Category: Editorial

Data Center Performance Varies Across Texas

Posted on by Sarah

As they are no longer merely the domain of enterprise users, demand for data centers has skyrocketed in recent years with more information moving to the cloud. The pandemic has created issues, nevertheless, the events of 2020 have largely accelerated this trend. By just about every metric, the asset class saw incredible gains during the first half of the year,
according to a report by JLL. Datacenter REITs outperformed other sectors, absorption rose in most markets and operators have thus far weathered the
pandemic with steady—if not booming—business activity. As strong as the overall industrial sector has been this year, data centers have been even stronger. For example, the stay-at-home orders brought on by COVID-19 led to an increase in online shopping, and thus renewed demand for warehouse and logistics space. This, in turn, has resulted in a year-over-year increase in returns of 2.3 percent among industrial REITs, according to information gleaned from Nareit. Contrast that with data center REITs, which saw an incredible 19.2 percent climb over that same period. Residential, office, healthcare, retail and hospitality REITs all regressed during the 12-month period ending on June 30, 2020. What’s behind this surge? First is the increase in online shopping; in addition to furthering demand of the storage of goods, extra server space is required to accommodate all the ones and zeroes supporting this activity. Click to read more at www.rednews.com.

NewQuest Closes Three Houston-Area Deals

Posted on by Sarah

NewQuest Properties recently facilitated one retail lease and three property sales in the larger Houston metro. Crumbl Cookies has leased 1,572 square feet of retail space in the Grand at Aliana, located at the intersection of West Grand Parkway S and West Airport Boulevard, Richmond, Texas. David K. Meyers and Josh Friedlander of NewQuest Properties represented the landlord. Greg Stanislawski and Mark Stanislawski of the Retail Strategy represented the tenant. APG Industrial LaPorte LLC has sold a 12,810-square-foot warehouse on 5.6 acres at to ESCO International Trading LLC. Dave Ramsey and Brad Elmore of NewQuest Properties represented the seller in the direct deal. Turbo Restaurant Management LLC has sold a 2,219-square-foot vacant structure on a 0.7-acre pad site at 9540 Hwy. 6, Missouri City, Texas and a 2,150-square-foot vacant building, also on a 0.7-acre pad site, at 9046 FM 1960 Bypass W., Humble, Texas to Briggs of Missouri City Properties LLC. Andrew Alvis of NewQuest Properties represented the seller. Tyson Walker of BWB Advisors represented the buyer.

Bradford Inks Three Leases in North Dallas Portfolio

Posted on by Sarah

Bradford Commercial Real Estate Services has pushed a four-building industrial portfolio in Farmers Branch, Texas to 100 percent occupancy, signing 24,261 square feet in two new leases and one renewal. Midpoint Auto Group has leased 13,119 square feet at 3300 Garden Brook Drive while JKMG & International Co. Inc., dba Noroo, has taken 4,472 square feet at 3314 Garden Brook Drive, filling the balance of the portfolio’s vacancy. In a long-term renewal, United Fine Arts Services LLC has held fast to 6,670 square feet in 3109 Garden Brook Drive. Brian Pafford, executive vice president and managing partner of Bradford, and Susan Singer, executive vice president, closed the triple play for the landlord, Gardenbrook Industrial LLC, shortly before the portfolio changed hands. “These three deals certainly helped in the sale process,” Pafford said, “as did our ability to add to the portfolio’s value by raising the bar on future rates for renewals and new leases.” The Bradford team was facing a six-month deadline to fill the 13,119-square-foot vacancy with another automotive group or face the loss of the permitted use. “We got the deal done in the nick of time,” Pafford said. Pafford and Singer negotiated direct deals with Midpoint Auto Group and United Fine Arts Services. Daniel Lee of Stellar Real Estate LLC represented Noroo, which is opening its first location in Texas. The portfolio also includes a single-tenant building at 3113 Garden Brook Drive and a multi-tenant structure at 4101 Lindbergh Drive. The shallow-bay warehouses are geared toward smaller tenants with spaces from 5,000 to 20,000 square feet. “There continues to be strong demand for spaces in that size range,” Pafford said.

