Category: US/Texas CRE News

CCIM Office Sector Luncheon—Demand, Density and Flex Space: Systemic Change or Return to Yesterday?

Posted on by Sarah

Keynote Speaker: Dr. James Gaines, Chief Economist, Texas A&M University, Real Estate Center

February 2020, was the peak of the 128-month-long prior recovery; then we fell sharply into recession
• Down 31% in Q2 and down 25-30% in Q3 (est.)
• Since March nationwide, 63 million have filed for unemployment—about 38% of the workforce; in Texas, 6 million; Texas lost 1.4 million jobs in March-April alone; lost jobs have now recovered by about one-half; Houston has retained 92% of pre-COVID jobs
• Texas has had a ‘double whammy’: oil and COVID…energy demand is down and will stay there for a while, although price at $40 bbl seems to have stabilized
• Our federal deficit will hit $4 trillion this year, and the Fed has had to borrow $3 trillion of it; in 2-5 years there will be a huge debt overhang
• 3.4 million mortgages—7% of total-are in forbearance arrangements, but those arrangements may expire in early 2021
• For recovery, we must: a) get virus under control b) increase consumer demand and spending c) re-employ people d) stabilize/improve global trade
• We have no inflation and stable (low) interest rates at or lower than 3%
• Texas is a little better off than rest of the U.S., and it should be early 2022 before we approach under 5% unemployment
• Home sales are up 3.5%, and prices up 5-6%; there is an inventory shortage of single-family homes; new home construction is up and could be one of major drivers pulling us out of current slump

