Financial Pain on the Way? Trepp Survey Suggests it’s True

Is more pain coming for commercial real estate companies? A new survey suggests that an uncertain economy will bring plenty of it before 2022 ends.

That doesn’t mean, though, that commercial real estate professionals don’t have hope that this pain will be relatively short-lived.

According to a new survey from Trepp, commercial real estate professionals are concerned about rising interest rates and inflation, and expect that both will hurt their businesses before 2022 ends. But they also think that commercial real estate will escape the worst effects of these economic headwinds.

That’s according to the Trepp 2022 CRE Sentiment Survey. From July 13 through Aug. 1, Trepp polled its more than 20,000 clients, blog readers and listeners for their opinions on the near-term future of the commercial real estate and commercial mortgage-backed securities markets.

And what did respondents say? In little surprise, 70% of them said that they expect the office sector to suffer the most from economic challenges throughout the remainder of 2022. This sector, of course, has been hit hard throughout the COVID-19 pandemic, with many employees still working from home. Respondens said that they expect the next several months to remain challenging for this sector.

A total of 83% of survey respondents predicted that during the next six months that delinquencies will increase in both the commercial real estate and commercial mortgage-backed securities industries.

And more than half of respondents said that economic conditions and higher interest rates would impact their businesses negatively.

There was some hope, too, from the survey. For U.S. equities, almost two-thirds of respondents predicted that the S&P 500 would not fall below 3200. Only 27% believed oil would top $150 a barrel. And the results were evenly divided between those who felt that the 10-year Treasury would rise above 4.5%.

A total of 58% of respondents predicted that the multifamily sector will see the highest transaction volume during the next six months. And in a glimmer of hope for the office sector, 70% of participants reported that they are working in the office at least three days a week.

Just under three-quarters of respondents said that their firms were either unchanged or growing when compared to 2021. A total of 88% of participants said that they are either keeping their companies’ current headcount or hiring new employees as needed. Despite this, more than half of respondents said that economic conditions will have a negative impact on their businesses by the end of 2022.

How to Keep Dallas-Fort Worth at the Top

You’re sitting in your office having a cup of coffee and reading the newspaper. Great news all around. Your city is a top-five metropolitan area in the country and growing. Job growth is phenomenal. Shiny new buildings everywhere.

North Texas 2022? Perhaps, but also Detroit 1950.

Living in North Texas today, it’s easy to take for granted that we lead the nation in job growth and in-migration. Since 2010, the U.S. Census Bureau estimates the population of the Dallas-Fort Worth metro area has grown by 23.1%—the most of any metropolitan area in the country for the same period.

It’s expected that DFW will overtake Chicago as the nation’s third-largest metro area by the 2030s.

Much of this growth is attributed to the uptick of companies and workers relocating from other states. Our region has a lot of positive benefits that attract businesses and people – we have all heard them many times: low regulatory climate, no state income taxes, affordable housing, and a diverse economy. Click to read more at www.dmagazine.com.

Edge Realty Partners Secures Leasing Assignments for Over One Million Square Feet in North Texas

Edge Realty Partners, a leading commercial real estate firm providing national brokerage, development, and investment sales services, announced an agreement with DLC Management Corp. to lease more than one million square feet in two premier power centers in North Texas – The Village at Allen and White Rock Marketplace.

The Village at Allen
Built in 2009 and totaling more than 836,000 square feet, the Village at Allen has become an important commercial hub in the Allen market. The center’s tenants range from well-known shopping destinations to entertainment, dining, and fitness, in addition to being home of the fan-favorite hockey team, the Allen Americans. Retailers include Target, Dick’s Sporting Goods, Five Below, Burlington, T.J.Maxx, and Best Buy. The Village at Allen is also home to a variety of restaurants including Kelley’s at the Village, Uncle Julio’s, and BJ’s Restaurant & Brewhouse.

White Rock Marketplace
Also managed by DLC Management Corp. and owned by an affiliate, White Rock Marketplace is located at the northwest quadrant of Garland and Jupiter Roads in Dallas. The shopping center totals 274,822 square feet, and is anchored by Home Depot, and complemented by additional shopping, fast-food favorites, and fitness centers. Retailers include Planet Fitness, Shoe Carnival, Marshalls, and Burlington.

geniant Joins Forces with Eastlake Studio to Transform the Nature of Design Consulting

Today, geniant, a next-generation experience consulting company, announced the acquisition of Eastlake Studio, a Chicago-based architecture and interior design firm. Together, the forward-thinking teams will collectively transform the nature of experience consulting by integrating architecture and digital solutions to deliver exceptional experiences for employees and customers.

