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDNews.com.
BOMA AUSTIN: bomaaustin.org/ BOMA SAN ANTONIO: bomasanantonio.org CBA: cbaaustin.org/ CCIM CENTRAL TEXAS: ccimtexas.com CREW AUSTIN: crewaustin.org
CREW SAN ANTONIO: crew-sanantonio.org CTCAR: ctcaronline.com IREM AUSTIN: iremaustin.org IREM SAN ANTONIO: iremsanantonio.org
whatâ€™s going on
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
ULI Austin Battle of the Plans - 2 teams
of Young Professionals competed.
IREM Austin Lunc
heon with Colone l Richard Hansen Director for U.S. , Communications Army Futures Co mmand.
CREW Austin Prog
CREW San Antoni
ding our Inne #MovieMixer - Fin
! r Dancing Queens
Congrats to Irulian Dabbs - win
ner of CTC AR Prize!
REDNews Newsletter [4:00pm]
CREW Fort Worth - Luncheon [11:30am - 1:00pm]
NTCAR - Commercial Real Estate Expo [3:00pm - 7:00pm]
CCIM North Texas - CI 101: Financial Analysis for Commercial Investment Real Estate [8:00am - 5:00pm] REDNews Newsletter [4:00pm]
IREM Fort Worth - Crockett Row Crawl and Food Hall [11:30am - 1:00pm] REC Fort Worth - 2019 Panther City Dodgeball Tournament [4:30pm - 9:00pm] BOMA Fort Worth - Axe Throwing Contest [5:00pm - 7:00pm]
CREW Fort Worth - New to CREW Breakfast [8:00am - 9:30am]
NAIOP North Texas - "Lasting Legacies of the Millennial Generation" [11:30am - 1:30pm] REDNews Newsletter [4:00pm]
BOMA Fort Worth - Luncheon [11:00am - 1:00pm] BOMA Dallas - Allied Business Council [3:00pm - 7:00pm] BOMA Fort Worth - SAC Meeting *Invitation Only [3:00pm - 4:00pm]
IREM Dallas - Luncheon [11:30am - 1:30pm]
NTCAR - 3rd Quarter Membership Meeting [7:30am - 9:00am]
CCIM North Texas - Site to do Business Training Course [8:30am - 1:00pm] BOMA Fort Worth - Board Meeting *Invitation Only [12:00pm - 2:00pm] BOMA Dallas - BOMI Course: Boilers, Heating Systems & Applied Mathmatics [5:00pm - 8:00pm]
CCIM North Texas - Happy Hour [5:30pm - 7:00pm]
REDNews October Issue Deadline [5:00pm]
CCIM North Texas - Luncheon [11:30am - 1:00pm]
CORENET North Texas - 2020 Black White & Blue Meet the Jurors Happy Hour [5:00pm - 7:00pm]
CREW Fort Worth - Brews and BBQ [5:30pm - 8:00pm]
REDNews Newsletter [4:00pm]
CORENET North Texas - Farewell to Summer Happy Hour [5:30pm - 7:30pm]
BOMA Fort Worth - CSC Meeting *Invitation Only [11:30am - 12:30pm]
CCIM North Texas - 25th Annual Sporting Clays Tournament [10:00am - 6:00pm] TABB Dallas - Luncheon [11:30am - 1:00pm]
CREW Dallas - Luncheon [11:30am - 1:00pm]
BOMA Dallas - BOMI Course: Leasing & Marketing for Property Managers [5:00pm - 8:00pm]
CREW Dallas - Golf Classic LPGA Pro-Am [8:00am - 5:00pm] REDNews Newsletter [4:00pm]
The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDNews.com.
BOMA 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€™s going on
IREM FORT WORTH: fortworthirem.org LADIES IN CRE: ladiesincre.com NAIOP: northtexasnaiop.com NTCAR: ntcar.org SCR: scr-fw.org
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
CCIM Summer Service Project at Reverchon
Park with Family Gateway.
