Category: North Texas

Hope Lingers For Retail, but Retail Real Estate is in for a Long Journey Back to Profitability

Posted on by Sarah

With stay-in-place orders keeping customers at home, the retail sector is set to face pressure unlike other asset classes. And as the NOIs at retail properties contract, that financial stress will radiate up the real estate infrastructure, from retailers shuttering their stores, to landlords unable to
collect rents to lenders themselves. How much pain retailers feel is directly tied to how long our pandemic countermeasures are kept in place. As of this writing, for example, Dallas County’s “Safer-at-Home” order is in effect until April 30, which rescinded and earlier extension by the commissioner’s court approving the county’s disaster declaration until May 20. “If we open the doors May 1, I think we will just fine. If we open the doors on June 1, there’s going to be collateral damage,” said Jennifer Pierson, managing partner at Dallas-based STRIVE. “If we go into August, I don’t think the word
‘severe’ would be an understatement.” Before the pandemic, retail was already suffering as e-commerce took its toll and consumers opted to shop from home. The one shining segment of the sector was experiential retail, a tag applied to everything from fitness centers to DIY pottery shops, but which is largely comprised of restaurants and bars. With shelter in place orders now keeping consumers away from these establishments too, many are in dire straits. The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, passed by Congress and signed into law by President Donald Trump on March 27, seeks in part to address this issue. Click to read more at www.rednews.com.

North Dallas Multi-housing Property Refinanced

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JLL Capital Markets arranged the refinancing of Advenir on Addison, a 264-unit, garden-style multi-housing property in Dallas. JLL worked on behalf of the borrower, Advenir, to secure the seven-year, fixed-rate loan through Freddie Mac. The loan will be serviced by Holliday Fenoglio Fowler LP, a JLL company and a Freddie Mac Optigo lender. Advenir on Addison is located at 17671 Addison Road near the intersection of President George Bush Turnpike and Dallas North Tollway. The property is well supported by retail, dining and entertainment venues, including the Galleria Mall, Village on the Parkway, the Shops at Willow Bend and Valley View redevelopment. Advenir on Addison is also near the Platinum Corridor, one of the DFW metroplex’s largest office corridors, and three of the metro’s largest mixed-use developments: CityLine, Legacy Business Park and Frisco’s $5 Billion Mile. Units include one- and two-bedroom floor plans averaging 923 square feet with amenities such as stainless steel appliances, granite kitchen counters, hardwood and slate flooring, spacious walk-in closets, in-unit washers and dryers and attached garages for all units. Click to read more at www.rejournals.com.

Texas developer Hines teams up with venture that includes Mayo Clinic for safer workplaces

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A collaboration that includes the Mayo Clinic and two of the country’s top commercial property firms is studying workplace adaptations to reduce infection from the COVID-19 virus. Houston-based developer Hines, international brokerage firm Cushman & Wakefield and the Well Living Lab are teaming up for the effort to make offices safer as the economy begins to restart. Well Living Lab is a joint venture by Minnesota-based Mayo Clinic and Delos, a New York-based environment and “wellness solutions” firm. The group plans to contribute designs and science “for reducing the risk of respiratory virus transmission in work environments.” “Our people have been pioneers in creating progressive real estate that advances the built environment, so joining this effort is a natural way for us to give back while continuing to anticipate and meet the needs of tenants, clients and investors,” Hines CEO Jeff Hines said in a statement. Hines — which has office projects in the Dallas area — will provide expertise from its decades-long experience creating successful real estate projects. Click to read more at www.dallasnews.com.

Coronavirus Impacts Commercial Real Estate and Related Jobs

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The North Texas real estate market and the jobs that depend on it are one of the many industries impacted by the coronavirus pandemic. How serious the damage will be is not yet clear, but Southern Methodist University business professor Mike Davis said he did not expect a rapid recovery. “We know things are going to be different,” he said. “We’re entering into this horrific recession and recessions this bad, you feel the echoes of that for two or three, maybe even longer, years after that.” The drastic hit to aviation and the hospitality industry could cripple future construction of hotels and airport-related business. Shopping center development that was already hurt by a shift to online shopping may decline further as customers become even more accustom to e-commerce during forced time at home. Employment and job opportunities will be hurt. “We’re going to see a fundamental shift in the way we shop and the way we do business. That may mean fewer people getting on airplanes, which means fewer sales at all those food places and shopping places at the airport,” Davis said. “It could mean more on line sales as more people discover that’s just a good way to do business.” Click to read more at www.nbcdfw.com.

How North Texas small businesses can apply for an economic injury disaster loan

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Late last week, Governor Greg Abbott announced that Texas is now included as part of the U.S. Small Business Administration’s Economic Injury Disaster declaration, allowing qualifying businesses in the state access to the loan program. SBA Public Information Officer for the Office of Disaster Assistance Susheel Kumar, whose district includes Texas, explained in an interview that the program allows for loans up to $2 million with interest rates for small businesses at 3.75 percent, while nonprofits are at 2.75 percent. Repayment plans can be up to 30 years, but the exact terms are decided case-by-case. The first payment for the loan doesn’t start until 12 months have elapsed, Kumar said. “The economic disruption has caused a strain on supply chains nationwide,” Kumar said. Kumar said that the SBA has received “significant volumes” of applications, but did not venture to estimate how many since he does not have the numbers yet. He also said there have been a number of loan approvals, as well. The term “small business” can mean a variety of things. Kumar said that often how the SBA determines which businesses are deemed “small” depends on a variety of factors, including the industry, amount of average annual receipts and number of employees, among other factors. The SBA’s definition for various industries can be found here. Click to read more at www.wfaa.com.

Tenants ask for rent relief as pandemic shuts down business

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Even when business stops, the rent goes on. But with the unprecedented restrictions caused by the coronavirus, building tenants and their landlords are scrambling to deal with the new reality. Retail and commercial building tenants who have been forced to shut down are seeking relief from rent payments that still come due even when their doors are shut. “It’s not just restaurants — there are a lot of businesses that aren’t prepared to go two months without income,” said Tom Lynn, chairman of Dallas commercial property firm NAI Robert Lynn Co. “The companies that haven’t been able to access their properties and run their businesses are calling us to see if they can get some relief.” Even a landlord willing to cut his tenants some slack faces obstacles, Lynn said. His loan agreements may preclude free rent. Plus, some leases in retail buildings can be voided if a large percentage of the tenants in the project close down or pull out. Click to read more at www.dallasnews.com.