Industrial Age: Texas Cities Are Drawing Investors Looking to Capitalize on the Industrial Boom

Posted on by Sarah

Industrial is far and away the hottest sector in commercial real estate right now and the hottest industrial markets are scattered throughout Texas,
each one creating a unique draw for investors and developers. Houston
The largest city in the Lone Star State also boasts the most absorption of industrial space so far in 2020: just more than 6.4 million square feet. According to CBRE research, nearly 3.9 million of that got leased up just in Q2. In that same period, though, about 8 million square feet came on the market, which boosted vacancy rates to 6.9 percent. About 18 million square feet of new industrial is under construction in the Houston market with the southwest (8.5M SF) and northwest (4.8M SF) sectors bringing in the most space. “Houston is very competitive,” said Alfredo Gutierrez, president of industrial-focused investment firm SparrowHawk Real Estate
Strategists. “Because of the setback in oil prices, some investors are perceiving a pullback in real estate by some of the energy companies. That
provides a window of opportunity to invest in industrial real estate in Houston.” He predicts this window will close in late 2021 as the energy sector rebounds, e-commerce increases and the benefits of trade with Mexico expand in Houston. Dallas-Fort Worth When it comes to new construction, it’s hard to beat the numbers coming out of the Dallas-Fort Worth area. CBRE reports that in Q2, more than 23 million square feet was underway. Thing is, that space is getting eaten up as soon as it hits the market. For example, DFW had about 3.4 million square feet incompletions and 2 million square feet of net absorption this spring, marking 39 consecutive quarters of positive net absorption. “I think Dallas is the strongest market in the United States right now,” Gutierrez said. “Dallas is just screaming hot.”

REDNews’ Texas Capital Markets Virtual Summit

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Emerging Trends in Logistics and

• We can’t be angry about the COVID pandemic and its interruptions of our business lives, and we have to accept where we are and move forward; some sectors are down, some are flat, and some are way up.
• The multifamily and industrial sectors for example are way up, and are very attractive to lenders, although underwriting is more careful and conservative than before; some trophy office buildings are able to secure financing as well; lower LTVs, some non-recourse loans still, but also loans with initial recourse that burns off as the project reaches stabilization; some lenders prefer Texas loans.
• There are lenders in the market still willing to look at all property types, and now that many have worked through their forbearance requests from earlier in the year, they are looking to put out money through new builds and acquisitions and refinancing…although much more conservatively than pre-COVID; new development loans tend to favor multifamily; some of the big national banks have dropped out of the construction loan market. Click to read more at www.rednews.com.

REDnews DFW Industrial Summit

Posted on by Sarah

• As multifamily, retail and office “feel the pain,” industrial is holding up well, and accelerating, as e-commerce continues expansion; investors are transferring their attention to industrial from these other sectors
• Companies are bringing back manufacturing from Asia to the U.S. and to Mexico, which is much closer to DFW; companies are coming here from California; labor costs in Mexico now approximate those in China, as China’s economy has strengthened
• Distribution and heavy manufacturers seem strong, but some light manufacturers are seeing stress
• DFW is strategically located in the middle of the country, is in the central
time zone, is one day’s drive from Mexico and Port of Houston, and it is “the” hottest industrial market in the country, and some say “the world;” DFW has a super freeway network and good general accessibility
• Manufacturers wanting to “near-shore” from China to Mexico are hampered from the difficulty of business travel to MX during COVID
• After a pause with the onset of COVID, investment deals are do-able and cap rates are back to where they were at the start of the year
• Loans are available at an average of 60 percent LTV, with lenders requiring ample debt service coverage—however, low leverage requires more expensive equity and mezzanine money
Click to read more at www.rednews.com.