RECON

Real Estate Center Online News

November 25, 2014


Texas Job Growth Continues

DALLAS (Dallas Morning News) – Texas maintained steady job growth in October, posting another record for job creation over the past 12 months.

The state added 35,200 seasonally adjusted jobs in October, according to the Texas Workforce Commission. September’s employment gain was also revised from 34,600 to 37,400.

A record 421,900 jobs have been created over the last 12 months by employers statewide, representing one in every six new jobs in the United States.

The unemployment rate fell from 5.2 percent in September to 5.1 percent last month. In Dallas-Fort Worth, the nonseasonally adjusted rate for October was 4.8 percent, compared with the nationwide rate of 5.8 percent.

Texas ranked second nationally in job creation, trailing California’s 41,500 new jobs in October, but still leads the nation in jobs added over the last 12 months.

Energy companies added 4,100 jobs in October. Over the last 12 months, energy employment has grown at an 11.3 percent pace, the highest rate in two years.

Construction added 9,200 jobs last month. Employment over the last 12 months has grown 6.2 percent.

Trade, transportation, and utilities added the most jobs (17,500). Education and health services added 6,800 jobs. Leisure and hospitality gained 4,800.

213,864-SF Collins Square Office Building Sold

RICHARDSON (CBRE) – Collins Square, the 213,864-sf office building at 1301 E. Collins Blvd., has been purchased by Pillar Commercial and Origin Capital Partners. The seller was StreamCo.

The four-story office building is 87 percent leased to the Travelers Indemnity Company, a wholly-owned subsidiary of The Travelers Companies Inc. This location serves as the company’s Dallas regional headquarters.

The new ownership is planning several capital projects, including a full elevator modernization and new roof overlay. Cosmetic upgrades to the primary entrances, new landscape plans and common area improvements are also expected to finish within the next six months.

CBRE Capital Markets represented the seller.

Dallas, Houston Among Nation's Most Attractive Markets for Data Centers

DALLAS (CBRE) – The growing reliance on cloud computing is reshaping traditional network computing and boosting demand for leased data center space in the United States.

Dallas and Houston rank among the five most attractive markets for leasing a data center, according to CBRE Group Inc.’s latest research report, “Leasing a Data Center: U.S. Market Cost Comparison.”

The report analyzed a typical one-megawatt data center lease over a seven-year term across 23 key markets in the United States.

Joining Dallas and Houston in the top eight of most attractive data center markets are Atlanta, Colorado Springs, Northern Virginia, Portland, Seattle and Salt Lake City.

Employment Growth Still Fueling Austin Office Demand

AUSTIN (REOC Austin) – Employment growth and an expanding economy continue to drive demand for office space, reported REOC Austin in its third quarter 2014 Austin office market report.

According to the survey of nearly 42 million sf of area office lease space, the market had 337,467 sf of positive net absorption in the third quarter. The total gain was split between top-tier Class-A properties, with 161,087 sf, and Class-B properties, with 169,704 sf.

In all, the local office market had 956,194 sf of positive net absorption through the first three quarters of the year.

Steady demand has squeezed vacancy rates to below 10 percent. The market closed the third quarter with a citywide vacancy rate of 9 percent, compared with 9.7 percent last quarter and 11.8 percent recorded in the same quarter a year ago.

The vacancy rate for Class-A space tightened to 9.1 percent compared with 9.7 percent last quarter and 12.3 percent a year ago. Class-B vacancy now stands at 8.4 percent, down from 9.3 percent last quarter and 11.2 percent last year.

“As the market continues to tighten, office tenants have been challenged on two fronts: not only has it been more difficult to find space, but the cost of renting that space has become more expensive,” said Doug McGregor, senior office consultant at REOC Austin.

The citywide average quoted rental rate climbed $0.72 over the year to $26.06 per sf per year on a full-service basis, which is up 2.8 percent compared with a year ago. Rents are rising across the board, but the cost for renting office space in the suburbs is cheaper, on average, than downtown. The average rent for suburban office space is $25.16 compared with $34.93 in the CBD. Class-A properties in the suburban submarkets average $30.83 while Class-A buildings downtown command an average of $42.41.

NewcrestImage Bringing Diamond Luster to Amarillo Embassy Suites

AMARILLO (Amarillo Globe-News) – A four-diamond-rated hotel is in the works here.

The City of Amarillo and NewcrestImage have entered an agreement for the hotelier to deliver the upscale Embassy Suites on Buchanan St. across from the Amarillo Civic Center Complex.

NewcrestImage must spend $45 million and attain the rating, designated by AAA, for 80 years. The hotel will include 200 rooms, 17,000 sf of meeting space, a full-service restaurant and bar or lounge.