A FW Past BAE, Glenda Simcox with BOM Former BOMA For t Worth Jones. tt Sco ir, Cha al A Internation President and current BOM BOMA Dallas Bring Your Team Luncheon (Featured Speaker, Attendees Kim Hartz Adaptive Training Fo , David Vobora undation), Christy Earley, Tracey Pals (L to R).
TREC Dall as Young G u ns d o MLK, Jr L earning C nated toys and g a enter, a D allas ISD mes to the facility..
CORENET North Te
xas Ar t of Regiona
l Real Estate Pursu
2019 2 Monday 4 Wednesday
REDNews Newsletter [4:00pm]
IREM Houston - Leading a Winning Property Management Team (HRS402) [8:00am - 5:00pm] BACREN - Luncheon [10:30am - 1:00pm] BOMA Houston - Board of Directors Meeting *Invitation Only [11:30am - 1:00pm]
REDNews Newsletter [4:00pm]
ACRP - Oktoberfest [5:00pm - 8:00pm] Women in Real Estate Summit 8:00amâ€“ 12:00pm
CREN Gulf Coast - Luncheon [11:00am - 1:00pm] TABB Houston - Chapter Meeting [11:30am - 1:00pm] BOMA Houston - Members Only Social [4:30pm - 6:30pm]
CREW Houston - Luncheon: Recovery of Downtown Houston Art District After Hurricane Harvey [11:30am - 1:00pm]
REDNews Newsletter [4:00pm]
IREM Houston - Lunch with "Mattress Mack", Jim McIngvale [11:30pm - 1:00pm]
C.R.E.A.M. The Woodlands - Luncheon [11:30am - 1:00pm]
ULI Houston - Sporting Clay Scholarship Classic [11:00am - 4:30pm] BOMA Houston - Membership Meeting: Houston Mayoral Panel [11:30am - 1:00pm] CCIM Houston/Gulf Coast - Luncheon [11:30am - 1:00pm] REDNews October Issue Deadline [5:00pm]
BOMA Houston - BOMI RPA Course: Law and Risk [8:00am - 5:00pm] REDNews Newsletter [4:00pm]
FBSCR - Monthly Meeting [8:00am - 9:00am] IREM Houston - Marketing & Leasing Strategies for Office Buildings (MKL406) [8:00am - 5:00pm] CREN Gulf Coast - Property Information Exchange *Invitation Only [11:00am - 1:00pm]
CCIM Houston/Gulf Coast - Introduction to Development Workshop [8:30am - 12:00pm] C.R.E.A.M. The Woodlands - TakeAway Tourettes Charity Golf Tournament [10:00am - 3:00pm]
CORENET Houston - 2019 Education Day [8:00am - 12:00pm]
REDNews Newsletter [4:00pm]
Southland Title @ BACRE 28
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
whatâ€™s going on
ULI Houston, Tranquility bas e here. The Eagle has landed. - Neil Armstrong. Photo credit of NASA..
la HRBC Legis
Houston Young Real Estate Prof essionals joined 2019 IREM Futu the re Leaders Prog ram.
CREN Gulf Coast at Harold's
CENTRAL SOUTH TEXAS AUSTIN, TX
TOTAL QUALITY LOGISTICS LEASES 19,839 SF Culture Map
Source: Austin American Statesman
UT AUSTIN TO START CONSTRUCTION ON BRACKENRIDGE TRACT
Source: Culture Map
71 RAINEY STREET SOLD TO BOB WOODY Bob Woody has purchased 71 Rainey Street which is the last residence on a street that has become a commercial hub. Woody owns at least 10 bars & restaurants in the area & will most likely convert this property to the same usage.
UT Austin is starting construction on a 17-story office tower on the Brackenridge Hospital property east of the 11-acre Waterloo Park. The defunct hospital tract is the epicenter for Austin’s innovation district & the building will expand the center. Apartments & retail are projected to follow along with a 5-star hotel.
