Category: News & Market Reports

Embrey Closes Sale in San Antonio, Texas, of Luxury Multifamily Property Standard at Legacy

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SAN ANTONIO, Dec. 16, 2021 /PRNewswire/ — Standard at Legacy, a 323-unit multifamily community in desirable north San Antonio, has been sold by Embrey Partners LLC.

The purchase was made by Sherman Residential and brokered by Newmark.

“This is a best-in-class community in a premier location with easy access to Highway 281 and Loop 1604,” said John Kirk, Managing Director and Executive Vice President for Embrey. “Standard at Legacy supports the active lifestyles of today’s rising professional with a wide range of residential amenities and easy access to the high-end dining, shopping and employers in the area.”

Amenities include a cyber lounge with workspaces and conference room, fitness center equipped with a yoga and virtual fitness studio, golf simulator, an outdoor living area with kitchen and games, and an indulgent pool with cabanas. A pet spa and dog park are also available for furry companions. Click to read more at www.prnewswire.com.

Office Market Can’t Escape its Limbo

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It remains an uncertain time in the U.S. office market. That’s because whenever companies appear ready to bring their workers back to the office during the COVID-19 pandemic, a new variant — first it was Delta, now it is Omicron – halts their plans.

That has left the office market in limbo for much of the COVID-19 pandemic. According to the latest research from CommercialEdge, this isn’t about to change anytime soon.

In its December National Office Report, CommercialEdge reported that in November, the U.S. average office vacancy rate hit 15.2 percent. That is a rise of 140 basis points during the past year, but also a fall of 40 basis points in the last six months.

Office rents have stagnated, too. CommercialEdge reported that across the country, listing rates for office space averaged $38.62 a square foot in November. Average asking rents were up by 1.2 percent year-over-year. This number remained unchanged compared to the previous month.

Office transactions completed through the end of November came out to $68.8 billion, according to CommercialEdge. This means that transaction volume in 2021 has already surpassed last year’s total volume by 11 percent.

The average sale price rose to an all-time high this year, reaching $291 a square foot in November.

Pandemic Changed the Way Renters Searched for Apartments, Too

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The COVID-19 pandemic has changed the way many people live. But it’s also changed the way in which renters search for apartments, according to new research from Point2, a site that covers real estate market trends.

Point2 analyzed Google searches to determine what renters have been looking for when searching for an apartment. Researchers found that certain search phrases appeared in 2020 and 2021 that renters rarely used in years past.

An example? Point2 found that renters during the last two years have increasingly used the phrase “rent relief” when conducting a Google search for apartments. According to Point2, this phrase was included in 90 searches a month in 2019 but 9,900 in 2020 and 49,500 in 2021.

The phrase “eviction moratorium” was searched only 40 times a month in 2019 but 40,500 times a month in 2020 and 201,000 times a month in 2021.

And also in 2020? Point2 said that the keyword “subleasing” increased 22 percent when compared to a year earlier.

Why Investors Are Bullish on Commercial Real Estate

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Optimism is back for commercial real estate. Property performance through the third quarter of 2021 reflects considerable gains for real estate investors, while interest rates and inflation are of limited concern to the asset class.

Investment returns for institutional-quality properties hit a 15-year high in the third quarter of 2021, according to the National Council for Real Estate Investment Fiduciaries (NCREIF). NCREIF tracks institutional-quality commercial property and fund performance, using data provided by its investment-management members.

The NCREIF Property Index (NPI) total return for Q3 2021 was 5.2%, comprising a 1% income return and a 4.2% capital return (or appreciation). The last time the NPI quarterly total return was over 5% was Q4 2005. For context, the 20-year average quarterly total return is 2%.

Q3 2021 commercial property performance was stunning. But it is also impressive given the very short and shallow depreciation cycle in 2020. Depreciation, as measured by the capital return, lasted only two quarters (Q1 and Q2 2020) and resulted in cumulative depreciation of only 2.7%. As a result, commercial property values in the NPI are already 5% above their pre-pandemic peak. Click to read more at www.nasdaq.com.