Resolut RE Closes Dozens of Transactions Around Texas

Posted on by Sarah

RESOLUT RE recently completed 26 leases in Texas. The deals included retail and industrial transactions in the Austin, Houston Dallas-Fort Worth and San Antonio markets. Aloha has renewed at AMLI South Shore (1620 E. Riverside Drive, Austin). Phil Morris of RESOLUT RE represented the landlord. Brent Campbell of Don Quick & Associates represented the tenant. Austin Title has leased 4,298 square feet at Heritage Court (200 E 8th St, Georgetown, Texas). Andrew Perkel and Michael Noteboom of RESOLUT RE represented the landlord. Brad Buckman of Aquila Commercial and Ryan Tiernan of Orion Real Estate Group represented the tenant. J Heart CBD has leased 1,200 square feet at 6719 North Lamar Shopping Center (6719 N Lamar Blvd, Austin). Phil Morris of RESOLUT RE represented the tenant. Hutch Hutchings and Cole Brodhead of Edge Realty Partners represented the landlord. Marco’s Pizza has leased 1,410 square feet at Cannon West (6800 Westgate Blvd, Austin). Phil Morris of RESOLUT RE represented the landlord. Brett Gissler of Edge Realty Partners represented the tenant. One of the Kids has leased 3,360 square feet at Park Street Commons (2111 E Park St, Austin). Joey Mendez and Michael Noteboom of RESOLUT RE represented the landlord. Tim Edwards of Flintrock Commercial represented the tenant. Relaxing House has leased 1,750 square feet at Williamson Square (10700 Anderson Mill Rd, Austin). Joey Mendez of RESOLUT RE represented the landlord. The Treasure Nouk has leased 1,212 square feet at The Marketplace (500 Lake Air Dr, Waco, Texas). Jacob Nagy and Michael Noteboom of RESOLUT RE represented the landlord. The UPS Store has leased 1,552 square feet at 8708 South Congress Avenue in Austin. Joey Mendez and Michael Noteboom of RESOLUT RE represented the landlord. Tim Grondin of ISO Commercial represented the tenant. NobiliTea has leased 1,875 square feet at Grand Central at Milam (206 N Milam St, Fredericksburg, Texas). Gavin Fite of RESOLUT RE represented the tenant. Alec Spencer and Jeremy Peterson of St. Croix Capital Companies represented the landlord. An undisclosed buyer has purchased the 38,372 square feet shopping center at 7113 Burnet Road in Austin. David Simmonds of RESOLUT RE represented the buyer. Carl Daywood of Carl Daywood Realtors represented the seller. An undisclosed buyer has purchased the 3,250 square feet building at 923 Texas 332 Loop in Liberty Hill, Texas. Phil Morris and Emilie Niekdam of RESOLUT RE represented the seller. Kim Sanders of Keller Williams Realty, Inc represented the buyer. Crave has leased 2,827 square feet at Waters Edge at Viridian (3990 N Collins St, Arlington, Texas). Sherry Naquin Sanchez of RESOLUT RE represented the tenant. Cameron Haddad and Zach Boatwright of Vision Commercial Real Estate represented the landlord. An undisclosed buyer has purchased the 30,000 square feet Central Mall in Texarkana located at 3501 Mall Drive in Texarkana, Texas. Brian Sladek of RESOLUT RE represented the buyer. Steve Schrenk of JLL represented the seller. An undisclosed buyer has purchased 0.647 acres at 6520 West Adams Avenue in Temple, Texas. Brian Sladek and Tucker Francis of RESOLUT RE represented the seller. Dave Burggraaf of Evergreen Commercial Realty represented the buyer. Aaron’s has leased 4,500 square feet at Little York Plaza (1409 Little York Rd, Houston). Joaquin Orozco and Taki Dallis of RESOLUT RE represented the landlord. Clay Albers of Clay Alberts Properties represented the tenant. Find A Pet has leased 4,650 square feet at 3433 Gulf Freeway in Houston. Myra Vorrice of RESOLUT RE represented the tenant. Fred Ghabriel of Bejjain & Associates represented the landlord. Hartz Chicken has renewed at Wharton Retail Shopping Center (10314 Highway 59 South, Wharton, Texas). Taki Dallis of RESOLUT RE represented the landlord. Houston’s Fuzzy Tails has leased 1,125 square feet at Kingsland Plaza (23222 Kingsland Blvd, Katy, Texas). Jim Thompson and Benny Nguyen of RESOLUT RE represented the landlord. Howdy Hot Chicken has leased 2,320 square feet at Mason Square (1443 S Mason Rd, Houston). Jim Thompson and Lyle Cowand of RESOLUT RE represented the landlord. Emily Durham of Waterman Steele represented the tenant. Octapharma Plasma has leased 8,320 square feet at Little York Plaza (1409 Little York Rd, Houston). Joaquin Orozco and Taki Dallis of RESOLUT RE represented the landlord. David Stefancic of Cushman & Wakefield represented the tenant. Polar Clean has renewed at 12450 Hwy 3 in Webster, Texas. Dani Allison of RESOLUT RE represented the tenant. Rococo Salon Suites has leased 1,918 square feet at Eagle Springs Shopping Center (5444 Atascocita Rd, Humble, Texas). Jim Thompson and Benny Nguyen of RESOLUT RE represented the landlord. An undisclosed buyer has purchased the 7,000 square feet office building at 2305 Hwy 6 South near Westheimer in Houston. Mohamed Gamal of RESOLUT RE represented the seller Kareem Gamal, President of Gamal Enterprises Inc. An undisclosed buyer has purchased the 23,500 square feet Corrigan Plaza located at 5402 Broadway Street in Pearland, Texas. Jim Thompson and Benny Nguyen of RESOLUT RE represented the seller. Nolan Rencher of Rencher Properties represented the buyer. An undisclosed buyer has purchased 0.74 acres at Colony Park Shopping Center located at SH 6 and Boonville Road in Bryan, Texas. Dave Burggraaf of RESOLUT RE and Jeremy Richmond of Oldham Goodwin represented the buyer. Kyle Knight and Brett Vinzant of Weitzman Group represented the seller. NobiliTea has leased 1,875 square feet at Grand Central at Milam (206 N Milam St, Fredericksburg). Gavin Fite of RESOLUT RE represented the tenant. Alec Spencer and Jeremy Peterson of St. Croix Capital Companies represented the landlord.

