Economist says COVID will cause housing to flourish in suburbs, small towns

Places like Uptown and downtown Dallas will flounder, and places like Frisco, Prosper, Celina and further-flung suburbs will flourish as the U.S. housing market adjusts to a world where COVID-19 is a reality of life. That was one of many predictions made by Mark Dotzour, who spent 18 years as chief economist for the Texas A&M Real Estate Center, during a webinar Wednesday put on by Dallas-based HomeVestors of America. With COVID-19 concerns and business closures — government-mandated and otherwise — people will trade urban density for more elbow room in the suburbs and exurbs, and working from home will be the norm, Dotzour said in the virtual chat about how the pandemic will affect residential real estate. “The urban vibe just isn’t what it was anymore,” Dotzour said. “How are you going to get into a high-rise office building when the mayor says you can only have four people in an elevator at one time?” Demand for suburban housing will rise and people will want to live in smaller towns within a 60-minute drive of major cities, Dotzour said. In the years ahead, many more people will work from home, coming into the office perhaps only for a weekly all-hands-on-deck meeting, Dotzour said. “It’s going to put pressure on the downtown area,” he said. “People are going to want to have a little bit of space. I see a longer-term trend here of people moving out of the big-city density into the suburbs.” Click to read more at www.wfaa.com.

New Amazon fulfillment center to bring 1,000 jobs to Fort Bend County

FORT BEND COUNTY, Texas — Construction is getting underway on a new Amazon facility that will bring hundreds of jobs to Fort Bend County, officials announced Thursday. County Judge KP George announced the development of a “state-of-the-art Amazon e-commerce center” being built in Richmond. “Last year, I penned a letter to Amazon to put Fort Bend County on the map as an ideal location for industries of the 21st century. Today, I am proud to announce that construction is underway on a state-of-the-art Amazon e-commerce center in Richmond, Texas,” stated the judge. The announcement comes just one day after news that Google is opening an office in Houston, although it won’t be anywhere near the size of Amazon’s facility. County officials said Amazon’s Fort Bend fulfillment center will “generate 1,000 high-quality jobs for our community, adding tremendous value to our commercial sector.”

Click to read more at www.khou.com.

Avison Young negotiates 12,250-SF lease for professional engineering company in downtown Houston

Avison Young negotiated a 12,250-square-foot office lease renewal on behalf of professional engineering consulting firm, RCP Inc., located at 801 Louisiana in Houston’s central business district. RCP Inc., the tenant, was represented by Avison Young principal Anthony Squillante and vice president Josh Morrow, who are based in the company’s Houston office. The landlord, 801 Louisiana Partners, L.P., was represented by Trey Miller of Boxer Property. “RCP Inc. has called 801 Louisiana home for approximately 10 years and I am pleased that we could assist them with extending their stay for even longer,” said Squillante. “Employees at RCP will continue to enjoy easy access to the tunnel system and popular downtown attractions such as the Theater District and Tranquility Park,” said Morrow. Since 1995, RCP Inc. has been one of Houston’s leading providers of regulatory compliance and engineering services. The professional engineering firm provides a broad scope of services that include compliance program development, risk management services, technical writing and acquisition support. The RCP team consists of nearly 60 regulatory experts and professional engineers. “Anthony and Josh provided valuable assistance in selecting and performing detailed analysis and comparisons of our office space options in downtown Houston,” said W. R. (Bill) Byrd, PE, president of RCP Inc, of RCP Inc. “After an eight-month process we were able to negotiate a renewal of our current office space on very favorable terms. I am grateful for the expertise and guidance provided by Avison Young.”

