Category: November – 20

Development Depth: EDCs Protect Business, Encourage Growth During Pandemic

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Success in the commercial real estate world has always been about the ability to evolve. Investors are constantly looking for what’s “next,” while developers keep an eye on what the market is asking for. Retailers need to know the trends that their customers will want. And economic development organizations must be able to pivot when their community indicates a change is needed. In so many ways, the COVID-19 pandemic has tested the evolutional capacity of EDCs throughout Texas and a number of them are passing with flying colors, helping the investors, developers and companies that call their towns home weather an incredibly challenging time. At the Greater Houston Partnership (GHP), the team shifted to a strategy of remote working, online meetings and virtual events in March, according to Craig Rhodes, senior director of regional economic development. “The traditional trade shows, conferences and outbound recruitment missions have been replaced with virtual industry roadshows, site consultant outreach and targeted business outreach activities,” he said. An example of that: GHP hosted a virtual business recruitment mission with Houston Mayor Sylvester Turner in October 2020 to connect with companies in Silicon Valley. The event followed up a successful delegation trip in 2019 meeting with California tech companies about the opportunities for growth in Houston. “The project pipeline has continued to stay active with new prospects considering relocations and expansions in the region. We have had multiple new projects announce this year including Amazon, Google Cloud and Greentown Labs,” said Rhodes. “We are currently tracking over 140 active projects in the pipeline, with manufacturing and logistics leading the industry sectors.” Similarly, the pandemic has changed operations for the City of Seabrook and its economic development arm, but economic development director Paul Chavez said his team is embracing the new normal. “We are utilizing new technologies and finding innovative and creative ways to communicate with prospects,” he said. In nearby La Marque, the EDC changed its focus from business attraction to business retention, delivering nearly $1 million in COVID Business Relief Grants to business owners. The funds helped keep the doors open after state-mandated closures had a profound impact on business owners of every kind, especially retail and restaurants. “Over and over, we’ve heard our business owners say that they wouldn’t have made it through the pandemic without our COVID Business Relief program. Rather than a big project slam dunk this year, we had hundreds of small businesses survive the 2020 COVID pandemic,” said Alex Getty, executive director of La Marque EDC. “That’s something we’re proud of and we’re in a great position heading into 2021.” There’s been no slowdown in prospect activity at all in Conroe, one of Houston’s fastest-growing suburbs. If anything, Conroe Economic Development Council executive director Danielle Scheiner said things are picking up, particularly for warehousing and logistics projects but also for manufacturing of consumer products. “We are still averaging 1,000+ homes a year with more and more sites in the early stages of development,” she said. Conroe’s EDC just celebrated the signing of its first occupant in the Deison Technology Park. VGXI, Inc., a manufacturer of plasmid DNA for vaccines and gene therapies, will move its headquarters to Conroe from The Woodlands. The state-of-the-art, 240,000-square-foot facility is expected to be operational in January 2022. “On the industrial side, we have five projects currently under construction in our two parks,” said Scheiner. “We still have some retail/commercial sites under construction, although I don’t anticipate any new ones starting anytime soon.” Retail, she expects, will be the sector hit hardest by the pandemic. Scheiner said many of Conroe’s local eateries and boutiques have held on so far, but they need the continued support of the community. In Seabrook, that’s exactly what customers have been doing. Sales tax revenue there has remained healthy, while other areas have taken hits. “Both retailers and restaurants in Seabrook offered and continue to offer services to meet the current needs of our residents and visitors. This in addition to our SEDC Emergency Business Retention Incentive has helped keep our economy strong,” said Chavez. The City Council’s planning and zoning commission is currently reviewing plans for a five-level, 170-room boutique hotel that would feature an extended stay complex of 76 guest suites. “Also included in the plan is a 23,700-square-foot conference center, 24,850 square feet of retail buildings for food beverage leases and a future proposed multifamily apartment building containing approximately 260 residential units,” Chavez said. “This development will be located with waterfront views of Clear Lake and only minutes away from I-45 and NASA Space Center.” Location, he points out, is as important as ever when discussing future development plans. “Being on Galveston Bay and Clear Lake with prime commercial property that fronts the water, Seabrook has numerous opportunities that are available for planned development,” said Chavez. “In a past survey when asked what makes Seabrook attractive and distinguishable from surrounding cities, the most repeated responses received from the community survey were: the waterfront, the potential for waterfront development, opportunities for water recreation (boating, fishing, etc) and coastal living.” The value of location is something La Marque EDC’s executive director also stressed. “COVID changed things but our position is as strong as ever. Our location along 45 and proximity to the Galveston-Kemah-NASA tourism market will continue to drive commercial development in our city,” Getty said. “Over the past decade our population has grown by more than 30 percent and we don’t see it slowing down as another new neighborhood development was approved by the City Council this fall.” La Marque’s EDC is also responding to business owners who are taking advantage of this time as an opportunity to renovate and improve their properties. “We’ve seen an uptick in business improvement grants, which is encouraging. We’re seeing everything from 50-year-old buildings getting facelifts to new signs and landscaping at some of our retail centers and even complete interior remodels in some of our local restaurants,” said Getty. Chavez agreed. “Businesses and developers continue to ask for feedback on the types of projects that would qualify for incentivizing,” he said, “and our track record shows that we are aggressive with coming up with deals that provide a solid return on investment for the community that also pushes the needle towards landing the project in Seabrook.” Prospective developers in Conroe are asking about anything that will help offset their overall cost of doing business, whether that be tax incentives or fast permitting approval. “Anything that allows them to operate more efficiently to help their bottom line,” said Scheiner. “They are interested in understanding how we approach incentives for jobs that might be working remotely. In our case, if the payroll is managed out of that facility, they can count those jobs regardless of whether they are working remotely or at the physical location.” Though the pandemic has certainly created challenges, Houston-area EDCs are stepping up to face those challenges in whatever way their communities need and will continue to do so to help businesses thrive.

