JLL Capital Markets neogitated the sale of Cedar Port IKEA, a 996,482-square-foot industrial distribution center near Houston, Texas.

JLL represented the seller in the transaction, with MDH Partners acquiring the property.

The property consists of two Class-A buildings built in 2017, currently fully leased to IKEA. It features 32-foot clear heights, large 190-foot truck courts, ESFR sprinkler systems,  abundant trailer parking and future rail capability.

Strategically located at 4762 and 4830 Borusan Rd in Baytown, Texas, the property sits within the sought-after Southeast Houston industrial submarket. Its prime position, just two miles from State Highway 99 and 15 minutes from Barbour’s Cut Container Terminal, offers exceptional regional connectivity and streamlined access to the Port of Houston.

Additionally, the property is part of Cedar Port Industrial Park, the largest master-planned, rail-and-barge-served industrial park in the United States and the fifth largest globally. This 15,000-acre campus features heavy utilities and exceptional infrastructure, hosting industry leaders like Walmart, GE, DHL and The Home Depot.

The JLL Investment Sales and Advisory team was led by Industrial Group Co-Lead and Senior Managing Director Trent Agnew, Senior Director Charlie Strauss and Director Lance Young.

HOK, a global design, architecture and engineering firm, has left its
mark on some of Texas’ most renowned skyscrapers, including Houston’s
JPMorgan Chase Tower and Dallas’ Trammell Crow Center. As the real
estate landscape shifts due to economic and environmental factors, these
projects exemplify the growing trend of renovating existing properties.
“Here in Austin, for example, there was such an incredible boom and so
many office buildings built,” said George Blume, HOK’s Austin/Dallas
design principal. “But as a result of COVID, it’s been really challenging to
get occupancy in those buildings.”
This abundance of available space is steering the industry towards
renovation rather than new construction. Blume believes that the focus
has shifted from creating new amenities to infusing existing spaces with
a modern, attractive feel.
“You’re not going to see a lot of new office buildings any time soon,” he
noted. “We all have to now work with the supply that we have.”
The pivot toward renovation is not just a matter of necessity; it also makes
financial and environmental sense. Blume emphasized the importance of
leveraging existing structures rather than building anew.

“Building construction is quite a draw on the resources that we have, but we have so much building stock in this entire world, it would behoove us to work with what we have as much as possible,” Blume said, noting that this approach not only saves on construction costs but also appeals to tenants. “Since there’s not an appetite for new construction right now, it’s very much a tenant’s market. Tenants have a lot of power and a lot of choice. There’s great value in retrofitting an existing property. That’s a great story for sustainability.” The financial advantages of renovation are clear, but Blume also highlighted the ongoing “arms race” to attract top talent. Companies are constantly seeking to make their office environments more inviting.

“It’s really appealing to every generation of talent, making them feel like this is a really inviting, fun place to work,” Blume said. “You can only do that so much with your actual tenant interior. The tenants are going to want those properties to have as much of a similar value as possible.”

When it comes to revamping iconic properties like the JPMorgan Chase Tower and Trammell Crow Center, there’s an added challenge: modernizing without losing the essence of the building’s original architecture. “JPMorgan Chase is a classic tower. It’s currently the tallest building in Texas. It’s by I.M. Pei, and it is a gem of architectural history,” Blume explained. “On paper, you wouldn’t need to do anything with that project to attract tenants. But over the last ten years, there were plenty of incredible Class-A towers built.”

Marcus & Millichap closed the sale of a net-leased Tractor Supply Co. location in Nixon, Texas.

Zack House, Mark Ruble and Chris Lind, investment specialists in Marcus & Millichap’s Columbus and Phoenix offices, had the exclusive listing to market the property on behalf of the seller, a limited liability company. Tim Speck, Broker of Record in Texas, assisted in closing the transaction. 

Located at 1106 E. 2nd St., the brand-new, 23,957-square-foot Tractor Supply Co. features a 15-year corporate lease. The property is a high-quality 2024 construction situated on a 4.42-acre lot. It is easily accessible along Central Ave. and Hwy. 87, receiving visibility from roughly 7,000 vehicles a day. Major retailers nearby include Family Dollar, Dollar General, Dairy Queen, Circle K and Ford. 

 JLL Capital Markets facilitated the sale of Little York Plaza, a 114,982-square-foot Hispanic grocery-anchored shopping center in the Near North submarket of Houston, Texas.

JLL worked on behalf of the seller. The asset was purchased by The Criterion Fund, a full-service retail development and investment group specializing in strip center investments.

Little York Plaza, situated at 1523 Little York Rd., is strategically located along Hardy Toll Rd. and Little York Rd., with a daily traffic count of 41,370 and 25,261 vehicles respectively. Little York Plaza sits in the center of the Hardy Heights community, acting as an essential shopping center with a tenant lineup tailored to serve the neighboring rooftops.