ABBOTT LABS LEASES ENTIRE BUILDING Abbott Laboratories has leased the 130,000 sf building in Seven Oaks office park located at 8701 Bee Caves Road. The company will relocate to the new building when it is complete in 2020. PSW BUILDING THREE RESIDENTIAL PROJECTS PSW Real Estate LLC is developing a 44-unit micro-unit apartment project at 2001 S. First Street, a four story, 63-unit condominium project at 900 S. First Street & a 59-unit condominium project at 1600 First Street.
XSPACE COMING TO LAKE TRAVIS Australian natives Tim Manson & Byron Smith are building a 114 unit for-sale condo project at 4229 N. FM 620. The units will range in size from 300 sf to 1000 sf with prices starting at $82,000 & can be utilized for self-storage or office.
will be annexed into the city limits & will include single-family homes, apartments, commercial buildings & open space. The developer has several other projects within the city.
MARBLE FALLS, TX
12,044 SF INDUSTRIAL BUILDING SOLD Base 57 LLC purchased a 12,044 sf industrial building on 1.27 acres located at 2302 Western Trails Blvd from West Trails Industrial LLC. Brad Elmore with NewQuest Properties represented the buyer & Matt Fain & Lee Ellison with ECR represented the seller.
CEDAR PARK, TX
WARM AUDIO HQ UNDERWAY Warm Audi, an audio manufacturer & distributor, has started construction on a 40,000 sf headquarters facility in Cedar Park which is set for completion spring 2020. The facility will include a 3,500 sf recording studio with room for additional employees.
Source: 281 Round Mountain LLC
MASTER-PLANNED COMMUNITY SCHEDULED 281 Round Mountain LLC will develop Trinity Oaks Preserve on 34 acres along SH 281 & Old Marble Falls Road. The project will be a gated, build-onyour-own homesite community of 3-acre plots. Amenities will include an outdoor community pavilion, firepit area, fully stocked fishing pond & green space.
ROUND ROCK, TX
RESEARCH PARK CAMPUS SOLD Los Angeles-based Karlin Real Estate purchased the 1,000,000 sf Research Park facility, which is occupied by Flextronics International, from Equity Commonwealth. The buyer plans to incorporate the campus into their Parmer Innovation Centers’ branded office parks. THREE MULTI-FAMILY PROJECTS SOLD
Total Quality Logistics leased 19,839 sf at 6800 Burleson Road in the Bergstrom Tech Center. Jason Steinberg & Matt Levin with ECR represented the landlord & Erin Morales & Caroline Stockard with CBRE represented the tenant.
Chicago-based Waterton purchased a 950-unit multi-family portfolio which includes the 390-unit Madison at Stone Creek project at 6800 McNeil Drive, the 300-unit Madison at Wells Branch project at 3201 Century Park Blvd & the 260-unit Madison at Scofield Farms project at 13401 Metric Blvd. BUILDSOCCER TO ADD SIX FIELDS Nonprofit organization BuildSoccer is leasing 20 acres at Brodie Lane & FM 1626 within Marbridge, a 200-acre residential community for adults with cognitive disabilities. Once fund raising has been initiated, work will begin on the project which is projected to take two years to develop.
Source: Bloomberg News File
TOYOTA SUPPLIER BUILDING 500,000 SF PLANT Toyota Supplier, AW Texas Inc, is building a 500,000 sf plant on 159.5 acres on I10 at S. Santa Clara & Bolton Roads and upon completion plans to hire 900 employees. The property is located within a Reinvestment Zone & will receive a 20-year property tax abatement from the city & a 10-year abatement from the county.
Source: Kalahari Resort Artist Rendition
CONVENTION CENTER APPROVED The development of a 200,000 sf convention center within Kalahari Resort has been approved by the Transportation & Economic Development Corporation & the city council has approved the sale of $21.3 million sales tax revenue bonds. Completion of the project is scheduled for November 2020.
SAN ANTONIO, TX
CHILDREN’S ADVOCACY CENTER OPENS
MA PARTNERS BUILDING MIXED-USE PROJECT
Bexar County’s children’s advocacy center, ChildSafe, has opened a 65,000 SF facility at 3730 I10 E. The center includes 43,000 sf of green space, gardens & court yards & treated 3,675 local children in 2018.