Construction will begin by Aug. 30 of next year. The city will own the hotel and lease it to NewcrestImage to run for eight decades.

The hotelier will receive rebates of the sales and property taxes it pays the city and state for limited periods.

Another agreement has been reached between the city and Wallace Bajjali Development Partners for construction of a $14.3 million, 750-space parking garage for the vacant block immediately south of the hotel site. The city will own the property. Wallace Bajjali has the option to lease the ground-floor space to retailers.

Sam's Club Adding Bulk to El Paso

EL PASO (El Paso Inc.) – The city’s fourth Sam’s Club is tentatively set to open Jan. 22.

The 136,000-sf store at Patriot Fwy. and Diana Dr. will bring more than 175 jobs. Hiring for the new northeast El Paso store is currently underway.

Located on 30 acres, the store is part of the largest redevelopment project the city has ever done.

The Park 161 Going in Grand Prairie

GRAND PRAIRIE (Dallas Morning News) – Houston-based Avera Cos. is building a large distribution complex on nearly 19 acres at the corner of SH 161 and January Ln.

The Park 161 Distribution Center was designed by Powers Brown Architecture. Avera Construction is the general contractor.

The 345,150-sf facility is scheduled to open in early 2015.

Cane Island Community Coming to Katy

KATY (RealtyNewsReport.com) – Cane Island is coming to town.

Rise Communities is developing the 1,000-acre master-planned community, which will have 2,000 new homes priced from the $200,000s to the millions.

Homebuilders include Conventry Homes, David Weekley Homes, Perry Homes, Ryland Homes, Shea Homes, Toll Brothers and Trendmaker Homes.

The community will be accessible from I-10 at the new Cane Island Pkwy. interchange. It will open mid next year.

San Antonio Apartment Demand Keeping Pace With New Delivery

SAN ANTONIO (Marcus & Millichap) – "Thriving demand" for local rental housing is keeping pace with the delivery of hundreds of new apartments, reports Marcus & Millichap in its fourth quarter 2014 San Antonio apartment market report. As a result, the firm expects overall vacancy to rise only nominally this year.

At the end of the third quarter, vacancy was tight in nearly all corners of the market. Six of 14 submarkets posted vacancy rates lower than the marketwide rate, and an additional five submarkets are within 100 basis points. Private-sector employers are hiring workers at a faster pace than a year ago to widen the pool of prospective renters and fill local complexes.

Among Marcus & Millichap's end-of-the-year projections:

  • Hiring will gain momentum through the end of 2014. For the entire year, 25,000 positions will have been created, easily surpassing the 19,300 new hires made in 2013.
  • Prompted by growing rental housing demand, developers will place in service 6,500 units during 2014, eclipsing the 4,200 rentals brought online last year. More than 700 apartments will come online in central San Antonio, but the far north central and far northwest submarkets will each record significant inventory increases.
  • The delivery of new units in the metro will outpace a sizable increase in demand, yielding a 20-basis point jump in the vacancy rate this year to 7.4 percent. The vacancy rate rose 40 basis points last year.
  • The average rent here will increase 3.4 percent to $848 per month in 2014. As a result of the increase, the average rent will have climbed 17 percent in the past four years, including a 2.9 percent bump in 2013.

Farm, Ranch Management Symposium Set for Dec. 3

AMARILLO (Texas A&M AgriLife Extension Service) – The Texas A&M AgriLife Extension Service will host its annual Farm and Ranch Management Symposium during the Amarillo Farm and Ranch Show Dec. 3.

“A Focus on the Technologies and Advancements of Commodities in the Panhandle” will be held in the Amarillo Civic Center Grand Plaza at 401 S. Buchanan St. Registration is at 1:15 p.m. The program begins at 1:30 p.m.

Four Texas Department of Agriculture continuing education units (two general, one integrated pest management and one drift minimization) and four certified crop advisor credits will be offered.

Registration is $10 at the door.

Aday Estates Bringing Homes to Waxahachie

WAXAHACHIE (WaxahachieTx.com Daily Light) – Encore Land has purchased 43.5 acres for development of Aday Estates.

Located one mile west of I-35E on FM 66, the project will bring 36 new one-acre estate lots to the Waxahachie community.

Giles Real Estate represented the seller, Mr. and Mrs. Don Walker, and Transwestern Commercial Services represented the builder.

No RECON Friday

COLLEGE STATION (Real Estate Center) – The Real Estate Center will be closed Thursday and Friday for Thanksgiving. There will be no RECON Friday. We will resume our usual publication schedule Tuesday, Dec. 2.

From all of us here at the Center, have a safe and happy Thanksgiving.

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