Middle Market Digest: This Week in the South and Mountain Regions

Tuesday, May 1 marked the US economy’s second-longest expansion since 1785, according to new research released by Cushman & Wakefield. If this trend continues through July 1, 2019, the expansion of this economic cycle will officially be the longest on record. Cushman & Wakefield’s report examines two of the most popular and widely-watched economic indicators–the yield curve and the state of the US stock market–to offer insight into the state and future of the current expansion. Long expansions are not the historical norm, according to Revathi Greenwood, head of Americas research with Cushman & Wakefield. Until this week, the expansion from 1961 through 1969 was the second longest in US history.—Lisa Brown

BY THE NUMBERS

AUSTIN, TX—Austin’s overall retail vacancy rate remained at 3.9% quarter-over-quarter, and up 10 basis points year-over-year. Net absorption grew to 400,000 square feet as of the quarter’s end, following the previous quarter’s 283,000 square feet, and on par with the 336,000 square feet year-over-year, according to NAI Partners’ first quarter 2018 Austin retail quarterly report.

HOUSTON—The NAI Partners Sublease Index—measured by the amount of sublease space as a percentage of total available space—decreased 140 basis points to 14% in April. The drop was due primarily to 453,000 square feet of sublease space moving over to direct space in the Greenspoint/North Belt West submarket—specifically 8 Greenspoint at 222 Benmar Dr. and CityNorth 1 at 233 Benmar Dr. There is 2 million square feet of available sublease space with a one-to two-year term left, equally divided between class-A and -B space. The CBD and Westchase submarkets represent 32% and 25% of this space, respectively.

HOUSTON—Houston’s overall retail vacancy rate decreased to 5.4% in first quarter 2018, a drop of 10 basis points quarter-over-quarter from 5.5%, though a 40-basis-point increase year-over-year. Net absorption decreased to 1.3 million square feet as of the quarter’s end, following the previous quarter’s 1.6 million square feet, and almost 50% higher than the 856,000 square feet year-over-year, according to NAI Partners’ first quarter 2018 Houston retail quarterly report.

SAN ANTONIO—San Antonio’s overall vacancy rate was 9.8% ending first quarter 2018, unchanged quarter-over-quarter and up 10 basis points year-over-year. Net absorption remained positive at 18,595 square feet at quarter’s end, down from 422,041 square feet as of fourth quarter 2017, although up from -7,530 square feet at this time last year, according to NAI Partners’ first quarter 2018 San Antonio office quarterly report.

SAN ANTONIO— San Antonio’s industrial market tightened during the first quarter of 2018, with the overall vacancy rate decreasing to 5.4%, a drop of 20 basis points quarter-over-quarter, and 40 basis points year-over-year. In addition, net absorption gained traction and rose to 270,831 square feet as of the quarter’s end, compared to 35,486 square feet at the end of the fourth quarter 2017, and up significantly from -277,302 square feet this time last year, according to NAI Partners’ first quarter 2018 San Antonio industrial quarterly report.

NEWS AND NOTABLES

DALLAS—Westmount Realty Capital LLC, a commercial real estate development and investment management company, announced that Derek Schauer has joined the company as senior director–office acquisitions. Schauer will play an integral role in expanding Westmount’s office portfolio by seeking out investment opportunities and managing the acquisitions process.

HOUSTON—JLL’s Geoff Perrott has been awarded the firm’s national rookie MVP award. This award is given to a single top contributor who also demonstrates a strong commitment to the firm’s values. Perrott, an associate broker with JLL Houston’s Industrial team, was selected from a national pool of associates representing all brokerage lines.

RICHARDSON, TX—Alliance Architects Inc., a commercial architectural and interior design firm, celebrates 25 years of helping to shape DFW’s architectural landscape. Since its inception in 1993, the company has developed a reputation for its professionalism, creativity and customer service.

DEAL TRACKER

ALBUQUERQUE, NM—The 184-unit Lincoln Heights Apartments, located at 5800 Harper Dr., sold for an undisclosed purchase price. Bill Hahn, Trevor Koskovich and Jesse Hudson of NorthMarq Multifamily in Phoenix and Cynthia Meister of NorthMarq Multifamily in Albuquerque represented the buyer and seller in the transaction.

ALLEN, TX—Allen officials, developers, business professionals and North Texas influencers alike gathered for the topping off celebration of the first-ever Texas location of Delta Hotels by Marriott. Attendees experienced the first Delta new build by Marriott in the United States upon the completion of the six-story exterior.

