Category: Deals & Announcements

Two Woodlands office buildings trade to private asset management firm

Posted on by Mia Goulart

JLL Capital Markets has closed the sale of 10200 Grogans Mill Road and 1610 Woodstead Court, two office properties totaling 153,294 square feet in The Woodlands, Texas.

JLL represented the seller, and procured the buyer, a privately held asset management firm.

The two-property portfolio is positioned within The Woodlands, one of the nation’s premier master planned communities located 27 miles from Houston. The area is home to seven Fortune 500 corporate headquarters, boasts top-quality schools and residential neighborhoods, is home to more than 11 million square feet of retail and offers recreation options, including 220 miles of connected hike and bike trails.

10200 Grogans Mill Road and 1610 Woodstead Court sit on a total of 9.85 acres and are 66.7% leased overall. The tenancy is comprised of a diverse mix of industries, including finance, technology, legal services, oil and gas, consulting and logistics.

The JLL Capital Markets Investment Sales and Advisory team representing the seller was led by Senior Director Rick Goings and Managing Directors Marty Hogan and Kevin McConn.

  • 10200 Grogans Mill Road
  • 1610 Woodstead Court

Investors take note: Chronic underproduction of housing in the U.S. puts workforce rental housing in the spotlight

Posted on by Mia Goulart

Investors looking for attractive returns in the U.S. housing market need look no further than workforce rental housing. A chronic shortage of housing in the country, exacerbated by onerous zoning, land use, and environmental regulations, labor shortages, and demographic shifts, has created a prime opportunity for investing in this segment.

The Supply Shortfall
Since 2017, the shortage of housing in the U.S. has been growing at an alarming rate, with estimates now ranging from 3.8 to 6.8 million units. The lack of supply, particularly in the workforce housing sector, has resulted in historically low vacancy rates and record-high rent and home prices.

Between 2010 and 2021, household formation exceeded net housing deliveries by nearly 4.8 million units leading to a decrease in vacancy rates, making housing less affordable and hindering household formation.

To close the housing gap, at least 3.4 million units are needed within five years, and the rate of new unit delivery needs to increase by approximately 71%. This shortage is evident in the downward trend of the ratio of total housing inventory to the total number of households, which has been below 1 (meaning there is at least one household unit for every household) since Q4 2017.

The shortage also disproportionately affects younger generations, as the median age of household heads has increased from 49.0 in 2008 to 52.1 in 2021.

The current combined vacancy rate for all for-sale and for-rent housing in the US is just 2.5%, with rent and home prices growing annually by an average of 11.1% and 18.9%, respectively.

The Growth and Impact of Zoning, Land Use, and Environmental Regulations on Housing Production
Strict local zoning and environmental laws limit affordable housing by increasing development costs by 32% for multifamily projects. This reduces supply, forcing developers to charge higher prices.

Increasing regulations worsen the housing shortfall, as evidenced by a negative correlation between regulatory cases and permits issued per state. From 2006 to 2018, 49% of U.S. metropolitan areas increased land use regulations. Each regulation in a California city raises the cost of owner-occupied and rental housing by an estimated 4.5% and 2.3%, respectively.

The Workforce Rental Cohort
The shortage of new workforce housing is hurting those earning between $45,000 and $75,000 annually the hardest, as developers typically focus on either luxury apartments or affordable housing. This underserved segment has higher rents and reduced vacancies, making it an attractive investment opportunity.

Private real estate funds focused on workforce rental housing have historically returned an average net IRR of 16.4% between 2009 to 2019, outperforming luxury housing-focused funds’ average net IRR of just 10.7%. While past performance is not indicative of future results, the favorable demographic and supply/demand fundamentals make the workforce multifamily sector a positive outlook for investors.

The chronic underproduction of housing in the U.S. has made workforce rental housing an attractive and sustainable target for investment. As demand goes unmet, prices rise, and this is a trend that is set to continue in the coming years. Investors looking for opportunities in the U.S. housing market should consider investing in the workforce rental segment for durable cash distributions and sustainable capital value appreciation. 

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Kingbird Investment Management Senior Managing Director Kenneth Munkacy is responsible for creating and overseeing Kingbird’s investment strategy, acquisitions, joint ventures, and investment management platform in the U.S. Munkacy has over 33 years of global real estate experience and has been involved in all aspects of real estate including acquisitions, development, finance, portfolio and asset management. Munkacy has led full service real estate investment and operating companies in 12 countries and 23 states and has overseen over $3 billion in transactions.

Dallas’ Chase Tower to be renamed Dallas Arts Tower; lobby renovations planned with addition of art gallery and two restaurants

Posted on by Mia Goulart

A 55-story skyscraper adjacent to Dallas’ Arts District will soon undergo another multi-million-dollar makeover that includes a new name, reimagined lobby, and the addition of two restaurants.