MA Partners has been approved to build a mixed-use project on 95 acres near FM 1660 & Mager Lane. The property
UNION AT CARROLLTON PHASE IV
CROWN CENTRE UNDER CONSTRUCTION
PILLAR COMMERCIAL BUYS OFFICE CAMPUS
Bright Realty has started construction on a 109,000 sf office building at SH 121 & Carrollton Parkway in the Castle Hills master-planned community
Dallas-based investment firm, Pillar Commercial, purchased the two-building, 240,000 sf Richardson Office Center I & II office complex at 3001 & 3101 E. President George Bush Highway. The seller was Buchanan Street & Carval Investors represented by CBRE.
High Street Residential, a subsidiary of Trammell Crow Company & Olympus Property, are building the fourth phase of Union at Carrollton called Olympus on Broadway, which will include 400 apartment units. The project is located in downtown Carrollton along the DART green line.
Source: Harwood International
CITYMARK BUILDING SOLD
FAIRVIEW TOWN CENTER SELLS
Dallas-based Harwood International, in a partnership with Waterfall Asset Management, purchased the 226,000 sf Citymark office building located at 3100 McKinnon Street. Morgan Staub & Rob Steinwedell with Harwood International handled the transaction.
FORT WORTH, TX Source: Loopnet.com
129,061 SF INDUSTRIAL PROPERTY SELLS Chicago-based Brennan Investment Group sold a 129,061 sf industrial facility located at 8220 Ambassador Row. The property serves as the corporate headquarters for Delivery Limited. ENDEAVOR BUILDING 19-STORY MIXED-USE TOWER Endeavor Real Estate Group is building a 19-story mixed-use tower at Boll Street & McKinney Avenue. The property will include 290 residential units, 60,000 sf of office space & 15,000 sf of retail space.
ALLIANCETEXAS ADDING 1.3 MILLION SF Hillwood has announced they will deliver 1.3 million sf of industrial space split between Fort Worth & Northlake by mid 2020. One new building at Alliance Center North 7 will have 810,908 sf & the other will have 459,762 sf at Alliance Northport.
Callaway Golf Company will be opening a 783,465 sf distribution center at AllianceTexas. The company is quadrupling its spaces in the masterplanned community with completion scheduled for early 2020.
TOLL BROTHERS BUILDING 4-STORY MULIT-FAMILY
RETAIL CENTER SOLD CHIME SOLUTIONS LEASES 50,000 SF Atlanta-based Chime Solutions has leased 50,000 sf for a call center inside Red Birl Mall which is scheduled to open in the fall with 500 employees. The center will be located in the old JCPenneyâ€™s store within the mall.
MOUNT VERNON, TX
ASSISTED-LIVING COMMUNITY SELLS The 50-unit Vernon House assistedliving facility located at 502 Meadowpark Drive has been sold to a local doctor for $2.8 million. The 41,000 sf facility sits on 2.5 acres & was constructed in 1994.
Fremont, CA-based MacAbar Investments LLC sold the 32,254 sf retail center located at 10010 N. MacArthur Blvd to a local buyer. The center is 44% leased & the anchor tenant is Taj Grocers. Weitzman brokered the transaction.
ASSISTED-LIVING FACILITY SOLD Chicago Pacific Founders & its subsidiaries, CPF Living Communities & Grace Management, purchased the 83-unit Twin Rivers Assisted Living & Memory Care center located on five acres at 1720 N. Plano Road.
CALLAWAY GOLF TO OPEN DISTRIBUTION CENTER
KWA Construction has started construction on The Kilby, a four-story multi-family project on Main Street east of the Dallas North Tollway. The complex is set to open in 2020.
Source Peter Brodsky
InvenTrust Properties Corporation purchased the 67,538 sf Shoppes at Fairview retail center for $36 million. The center is located at 105 Stacy Road & is anchored by a Whole Foods market. JLL handled the transaction.