Leadership Strategies For Sticking Together While Staying Apart

Posted on by Sarah

As we approach the new year, it’s a good time to reflect on the importance of gratitude and giving. These last 10 months have changed how we live, work and play, but one key lesson we have learned from COVID-19 is that we can still stick together while staying apart. No doubt, the pandemic profoundly and directly impacts commercial real estate through quarantines, shutdowns, social distancing, supply chain disruptions, and loss of consumer confidence. CRE and the overall economy will rebound. The speed with which the country and the industry emerge from the crisis depends on the availability and adoption of vaccines, patience with masks and social distancing, monetary stimulus, and stabilizing the property types, markets, and projects. “To whom much is given, much will be required.” If you have heard that sage quote, you know it means we are held responsible for what we have. If we have been blessed with knowledge, talent, time, and resources, it is expected that we use these gifts to benefit others. Although social distancing keeps us physically apart, it does not mean we are alone. There are countless opportunities to support others. Yes, celebrations, dinners with friends, and sporting events have mostly been canceled. However, compassion, kindness, and faith in humankind have not been postponed. Here are some strategies we can take that reinforce this: SHOW APPRECIATION.

Sometimes the most effective things are the easiest. When did you last say thank you to someone in your organization for a job well done? Perhaps you do this regularly, in which case you should encourage others to do it as well. Taking the time to show gratitude makes others feel valued. It is also contagious behavior, and the more everyone does it, the more it becomes part of your culture. A study by Glassdoor found that 80 percent of employees are willing to work harder for an appreciative leader, and 70 percent said they would feel better about themselves and their efforts if their managers recognized them more often.

Click to read more at www.dmagazine.com.

Tools of the Trade: How Technology will Enable Office Workers to Return

Posted on by Sarah

The very first COVID-19 vaccines have been administered in the United States, though experts estimate it will take months before vaccination becomes an option for the general public. Still, it is a sign that we are steadily moving toward post-pandemic life. When it comes to certain parts of commercial real estate, that may not look exactly like it did even a year ago. Offices emptied at the beginning of the pandemic as companies sent millions of employees home to help prevent the spread of the virus. As we’ve learned more about it and how to protect workers, more are returning to the office. But according to a Qualtrics study, two out of three Americans still feel uncomfortable about returning to their workplace. The CDC outlines its recommendations for bringing workers back, which involves developing a COVID-19 workplace health and safety plan by evaluating whether the building is ready for occupancy, pinpointing weaknesses in the workplace and developing hazard controls. That, in large part, charges property owners and managers with providing peace of mind for their tenants by focusing on outbreak prevention and worker safety in the months ahead. Technology will play an important role in that, enabling employees to feel safer when they return to the office. According to research from CB Insights, “To stay ahead of the curve, companies will need to consider key investments across wellness, remote collaboration tools, mobile cybersecurity tech, accessible HR tools and workforce training programs for professional development and upskilling.” Various new technology offerings have cropped up in the past few months to address the concerns of companies focused on bringing employees back into the office. One example of technology that could aid in the future of office management got its start back in 2017 but is perfectly poised for this moment. “Nimway was initially developed as an internal tool to help Sony’s own employees find their way around the huge campus in Lund, Sweden. With 13 different buildings, people were having a hard time locating meeting rooms, finding available workspaces and even colleagues,” said Lars-Gunnar Lundgren, the head of Nimway. “We soon realized we weren’t the only ones—lots of other companies had similar problems—so we decided to turn Nimway into a commercial solution.” Nimway technology was designed and is being continuously developed with end users in mind, said Lundgren, by supporting employees in their everyday lives and also by providing facility managers with useful occupancy data. An example: an employee can use Nimway to find and book meeting rooms, which will help companies manage capacity restrictions. Plus, the software’s wayfinding feature guides employees to the chosen meeting room. Nimway also developed new features to help minimize health risks for those who return to the building. Using the technology, employees can book a desk in the office up to 14 days in advance. And when they’ve finished working, Nimway’s desk sensors mark the space as “unavailable” until after it has been cleaned. “Obviously Nimway can’t guarantee people’s safety, but what it does is help companies implement the COVID safety policies they’ve decided to apply,” Lundgren said. For that reason, he added, Nimway isn’t encouraging companies to rush into reopening their offices. “Rather, we want to support them with useful tools when their process begins,” said Lundgren. “There are different restrictions in different countries, but one thing we’ve observed everywhere is that it takes time and careful planning to get this right. Our customers are aware of this and that’s why they’re working to get the technology they need in place ahead of time.” Even beyond the pandemic, Nimway allowed users to analyze space utilization and, as a result, improve office layouts. “This reduces the need for additional buildings which, in turn, reduces short-term raw material use as well as long-term energy consumption,” Lundgren said. “You could say that ‘green’ thinking is built into the Nimway solution.” Companies can also continue using the program as it was originally intended—as a vehicle to eliminate the stress of everyday tasks such as finding a meeting room or colleague. “Nimway allows employees to spend more time and energy on creative and productive tasks. This is fantastic for both staff and business owners since people can put their energy where it really counts,” said Lundgren. “It’s good for company culture … and for the bottom line.” No matter which tools a company chooses to boost employee safety, privacy and morale in the coming months, the office will continue to be a place where workers can connect and innovate—two aspects of work that have been sorely lacking during the pandemic.

PPP and Other SBA Loan Provisions in Consolidated Appropriations Act of 2021

Posted on by Sarah

The Consolidated Appropriations Act of 2021 — which includes a $900 billion COVID-19 stimulus package that extends unemployment benefits and provides additional assistance for small businesses — was signed into law December 27, 2020. The Act also contains several key provisions regarding the Small Business Administration (SBA) and the paycheck protection program (PPP). Here is a summary:

Deductibility of PPP funded expenses: This provision overturns the IRS ruling that expenses funded with PPP loans were not deductible. Effective date is back to enactment of CARES Act.

EIDL advances: The $10,000 EIDL advance is excluded from income and no expenses are disallowed with respect to the income exclusion. In addition, EIDL advances no longer will reduce the amount of PPP loan forgiveness.

Income exclusion and expense deductions for payments made on Section 7(a) SBA loans: Section 1112 of the CARES Act provided that the SBA would pay up to six months of principal and interest on certain SBA loans. The new Act would provide, similar to PPP loans, that the principal paid by the SBA does not result in income forgiveness and no deductions are disallowed as a result of the income forgiveness.

Click to read more at www.wipfli.com.

How Parking Garage Conversions Can Help Address Overbuilding

Posted on by Sarah

Oversupply of parking for office buildings continues to be ineffective in terms of capital expenditure and material waste. I first wrote about the unrealistic parking ratios expected by the real estate brokerage community in 2018. Brokers continue to operate under the principle of protecting the tenants they represent, and CMBS lenders continue to routinely dictate parking requirements that far exceed the current or future needs of corporate office facilities. Four parking spaces per 1,000 rentable square feet of office space is an outdated standard that has resulted in hundreds of thousands of seldom or never used parking spaces. DonPowellOne of the region’s most successful developers, Granite Properties, did a formal study at its Granite Park that continues to serve as a relevant metric and clearly identifies the over-parking problem in suburban office buildings. Its study found that 2,600 parking spaces within its mixed-use complex have never been utilized. BOKA Powell estimates the order of magnitude of investment in those unused spaces equates to just under $40 million—28,000 cubic yards of concrete placed, 144,000 construction person-hours expended, and 819,000 square feet of inflexible, single-purpose concrete structure. Contrarians say that as buildings age, the class of tenants drops a notch or two, resulting in more back of house office uses (i.e., higher-density workspaces), and that is when the higher parking ratio will pay off. Click to read more at www.dmagazine.com.