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
Office in San Antonio “Ok” and not sliding too much; 15% vacancy citywide, with average rents $21.85 down from $22.50 this time last year; robust development market; tenants beginning to return to offices
Some landlords working with tenants on short-term renewals to build tenant goodwill, and to retain them.
The hybrid work from home and office model is here to stay, although the productivity metric for this formula is not fully known yet.
Company culture is “at the office” and it is especially important to for new hires to interact with peers and senior employees as they learn and absorb the company culture.
When pandemic recedes, we will be quick to return to old habits and dense environments, office and social; in 18-24 months we will be back to normal here
8% unemployment in S.A.
The Columbus, Ohio, office of Marcus & Millichap closed the sale of Advantage Storage, a 95,825-square-foot self-storage facility located in Arlington, Texas. Brett Hatcher and Gabriel Coe, investment specialists in Marcus & Millichap’s Columbus office, had the exclusive listing to market the property on behalf of the seller. Tim Speck, Division Manager and Broker of Record, assisted in closing this transaction. Advantage Storage is located at 1040 West Sublett Road in Arlington. It is a new, class-A facility that features 469 climate-controlled units, 302 non-climate units and four warehouse spaces, totaling 95,825 net rentable square feet.
Bellomy & Co. announced the sale of Texas Storage in Rosenberg, Texas, 37 miles southwest of Houston. The Class B property comprises 335 units in 44,718 square feet. Bill Bellomy and Michael Johnson of Bellomy & Co. represented Diehl Investments II LP, the Katy, Texas-based seller. The team also procured the Delaware-based buyer, BCORE Storage Jennetta LP
Texas Attorney General Ken Paxton said Wednesday that he has sued the City of Austin and Travis County, a declaration that came a day after local leaders declared new restrictions for when restaurants and bars can serve customers during New Year’s weekend. Paxton filed a petition for temporary injunction and a temporary restraining order in Travis County District Court targeting orders made by Austin Mayor Steve Adler and Travis County Judge Andy Brown. Citing an increase in COVID-19 cases, they announced that dine-in food and beverage service must be restricted indoors and outdoors from 10:30 p.m. to 6 a.m., starting Thursday and ending at 6 a.m. Sunday. The measure did allow drive-thru, curbside pick-up, take out, or delivery services. “Mayor Adler and Judge Brown do not have the authority to flout Gov. [Greg] Abbott’s executive orders by shutting down businesses in Travis County and our state’s capital city,” said Paxton in a statement. “The fact that these two local leaders released their orders at night and on the eve of a major holiday shows how much contempt they have for Texans and local businesses.” Click to read more at www.texastribune.org.
This past year, industries across Houston and beyond have been significantly impacted. With the COVID-19 pandemic and the election, the uncertainty of the future created hesitation for many to move forward with business, while others found new opportunities for growth and expansion. While all sectors of the commercial real estate industry were affected, today we explore the state of the industrial sector as we head towards the end of the year. Houston, We Need More Space. One of the biggest shifts we have seen during COVID-19 has been the need for larger warehouse spaces in order to meet the immediate needs of the consumer. Since many customers and businesses switched to e-commerce during the pandemic, the demand for space has increased. As a result, one of the trends we are seeing is an increase in space capacity caused by the demand from national retailers and e-commerce giants like Amazon. Developers and landlords are now having to deliver additional features and amenities such as added trailer parking space, suitable loading docks and extra storage space to accommodate these tenant demands. It is a trend that the industry has been talking about for the last three years and it’s something we can expect to continue to see for the foreseeable future. Click to read more at www.lee-associates.com.