SALE/LEASEBACK OF INDUSTRIAL PROPERTY
Source: Legacy Central
RIBBON COMMUNICATIONS LEASES 107,000 SF Ribbon Communications leased 107.000 sf at the Legacy Central campus at US 75 & Legacy Drive. The tenant was represented by CBRE & Transwestern represented the landlord.
PROSPER, TX RISLAND HOMES STARTS NEW COMMUNITY Risland Homes is starting a single-family community called Legacy Gardens on Prosper Trail on 300 acres west of Dallas North Tollway & two miles north of Highway 380. Homes prices will start at $400,000.
Col-Met Engineered Finishing Solutions sold & leased back its 145,375 sf industrial building at 2975 Discover Drive. The property was built in 2015 on 12 acres. Marcus & Millichap handled the transaction.
ROWLETT, TX CRYSTAL LAGOON RE-LAUNCHED The Rowlett City Council has approved the $1 billion-plus Crystal Lagoon development along Lake Ray Hubbard. Sapphire Bay Land Holdings LLC is the new development partner with the city & they have closed on the purchase of 120 acres of land south of I30 at Dalrock Road for the development.
bulletin Mike Melody, Tom Melody, Tom Fish & Paul House have joined Walker & Dunlop as managing directors in their new Houston office & Jonathan Paine has joined as a senior vice president.
CONROE, TX 2,200 ACRE ARTAVIA UNDER DEVELOPMENT Airia Development has announced builders for the initial phase of their 2,200 acre master-planned community near Texas 242 & FM 1314. Homes will range upward from $240,000.
BRIDGELAND CENTER DEVELOPMENT PLANNED The Howard Hughes Corporation plans to start construction of their 900-acre “urban hub” of Bridgeland in 2020. The initial phase will include 350,000 sf of office space, 80,000 sf of retail space, 40,000 sf for restaurants & 650 apartments. The development will also include a hotel and cinema. BRAUN BUILDING NEW RETAIL CENTER Braun Enterprises is planning a 16,400 sf retail center at US 290 & Fry Road. Mia’s Table, Frost Bank & Fajita Pete’s have preleased approximately 11,000 sf of the space.
FRIENDSWOOD, TX RETAIL CENTER UNDER CONSTRUCTION
Houston-based Virgata Property started construction on Phase One of their 50,000 sf retail center located at FM 518 & FM 528. Phase One includes 20,000 sf with leases to Chipotle, Mod Pizza, Orange Theory Fitness, Jersey Mike’s Subs, Chickfil-A, Valvoline, etc. David Boone with Virgata represented his company in lease negotiations.
STATE VENTURE BUYS THREE OFFICE BUILDINGS State Venture, sister company to the merged Pioneer Exploration & Atlas Operating Companies, purchased three office buildings including the 140,593 sf, 1900 St. James building, the 136,325 sf, 2525 North Loop Building & the 57,525 sf, 2425 Fountainview building. The company 32
plans to relocate from 3501 Allen Parkway to 10,000 sf on the eighth floor of the 1900 St. James building. ENERGY TOWER II 100% LEASED Energy Tower II leased its remaining 26,006 sf in Energy Tower II located at 11720 Katy Freeway to New Era Life Insurance Company. Steven Bryant & Brandon Poynter with Mac Haik Realty represented the landlord.
TIG REAL ESTATE SELLS SUNRISE LAKE TIG Real Estate Services sold the 74,612 sf Sunrise Lake mixed-use development located at 9307 & 9223 Broadway Street. JLL handled the transaction.
QUASAR LOGISTICS BUYS 71.8 ACRES Quasar Logistics IAH Ltd purchased a 71.8 acre tract located near US 59 & Rankin Road from Platinum Ridge LP for a logistics/distribution facility. Clay Pritchett with NAI Partners represented the buyer & John Ferruzzo, Nick Peterson & Ryan Searle with NAI Partners represented the seller.
