Marcus & Millichap closed the sale of a net-leased Tractor Supply Co. location in Nixon, Texas.

Zack House, Mark Ruble and Chris Lind, investment specialists in Marcus & Millichap’s Columbus and Phoenix offices, had the exclusive listing to market the property on behalf of the seller, a limited liability company. Tim Speck, Broker of Record in Texas, assisted in closing the transaction. 

Located at 1106 E. 2nd St., the brand-new, 23,957-square-foot Tractor Supply Co. features a 15-year corporate lease. The property is a high-quality 2024 construction situated on a 4.42-acre lot. It is easily accessible along Central Ave. and Hwy. 87, receiving visibility from roughly 7,000 vehicles a day. Major retailers nearby include Family Dollar, Dollar General, Dairy Queen, Circle K and Ford. 

 JLL Capital Markets facilitated the sale of Little York Plaza, a 114,982-square-foot Hispanic grocery-anchored shopping center in the Near North submarket of Houston, Texas.

JLL worked on behalf of the seller. The asset was purchased by The Criterion Fund, a full-service retail development and investment group specializing in strip center investments.

Little York Plaza, situated at 1523 Little York Rd., is strategically located along Hardy Toll Rd. and Little York Rd., with a daily traffic count of 41,370 and 25,261 vehicles respectively. Little York Plaza sits in the center of the Hardy Heights community, acting as an essential shopping center with a tenant lineup tailored to serve the neighboring rooftops.

The area is seeing positive growth, benefitting from increased activity with new school openings and construction of local parks, along with other developments. Located in an underserved retail submarket, the asset features in place rents significantly below market with sticky tenancy with over 16 years of tenure at the site.

Little York Plaza, a vintage shopping center built in 1997, enjoys an impressive 98.3% occupancy rate. Situated on 11.45 acres, the property is anchored by Seller’s Bros, Houston’s leading Hispanic grocery chain, part of the larger La Michoacana brand portfolio. The center boasts a diverse tenant list featuring Dollar Tree, Melrose Family Fashions and Aaron’s Appliances. The property has seen positive leasing activity, recently signing a lease with Verizon.

JLL Capital Market’s Investment and Sales Advisory team representing the seller was led by Senior Managing Director Ryan West and Senior Director John Indelli.

Are commercial real estate professionals more optimistic today following the recent interest-rate cut enacted by the Federal Reserve Board? A recent survey seems to suggest that they are.

The CRE Finance Council (CREFC) released the results of its Third-Quarter 2024 Board of Governors Sentiment Index survey late last month. Conducted between Sept. 4 and 12, this survey provides crucial insights into the state of the commercial real estate finance sector.

The third-quarter 2024 Sentiment Index surged to 121.1, an 18% increase from 102.4 in the prior quarter. This marks the highest reading since the index was launched. It reflects significant optimism over the Fed’s easing of interest rates, the potential for a U.S. economic soft landing and the impact on both commercial real estate assets and lending market conditions.

The survey’s core questions reveal a more positive outlook for lending and CRE fundamentals:

• Economic Outlook: Optimism surrounding the U.S. economy rose, but overall sentiment remains guarded. Some 32% of respondents expect improved performance over the next 12 months, up from 11% last quarter. Only 11% now anticipate worsening conditions.
• Rate Impact: An overwhelming 85% of respondents expect lower mortgage and capitalization rates to positively impact CRE finance and CRE asset values, a substantial increase from 41% last quarter.
• CRE Fundamentals: Confidence in CRE fundamentals improved, with 40% predicting better conditions over the next year, up from 24% in the previous quarter.
• Transaction Activity and Financing Demand: Investor demand for CRE assets is expected to grow, with 81% anticipating increased demand, up from 54% last quarter. Borrower demand for financing also saw an uptick, with 85% projecting higher loan demand compared to 65% last quarter.
• Liquidity and CMBS Market: Confidence in liquidity improved significantly, with 77% expecting better/more liquid market conditions in the debt capital markets, up from 46% in the prior quarter. In addition, positive sentiment around CMBS and CRE CLO demand increased to 66% from 43%.
• Optimistic Industry Sentiment:Industry sentiment was markedly more positive, with 57% expressing a positive outlook, up from 22% in the previous quarter, with negative sentiment dropping to just 2%.

