At this time in 2020, it was hard to imagine that the industrial market could get much better. It was arguably already the strongest of the sectors when the pandemic hit. And while shutdowns had a devastating impact on other real estate markets, industrial only gained steam. “The Dallas industrial market is as hot as we have ever seen it,” says Josh Barnes, Senior Vice President of Holt Lunsford Commercial (HLC). “Tenant demand has continued to provide +/- 20M Square Feet of net absorption, which has allowed the development pipeline to remain strong.” The Metroplex was at or near the top of just about every nationwide industrial ranking a year ago thanks to its key position as a logistics hub. “Companies located here can access numerous markets in the United States, not to mention Texas itself. That’s 29 million people alone,” says Bill Baumgardner, Executive Vice President of VanTrust. “Dallas is the hub to all that.” The pandemic accelerated consumer buying habits, increasing e-commerce business and, in turn, the need for distribution sites. “All these consumer product companies are now focused heavily on what their e-commerce strategy is and how they get their goods to your home as quickly as possible,” Baumgardner says. “Couple that with the sustained population growth and job growth, that’s a great recipe for a solid industrial market,” adds Barnes.
Another side effect of the pandemic that has benefited the industrial sector: layoffs in other areas have helped remedy a long-standing labor shortage. “With traditional retail and hospitality taking their lumps during the pandemic, we’ve seen a migration of those workers into the industrial distribution sector,” says Baumgardner. Click to read more at www.rednews.com.
Austin developer Ari Rastegar on how Covid will change real estate in large American cities forever… and how Texas is cashing in. He closed 11 major commercial real estate deals during the Covid-19 pandemic. This came after years of telling anyone who would listen how much opportunity there was in the central Texas capitol city many refer to as Silicon Hills. His proclamation earned Ari Rastegar the moniker ‘Oracle of Austin’. But Ari Rastegar isn’t stopping with Austin. “Austin was our prototype to establish and then expand around the Sun Belt,” says Rastegar, founder of Rastegar Property Company, an Austin-based CRE investment firm & vertically integrated real estate company with a focus on value-oriented real estate. “Nashville, Dallas, Phoenix, Raleigh and Tampa – the Sun Belt is hotter than it has ever been, and we see no end to the migration. You think Austin is exciting?” says Rastegar. “Get ready!” For years he watched droves of young professionals making their way to Austin, and he took careful note. That’s why, when the pandemic hit, Rastegar realized it would only expedite these migration trends. He utilized this insight and his uncanny ability to see around corners to position and propel Rastegar’s business plan forward. Now, that vision is bearing its fruit as companies like Apple, Facebook and Amazon invest long term in the city where he was born. Rastegar’s keen understanding of his hometown —- where he made his first real estate deal while in law school — gave him the advantage of knowing exactly where the young professionals coming to the city would want to live and the type of housing that would appeal to them. Click to read more at www.forbes.com.
The eyes of Texas — and the entire world of commercial real estate — appear to be upon Austin. In a new survey from commercial real estate services company CBRE, commercial real estate investors rank Austin first among U.S. metro areas for investment prospects in 2021. Austin knocked Los Angeles off its previous first-place perch. Dallas-Fort Worth comes in at No. 2, with Los Angeles holding down the No. 3 spot. Austin appeared at No. 3 in CBRE’s 2020 survey and No. 11 in the 2019 version. Dallas-Fort Worth ranked second in 2019 and 2020, while LA ranked first in those two years. “The Sun Belt markets of Austin, Dallas, Phoenix, and Atlanta were among the top-performing metros where the least number of jobs were lost in 2020,” CBRE says in its survey findings. For the first time in the history of the CBRE survey, big-time investors (those that manage assets of more than $50 billion) preferred smaller markets like Austin and Dallas-Fort Worth over mega-markets like New York City and San Francisco. CBRE says markets such as Austin and Dallas-Fort Worth “will see intense competition for good-quality assets from all types of investors.” At the same time, commercial real estate services company JLL names Austin one of the “rising star” cities for investment in the U.S. Also in that category are Dallas; Denver; Charlotte, North Carolina; Miami; Nashville; and Raleigh, North Carolina. JLL cites population growth and job growth, as well as a lower cost of living and shorter commute times than places like New York City and San Francisco, as reasons for its bullish outlook regarding “rising star” locales. Click to read more at www.austin.culturemap.com.
It didn’t take long for South Texas Twitter to have some fun with the news that Elon Musk is investing millions into the area. On Tuesday, the Tesla CEO announced his $20 million donation to schools in Cameron County, the southernmost county in Texas, as well as a $10 million donation to the City of Brownsville for “downtown revitalization.” Other Twitter users had suggestions for how the money can be used, like building a Pluckers or bringing back Mr. Gatti’s. Some even joked that Texas’ power grid wouldn’t be able to handle the futuristic vibes that Musk and his SpaceX will bring. Musk even chimed in on one suggestion. Only time will tell how Musk and his money will reshape the heart of South Texas. Click to read more at www.mysanantonio.com.
History has proven that the U.S. economy is amazingly resilient to horrific events such as those that occurred during the past year. According to ITR Economics, the recovery of the economy is progressing nicely — consumers are happy and businesses are buying capital equipment. However, there are concerns that excessive government stimulus spending will cause runaway inflation in the future. There were lots of winners and losers in the pandemic. Industrial benefitted the most with the dramatic increase in e-commerce. Costar reports that the industrial market is very tight with low vacancies and increasing rents. Demand for distribution logistics space is at an all-time high. More and more warehouse space is needed closer to the consumer. The office market is struggling and may take years to recover as employees continue to work remotely until they have to return to work. Many Texas office buildings were already hurting with the struggling oil and gas market. Available office space is near record highs according to Costar. Click to read more at www.dmagazine.com.
For a state that has weathered its share of storms, Texas was unprepared for the record-setting deep freeze that hit in mid-February and the initially estimated $50 billion in damages. “According to Enki Research disaster modeler Chuck Watson, the severe weather event could cost as much as $90 billion, making this the largest insurance claim event in history,” said public insurance adjuster Scott Friedson, CEO of Insurance Claim Recovery Support (ICRS). REDnews connected with Friedson while he was making the trek to Houston, where he was slated to inspect more than 35 different properties that week. “There is no insurance risk model that accounts for a catastrophic loss to an entire state, especially the state of Texas,” he says. Hurricanes, Friedson explains, typically cause damage along the coast. Even a hail storm or tornado has limited exposure. The freeze, on the other hand,
stretched from the westernmost point of Texas to its easternmost point. “Many property owners are juggling pipe repairs, water damage mitigation, satiating tenant demands and dealing with their insurance claims simultaneously,” says Friedson, who exclusively represents commercial and multifamily owners, as well as management companies. “The carriers’ adjusters are coming as quickly as they can as policyholders are grappling with understanding their policy, as well as their contractual obligations in order to ensure a fair and prompt settlement.” Click to read more at www.rednews.com.