Dalfen Industrial Expands East Dallas Footprint with Acquisition of Peachtree Distribution Center

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Dalfen Industrial has acquired Peachtree Distribution Center from Clarion Partners at 17745 Lookout Road in the east Dallas suburb of Mesquite, Texas. Terms of the deal were not disclosed. Constructed in 2001, the property is a 396,750-square-foot, cross-dock, multi-tenant distribution facility within a minute drive of I-635—the loop around Dallas—as well as I-30, I-80 and the Mesquite Airport. The property includes 68 docks, ample car and trailer parking space and is 100 percent leased to three internationally recognized tenants–Dal-Tile Corp., Parker-Hannafin Corp. and Bronco Orora. “This acquisition is squarely within our strategy of focusing on infill in key markets,” said company president and chief investment officer, Sean Dalfen. “Dallas-Fort Worth has one of the strongest industrial markets in the nation, and the East Dallas Mesquite submarket is one of the best due to location, workforce and proximity to major highways.” The East Dallas Mesquite industrial submarket is a longstanding transportation center and is home to one of Dallas-Fort Worth’s major intermodal hubs for industrial development, attracting the undeniable attention of institutional investors and large-cap companies. “Adding Peachtree to our other two properties in the submarket (as well as one large property under development), Dalfen views this submarket as a perfect last mile location to service the rapidly growing north and east Dallas suburbs,” said Kevin Caille, market officer for Dalfen. With this acquisition, Dalfen Industrial currently owns and operates over 4.4 million square feet of last mile industrial assets in Texas and over 24 million square feet nationwide.

Rastegar Acquires Office in Affluent West Lake Hills to be the Company’s Global Headquarters

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Espirit Office Building to Feature Design Elements Addressing Health and Wellness

Austin, TX – December 2, 2020 – Rastegar Property Company, a technology-enabled private real estate investment firm focused on value-add and development in all asset classes throughout Austin and the Southwest United States, announced today the acquisition of the Espirit office building, located at 515 S. Capital of Texas Hwy in West Lake Hills, one of the wealthiest zip codes in all of Austin. The two-story, 29,685 square foot office building that features single level subgrade parking will be the global headquarters for Rastegar Property Company as well as other businesses looking to take advantage of the prestigious location that is just under seven miles from downtown Austin and 14 miles from the Austin-Bergstrom International Airport. Located in the heart of West Lake at the intersection of Bee Caves and Highway 360, Rastegar and the businesses that will lease space in the building will benefit from being able to offer convenient employment opportunities to the neighborhood’s affluent residents while taking full advantage of the various restaurants, shopping and other amenities in the area. “While many have cooled on office real estate, we believe the Espirit building provides Rastegar Property Company with an innovative opportunity to get our hands on a property located in one of Austin’s premier neighborhoods,” said Ari Rastegar, Founder and CEO of Rastegar Property Company. “As human beings, we’re communal by nature and need human interaction to be our most productive, which is why we are confident that there will be a welcomed return to the office post pandemic, with added health and wellness elements that address the concerns brought on by COVID-19.” The health and wellness of both employees and tenants is a core value of Rastegar Property Company, and the Espirit office building will be designed and maximized for the post-COVID world. Sitting on 2.39 acres will allow Rastegar to build outdoor workstations that take advantage of Austin’s favorable climate while the latest technology and materials will be used throughout the building to keep employees and other tenants safe and healthy. “The building has great bones in a terrific, easily accessible location. This will enable us to transform the space into one of the most sought-after boutique offices in West Lake,” said Hunter Floyd, Director of Design and Development at Rastegar Property Company. “Design will also focus on the post COVID environment by adding outdoor amenities, enhanced air filtration systems, touchless entries and exits, and common touchpoints, like railings and elevator buttons, could feature antimicrobial materials like copper.” About Rastegar Property Company Rastegar Property Company is a technology-enabled private real estate investment firm focused on value-add and development in all asset classes throughout Austin and the Southwest United States. Rastegar and its affiliates have co-invested in or directly own and operate over 13.8 million square feet of real estate across projects in 13 states and 38 cities. The firm specializes in acquiring complex or undervalued assets with opportunities to create value through repositioning, redevelopment, and/or improved operational efficiencies.

