Real Estate Center Online News

February 24, 2012

Grubb & Ellis Files for Bankruptcy

SANTA ANA, Calif. (Grubb & Ellis, New York Times) – Grubb & Ellis has filed for Chapter 11 bankruptcy and agreed to sell most of its assets to BGC Partners.

The company listed $150 million in assets and $167 million in debts in the bankruptcy declaration it filed earlier this week.

According to CFO Michael J. Rispoli, the company was hurt by the 2007–09 financial markets meltdown, the 2007 merger with NNN Realty Advisors and "liabilities and losses associated with disposed businesses."

Revenue in the company's transaction services business fell from $312 million in 2007 to $173 million two years later, the filing showed.

Houston Industries Gear Up for $10 Billion Year

HOUSTON (Houston Business Journal) – A total of 234 major industrial projects are scheduled to break ground this year in the ten-county Houston region, according to Sugar Land-based Industrial Info Resources.

Over $9.8 billion in investments are already planned in Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Matagorda, Montgomery and Wharton Counties.

Companies on the development list include AECOM Technology Corporation and Trans Canada Corporation.

El Paso Facing More Foreclosures

EL PASO (El Paso Times) – January foreclosure filings were up in El Paso from the same month in 2011, according to data from RealtyTrac.

The area had 128 homes in various phases of foreclosure, up 117 percent from the 59 homes in foreclosure during January 2011.

By contrast, Texas as a whole had 39 percent fewer foreclosure filings in January from the same month last year. U.S. foreclosure filings from January were also down 19.3 percent from a year ago.

On a positive note, El Paso foreclosure filings were down 19.5 percent from December 2011.

Lubbock Reviving Downtown by Burying Power Lines

LUBBOCK (Lubbock Avalanche-Journal) – City officials hope removing power lines from the downtown landscape will attract investment.

The $2.3 million project to move utilities underground is being financed with a $1.5 million Economic Development Administration grant and an $800,000 grant from the city, according to Chief Operating Officer Marsha Reed.

“Visually, downtown, all of the power poles and the utilities are a definite eyesore,” said Reed.

Developer Delbert McDougal asserts putting utilities underground will spur interest in downtown redevelopment.

Phase one of the utility project is located along Ave. O, stretching from 10th St. to 19th St., and eastbound along Main St. to Ave. L.

The project is planned for completion by September.

Abilene Home Sales' January Jump

ABILENE (Abilene Reporter-News) – Rising home prices didn't slow down existing home sales in Abilene last month. Sales increased by more than 25 percent over January 2011, according to data from the local Realtors' association.

Residents purchased 79 homes last month, compared with 63 the previous January. The total value of those homes was more than $10 million, nearly 26 percent higher than the volume for January 2011.

The median sales price rose $8,200 year-over-year to $117,000. The average sales price was $126,822, up slightly from January 2011.

Bayou Redevelopment a Learning Experience

HOUSTON (Witz!PR) – The winning proposal for a Buffalo Bayou site, east of downtown Houston, came from an unlikely group: high school students from Barbara Jordan High School for Careers.

Members from Commercial Real Estate Women (CREW) Houston volunteered to work with 82 female high school students for the mock real estate development exercise, which resulted in several teams planning the redevelopment of the Buffalo Bayou Partnership site near Tony Marron Park.

The winning submission for a mixed-use development included multifamily housing, retail, a clinic and a park.

Although the design won’t actually get built, Barbara Jordan High School Principal Andria Schur believes the event will have a lasting impact on the students.

“The students aren’t aware of the immense number of potential career paths," Schur said. “Many of the girls who attended this event don’t have accomplished women in their lives, and will be first generation college students. The CREW event showed them what is possible with the right skill set.”

CREW Houston President Cortney Cole was also impressed with the enthusiasm and interest the girls showed in the hands-on learning project.

CREW Houston, established in 1996, is one of the city’s leading organizations devoted to women in the commercial real estate industry, and is a chapter of the national CREW Network.

Americans Spending More on Housing

WASHINGTON (Center for Housing Policy) – Most working Americans probably expect housing costs to take a substantial chunk out of their paychecks. But that chunk seems to be getting bigger.

According to a new report from the Center for Housing Policy, nearly one in four working U.S. households spends more than half of their total income on housing. One reason for this is that incomes are shrinking.

Between 2008 and 2010, incomes for working homeowners slid more than twice as much as housing costs. In fact, incomes for working homeowners fell even more sharply than they did for working renters.

“The data show that homeowners have been hit hard by the housing crisis in more ways than just lost equity,” said Jeffrey Lubell, executive director of the Washington-based center. “Many working homeowners have been laid off or had their hours cut.”

Lubell also said most homeowners bought their homes at a time when housing prices were much higher than they are today.

“As a result, their housing costs have not declined nearly as much as you would expect from looking at the broader market declines in home sale prices," he said.

Meanwhile, renters have seen rents go up thanks to increased demand for apartment living.

“More and more people are interested in renting,” said Laura Williams, who authored the report. “Some prefer it because it allows them to be more mobile in a tough job market. Others are postponing purchasing a home or facing difficulties obtaining a mortgage. Given the long lead times involved in responding to increased demand with increased supply, the rental market has tightened somewhat and rents increased.”

Austin Area Accelerates Job Growth

AUSTIN (Austin Business Journal) – The Austin area is expected to experience more rapid employment growth over the next couple years, according to economist Angelos Angelou.

Angelou predicts the region will gain 19,000 jobs in 2012 and 20,000 jobs next year, with most of the gains in retail, education, health, hospitality and manufacturing sectors. Austin added about 13,000 jobs in 2011.

While Angelou expects area unemployment to fall below 5 percent within a year, he also clarified that low-wage jobs will make up the bulk of the added employment.

According to Angelou, Austin also has an opportunity to grow the automotive sector with the addition of the Circuit of the Americas, a Formula One racetrack under construction two miles from Austin-Bergstrom International Airport.

With the anticipated job and population growth in the area, Angelou advocates expanded transit options as a key to easing increased traffic congestion.

Fannie's, Freddie's Next Phase

WASHINGTON (Federal Housing Finance Agency) – The Federal Housing Finance Agency (FHFA) has set new objectives for the conservatorships of Fannie Mae and Freddie Mac.

The three strategic goals for the government-sponsored enterprises include building new infrastructure for the secondary mortgage market, simplifying and shrinking their marketplace presence, and continuing foreclosure prevention activities as well as mortgage credit availability.

Fannie Mae and Freddie Mac have received more than $180 billion in taxpayer support since being placed in conservatorship in September 2008.

According to the Appraisal Institute, the FHFA is doubtful the money will be repaid in full.

Waco ISD Closing Nine Campuses

WACO (Waco Tribune-Herald) – After a six-month battle, the Waco Independent School District voted yesterday to close nine school buildings and move students to other campuses to help alleviate budget concerns.

Closures include Viking Hills Elementary, Sul Ross Elementary, Meadowbrook Elementary, North Waco Elementary, Lake Waco Montessori, Brazos Middle, University Middle, Waco Alternative School and STARS High School.

A new consolidated middle school will open on the current A.J. Moore Academy High School campus, while high school students from A.J. Moore will move to University High School.

According to Waco ISD, the school board will begin redrawing attendance zones next month.

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