2200 Ross Ave., formerly known as Chase Tower, will be rebranded as Dallas Arts Tower. Owner Fortis Property Group worked with professionals from Stream Realty Partners to strategically select a new moniker that pays tribute to the surrounding neighborhood and amplifies the district’s mission to unify culture and commerce in one dynamic destination. Stream, a national commercial real estate firm headquartered in Dallas and offering an integrated platform of services, leases the office building. Executive Vice President and Partner J.J. Leonard and Managing Director Matt Wieser are the leasing agents for the building’s 1.25 million square feet of office space.

While the landmark building is a work of art designed by architect Richard Keating, its lobby will soon become a masterpiece for tenants and visitors alike. New York-based Fortis plans to add an art gallery displaying pieces from local artists and commission art installations throughout other public spaces. New lighting and flooring will help showcase the artwork. Elevator cabs also will receive a refresh. Construction for the lobby and restaurants is expected to start in late summer, with a 2024 completion. Dallas-based ENTOS Design is working with restaurant architect 75 Degree Design Studio of Dallas on the common area improvements.

Two new restaurants will be constructed in conjunction with the lobby renovations. Dallas-based hospitality powerhouse Milkshake Concepts has been awarded space in the lobby and The Rotunda to launch two eateries that will complement the neighborhood.

For the lobby, Milkshake Concepts will design a European-style, all-day café featuring a robust coffee program, daily baked goods, and a diverse menu with items that can be taken to go or enjoyed in a bright, open environment. Early evening meals and a wine program are expected to be featured.

A first-of-its-kind Greek restaurant will be introduced in The Rotunda. A selection of fish, grilled meats, and traditional sides and dips will anchor the menu that will serve a bustling lunch crowd and refined dinner group.

Jack Gosnell, Elizabeth Herman Fulton, and Marissa Stave with CBRE negotiated Milkshake Concepts’ lease on behalf of Fortis and are leading retail leasing for Dallas Arts Tower. 

Stream has leased Dallas Arts Tower since Fortis purchased the building in 2016. The Class A skyscraper has seen several significant updates since, including a new motor court, water features, and landscaping on the Ross Avenue-facing frontage; the addition of a sky lounge and meeting center on the 40th floor; and a new fitness center. An executive tenant conference center, Starbucks coffee shop, convenience store, on-site shoeshine, full-service car wash, and sky bridge that connects to the Dallas Marriott Downtown and DART Light Rail station are among its many amenities.

Silver Star Properties shares new leasing activity in Dallas and Houston

Posted on by Mia Goulart

Silver Star Properties REIT, Inc. (Silver Star Properties), formerly known as Hartman Short Term Income Properties XX, Inc. has announced new leasing transactions in Dallas and Houston:

  1. Healthline Medical Equipment, Inc. Renewed 12,001 square feet at 1901 North Glenville Drive in Richardson, Texas. In the transaction, Lynna Smith represented the landlord, Silver Star Properties REIT. 
  2. Perc Engineering, LLC expanded 3,078 square feet marking a 14749 office space at 1880 S. Dairy Ashford Road in Houston, Texas. In the transaction, John Silberman with NAI represented the tenant and Kacie Skeen represented the landlord, Silver Star Properties REIT.
  • 1901 North Glenville Drive, Richardson

GREA brokers sale of former president’s apartment in Houston

Posted on by Mia Goulart

Jordon Emmott and Abraham Garza of GREA (Global Real Estate Advisors) brokered the sale of Chateaux Dijon Apartments from Investres (which purchased the property in 2018) to Three Pillars Capital Group. The 426-unit multifamily community is located in the Galleria area at 5331 Beverlyhill Street (77056).

Three Pillars has extensive renovation plans for the community that President George W. Bush once called home.

Emmott noted, “Chateaux Dijon is one of the most historic and recognizable apartment properties in Houston. The architecture was simply way ahead of its time and I am excited to see the asset being revitalized.” 

Partners arranges sale of last remaining building for TNRG Development at Intercontinental Crossing Business Park

Posted on by Mia Goulart

Partners Real Estate, one of the largest independent commercial real estate firms in Texas, recently arranged a 23,100-square-foot sale at 18315 Aldine Westfield Road to close out a three-building industrial spec development project, totaling 93,350 square feet for TNRG Development at Intercontinental Crossing Business Park.

  • 18321 Aldine Westfield Road: 50,000-square-foot freestanding dock-high loading distribution building on ±2.56 acres
  • 18311 Aldine Westfield Road: 20,250-square-foot freestanding dock-high loading distribution building on ±1.50 acres
  • 18315 Aldine Westfield Road: 23,100-square-foot freestanding dock-high loading distribution building on ±1.30 acres

Partners’ Clay Pritchett, SIOR and Zane Carman represented the seller, TNRG Development, in each of these transactions.