The area is seeing positive growth, benefitting from increased activity with new school openings and construction of local parks, along with other developments. Located in an underserved retail submarket, the asset features in place rents significantly below market with sticky tenancy with over 16 years of tenure at the site.

Little York Plaza, a vintage shopping center built in 1997, enjoys an impressive 98.3% occupancy rate. Situated on 11.45 acres, the property is anchored by Seller’s Bros, Houston’s leading Hispanic grocery chain, part of the larger La Michoacana brand portfolio. The center boasts a diverse tenant list featuring Dollar Tree, Melrose Family Fashions and Aaron’s Appliances. The property has seen positive leasing activity, recently signing a lease with Verizon.

JLL Capital Market’s Investment and Sales Advisory team representing the seller was led by Senior Managing Director Ryan West and Senior Director John Indelli.

Are commercial real estate professionals more optimistic today following the recent interest-rate cut enacted by the Federal Reserve Board? A recent survey seems to suggest that they are.

The CRE Finance Council (CREFC) released the results of its Third-Quarter 2024 Board of Governors Sentiment Index survey late last month. Conducted between Sept. 4 and 12, this survey provides crucial insights into the state of the commercial real estate finance sector.

The third-quarter 2024 Sentiment Index surged to 121.1, an 18% increase from 102.4 in the prior quarter. This marks the highest reading since the index was launched. It reflects significant optimism over the Fed’s easing of interest rates, the potential for a U.S. economic soft landing and the impact on both commercial real estate assets and lending market conditions.

The survey’s core questions reveal a more positive outlook for lending and CRE fundamentals:

• Economic Outlook: Optimism surrounding the U.S. economy rose, but overall sentiment remains guarded. Some 32% of respondents expect improved performance over the next 12 months, up from 11% last quarter. Only 11% now anticipate worsening conditions.
• Rate Impact: An overwhelming 85% of respondents expect lower mortgage and capitalization rates to positively impact CRE finance and CRE asset values, a substantial increase from 41% last quarter.
• CRE Fundamentals: Confidence in CRE fundamentals improved, with 40% predicting better conditions over the next year, up from 24% in the previous quarter.
• Transaction Activity and Financing Demand: Investor demand for CRE assets is expected to grow, with 81% anticipating increased demand, up from 54% last quarter. Borrower demand for financing also saw an uptick, with 85% projecting higher loan demand compared to 65% last quarter.
• Liquidity and CMBS Market: Confidence in liquidity improved significantly, with 77% expecting better/more liquid market conditions in the debt capital markets, up from 46% in the prior quarter. In addition, positive sentiment around CMBS and CRE CLO demand increased to 66% from 43%.
• Optimistic Industry Sentiment:Industry sentiment was markedly more positive, with 57% expressing a positive outlook, up from 22% in the previous quarter, with negative sentiment dropping to just 2%.

The survey also explored expectations regarding Federal Reserve actions and the potential impact on the CRE market. With the survey conducted just before the Federal Reserve’s decision on Sept. 18 to cut interest rates by a half-point, 47% of respondents anticipated a 50-basis point cut in interest rates by year-end 2024, with 15% expecting a rate reduction of 75 basis points during the same period.

Most respondents (60%) expect a meaningful recovery in CRE transaction volumes in 2025 as interest rates stabilize. However, concerns persist around the office sector, with 62% expecting continued declines in office property values, particularly for older, less-amenitized buildings.

“The latest survey results signal a strong resurgence of confidence within the CRE finance industry,” said Lisa Pendergast, executive director of CREFC, in a statement. “Expectations of further Federal Reserve easing, combined with increased investor and borrower demand, suggest market participants are preparing for growth and opportunity through year-end and into 2025. While challenges remain —particularly in the office sector — the overall outlook is more optimistic than in previous quarters.”

“Expectations of easier U.S. central bank monetary policy have improved sentiment in the commercial real estate finance market and any additional interest rate cuts by the Federal Reserve likely will support transaction volume,” added Leland Brunch III, chair-elect of the CREFC and managing director and head of capital markets and banking for the US RESF Group at Bank America, also in a statement. “The lower borrowing costs are welcome after a protracted period of elevated interest rates.”

KWA Construction completed The Draper Apartments, part of GroundFloor Development’s redevelopment project in Garland, Texas.

The project was financed in partnership with the U.S. Department of Housing and Urban Development.

Located on the northwest corner of South Garland Avenue and West Avenue B, The Draper is a three-story, 155-unit community within walking distance of the newly renovated Downtown Square, which features various shops, restaurants and entertainment venues.

Designed by JHP Architecture, The Draper’s resident amenities include a resort-style pool with tanning deck, fitness center, business center, co-working lounge, resident lounge, private garages and covered parking.

In-unit amenities include, quartz countertops, stainless steel appliances, walk in closets, vinyl plank flooring and plush carpeting, and washer and dryers. The property is also is near the Downtown Garland DART station, providing public transportation access to points across Dallas-Fort Worth.