AUSTIN, TX—Avnet leased 3,095 rentable square feet at Amber Oaks G, located at 9601 Amberglen Blvd. The landlord was represented by Jason Steinberg and Patrick Ley with ECR and the tenant was represented by Thomas Matheney with Colliers International.

AUSTIN, TX—Phillips & Jordan leased 3,396 square feet at Amber Oaks G located at 9601 Amberglen Blvd. Patrick Ley and Jason Steinberg with ECR represented the landlord and John Hanly with CRE Solutions represented the tenant.

AUSTIN, TX—Holliday Fenoglio Fowler LP announces the $19.915 million financing of UpCycle, an 81,711-square-foot warehouse/creative office conversion project located on 6th Street in East Austin. The HFF team worked on behalf of the borrower, a joint venture between EverWest Real Estate Investors and WHI Real Estate Partners

AUSTIN, TX—NAI Partners recently arranged a 3,465-square-foot industrial renewal for tenant Decor Builders Hardware at 2210 Denton Dr. NAI Partners’ Troy Martin represented Decor Builders Hardware in the transaction.

BURLESON, TX—Marcus & Millichap announced the sale of Town Villa, a 12-unit apartment property. Trey McGhin, Member of the National Multi Housing Group in Marcus & Millichap’s Fort Worth office, had the exclusive listing to market the property on behalf of the seller, a Texas based limited liability company.  The buyer, a partnership, was secured by McGhin.

DALLAS—Holliday Fenoglio Fowler LP announces the refinancing of 9111 Cypress Waters Blvd., a recently completed, 223,319-square-foot class-A office building. The HFF team worked on behalf of the borrower, the Billingsley Company, to secure the 15-year fixed-rate loan through Lincoln Financial Group. Loan proceeds were used to take out the construction loan.

DALLAS—Marcus & Millichap’s Fluellen-Hoover multifamily investment sales team closed 14 multifamily properties with a total of 2,369 units in the first quarter of 2018. Although 13 of the properties are in Texas, one is in Albuquerque, NM. The assets sold for a total of more than $192 million.

DENVER—CBRE recently completed a 65,126-square-foot lease on behalf of Freelance Enterprises, a manufacturer of premium custom commercial millwork. The location at 5151 Bannock St. is part of the Colorado Trade Center in central Denver. Staying central was a priority for Freelance, both for the ease of employees and the desire to avoid the upcoming I-70 construction. Jeremy Ballenger, Tyler Carner and Jessica Ostermick with CBRE industrial and logistics services represented Freelance in the lease. CBRE project management services in Denver is facilitating with move management. The company is working on build out now and will occupy the space beginning this summer.

DENVER—CBRE has completed the $50 million sale of the Willow Run Village multifamily community located in Broomfield in the northwest Denver metro. CBRE’s Dan Woodward, David Potarf and Matt Barnett represented the seller, Griffis/Blessing of Colorado Springs. The buyer was Hamilton Zanze of San Francisco. CBRE Capital Markets, Debt and Structured Finance, arranged the financing.

FORT WORTH—Sanderson Sylvania LLC purchased a 39,204-square-foot tract of land at 955. N. Sylvania. Transwestern vice president Grant Huff represented the buyer in the transaction. Keith Beasley of Century 21 Mike Bowman Inc. represented the seller.

FORT WORTH—DAXCOR LLC purchased a 5,000-square-foot, single story office building at 2512 Horne St. Transwestern principal Bill Behr and associate Gavin Behr represented the seller, J. Walton Lawrence Jr. Mark Allsup of JAMA Holdings Inc. represented the purchaser in the transaction.

FORT WORTH—Woodside Capital Partners has signed a new lease for 3,586 square feet of office space at FortyTwoHundred, 4200 S. Hulen. Transwestern principal Whit Kelly and associate Jason Harrell represented the landlord in the direct transaction.

FORT WORTH—Brashier & Crosby PLLC signed a new lease for 5,698 square feet of office space at 500 W. 7th St. Transwestern principal Bill Behr and associate Gavin Behr represented the tenant in the transaction. Stephanie Gwizdz of Red Oak Realty represented the landlord.

FORT WORTH—Eating Recovery Center LLC has signed a new lease for 3,458 square feet of office space at the Frost Bank Building, 4200 S. