Real Estate Center Online News

August 1, 2014

South Side Neighborhood Rebirth Continues

DALLAS (Dallas Morning News) – A lot can change in 20 years. Take the South Side neighborhood near Downtown, an area that was once home to mostly empty buildings but is now in the middle of a revitalization.

Local development firm Matthews Southwest is spearheading many of the neighborhood's changes.

The firm is about to finish its $24 million, 164-unit apartment complex at 1400 Belleview. Monthly rents there will start near $500. Units are 85 to 90 percent preleased. The building will also include 7,500 sf of ground-floor retail.

In addition, Matthews and Irving-based builder TDI have broken ground on a 290-unit apartment community at 1210 S. Lamar. The $30 million complex will be geared toward more affluent renters, with rents starting at just over $1,000 per month.

Also in the works is an eight-screen Alamo Drafthouse. The theater will be at Lamar and Cadiz St.

The neighborhood's rebirth began almost 20 years ago when Jack Matthews first visited the area. His first project there was turning an empty Sears, Roebuck & Co. warehouse into 457 loft apartments.

Texas Job Market Sizzling

COLLEGE STATION (Real Estate Center) – The Texas economy gained 370,300 nonagricultural jobs from June 2013 to June 2014, an annual growth rate of 3.3 percent compared with 1.9 percent for the United States.

According to the Real Estate Center’s latest Monthly Review of the Texas Economy, the state’s nongovernment sector added 342,800 jobs, an annual growth rate of 3.6 percent compared with 2.2 percent for the nation’s private sector.

Texas’ seasonally adjusted unemployment rate fell to 5.1 percent last month from 6.4 percent a year ago. The nation’s rate decreased from 7.5 to 6.1 percent.

All Texas industries had more jobs. The state’s mining and logging industry ranked first in job creation, followed by the transportation, warehousing and utilities industry, professional and business services, leisure and hospitality, and construction.

All Texas metro areas except Texarkana had more jobs last month than a year ago. College Station ranked first in job creation, followed by Midland, Dallas-Plano-Irving, Odessa and Austin-Round Rock-San Marcos.

The state’s actual unemployment rate last month was 5.5 percent. Midland had the lowest unemployment, followed by Odessa, Amarillo, San Angelo, Abilene and Austin-Round Rock-San Marcos.

Temple Realtor Appointed to Advisory Committee

COLLEGE STATION (Real Estate Center) – Long-time Temple Realtor Bill Jones is the newest member of the Advisory Committee for the Real Estate Center at Texas A&M University.

Jones succeeds Avis Wukash of Round Rock as the ex-officio member representing the Texas Real Estate Commission (TREC). He is broker-owner of Accent Real Estate Services.

Jones has been a licensed Realtor for nearly 35 years. His gubernatorial appointment to TREC expires in 2017.

The three-time Temple-Belton Realtor of the Year was chairman of the Texas Association of Realtors in 2010. Jones has served the National Association of Realtors in numerous capacities, including federal political coordinator, property management chair, regulatory chair and director from 2005 to 2012.

He is a member of many real estate related organizations, such as the Central Texas and Texas Apartment Associations; the Temple, Texas and National Associations of Home Builders; National Association of Residential Property Managers; Institute of Real Estate Management; and the Community Association Institute.

The Advisory Committee was created by a 1971 law establishing the Real Estate Center and placing it at Texas A&M. Nine members are appointed by the governor for six-year terms. Six are real estate brokers licensed for at least five years. The brokers represent finance, improvements, residential properties, commercial properties and industrial properties. Three members represent the public.

Austin Office Market Heating Up

AUSTIN (REOC Austin) – The local office market had just over 306,500 sf of positive net absorption in the second quarter, raising the year-to-date total gain to nearly 636,000 sf, according to REOC Austin's survey of more than 41.7 million sf of area office lease space.

In response, the citywide vacancy rate tightened to 9.7 percent compared with 10.5 percent last quarter and 12.3 percent recorded in the same quarter a year ago. At the end of June, the citywide average quoted rental rate climbed to $26.32 per sf per year on a full-service basis, up $0.14 over the previous quarter and $1.52 over a year ago for an annual increase of more than 6 percent.

"Continued demand resulting in declining vacancy rates and increased rental rates has set the stage for developers to deliver new product, which is exactly what they are busy doing," said Kim Gatley with REOC Austin. "We are tracking nearly 2.3 million sf of office space currently under construction, and nearly half of it is situated in the scenic southwest sector.”

Two new projects broke ground there in the second quarter: Capital Ridge (217,490 sf) near Loop 360 and Bee Caves Rd., and the first of two buildings at Encino Trace (159,000 sf), located at 5707 Southwest Pkwy.

In the northwest sector, work has begun on two four-story office buildings at Champion Office Park. The project at 6500 N. Capital of Texas Hwy. spans 230,000 sf.