This Is the Altered Normal

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The COVID-19 pandemic continues to necessitate unimagined change. The impact it has brought to our world would have seemed, for many, unthinkable at the turn of the year. Some refer to this change as the “new normal.” Really, however, it’s the ”altered normal.” We are experiencing significant alterations to supply chain, manufacturing, and education models. How families live together and apart, how and where we shop, the shape of our workplaces, the meaning of an essential worker, and every facet of recreation and leisure have seen major changes as well. While the sharpness of these shifts may make life and work feel like a new reality, this altered normal has been in motion for decades — and most of us have missed it. Businesses most able to adapt in this pandemic are helmed by leaders who previously built into their thinking and strategic plans the ideas of disruption and digital transformation. These are strategic leaders who previously understood the forces and trends that were shaping the future, and grasp that the industry is ever-evolving beyond COVID-19.

Consumer Response

After hitting a peak in February 2020, the United States officially entered an economic recession, ending its longest expansion in history, lasting just over 10 years. Other global economies are also suffering. This recession is different to those of before. How fast the economy has slowed, who its slowing is affecting, and its leading factors all distinguish it from previous downturns. Jason Furman, an economist and professor at Harvard Kennedy School, described the current U.S. economy as being in a “medically induced coma.” Others highlight the fact that for many consumers and politicians, the remedy for the pandemic is an economic pause. Click to read more at www.ccim.com.

Keller Williams City View Takes Full-building Lease in Northwest San Antonio for New Campus

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Transwestern Real Estate Services announced that Keller Williams City View, a franchise of Keller Williams Realty International, has signed a full-building lease for 30,000 square feet at The Park at Vance Jackson. The property, located at 15510 Vance Jackson Road in San Antonio, was delivered in February 2020. Transwestern executive managing director Russell T. Noll, CCIM, CPM, and Deborah Bauer of Drake Commercial provided agency leasing services on behalf of the landlord, The Park on Vance Jackson LLC. Managing director Cynthia Lee, CCIM, GRI, of KW Commercial City View represented the tenant. “We are thrilled to welcome Keller Williams City View as it creates its first campus in the nation at The Park at Vance Jackson,” said Noll. “The Park at Vance Jackson will provide a cohesive campus that aligns with Keller Williams’ goals, while simultaneously launching a dynamic future and dramatically lowering occupancy costs.” The Park at Vance Jackson includes two 30,000-square-foot, single-story buildings. The property delivers on location, access, high-profile signage opportunities, proximity to best-in-class amenities and the highest standard of service levels in a dynamic and growing submarket. More than any time in recent history, a company’s office environment is vital in attracting and retaining top talent as well as communicating culture, brand and a sense of place for clients. Keller Williams City View has designed its new campus to adapt to the post-pandemic way of working and collaborating. Agents will have their own front doors to individual suites and access to conference rooms with video call capability and a 100-seat training facility to accommodate everyone under one roof. In the midst of COVID-19, Keller Williams has proven its faith in the San Antonio market’s ability to weather economic storms by its decision to move forward with this significant commitment. “This was a nuanced transaction that required a seasoned and experienced real estate team to negotiate, educate, mentor and coach throughout the process, and working with a fellow CCIM allowed for a highly collaborative approach,” said Lee. “Several factors motivated this location decision, including an environment that is conducive for collaboration, space for facetime that encourages connection, and a campus-like environment as we continue to expand and grow to better serve our customers. We are thrilled with our new home at The Park at Vance Jackson and look forward to recruiting more agents, connecting with our vendors, and enhancing our customer’s experience.”