NEUTRON HOLDINGS LEASES 55,826 SF
Source: The Cannon
CO-WORKING CAMPUS OPENS ON BRITTMOORE The Cannon, a 120,000 sf coworking facility, has opened at 1336 Brittmoore Road which is reportedly approximately 90% leased. Cannon Ventures, the investor arm of The Cannon, will also have space in the new facility. SENIOR HOUSING DEVELOPMENT UNDERWAY Ilan Investments has broken ground on a 229-unit senior-housing community located at 12840 Jones Road. Opening is scheduled for summer 2022. WELCOME GROUP BUYS INDUSTRIAL PORTFOLIO
LOWER HEIGHTS DISTRICT UNDER CONSTRUCTION Gulf Coast Commercial has broken ground on their 320,000 + sf, 24-acre mixed-use project along I10 between Studemont & Sawyer Street. Upon completion the project will include a movie theater, retail, restaurants, office space & apartment units. Phase I will include the construction of a 370-unit apartment project by Trammell Crow Residential.
Dallas-based Crow Holdings is planning to build a 530,000 sf industrial park called Layne Crossing in Greens Crossing Business Park near I45 & Beltway 8. Upon completion, the project will include six buildings and the first will have 85,802 sf located at 11122 Beltline Road.
143,332 SF INDUSTRIAL PROPERTY SOLD Mohegan Alcorn purchased a 143,332 sf industrial property located at 9411 Alcorn Street from BSR Investments. Mike Spears, Derek Riggleman & Robert LaCoure with Lee & Associates represented the seller & Abbas Rajabi with Mohegan Capital represented the buyer.
530,000 SF PLANNED FOR NORTH HOUSTON
Welcome Group LLC purchased an 18-property, single-tenant industrial portfolio which consists of 18 properties. Thirteen of the properties are located in the Houston area, two are located in Dallas & Austin & one is in San Antonio. JLL represented the buyer. BURNS & MCDONNELL ADDS 60,000 SF Burns & McDonnell are increasing their office space from 158,000 sf to 218,000 sf at 1700 West Loop South. Scott Fikes & Jenny Mueller with JLL represented the landlord & Joe Peddie with Cushman & Wakefield represented the tenant.
Neutron Holdings leased 55,826 sf at 8575 Volta Drive. John Hornbuckle of Cypressbrook Company represented the landlord & Jim Stark with CBRE represented the tenant.
KELSEY-SEYBOLD BUILDING 37,000 SF FACILITY Kelsey-Seybold has started construction on a 37,000 sf, two-story clinic in NewQuest’s 91-acre, Grand Morton Town Center, located along SH 99. The clinic is expected to open April 2020.
MISSOURI CITY, TX
CHAPTER 380 AGREEMENT GOES TO NEWQUEST The City of Missouri City has granted a Chapter 380 agreement to NewQuest to pay for the new 250,000 sf Fort Bend Town Center II located at the corner of SH 6 & Fort Bend Parkway Toll Road. NewQuest will receive some sales tax back & up to $6.25 million in property taxes back to the company.
SUGAR LAND, TX
CHI ST.LUKE’S MEDICAL PLAZA SELLS The five-story, 120,596 sf CHI St. Luke’s Health Sugar Land Medical Plaza located at 1317 Lake Pointe Parkway sold to an undisclosed buyer. CBRE represented the seller.
DON'T FORGET TO REGISTER!!