"An estimated 40 percent of office space currently under construction has already been spoken for,” Gatley said, "which means that the vacancy rate will not spike as drastically as it otherwise might when these projects reach completion."

Despite significant leasing activity in the southwest sector, it was the only submarket to have a negative change in the amount of occupied space compared with last quarter, recording 66,468 sf of negative net absorption.

Meanwhile, office properties in the northwest sector had the greatest gain with 183,691 sf of positive net absorption. As a result, the vacancy rate there dropped to 8.1 percent while the average cost of renting office space climbed to $26.76, up $0.18 from last quarter.

Central business district (CBD) properties maintained the city's highest rental rates. At the close of the second quarter, the cost to rent office space downtown increased to an average $36.15, up more than $4 from the previous year. CBD rents are nearly $8 higher than the next highest area, which is the southwest sector, where the average rental rate is $28.63.

Parmer Kicks Off With 192,000-SF Office Building

AUSTIN (Karlin Real Estate) – Karlin Real Estate and Trammell Crow Company have broken ground on Parmer 3.2, a 192,000-sf Class-A office building.

The building marks the beginning of phase one of Parmer, Karlin’s 400-acre master planned technology and office park at Parmer Ln. and I-35 in the north central part of the city.

The three-story building will have 64,000 sf floor plates designed for either single or multitenant occupancy.

Construction is expected to be completed in second quarter 2015.

Parmer is currently zoned for up to nine million sf of office, industrial, hotel and retail uses. More than 300 acres are available for future expansion, said Brad Maples with Trammell Crow Company in a press release.

The development is bordered by McCallen Pass on the west, E. Howard Ln. on the north, Harris Ridge Blvd. on the east and Parmer Ln. on the south with immediate access to I-35, MoPac and US 183.

Other members of the development team include architect STG Design and general contractor Austin Commercial.

South Dallas Industrial Warehouse Breaks Ground

DALLAS (CBRE) – Crow Holdings Capital Partners LLC announced this week the development of Mountain Creek, an industrial park that will be built along I-20 and Grady Niblo Rd.

Located within the South Dallas submarket, the 87-acre development will include two buildings totaling 1.3 million sf of new distribution and warehouse space.

The first phase, a 630,000-sf building, is slated to break ground sometime this quarter.

CBRE’s local office will handle leasing. Crow Holdings Capital Partners has hired McFadden & Miller as contractor, and Azimuth Architecture as architect.

Class-A Ravella at Kingwood Underway

KINGWOOD (Stanmore Partners) – Houston-based real estate development and investment firm Stanmore Partners has broken ground on its first multifamily development here.

Located at 25710 Loop 494 at Northpark Dr., Ravella at Kingwood Apartment Homes will be a two- and three-story Class-A multifamily rental community within the 24-acre master-planned Village at Northpark development.

The 264-unit complex will occupy just under 13 acres. It will have one-, two- and three-bedroom units ranging from 709 to 1,689 sf.

Steinberg Design Collaborative, also of Houston, was the architect. Moore Design Group of Dallas will handle interior design. Hoar Construction LLC is the general contractor.

Former El Paso Hoover Industrial Facility Sold

EL PASO (Hackman Capital) – Hackman Capital Partners LLC has purchased a 423,435-sf plastic injection molding and computer numerical control (CNC) tool-making facility here.

The facility, along with a second one in Juarez that was part of the deal, was owned by a Hoover Inc. affiliate.

The real estate and equipment investment firm partnered with Industrial Assets Inc. and Maynards Industries, both equipment auctioneers, to purchase the assets in a bulk transaction.

The transaction also included complete injection molding machines and assembly component lines used for a wide variety of industries, in addition to ancillary tools and equipment.

In a press release, Hackman officials said they expect to sell the facilities to either an end-user or an investor.

64 Residential Units, Assisted-Living Facility Coming to Gonzales

GONZALES (Avalon Park Group) – Six months after purchasing land, Avalon Park has finished infrastructure and begun phase-one construction of its 1835 Village master-planned community. The first phase will have 64 residential units for sale or rent, plus a 30-bed assisted-living facility.

Work is underway on the first 24 of 36 townhomes (1,100 sf each). Eight will be available for rent this month. Construction begins next month on 12 duplexes (1,200 to 1,600 sf each) and 16 single-family homes (1,800 to 2,500 sf each).

The development is on the city's northeast side, behind the high school.

Avalon Park Group CEO Richard Kunz said they're currently planning infrastructure for the second phase.

"We are confident to be able to deliver 35 to 50 units per year to the market starting in 2015," Kunz said. "The development agreement with the city allows the construction of up to 500 dwelling units in 1835 Village."

He said the agreement also allows for up to ten acres of commercial/retail.

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