Don’t look now, but some sectors in some markets aren’t just weathering COVID-19, they’re settling in for years of growth. Consider the DFW market where, during the first half of 2020, more than 8.2 million square feet of industrial space was absorbed. This data, which was culled from recent CBRE research, held close to the year-over-year absorption of 8.7 million square feet that the area experienced in 2019. While the pandemic is causing disruptions in sectors and markets throughout the country, the DFW industrial market appears to be quite healthy. CBRE tracked 71 transactions of 100,000 square feet or larger that closed during the first two quarters. Half of these, comprising 12.6 million square feet, were new leases, with 5 million square feet of that going under contract during Q2 as the pandemic was well underway. Steve Trese, senior vice president with CBRE in Dallas, believes that supply and demand are still fairly in balance across the metro. This holds true both for industrial product in general and for large logistical warehouses. “Smaller, front-park, rear-load product is flying off the shelf in infill areas. Partly because of the lack of quality sites, developers are capitalizing on challenging small land, and getting higher rents than ever before,” Trese said. “Big box is equally successful, but is venturing out farther than our more traditionally tracked submarkets, seeking quality labor, less congested infrastructure and slightly more affordable land basis.” Click to read more at www.rednews.com.
The spread of coronavirus and millions of job losses have put the real estate market on shaky ground. But one property sector shows no sign of a slowdown, even in the face of the pandemic. If anything, the North Texas industrial building market seems to be gaining ground as demand for consumer products and e-commerce soars in the area. “I believe the industrial market is going to be more insulated from the effects of the pandemic than the other property types,” said Jeff Thornton, regional senior vice president of Duke Realty. “There is clearly evidence that the industrial market continues to move forward. “At Duke alone, we have had more than a half-million square feet of leases during the pandemic,” said Thornton, whose firm owns multiple Dallas-Fort Worth area industrial properties. Duke Realty just did a major expansion with tech firm Samsung in one of its Coppell warehouse buildings. Big warehouse and distribution deals have recently been announced all over the area for companies including Ocean Spray, Mars Inc., U.S. Auto Parts Network, ICU Medical, and FedEx. The pandemic has increased demand for distribution space for e-commerce companies that deliver products directly to consumers, said Tom Pearson, executive vice president of Colliers International. “Just a 5% increase in e-commerce sales would equate to millions of square feet of new industrial space requirements around the country,” Pearson said. Click to read more at www.dallasnews.com.
Texas Central won a critical legal decision in developing a high-speed rail project between Dallas and Houston. The landowners, Leon County’s Jim and Barbara Miles, plan to appeal the ruling to the Texas Supreme Court, according to published reports. “If ever there was a ruling that created ‘the Wild, Wild, West’ of eminent domain authority, this is it,” Blake Beckham, The landowner’s attorney and special litigation counsel to Texans Against HSR, said in a statement. A Texas appeals court ruled in favor of Texas Central, holding that it was both a railroad company and an interurban electric railway, despite operating no trains yet. The Thirteenth Court of Appeals said Texas Central and its subsidiary Integrated Texas Logistics are legally railroads in the state of Texas, reversing a previous decision by the 87th District Court of Leon County. The decision by Justice Nora Longoria comes after a four-year court battle made by landowners along the proposed route in Leon County. The landowners argued that the project wasn’t a railroad and therefore didn’t have the rights associated with a railroad, including eminent domain and access to the property for surveyors. Click to read more at www.dmagazine.com.
JLL Capital Markets arranged the refinancing of Advenir on Addison, a 264-unit, garden-style multi-housing property in Dallas. JLL worked on behalf of the borrower, Advenir, to secure the seven-year, fixed-rate loan through Freddie Mac. The loan will be serviced by Holliday Fenoglio Fowler LP, a JLL company and a Freddie Mac Optigo lender. Advenir on Addison is located at 17671 Addison Road near the intersection of President George Bush Turnpike and Dallas North Tollway. The property is well supported by retail, dining and entertainment venues, including the Galleria Mall, Village on the Parkway, the Shops at Willow Bend and Valley View redevelopment. Advenir on Addison is also near the Platinum Corridor, one of the DFW metroplex’s largest office corridors, and three of the metro’s largest mixed-use developments: CityLine, Legacy Business Park and Frisco’s $5 Billion Mile. Units include one- and two-bedroom floor plans averaging 923 square feet with amenities such as stainless steel appliances, granite kitchen counters, hardwood and slate flooring, spacious walk-in closets, in-unit washers and dryers and attached garages for all units. Click to read more at www.rejournals.com.
As Texans adjust to life under orders to stay at home during the coronavirus pandemic — and scramble to cover expenses with incomes that were drastically cut or abruptly shut off — housing and real estate experts say it’s hard to predict what the parallel public health and economic crises will do to home values and sales. A lot depends on how long the twin troubles last. “We definitely will have a slowdown, but the question is how much and how long,” said Scott Norman, executive director of the Texas Association of Builders. That’s a sudden about-face for what had been, until now, one of the most dynamic real estate markets in the country. The state has had five consecutive years breaking records in terms of numbers of houses sold and median prices, according to Texas Realtors. And Texas’ home building industry has been solid, too; no other state had more building permits in 2019, according to census data. Luis Torres, an economist with the Texas A&M Real Estate Center, said the housing sector can be a barometer for the economy as a whole because it affects jobs of laborers, builders, Realtors and a litany of other professions. “And it has a multiplier effect into the rest of the economy, from moving companies to furniture stores,” Torres said. Already, experts are seeing slowdowns in home showings — which are now largely done virtually — and expect that permits for new construction might also drop. For regions whose residents rely largely on the energy industry for work, like Houston or the Permian Basin, or on cross-border trade, like the Rio Grande Valley, home values and sales may dip more than in other Texas regions. Click to read more at www.news-journal.com.
The North Texas real estate market and the jobs that depend on it are one of the many industries impacted by the coronavirus pandemic. How serious the damage will be is not yet clear, but Southern Methodist University business professor Mike Davis said he did not expect a rapid recovery. “We know things are going to be different,” he said. “We’re entering into this horrific recession and recessions this bad, you feel the echoes of that for two or three, maybe even longer, years after that.” The drastic hit to aviation and the hospitality industry could cripple future construction of hotels and airport-related business. Shopping center development that was already hurt by a shift to online shopping may decline further as customers become even more accustom to e-commerce during forced time at home. Employment and job opportunities will be hurt. “We’re going to see a fundamental shift in the way we shop and the way we do business. That may mean fewer people getting on airplanes, which means fewer sales at all those food places and shopping places at the airport,” Davis said. “It could mean more on line sales as more people discover that’s just a good way to do business.” Click to read more at www.nbcdfw.com.