The survey also explored expectations regarding Federal Reserve actions and the potential impact on the CRE market. With the survey conducted just before the Federal Reserve’s decision on Sept. 18 to cut interest rates by a half-point, 47% of respondents anticipated a 50-basis point cut in interest rates by year-end 2024, with 15% expecting a rate reduction of 75 basis points during the same period.

Most respondents (60%) expect a meaningful recovery in CRE transaction volumes in 2025 as interest rates stabilize. However, concerns persist around the office sector, with 62% expecting continued declines in office property values, particularly for older, less-amenitized buildings.

“The latest survey results signal a strong resurgence of confidence within the CRE finance industry,” said Lisa Pendergast, executive director of CREFC, in a statement. “Expectations of further Federal Reserve easing, combined with increased investor and borrower demand, suggest market participants are preparing for growth and opportunity through year-end and into 2025. While challenges remain —particularly in the office sector — the overall outlook is more optimistic than in previous quarters.”

“Expectations of easier U.S. central bank monetary policy have improved sentiment in the commercial real estate finance market and any additional interest rate cuts by the Federal Reserve likely will support transaction volume,” added Leland Brunch III, chair-elect of the CREFC and managing director and head of capital markets and banking for the US RESF Group at Bank America, also in a statement. “The lower borrowing costs are welcome after a protracted period of elevated interest rates.”

KWA Construction completed The Draper Apartments, part of GroundFloor Development’s redevelopment project in Garland, Texas.

The project was financed in partnership with the U.S. Department of Housing and Urban Development.

Located on the northwest corner of South Garland Avenue and West Avenue B, The Draper is a three-story, 155-unit community within walking distance of the newly renovated Downtown Square, which features various shops, restaurants and entertainment venues.

Designed by JHP Architecture, The Draper’s resident amenities include a resort-style pool with tanning deck, fitness center, business center, co-working lounge, resident lounge, private garages and covered parking.

In-unit amenities include, quartz countertops, stainless steel appliances, walk in closets, vinyl plank flooring and plush carpeting, and washer and dryers. The property is also is near the Downtown Garland DART station, providing public transportation access to points across Dallas-Fort Worth.

JLL Capital Markets secured refinancing for The Timbers, a 155-unit, 253-bed student housing complex in San Marcos, Texas.

JLL worked on behalf of the borrower, Orion Real Estate Partners, to arrange the loan through Freddie Mac. The loan will be serviced by JLL Real Estate Capital, LLC, a Freddie Mac Optigo Lender.

The Timbers is situated at 900 Peques St., a prime location near Texas State University with convenient access for students. This property enjoys close proximity to “The Square” which is Downtown San Marcos’ vibrant hub. The area is characterized by locally-owned shops, restaurants and nightlife spots, catering to the student population.

San Marcos, situated between Austin and San Antonio, has experienced significant growth since 2010, with its population increasing by over a third. With a median age of 25, San Marcos is heavily influenced by Texas State University’s presence. Reflecting the student-centric demographics, 64% of residents in the immediate area opt to rent rather than own.

The Timbers offers one-, two- and three-bedroom apartments with modern amenities. Units feature stainless steel appliances, hardwood-style flooring, in-unit washer/dryer, spacious walk-in closets and private balconies. Select apartments offer wood-burning fireplaces and vaulted ceilings. Community facilities include a clubhouse with flatscreen TV and arcade, pet park, full-court basketball, 24-hour fitness center, BBQ station and a swimming pool overlooking downtown San Marcos.

JLL Capital Market’s Debt Advisory team representing the borrower was led by Senior Director Dan Kearns, Vice President Patricia Heminger, Associate Rebecca Brielmaier and Analyst Katia Novi.

