Moving Dallas Forward Requires Bold Land Use in Transportation and Climate Policy

Spend enough time with Dallas urbanists during happy hour, and eventually, the conversation will drift toward discussing why our transit system does not work like a coastal city or how we can decarbonize our grid to reduce greenhouse gas (GHG) emissions to meet Dallas’ Comprehensive Environmental and Climate Action Plan (CECAP) goals, or how we make a dent in our rapidly rising housing costs, and the conversation inevitably arrives, in some form or fashion, at the same place:

Are these goals even possible with the current land use? Is our city dense enough? Will the suburbs reach Oklahoma at this rate?

The last one is spoken in jest, but only slightly so.

And for a good reason. We have ambitious goals like the CECAP calling for a reduction in our share of single-occupancy vehicle travel from 88 percent to almost 60 percent and 35 percent of new housing located within a transit-oriented development (TOD) community by 2050.

DART’s investment in its bus system, the Automated Bus Consortium, and D2 provide a major boost to our mobility ambitions, and the city’s strategic mobility plan includes excellent strategies like a citywide mobility hub network tied to an increased bicycle and pedestrian network. Click to read more at

REDnews 2021 Houston Commercial Real Estate Forecast Summit

Office Market Update Moderator: Gil Staley-The Woodlands Area Economic
Development Speakers: Robert Cromwell-Moody Rambin; Stephanie Burritt-Gensler; Ryan Barbles-Stream Realty Partners

Takeaway: The pandemic layered more pain on the office market in Houston, following as it did the slump in oil prices and the resulting employee layoffs. The flight to the suburbs from the CBD and indecision regarding co-working space has further muddled the picture and has added to landlord anxiety.

• Houston leads the country in office vacancy rate; hopefully, this year will see a bottoming out and a slow return to absorption
• There is a flight to newness, as most Houston office product was built in the ‘80s to serve that boom in oil
• The CBD and Energy Corridor have suffered the highest vacancy rates, with Uptown Houston also feeling pressure; employees working from home are enjoying freedom from long commutes; elevator and park and drive anxiety has driven the work from home phenomenon mini-boutique spaces in the suburbs as well
• There is a new term spawned by remote working: FOMO, or “fear of missing out” on what is happening within the company; collaboration is a big part of forming resilient company cultures and it is much weaker when working via Zoom
• Landlords are considering increasing ventilation even as Covid fades, but there is only so much humid air one can bring in from the outside in Houston
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Cities with a Higher Number of Remote-Friendly Jobs? Their Office Markets Aren’t Recovering as Quickly

As COVID-19 cases continue to fall in cities across the United States, the office sector is beginning a slow recovery. But not all recoveries are equal, with office markets with a greater percentage of remote-friendly jobs bouncing back more slowly, according to the VTS Office Demand Index.

And the opposite? Cities in which there is a smaller percentage of remote-friendly jobs are seeing their office markets rebound at a quicker pace.

The VTS Office Demand Index, or VODI, tracks tenant tours, both in-person and virtual, of office properties across the country. It is recognized as one of the earliest indicators of upcoming office leases.

VTS is a leasing, marketing and asset management platform for commercial real estate.

In Seattle, Boston and San Francisco, the share of jobs that are remote-friendly ranks among the highest in the country. It’s not surprising, then, that this latest VODI finds that the office markets in those cities have recovered the least, with their level of office-lease demand down 39, 43 and 46 percent from their 2018-2019 average, respectively.

Markets with a substantially lower share of remote-friendly jobs, Chicago, New York City and Los Angeles, are only down 14, 15 and 24 percent from their pre-pandemic levels, respectively.

“The pandemic didn’t just change the way we work, it changed the way we live. Many workers have found value in remote or hybrid work and may be reluctant to go back to the way life was pre-pandemic,” said VTS chief executive officer Nick Romito. “In cities with higher rates of fully remote jobs, hiring and retaining talent means employers will need to provide choices and flexibility, including fully remote and fully in-office.”

VTS found that after a strong burst in early 2021, demand for office space across the country slowed slightly in May. After rising 173 percent in the first four months of the year, demand for office space fell 8.5 percent in May from April. But demand in May is still five times higher than the pandemic low in May of 2020.

The May decline, likely fueled by a seasonal lull and an easing of pent-up demand, marks a reversion to office demand’s normal see-sawing behavior, VTS said.

“Demand for office space tends to follow seasonal patterns; it should not be concerning that most markets saw demand for office space taper in May,” said VTS chief strategy office Ryan Masiello. “Depending on the market, we anticipate that demand will continue to fluctuate this summer before rising again in August and September.”

In more good news for the office sector, as of May more than half of the markets covered were within 25 percent of their pre-pandemic benchmark level, a level that more closely resembles pre-COVID-19 normalcy. All markets, with the exception of Chicago and Los Angeles, saw demand for office space recede in May with Seattle losing the most ground, down 24 percent during the month.

