Category: News & Market Reports

REDnews DFW Industrial Summit

Posted on by Sarah

• As multifamily, retail and office “feel the pain,” industrial is holding up well, and accelerating, as e-commerce continues expansion; investors are transferring their attention to industrial from these other sectors
• Companies are bringing back manufacturing from Asia to the U.S. and to Mexico, which is much closer to DFW; companies are coming here from California; labor costs in Mexico now approximate those in China, as China’s economy has strengthened
• Distribution and heavy manufacturers seem strong, but some light manufacturers are seeing stress
• DFW is strategically located in the middle of the country, is in the central
time zone, is one day’s drive from Mexico and Port of Houston, and it is “the” hottest industrial market in the country, and some say “the world;” DFW has a super freeway network and good general accessibility
• Manufacturers wanting to “near-shore” from China to Mexico are hampered from the difficulty of business travel to MX during COVID
• After a pause with the onset of COVID, investment deals are do-able and cap rates are back to where they were at the start of the year
• Loans are available at an average of 60 percent LTV, with lenders requiring ample debt service coverage—however, low leverage requires more expensive equity and mezzanine money
Click to read more at www.rednews.com.

Two Texas Markets Prove to be Elite When it Comes to Industrial Real Estate

Posted on by Sarah

There’s been a lot of talk that the industrial market—particularly that segment serving e-commerce companies—is proving to be resilient to the economic damage wrought by COVID-19. Two Texas markets are helping lead the way as the country forges a path forward during the pandemic. New research by Transwestern suggest that there remained strong demand for large scale industrial space across the country during the first half of
the year. This demand is revving the engines of development, investment and leasing activity. Transwestern indexes the health of the national industrial market by tracking deal velocity and construction activity in 11 growth regions. Dubbed the “Elite 11,” these markets are perennial targets
for both global investors as well as the most sought-after locations for big-box distribution users, lastmile logistics, e-commerce and manufacturing
companies. Two Texas markets, Dallas-Fort Worth and Houston, make Transwestern’s Elite 11, along with Atlanta, Chicago, Lehigh Valley (PA), New Jersey, Northern California, Seattle, South Florida, Southern
California and Washington/Baltimore. These core markets are proving that this is one asset class that can’t be beaten by the pandemic. “Many sectors of the real estate market have been put on pause since March—but not the industrial real estate sector, which continues to flourish,” said Transwestern’s Matt Dolly, director of research. “Prior to the pandemic, the core markets led investment activity, and this movement has only intensified in recent months.” Click to read more at www.rednews.com.

New Class A+ Industrial Warehouse Sells Near Dallas

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JLL’s capital markets team has closed the sale of Park Row Logistics Center, a new, 155,425-square-foot, industrial warehouse in the Dallas-area community of Arlington, Texas. JLL represented a joint venture between developer Stream Realty Partners and LaSalle Investment Management in the sale to Clarion Partners, LLC for an undisclosed sum. The Class A+ Park Row Logistics Center is fully leased to Mochila Fulfillment, which provides order fulfillment and warehousing services to e-commerce brands. The single-load building was completed in late 2019 and features a 32-foot clear height, 180-foot truck court, 28 trailer parking spaces, 22 dock-high doors, 60 loading bays, one oversized door, one drive-in door, and low office finish. Situated on 9.23 acres at 3301 E. Park Row Drive, the property is in the Great Southwest/Arlington Industrial submarket, which is known for its central location within the Dallas-Fort Worth metroplex. This location has access to major interstates and highways, including Interstates 20 and 30 and highways 183, 161, and 360, which provide the tenant easy access to approximately 58.6 million customers within a one day’s drive. The COVID-19 pandemic and the shelter-in-place policies that ensued have accelerated e-commerce growth and the need for warehouse space across the nation. JLL expects e-commerce sales could hit $1.5 trillion by 2025, which would increase the demand for industrial real estate to an additional 1 billion square feet. JLL reports that strong fundamentals and ongoing demand for space in the DFW market will continue to push rents higher along with new speculative construction well into 2021. The JLL capital markets investment advisory team representing the seller was led managing director Dustin Volz, senior director Stephen Bailey, and analysts Zach Riebe and Austin Ross.

Lument Provides $21.5M in Freddie Mac Financing for Affordable Housing in El Paso

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Lument provided a $21.5 million Freddie Mac unfunded forward commitment loan to facilitate the substantial renovation of Jackie Robinson Memorial Apartments, an affordable multifamily property in El Paso, Texas. Lument is the combined organization of legacy industry experts Hunt Real Estate Capital, Lancaster Pollard and RED Capital Group. “By combining the Freddie Mac unfunded forward loan with tax credit equity and other soft funding sources, we were able to put in place an attractive debt structure to help improve these much-needed affordable apartments,” said Josh Reiss, director at Lument. Originally built in 1975, Jackie Robinson is a 186-unit, 4 percent low-income housing tax credit (LIHTC) community in the Housing Authority of the City of El Paso (HACEP) portfolio. As part of the transaction, the property will receive Section 8 assistance that will facilitate the conversion to long-term, project-based voucher rental assistance. Subsequently, all 186 units will be restricted to tenants earning income at or below 60 percent area median income. The $21.5 million Freddie Mac loan features a low, fixed-interest rate, 18-year term with three years of interest only, and a 35-year amortization schedule. The forward commitment term will be 30 months with one six-month extension. Jackie Robinson will undergo substantial interior and exterior construction, including a gut renovation of all residential units, from new drywall to new kitchen appliances. In addition, exteriors will be improved with new windows and doors, repaired or replaced roofs and new stair towers. Construction began in October 2020 and is expected to be complete within 24 months. Reiss and the Lument team have financed over 960 units in partnership with HACEP, totaling $41 million. Since 2015, the team has financed over $565 million in RAD transactions for a total of approximately 6,500 units.

NorthMarq Finalizes $8 Million Refinance of Crownridge Centre in San Antonio

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Bryan Leonard, senior vice president/managing director of NorthMarq’s San Antonio office arranged the $8 million refinance of Crownridge Centre. The 41,590-square-foot office property, located at the intersection of IH-10 and Camp Bulls in San Antonio, is leased to a diverse tenant base including financial, medical and oil/gas tenants. The transaction was structured with a fully amortizing, 20-year term. NorthMarq arranged the permanent-fixed loan for the borrower, a long-time San Antonio sponsor, through its correspondent relationship with a life insurance company. The transaction was a refinancing of the existing construction debt. “The property is extremely well located and was developed by an experienced longtime local sponsor. Interstate 10 construction in front of the project has concluded and there are excellent neighborhood amenities at the nearby RIM and LaCantera developments to support office development,” said Leonard. “We were able to secure competitive long-term permanent in a difficult pandemic environment to support ownership’s business plan for the asset. NorthMarq was able to capitalize on the value created in this asset by the borrower to attract competitive capital and the lender achieved a solid investment.”