In December 2023, the City of Houston made a notable declaration, officially
naming Dec.19 “CIVE Day” in recognition of CIVE’s contributions to the
city’s growth and development. Founded 21 years ago as an engineering
firm, CIVE has evolved into a powerhouse in design, construction and
procurement, particularly in the multifamily sector.

“The growth in the population created strong demand for housing close to jobs, transportation, and cultural amenities,” President Hachem Domloj said, adding that he sees his honor not just as a celebration of CIVE’s accomplishments, but also as a testament to the rapid changes in Houston’s urban landscape. “Now, people want to be closer to the city and that has driven a boom in high-density, transit-oriented developments.”

CIVE has been at the forefront of this shift, blending engineering prowess with creative solutions to meet the growing demand for affordable housing. “We’re working on multiple projects right now, with more than 1,000 units in design or build stages,” he said. “A standout is our project near the Galleria, where we fit an eight-story building with 180 units onto a 30,000-square-foot plot.”
Over the past decade, Houston has seen an increasing number of mid-rise and high-density developments. Domloj attributed this to the city’s expanding population and the need for housing that offers more
than just a place to live.
Creating multifamily developments that cater to changing consumer demands is a priority for CIVE and Ryan Companies, where mixed-use developments that blend residential, retail and office spaces are a growing focus.
“Thoughtful integration of each asset class is essential in any mixed-use development,” said Marcy Phillips, Senior Vice President for Multifamily Development at Ryan Companies. “This begins with considering how a person first engages with the community and continues through to the resident’s overall live-work-play experience.”
Domloj highlighted a similar approach in CIVE’s projects, particularly in student housing. One of the company’s key developments is a transitoriented, affordable housing project specifically designed for students.
“It’s not like typical student housing where tenants share kitchens or other amenities,” Domloj said. “These are individual studio units, located near the Metro rail line, providing students with easy access to public transportation. We modeled this project differently to value engineer, optimize the budget and make it affordable for the end user, while ensuring accessibility and sustainability.”
Both CIVE and Ryan Companies have embraced innovation to navigate the complexities of today’s multifamily landscape. For Domloj, the key to CIVE’s success has been adaptability.
“We started a division for procurement, which became its own company,” he said. “This allows us to procure materials in ways that give us an edge over competitors, especially when faced with high interest rates and material shortages.”
Phillips echoed this emphasis on innovation, highlighting Ryan Companies’ focus on technology and strategic planning. “We are maintaining control of key land assets and ensuring that design plans are aligned to start when the capital markets and interest rates stabilize,” she said. “Additionally, we are investing in innovative technologies, including artificial intelligence, market analytics and new prototypes, which will allow us to deliver products to market more efficiently.” Ryan Companies is also preparing to deliver more than 1,100 units in Texas by 2025, with major projects underway in Houston, Austin and Dallas-Fort Worth.
For both Phillips and Domloj, multifamily development is about more than profitability. It’s about contributing to the communities they serve. Domloj stressed that developers have a responsibility to think long-term. “Houston is at a pivotal moment in urban development,” he said. “We need to think beyond just short-term gains and focus on the sustainability of the communities we’re building.” Phillips agreed, emphasizing that creating vibrant, sustainable communities is crucial.
“Renters will continue to demand best-in-class features, amenities and overall resident experiences,” she said. As these challenges reshape the landscape, developers across Texas are adjusting their strategies to meet shifting market conditions while keeping a long-term view in mind. “Recent years have seen extreme fluctuations due to the pandemic, with record lows and highs in areas such as interest rates, capitalization rates, and supply and demand fundamentals,” Phillips said, adding that record high multifamily supply presents its own set of challenges for developers. “Design, entitlements, permitting, labor force availability, construction delays and rental price reductions, as well as increased concessions and a sluggish buy/sell market are affecting the industry.” Both leaders believe that market recovery is on the horizon. “The growth fundamentals in Dallas-Fort Worth are particularly strong, positioning the area well for both immediate and long-term multifamily development,” Phillips said. “While short-term economic pressures exist, we expect them to ease with falling interest rates and cap rate compression. With a typical pre-development timeline of two years, we believe that market conditions will have improved by the time new projects are delivered.”