CBRE Hotels research forecasts full demand recovery in Austin by late 2022

After suffering the greatest performance declines in the history of the U.S. lodging industry during 2020, the nation’s hotels will benefit from what is expected to be a relatively rapid economic turnaround in 2021 and 2022, according to the June 2020 edition of CBRE’s Hotel Horizons forecast report. By year-end 2020, the Austin-area hotel market occupancy level is forecast to decline to 40.4 percent, representing a 44.0 decline from 2019 levels. Average daily room rates (ADR) are estimated to fall to $103.13, which is a 28.4 percent decrease from 2019 levels. Resulting revenue per available room (RevPAR) falls from $103.89 in 2019 to $41.66 in 2020, a 59.9 percent decline. Looking forward, occupancies are expected to increase to the mid-60 percent levels by 2022, but not to the relatively high occupancy level of 72.1 percent experienced in 2019. Average daily rates are projected to have strong annual increases, but not surpassing 2019 levels until 2023. While RevPAR estimates show strong annual increases, RevPAR is not expected to surpass 2019 results until the third quarter of 2023. “Austin is a resilient market with many strong, diverse sources of room-night demand, but like the rest of the world, the lodging sector has been hit hard by the pandemic,” said Jeff Binford, managing director of CBRE Hotels South Central Division. “Once travel and social gathering restrictions can be safely lifted, Austin should see recovery more quickly than many other markets. Our expectation is the first wave of travel will be leisure travelers originating from reasonable driving distances, followed closely by business travelers. Groups, events and conventions may take a little longer before full recovery. Once travelers feel safe, many of the great Austin events will be back on the calendar.” Click here to read more at www.rejournals.com.

JLL secures $10M refinancing for Dallas’ Pinnacle Business Center

JLL Capital Markets has arranged a $10 million refinancing for Pinnacle Business Center, a fully leased, three-building, Class A, shallow-bay industrial facility totaling 181,050 square feet in Dallas. JLL worked on behalf of the borrower, an affiliate of Cohen Asset Management, to place the 10-year, fixed-rate loan with National Life. JLL will also service the loan. Completed in 2004, Pinnacle Business Center’s rear-load buildings feature clear heights ranging from 24 to 28 feet, deep truck courts, 51 dock-high doors, nine ramp access doors, office space and ample parking. The industrial facility is home to 12 tenants in a wide array of industries, including manufacturing, baking, architecture, clothing and automotive. Situated on 12.68 acres at 1444 N. Cockrell Hill Boulevard, 4310 Adler Drive and 4305 Pinnacle Point Drive, Pinnacle Business Center is six miles from downtown Dallas and located off Interstate 30, the major thoroughfare between Dallas and Fort Worth. Additionally, the park is in the Eastern Lonestar/Turnpike Industrial submarket, an established submarket that has seem tremendous rental growth over the past decade. The JLL capital markets debt placement team representing the borrower was led by director, DJ Meagher, senior managing director, Paul Brindley, and analyst, Dillon Donald. The team secured financing for the borrower’s acquisition of this property in 2015.

Speculative development in Laredo now fully leased

Freight Dispatch Service Agency has signed a full-building lease at the I-35 Logistics Center, a 131,718-square-foot, speculative industrial development in Laredo, Texas. Joshua Aguilar with CBRE in San Antonio represented the landlord/owner, Tailwind Real Estate Equities and the developer, Gulf Corporation. Joey Ferguson with NAI Swisher & Martin Realty represented the tenant. The development broke ground in August of 2019 and was completed in April of this year. Freight Service Agency—a local customs broker servicing multiple accounts handling warehousing and distribution services on behalf of its clients—took occupancy on June 1. This property was selected due to the size, building efficiencies, such as clear height, heavy trailer parking, heavy dock door count and minimal in-place office. In addition, the owner was able to provide a speed to market and a fast finish out. “What this speedy fulfillment of this property showcases is that the Laredo industrial market continues to have strong demand, with much of the new speculative construction already spoken for,” said Aguilar, first vice president at CBRE. “Despite the challenges of the current environment, Laredo has shown signs that trade is going to continue with no signs of slowing down. New development will be key in meeting the demand in the marketplace.” To continue to meet the growing demands of the Laredo industrial market, Gulf Corporation will soon break ground on another 300,000 square foot speculative development at Pinnacle Industrial Park.