The Chicago office market is especially promising now. VTS says that as of May, Chicago had a VODI of 86, which makes it the closest of all big-city markets to its pre-pandemic level of demand. Chicago is also the only major market to see an increase in demand for office space in May.

Suburban Commercial Real Estate Boom Continues Full Steam Ahead as Dallas office Market Struggles

In June, a group of public and private stakeholders approved a new framework plan to build a $130 million performing arts center at the Hall Park development in Frisco. The new venue would not only bring a large, world-class concert hall to the fast-growing Texas city, but it’s reflective of the investment and interest in Frisco and would become yet another major cultural amenity in a city increasingly known for its recreational and amusement offerings.

The plan for the performing arts center is just a drop in the bucket when compared to the investment in Frisco over the last decade. For instance, The Fields mega-development, which will deliver an expansive office park, thousands of new residences, hotels and more on a 2,500-acre site is anticipated to cost upwards of $10 billion. And the development already has a major tenant lined up as the future home of the PGA of America.

What’s happening in Frisco is something that other municipalities could only dream of — the city’s population has bloomed from 110,000 in 2010 to roughly 210,000 today. Frisco is frequently cited as the fastest growing city in the country and it’s also home to the 91-acre Dallas Cowboys’ headquarters dubbed The Star, the NCAA Division I football stadium Toyota Stadium, Comerica Center arena, Dr. Pepper Ballpark, the National Soccer Hall of Fame, the National Videogame Museum, and more.

All of this in a city of just over 200,000 residents. But there’s more on the way.

According to Jason Ford, CEcD and President of the Frisco Economic Development Corporation, his organization is currently working on upwards of 50 prospects at the moment. Ford says that there’s been a tremendous amount of interest in Frisco from corporate heads but the city is also doing the work to be as business-friendly as possible in order to win over as many of these prospects as possible.

Maximizing Returns: What You Need to Know About 1031 Exchanges and NNN Properties

One of the only constant things about commercial real estate is how much it changes. Trends cause shifts in demand, technology brings in new methodology and, as Texas CRE pros know all too well, a new presidential administration can alter how things are done. The Biden administration has already proposed restricting 1031 exchanges to $500,000 of gain, a move against which Asset Preservation, Inc. is pushing hard.

“The whole real estate industry has been working for two years to show Congress how much it would hurt jobs if they cut 1031s down,” says Greg Lehrmann, Attorney and Senior Vice President with Asset Preservation. “It would freeze capital.”

Asset Preservation, owned by Stewart Title, is one of the largest 1031 qualified intermediaries in the nation and a popular resource for would-be investors interested in a 1031 exchange. So named because it was created in IRC Section 1031, a 1031 exchange allows investors to swap one property for another, deferring capital gains taxes. In doing so, Lehrmann argues it keeps the commercial real estate market buzzing.

“When investors know they won’t have to pay capital gains, they’re more likely to make more transactions,” he says. “That means the title company employees make more. The real estate agents make more. The landscaper makes more. Home Depot makes more. Everybody makes more when people can trade up in real estate without paying taxes and the government actually receives higher ordinary income-tax rates on the additional income earned by all those people and companies.” That’s exactly what he says is happening right now as investors sell off high-maintenance real estate and exchange it for what he calls “mailbox money,” more passive real estate.

“They have three choices: buying into a triple-net property, investing in a Delaware Statutory Trust (DST) or banking on income-producing minerals,” says Lehrmann. Click to read more at

Mineral and Royalty Interests – The Perfect Complement to a Traditional Real Estate Portfolio

When many real estate investors hear the terms oil and gas mineral and royalty interests, they might cringe and possibly even run the other way. The unusual thing is the asset profile is very similar to that of a commercial real estate portfolio, yet delivered in a way that tends to be uncorrelated with traditional real estate yields and valuations. This is why an often misunderstood product set can be a perfect diversification tool to a traditional real estate portfolio.

Mineral Interests and corresponding royalties are considered subsurface real estate and are eligible as replacement real property for 1031 exchanges. The mineral royalty owner (MRO) owns a tract or fraction thereof from the surface of the earth downward. A portion of commodities extracted from the land by an operating lessor (OpCo) is paid to the owner in the form of a royalty. This is similar to a landlord/tenant relationship in a busy shopping center where the landlord negotiates for a portion of the gross sales earned by the tenant.

MROs receive royalties in units of actual commodities, such as barrels of oil as an example, which are then marketed for them by the OpCo as opposed to a portion of revenue from the OpCo. The royalty units are considered property of the MRO once the commodity reaches the earth’s surface at the wellhead. This mitigates the MRO’s counterparty credit risk exposure to the OpCo and generally makes the mineral royalty investment bankruptcy remote to the OpCo. Click to read more at