Houston-Based Asset Living Acquires JMG Realty

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Asset Living, a Houston-based leader in the property management sector, announced today that it has acquired JMG Realty, a real estate company specializing in the development and management of multi-family communities, headquartered in Atlanta. With the addition of JMG, Asset Living expands its footprint into the Southeast by adding more than 20,000 multi-family units and a new corporate office in Atlanta. This is the second acquisition for Asset Living in 2021.

“We began our conversations with Ryan McGrath many months ago and are delighted to be joining the Asset Living brand that shares similar principles as well as a history of establishing a loyal client base throughout the years,” said Karlton Jackson, CEO of JMG Realty. “After working with Ryan’s team to make this acquisition possible, I am confident that we’ll accomplish many amazing things together in 2022 and beyond.”

With over two decades of experience and approximately 575 employees, JMG Realty brings expertise in management, redevelopment, financial, and investment services for multi-family, affordable, and build-to-rent real estate properties servicing both private and institutional owners. The company has both regional and divisional offices located throughout the Northeast, Mid-Atlantic, Southeast, and Southwest.

“I’m excited to welcome JMG to the Asset Living family—it was an honor to collaborate with both Karlton and Tim to make this venture a reality,” said Ryan McGrath, CEO and President of Asset Living. “Don’t be mistaken, just because the acquisition is official doesn’t mean that we’ll be slowing down anytime soon. Now, the real work begins. Our plan is to continue this momentum of growth into the new year.”

This acquisition is an investment in Asset Living’s multi-family, affordable and build-to-rent portfolios from both a growth and geographical expansion perspective. The change will also bring new opportunities and resources to JMG employees, who will also have access to new tools and technologies to best serve clients.

“This is an exciting time to be joining the Asset Living brand,” said Tim Brock, President of JMG Realty. “We’ve been so impressed by Asset Living’s ability to grow while maintaining best-in-class client service, and we’re excited to bring that same drive to the Southeast.”

In November, Asset Living announced the company had acquired Dallas-based City Gate Property Group. Last year, Asset Living strategically acquired three organizations, growing by more than 60 percent in one year. McGrath plans to continue expanding the company’s footprint to bring Asset Living’s partners industry-leading talent and an enhanced suite of services.

Houston Office | Monthly Market Snapshot | December 2021

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Houston Office market vacancy at 25.4%.

HOUSTON OFFICE VACANCY STILL PUSHING UPWARDS
The vacancy rate increased 180 basis points to 25.4% as of November 30, compared to this time last year at 23.6%. Almost 2.6 million sq. ft. has been delivered to the market in 2021, with half of that space available for lease. At a time when leasing activity hasn’t returned to pre-pandemic levels, overall office net absorption registered at negative 2.4 million sq. ft.

CONSTRUCTION JUST UNDER 2.5 MILLION SQ. FT.
As of year-to-date November 30, 2021, there is 2.4 million sq. ft. under construction, representing non-owner-occupied buildings 20,000 sq. ft. and over. The submarket with the most square footage under construction is the Texas Medical Center, underscoring continued momentum toward life sciences office product. Texas A&M and partner Medistar are underway on construction of the 510,000-sq.-ft. Horizon Tower—a state-of-the-art life sciences building—at 6929 Main Street, which is expected to deliver in Q1 2023.

FUTURE JOB GROWTH EXPECTED FROM SECTORS OTHER THAN ENERGY
Houston shed 361,400 jobs at the start of the pandemic, but the metropolitan area has since recovered about 74.4% of those positions, according to the Greater Houston Partnership’s annual employment forecast. About 8,700 jobs are expected to be added in the professional, scientific, and technical services sector, which includes office-using industries such as accounting, engineering, architecture, and law to name a few. However, it’s not clear how many of the office-using jobs will translate to the need for more office space. Click to read more at www.naipartners.com.