Category: Focus 2020

Houston Industrial and Logistics Summit RECAP

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• Waller County in the past was resistant to growth and that has changed since residents have seen the strong tax base which can come from industrial users who need to grow out of Houston; the County realizes now that high-paying jobs can come with industrial development as well; the County has few drainage issues since it has slightly rolling terrain; a new rail-served park is in place; the world’s largest cricket field is coming to Prairie View, emblematic of Houston’s diversity; the conversion from Ag land to industrial tax base can have a huge economic benefit to the County, and the residents have realized the difference this makes
• La Porte works diligently to balance the needs of citizens with needs of industrial users, but available land is dwindling, and remaining tracts in some cases are being hoarded for future use as City Fathers try to get it into ‘best hands’; high tax base from industrial users enables high-end services to local citizens; the City realizes that ‘time is money to developers’ and it makes available meet-ups where a developer can come and sit down with all City department heads in one meeting to determine the level of support for his proposed land use
• Storm surge and inundation was minimal in La Porte during Harvey; nonetheless, attention is being given to future weather issues; a Tri-County cooperative effort has been established including Baytown and Chambers County after severe flooding in the Cedar Bayou watershed from rain and rising water which saw 6-8 feet of water invade a large industrial development which had been recently completed; the cooperative group is seeking regional, state, and federal dollars for future deluge and storm surge prevention, while pre-Harvey there was minimal cooperation

Click to read more at www.rednews.com.

Real Estate Brokers: What To Do with the “Leftover Equity” in a 1031 Exchange

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As a Real Estate Broker, do you ever have clients who do a 1031 exchange, secure a replacement property but find that the amount of the new acquisition leaves them short of the total exchange amount? Maybe they are short by as little as $50,000 to $100,000? In most cases like this the client ends up paying taxes on the remaining amount (Boot) of the 1031 exchange. However, in many cases they pay quite a bit more than the current 15% capital gains tax on that remaining amount. In fact, when you consider the recapture (of depreciation) that the IRS requires plus any state tax, it ends up being significantly more. There is another option to explore. Present them with an acquisition of the OTHER real estate, mineral interests. What are mineral interests? Like the surface real estate, mineral interests are a titled position recorded in the county clerk’s office, often in the same instrument. The difference is, mineral title conveys the rights below the ground. What value do they have? It can be significant value, especially in states like Texas where Energy Companies extract oil and natural gas from below the surface and pay the mineral owners a royalty off the gross production. There are millions of people who own mineral interest in the United States and billions of dollars are paid out to them each year in the form of royalty payments. The U.S. is the only country in the world where mineral interests can be privately owned. Click to read more at www.rednews.com.

A Renaissance Man; Meet the Recipient of the 2020 REDnews Lifetime Achievement Award

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Hundreds of Houston real estate professionals gathered at the Briar Club on March 12 for the inaugural REDnews Awards, highlighting the best and brightest of our industry. You can check out the full list of finalists and winners on page 13, but the most significant award of the night went to John Walsh. We honored him with the Lifetime Achievement Award for his decades of service to the Houston community. “I really wasn’t surprised because John has not only been successful, but it’s so well-deserved,” said longtime friend Howard Tellepsen, CEO of Tellepsen Builders. He and Walsh go back 50 years when the two attended Lamar High School together. “He’s very understated. He’s very humble. I’m just so proud that he is receiving this lifetime achievement award,” Tellepsen said. “I saw these characteristics of John in high school.” The pair graduated in 1962, going their separate ways. Walsh attended the University of Texas for undergrad, then received his MBA from the University of Houston before helping form Exxon’s real estate subsidiary, Friendswood Development. Click to read more at www.rednews.com.

Property Management Summit: 1/21/20

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More sophisticated management services are being requested by tenants; more tech, more advisory, even fundamentals are being pushed to a higher level. Management services must become more sophisticated as tenants’ businesses become more specialized. Management employees are changing as Gen X and Millennials replace retiring Boomers; Boomers have been harder-working, while young employees are interested in more work-life balance; younger workers are more comfortable with tech; 60% of boomer managers are nearing retirement. If tenants and landlords request more robust and varied services, how are management companies to price that? Sometimes it pays off to give more without increasing the fees to retain loyalty to your property management group, but customers are usually willing to pay more if they see they are getting more. Property management services are in danger of becoming a ‘commodity’, so how to differentiate your company from the competition? Should fees be lowered or quality and quantity of services be increased? Don’t just get cheap on your fee-quality delivery of service matters the most. Click to read more at www.rednews.com.

Reveling in Retail: Attendees Share Their Takeaways From ICSC’s Red River States Conference

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Each year when Rafael Tapia attends ICSC’s Red River States Conference, he goes in with the goal of having as many face-to-face meetings as he can. As the executive director of the Alamo Economic Development Corporation in Alamo, Texas, he’s working to bring new retailers to his community. “ICSC allows for one-on-one meetings with these contacts, which creates a sort of familiarity,” Tapia says. Just five minutes from McAllen on the Texas border, Alamo is quickly becoming one of the most vibrant cities in South Texas. The area boasts a robust economy, low cost of living, as well as a skilled and bilingual workforce. “Since 2014, the city has seen at least an estimated $21 million of private investment in commercial projects,” Tapia says. The list is impressive for a city its size. A fast-food franchise and Goodwill recently opened locations in Alamo. Also of note: the relocation of a small distribution company into a new 12,000-square-foot facility, the establishment of a 130-bed, 51,000-square-foot skilled nursing facility and the repurposing of a 97,000-square-foot facility for distribution. “Alamo offers plenty of opportunity for growth,” emphasizes Tapia. Click to read more at www.rednews.com.

Current Net Lease Market In Texas and Around the United States

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The following is an overview from REDNews Texas Net Lease & 1031 Summit which was paneled with single-minded experts, focusing on the net lease market in Texas and around the United States. It’s a segment of the industry that has evolved considerably over the past two decades, according to Net Realty Advisors partner Gavin Kam. Back in 2001, Kam said he had just started at Marcus & Millichap, joining as a retail agent. “One day, the office manager came up to me asked, ‘Have you ever heard of triple net deals?’ Of course, I said, ‘No.’ He handed me a list, some research, and instructions, then said, ‘Why don’t you take a look at this list and start calling?’” recalled Kam. Nineteen years on, it’s clear those phone calls paid off. His company, Net Realty Advisors, specializes mostly in multi-tenant investment sales. Kam told the summit’s attendees that he’s watched net leases go from a tool used institutionally by retailers to something more developers and brokers are utilizing. Click to read more at www.rednews.com.