Pearlstone Partners and ATCO to Present the City of Austin Design Commission a 41-Story Residential High Rise at 84 East Avenue

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AUSTIN, Texas—November 23, 2020. Austin-based Pearlstone Partners and New York-based ATCO Properties and Management announced they are presenting plans for a density bonus for their newest multi-family condominium development to the City of Austin Design Commission this evening. Currently referred to as “The East Tower” for permitting purposes, the developers are in the naming process with the formal name to be released at a later date. The East Tower is to be constructed at 84 East Avenue in Austin’s dynamic Rainey Street Historic District. Co-Developers, Pearlstone Partners, a full-service real estate development firm with more than 100 years combined experience in the local real estate industry, and ATCO Properties, the New York-based investment group, are still finalizing many of the details for The East Tower. The firms expect to break ground on the project in the second quarter of 2021, with completion projected for the fourth quarter of 2023. The 41-story condominium tower, situated on 0.41 acres is expected to offer approximately 284 residential homes at an average size of 975 square feet. The East Tower plans for the Design Commission will include the below updates:
• Compliance with Great Streets by fee-in-lieu due to the location and proximity to IH-35 and TXDOT Right-of-Way not allowing for full Great Streets. In addition to paying the fee-in-lieu, the ground level of The East Tower has been moved back to incorporate a more pedestrian-friendly streetscape.
• The streetscape was designed by DWG. and will feature several large planter boxes with full-sized trees and native Texas plants, as well as, a tree-shaded sitting area for passers-by and bike racks. At the northeast corner, planter boxes and a vine cabling system will create an over 100-foot-tall green wall adding life and vibrancy to the area.
• An exterior mural and sign visible via a public access easement will direct visitors and residents from Rainey Street to the public art gallery located adjacent to the rear lobby. Once a neighborhood of sleepy bungalows, the Rainey Street Historic District is now the densest neighborhood in the city in terms of population, offering class-A apartments, high-rise condominiums, and high-end hotels; 25-plus restaurants and food trucks, many of them award-winning; and 20-plus uniquely designed bars—all within a coveted neighborhood that earns a 90+ walkability score. Anticipated common amenities for The East Tower include a rooftop community clubhouse, sky-deck pool, cabana, outdoor kitchen, fireplace, and lounge; a resident fitness center, featuring private spin and yoga studios; a sky dog park, lawn and washing station; a community courtyard and gathering table; and a ground floor co-working space. The rear lobby will likely feature a public art gallery and mural showcasing works by local artists, with direct access to Rainey Street and its many inviting shops, eclectic variety of restaurants and cafes, live music venues, and other entertainment options. Pearlstone Partners and ATCO to Present the City of Austin Design Commission a 41-Story Residential High Rise at 84 East Avenue The East Tower will be less than a mile from the Austin Convention Center, a mile and a half from the
Texas State Capitol, two miles from The University of Texas at Austin, and just steps away from the coveted Ann and Roy Butler Hike-and-Bike Trail, which stretches more than 12 miles around Austin’s venerable Lady Bird Lake. With close proximity to major employers—including Google, Facebook, Atlassian, Parsley Energy, Indeed Tower, Oracle, and many independent start-up firms, as well as to UT Austin and the State Capitol Complex—The East Tower will offer an ideal live-work-play lifestyle. The architect for The East Tower is STG Design, the civil Engineer is Wuest Group, the interior designer is McCray & Co, and AECOM Hunt is providing pre-construction services. The property will be marketed exclusively by Prospect Real Estate.
“Pearlstone Partners is one of the few developers focused on developing an attainable urban housing portfolio,” said Pearlstone Partners CEO and Principal Robert Lee. “We are excited that this project will offer a new price point for buyers who have been priced out of the downtown market with the recently delivered developments. Appealing to an array of buyers including young professionals, empty nesters, first- and second-time home buyers, and anyone else who is attracted to the area’s energy, culture, and urban, walkable lifestyle, the development will feature one- and two-bedroom residences. The East Tower will aim to price the majority of the units from $499,000 to $999,000, which would be the lowest priced new build, downtown high-rise, especially in the highly sought-after Rainey Street District.”

About Pearlstone Partners

Austin-based Pearlstone Partners is a full-service real estate development firm with more than 100 years of combined experience in the local real estate industry. The company has been responsible for more than $200 million in locally developed real estate and has more than $600 million actively invested in a broad range of commercial projects, including office buildings, condos, multi-family and mixed-use projects in some of Austin’s most desirable areas, with an emphasis on urban properties in pedestrian-oriented locations. Pearlstone Partners engages in the economic development of Central Texas by creating high-quality, profitable real estate development projects. With experience managing every stage of the property development life cycle, Pearlstone is uniquely qualified to execute projects from concept through completion. For more information, visit //www.pearlstonepartners.com.

About ATCO

ATCO is a closely held real estate investment and ownership platform deploying capital in select cities across the United States, with a particular emphasis on urban properties in pedestrian-oriented locations. For over nine decades, ATCO has owned, managed, and developed a diverse real estate portfolio, primarily in and around New York City, and provided a range of services to other real estate owners. ATCO’s real estate operating company includes investment management, development, marketing, architectural design, and construction management, property management, and commercial and residential brokerage. ATCO’s investment and development portfolio consist of projects in excess of $2.2 billion in gross asset value.