Here’s Why The Leverage That We Can’t Track Matters

Despite all we hear about asset classes increasing in value across the board and the unprecedented strength of the U.S. economy, as a real estate entrepreneur and former professional trader, here’s what keeps me up at night: I believe we only know part of the story and that the piece we’re missing — our current inability to account for “invisible” or “hidden” leverage can have significant implications for our country’s economic health.

The hitch? We likely won’t know until it’s too late.

In a nutshell, “leverage” is the term for funds that are borrowed (outright or against an asset) with a goal of using those funds for further financial gain. Applied wisely, leverage has fueled wealth and economic growth for centuries; however, as with any debt, when things go south, borrowers can find themselves underwater, financially speaking. This is simply the reality of our economic system.

The risk is amplified when investors leverage assets that are inherently more difficult to track — such as cryptocurrencies, fine art, collectible cars and wine collections — and that are likely used far more often than our economic data shows. Trickier still, this kind of borrowing masks the multiplier effects of risk and debt, and it tends to be prevalent during times like these when we’re feeling optimistic and asset valuations “seem” to be on a never-ending upward trajectory. Click to read more at www.forbes.com.

First Look: Victory Park’s Newest Luxury Multifamily Garners Sky-High Rents

Creatively fitting a towering multifamily in a neighborhood like Victory Park required deep thought by international developer Hines and their team of architects and designers. The infill development of a former parking lot on the northeast corner of Nowitzki Way and Victory Park Lane, The Victor is now the tallest building in Dallas’ Uptown—and it’s garnering some of the highest rents in the area at about $370 a square foot.

Typically, such a building would be long and rectangular, much like the high-rises you see in downtown Dallas. But such a design would crowd the neighborhood’s urban fabric, Munoz + Albin Principal Jorge Munoz tells me as we walk along Nowitzki Way to tour the site.

Comprised of 344 luxury residences and adjacent to the American Airlines Center, the 40-story tower blends beautifully into the neighborhood. To do so, designers broke the masing of the tower into two distinct shapes to accentuate its verticality: a thin floating glass volume on the east and a masonry volume on the west. Click to read more at www.dmagazine.com.

Massive Business Relocation Jet-Fuels Texas Economy and Real Estate Boom – ‘White Commercial Real Estate’ Positioned to Offer Smart, Stealthy Commercial Realty Angles for Eager Investors

‘Six of the top ten fastest-growing counties in the U.S. are here in the Lone Star State. There is no better time to purchase Texas property than right now…’

HOUSTON, July 29, 2021 /PRNewswire/ — White Commercial Real Estate (WCRE) highlighted its unique role helping investors capitalize on the resurgence of the Texas economy, recently featured in a glowing public assessment by Texas governor, Greg Abbott. As the 9th largest economy in the world by GDP, Texas remains positioned for more economic expansion over the next five years, based on strong employment and income growth forecasts. Much of this is due to a healthy pro-business atmosphere fostered by the state, along with being the home base for 100 of the 1000 largest public and private companies in the U.S. Experienced and exclusive boutique real estate firms like WCRE, with strong roots in the area, are the surest way for property investors to seize upon the recent Texas economic upsurge. Click to read more at www.prnewswire.com

Houston Hits Major Milestone as Industrial Market Reaches Record Quarterly Leasing

While the Houston office market has had a rough 12 months, and will likely continue to lag in the coming quarters, the industrial market is booming. In fact, the industrial market in Houston is so strong, that the metro area has hit the highest quarterly leasing total on record, according to a recent report from NAI Partners.

Graphic via NAI Partners

By the end of the second quarter of this year, Houston’s overall industrial vacancy rate stood at 9%, more or less unchanged since the previous quarter, however, there were 12.5 million square feet of leasing activity recorded for Q2 of 2021, which is more than double the 6 million square feet of leasing activity during the same period last year. A wave of new deliveries from previous quarters has kept inventory levels stable and average gross rent rates relatively flat.

The news is significant for numerous reasons, but namely how the industrial market is helping bolster the broader commercial real estate sector as other asset classes continue to struggle since the start of the pandemic. But other economic indicators continue to show improvement, the report reveals, such as lower unemployment stats, the increase in drilling operations, and an uptick in new construction.

According to the report, the vast majority of industrial leasing over the last several years has been for warehouse and distribution space. The metro has had 12 straight years of positive net absorption, the report indicates, even as Houston continues to also witness record levels of industrial construction.

Major Q2 leases highlighted in the report include Ferguson’s 750,7750-square-foot lease at the Empire West Business Park, a 685,000-square-foot lease by Living Spaces Furniture Company at the Air 59 Logistics Center and a 645,000-square-foot lease at 4725 E. Grand Parkway by Webstaurant Store.

Chart via NAI Partners

While 15 million square feet of new industrial space remains under construction, nearly 70% of it is already leased, the report indicates, further illustrating the high demand for industrial. Additionally, Port Houston’s container terminals have remained busy, with year-to-date activity increasing by 8% over the same period in 2020.

As Houston’s import-export activity increases and the economy continues to shift towards e-commerce and manufacturing on-shoring, and Texas’s population growth remains steady, the sky-high demand for new industrial products will likely continue for the foreseeable future.

Making Mapping Easy: MapRight Offers New Tools for CRE Pros

Who remembers the days of Key Maps? Or, more recently, printing out directions before you headed to a destination? Only in the past 15 years have we been able to rely on applications such as Google Maps, Apple Maps or Waze.

“If you think mapping is boring or isn’t changing, you’re not paying attention,” says Steve Roberson, CEO & Founder of MapRight, an online and mobile mapping platform. “You used to have to use a paper map. The ability to see yourself on a real-time map has
only existed for maybe a decade.”

His company is taking that evolution even further, allowing clients to navigate and build maps whether they have GIS experience or not.

“One function on the MapRight mobile app allows a subscriber to send an interactive map to somebody. That somebody can get driving directions to a property and view it themselves without the agent even being there,” Roberson explains. “That person can evaluate the property’s boundary, floodplain and things like that. A feature like that had never really even been thought of except in the past decade.”

Roberson unlocked his passion for mapping decades ago as he completed his Master’s in applied geography with a concentration in GIS.

“I was always fascinated with real estate and how mapping interacted with it,” he says.

Real Estate Investors Lay Down in Family Homes

Wall Street businesses are more enthusiastic about buying family homes than ever before. They run the risk of killing their latest Golden Goose if they surge existing supplies rather than helping them build new homes.

Last week, Blackstone Real Estate Investment Trust purchased a portfolio of apartments from insurer American International Group for $ 5.1 billion. In June, the investment company spent $ 6 billion on the Home Partners of America, which owns more than 17,000 homes nationwide and offers lessors purchasing options. Bloomberg reported that private equity giant KKR has launched a new division to buy and rent homes.

Meanwhile, in Europe, real estate investors are increasing their share of the portfolio of investing in residential real estate, and German landlord Vonovia recently launched a € 18 billion acquisition of competitor Deutsche Wohnen. That’s $ 21.2 billion. Click to read more at www.texasnewstoday.com.