AA Realty Company.............................................19 Berkadia...................................................................3 Caldwell Companies...........................1- SE Texas City of Missouri City..............................................5 Duncan Realty...................................................... 17 Endurance Properties.......................................... 17 Equity Secured Capital........................................ 21 Greenberg & Co..................................................... 15 Houston Map Company.......................................11 JD Woodruff.......................................................... 15 Kay Properties & Investments.......................... 13 La Marque EDC........................................................2 National Environmental Services, LLC.............25 Phase Engineering................................................22 Savvy Inspections.............................1- C/S Texas
2nd Annual Women in Real Estate Summit: Houston Tuesday, September 24, 2019 8:00 AM - 12:00 PM Program Briar Estate Club Summit: Houston 2nd Annual Women The in Real 2603 Timmons Ln, Houston, Tuesday, September 24,Texas 201977027 8:00 AM - 12:00 PM Program More Information The Briarand ClubRegistration 2603 Timmons Ln, Houston, Texas 77027
www.resummits.com/houstonwire More Information and Registration
Showalter Law Firm..............................................11 Southwest Realty Group.....................................11 Texas Funding Corporation.................................11 The Real Estate Council - Greater Ft. Worth........21 Wilson Cribbs + Goren..........................................9 Women in Real Estate Summit...........................7 Worth & Company...............................................19 SEPTEMBER 2019
ray’s buzz BY RAY HANKAMER firstname.lastname@example.org
CCIM August Luncheon
Speaker: Andy Icken, Chief Development Officer, City of Houston
Takeaway: Instead of restrictive red tape controls (such as zoning) the City of Houston is unique among big cities in that it lets ‘The Market’ control development. When there is a deal that the City wants but it is not quite viable, after in-depth study, the City, with approval by the Mayor and Council, may offer incentives to ensure the deal happens. This often takes place in underdeveloped neighborhoods that are hard for developers to ‘sell’ to their equity investors or lenders. If the deal is beneficial to the City, the City has a number of economic tools to help make it happen. •A ndy Icken, who has had a long and successful career developing for Friendswood/ExxonMobil and the Texas Medical Center, has been called the City’s “Development Concierge”, as he meets with various parties to begin the process of identifying projects good for Houston and Houstonians • Incentives are only offered if otherwise a desired project would not quite work •A mong projects ‘wanted’ by the City are affordable housing, help for low-end distressed neighborhoods, encouragement of manufacturing jobs (Icken says Houston is the largest manufacturing city in the US), corporate relocations, eliminating ‘food deserts’ in poor areas, brownfield redevelopment, and transit oriented developments •D evelopers, council members and their districts, and others may originate projects for consideration, and so can TIRZs and management districts •P roposals may also come from the international presence in Houston, since we have 93 consulates and many of them have commercial attaches representing business interests in their home countries who want to come to Houston •A mong the tools to facilitate development in the City are tax abatement, opportunity zone incentives, State enterprise zone incentives, Chapter 380 programs, historic site exemption, EB-5 international investor program, and industrial districts • Icken thinks of his department as a sort of ‘marriage broker’, bringing investors into under-invested areas so they can help the area AND make a profit • T he big challenge is to find the really good projects
•S ometimes the big developers put in approved infrastructure at their expense and receive part of it back over time from TIRZ funds •A t present there are 40-50 projects in the pipeline in Icken’s office; some of them are as follows… •E ast End Innovation Hub, 300,000 SF warehouse is a ‘Maker’s Hub’, to help small businesses, which create 75% of the new jobs in Houston • ION innovation Center in Midtown in the old Sears store •M ulti-use incubator community on Brittmoore on the west side, 31 acres of offices, co-working, auditorium, fitness center, and small affordable housing units for the small business entrepreneurs with 5-10 people working to develop an idea and bring it to market •5 00 acres at Ellington are in line for City-incentivized development for the ‘right’ projects • F or years innovation came mostly from Houston’s big corporations, and now it is coming mostly from small start-ups •H ouston’s airports contribute 7% to the GDP of the City, and all investment there is paid for by the airlines: $250 million from United at IAH for 757 maintenance facility and $100 million from Southwest Airlines for maintenance, following an earlier huge investment to launch Southwest’s international service from Hobby, which has been extremely successful
•S ometimes older neighborhoods, which need the help, are nonetheless resistant to change, and need to be educated to benefits of projects
•A new consolidated car rental building at Hobby at the end of Broadway will also be the destination of the METRO NEXT light rail extension to the airport
•A s far as the TIRZ money goes, currently it is being reinvested 19% in infrastructure, 15% in quality of life projects, and 65% in drainage
•C ollaboration with the business community is essential for the City’s efforts
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