“We’re entering a new era in workplace design,” says geniant CEO of Physical Space David Dewane. “To meet future demands, we must think about the employee experience holistically – space, people, and technology. Eastlake is a best-in-class design firm that instantly brings geniant’s capabilities to a new level.”

“As we’ve been examining unique hybrid work models, we are finding that additional skill sets and methods are needed to truly understand the evolution of the modern workplace,” says Eastlake Studio Architect and Principal Kevin Kamien.

“geniant provides our team with experience research expertise that, when integrated with architecture and design, can shape the future for organizations in this critical moment in history,” added Eastlake Studio Interior Designer and Principal Christina Brown.

As consultants who have partnered with top companies around the country, geniant believes that the experience and performance of information workers can be radically improved. The modern office has not kept pace with the rapid changes in technology and lifestyles. The pandemic exposed this misalignment and has called the status quo into question.

To effectively adapt the employee experience to this new reality, geniant employs contextual research methods, producing crucial, actionable insights for optimal workplace performance — this has specific implications for workplace design, as well as cultural and change management programs.

“As designers, our curiosity has led us to deliver award-winning solutions for our clients over the past 35 years,” says Eastlake Studio Principal Emeritus Tom Zurowski. “This next step is a natural evolution. It allows our teams to gain even more insights into the clients we’re designing workspaces for,” added Jon Salzmann, principal emeritus of Eastlake Studio.

Eastlake Studio recently received an Interior Design Firm of the Year award at the 2022 Chicago Commercial Real Estate Awards and frequently has projects awarded by the International Interior Design Association (IIDA) and the American Institute of Architects (AIA). The firm’s work has appeared in publications including Metropolis, Interior Design, Architect, and Crain’s Chicago Business.

“Experiences happen in physical spaces, between people and through technology, shaping the world we live in,” says Chairman and Co-CEO David Lancashire. “The addition of Eastlake Studio is a key step in our strategy to provide a complete suite of services to help businesses optimize their entire brand experience.”

Olive Tree Affordable Housing Unveils $7.8 million Modernization Plan at The Life at Westpark

Olive Tree Affordable Housing, an affiliate of Olive Tree Holdings, a real estate investment firm focusing on value-add multifamily projects in dynamically growing markets across the United States, today unveiled its $7.8 million modernization plan at The Life at Westpark, a 312-unit affordable multifamily complex in Houston. Property improvements are currently underway, with final completion slated for Q1 of 2023.

The interior upgrades, which consist of comprehensive improvements to 188 of Westpark’s residences, 78 of which are designated Fair Housing Accessibility (FHA) units, include new flooring, cabinets, countertops and vanity tops, new sinks and service lines for both the kitchen and bathrooms, upgraded appliances and two-tone painted walls, with select units receiving new water heaters and HVAC systems. 30 residence upgrades have been completed to date, with an additional 52 currently in progress. Exterior upgrades completed to date include full roof replacements throughout, and the addition of exterior gate water valves.

Remaining rehabilitation efforts at The Life at Westpark include the completion of the interior residence upgrades, the installation of new windows and sidewalks throughout the complex, the addition of new accessible parking offerings, building siding and wood repairs and the creation of a refurbished leasing office.

Built in 1994 and acquired by Olive Tree Holdings in 2019, The Life at Westpark is an amenity-rich, pet-friendly community comprised of two-, three- four- and five-bedroom apartment homes reserved for those earning up to 60 percent of the area median income (AMI). In 2022, Olive Tree Holdings acquired a Housing and Urban Development (HUD) insured mortgage to undergo substantial capital improvements to preserve Westpark’s affordability status, which was previously set to expire in 2025 and will now be extended for an additional 75 years.

To date, Olive Tree Affordable Housing manages more than 4,000 affordable units nationwide, including preserving the affordability of 865 units within the Houston-metro area, totaling $125 million in development costs.

