Can appraisers accurately value CRE during COVID-19?

In an interview with the TreppWire podcast, Lonnie Hendry, vice president of commercial real estate product management at Trepp, shared with the show’s hosts his ideas around securing accurate evaluations of commercial properties while operating under the cloud of COVID-19. Hendry, also a professor of Finance at Texas Tech, said one of the biggest challenges appraisers are facing is providing a view on a property that can actually be backed up with hard, timely data. “That opinion has to be based on facts,” Hendry said, adding that the data used to calculate property values during periods of market stability – occupancy, revenues, cap rates and expense ratios – all come into question during a period like the current one, where sales are non-existent and comps from the last two months are largely worthless. Click to read more at www.mpamag.com.

College athletic conference finalizes plans for move to North Texas

One of the country’s top collegiate athletic organizations is moving its main offices to Texas, and it’s already expanding. The American Athletic conference has leased 18,000 square feet at The Summit at Las Colinas building on State Highway 114 in Irving. The conference, of which Southern Methodist University is a member, will move 30 employees to its new location this summer from Providence, R.I. this summer. The organization had originally planned to lease about 14,000 square feet, but decided on a larger space. Click to read more at www.dallasnews.com.

Everything’s (getting) bigger in Texas

2020 is a census year, so soon we’ll have a pretty good picture of the demographics, location and size of the U.S. population. But we’re pretty good at estimating too, and the estimates thus far show that Texas is definitely in growth mode. There are storm clouds on the horizon for one market, however. According to data from the U.S. Census Bureau, Texas was home to six of the 10 counties with the largest population gains: Bexar, Collin, Dallas, Harris, Tarrant and Travis Counties. Among the fastest growing counties in the nation, Texas tallied more than any other state as Comal, Hays, Kendall and Williamson Counties all made the list. Among metro areas that the Census Bureau analyzed, Texas was home to three of top ten MSAs with the largest population gains between 2010 and 2019. The Dallas-Fort Worth-Arlington metro had the greatest jump in that time frame, increasing by 1,206,599 residents—a 19.0 percent rise. Meanwhile, the 510,760 new residents in the Austin metropolitan area accounted for a whopping 29.8 percent increase. Click to read more at www.rednews.com.

Texas Central High-Speed Rail Wins Four-Year Court Battle

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.

A New Retail Sector is Beginning to Emerge from the COVID-19 Dust

With some businesses beginning to return to operations – albeit at a lower capacity than before the pandemic – the dust is starting to settle for the retail market in North Texas. While there have been significant job losses and financial hardships, some concepts have proven their strength. The retail sector that emerges from this crisis may look different than it did before, but the key takeaway is that the sector will return. The speed at which restaurants, bars, movie theaters, fitness clubs and other retail establishments were shut down was extraordinary. The resulting financial losses have been staggering. Several restaurant industry leaders estimate that 30% of locally owned restaurants will not re-open after the COVID-19 crisis passes. Move ticket sales in Texas are typically $200 million each month, but that dropped to only $5,000 in March. The founder of a popular Dallas restaurant recently stated company income was down 99%. These are levels that make it very difficult for any concept to survive unless its equity-to-debt ratio is healthy. However, there are some concepts that have not only survived, but thrived in this environment. Grocery stores, pharmacies and quick-serve restaurants with drive-thru lanes were the clear winners in the COVID-19 disruption. As business restrictions are lifted and consumers begin stimulating the economy, other concepts will come back. Though, we may not see as many of them as there were before – at least initially. Click to read more at www.transwestern.com.

Why-Retailers-Should-Use-Data-Strategically-in-This-Evolving-Economy?

Retailers have been navigating the shifting economic landscape brought about by the COVID-19 outbreak. The data collected during this unprecedented change in the economy can illustrate the effects of shutdown orders and assist retailers in developing a business continuity strategy for implementation. Portfolio Analysis: New data points since the pandemic have caused many retailers to pivot their business. Careful analysis of the new information is necessary to optimize a retail portfolio and develop a sound recovery strategy. Combining store performance data, demographics, marketplace characteristics, and financials will help retailers understand what areas are recovering after the crisis and what areas may provide opportunity for new investments. CBRE | Forum Analytics uses proprietary data and deep experience to help clients identify the right size for their businesses moving forward through economic challenges.

Useful questions to ask when optimizing a retail portfolio include the following:
What data should we be collecting and managing?
How can we assess the effects of the crisis on our portfolio?
What is the impact of the shift to online and mobile ordering?
Click to read more at www.cbre.com.