Hines Unveils Brava, Houston’s Tallest Residential Community

Hines, along with investment partners Cresset-Diversified QOZ Fund and Levy Family Partners, announced the grand opening of Brava, a world-class apartment high-rise located at the corner of Preston and Milam Streets in downtown Houston. Adjacent to Market Square Park and Texas Tower, Hines and Ivanhoe Cambridge’s new one-million-square-foot office tower, the residences lie at the convergence of Houston’s Central Business District, Theatre District and Historic District, offering a truly metropolitan living experience and immediate access to the city’s major urban, cultural and sports facilities.

Striking Views of the Downtown and Beyond

Comprised of 373 luxury residences, the 46-story high-rise stands taller than any other residential community in Houston. The tower, designed by Munoz + Albin Architecture & Planning, is positioned diagonally on its site, allowing for uninterrupted views from every window. Featuring a dynamic twisting shape that rises the building, the Brava’s distinct façade is a remarkable architectural presence and an important contribution to the Houston skyline.

Brava is expected to achieve LEED Gold certification, demonstrating Hines’ commitment to sustainability.

Contemporary, Art-Focused Interiors

Setting a new tone for the bustling borough, Brava’s modern design provokes a vibrant energy that yields undeniably welcoming and luminous spaces. With common space interiors by award-winning Mayfield and Ragni Studio (MaRS), a soothing color palette is accented by contemporary interiors, unique millwork and commissioned art installations by renowned sculptors and artists including D’lisa Creager, Sachin Tekade, Sergio Albiac and many others. Located on the former Houston Chronicle site, the building subtly incorporates the physical presence of a newspaper, from the consistent use of black and white materials to its uniquely curved façade. Houston-based artist Robynn Sanders, with Maverick Murals Art and Design completed MaRS’s vision for the concrete columns in the building’s lobby, which tell a story of Houston’s milestone events as recorded across the Houston Chronicle headlines ranging from the 1920s into the 2000s.

Condominium-Level Finishes in a Rental Residence

Brava boasts spacious single-level floor plans ranging from 657 to 2,926 square feet. Each light-filled residence features 10-foot ceilings, flexible living spaces, generous walk-in closets with custom shelving and floor-to-ceiling windows to maximize views. Natural materials and finishes create an inviting sense of warmth with luxurious millwork and fixtures including quartz countertops, stainless-steel Bosch appliances and wide-planked wood flooring complimenting Italian-made custom cabinetry throughout.

The building’s 10 penthouse residences, on levels 45 and 46, range in size from 1,739 to 2,927 square feet with large outdoor living rooms, freestanding bathtubs and ultra-luxurious finishes rivaling the finest of condominium residences. Select penthouses feature outdoor kitchens with gas grills and refrigerators, and contemporary indoor fireplaces.

Unmatched Amenities

Residents of Brava enjoy access to an array of outstanding amenities, including a 24-hour concierge; valet parking; 47th-level sky amenity deck capturing panoramic views of the skyline with private resident dining room and catering kitchen; 10th level resort style pool, cabanas, daybeds, yoga lawn and private terrace; state-of-the-art gym with on-demand virtual fitness classes; coworking and conference spaces; guest suites; multiple social lounges with complimentary beverage and coffee bars; pet parlor; on-site storage; bike shop and bike storage; 6,800 square feet of curated street-level retail and restaurants onsite.

Prime Location
The community’s prime location between Market Square and the Arts District boasts a WalkScore of 97, with more than 50 bars and restaurants, 40 million square feet of office space, and multiple cultural institutions in the immediate vicinity. Nearby attractions include the Buffalo Bayou Park system, Jones Hall, The Wortham Theatre, Sesquicentennial Park, the Toyota Center and Minute Maid Park, among others. Bravery Chef Hall, Georgia James Tavern and Finn Hall are all within walking distance of Brava, and over 50,000 square feet of retail is currently underway within one block of the project site.

Conveniently located near the METRORail red line on Main Street and several bus lines, Brava is also easily accessible from US 59, Memorial Drive, IH-10 East, IH-45 North, IH-10 West, Allen Parkway and IH-45 South via automobile.

Project Team, Pricing and More Information

Hines assembled a stellar Texas-based design team for Brava, including Munoz + Albin, design architect; Mayfield and Ragni Studio (MaRS), interior design of common areas; TBG, landscape architect; and Harvey Builders, general contractor. Jones Lang LaSalle (JLL) provided construction financing and equity. The building is managed by Willowick Residential, Hines’ own best-in-class multifamily property management firm. Construction commenced March 2019 and initial move-ins began in the first quarter 2022. Final delivery is slated for Q4 of 2022.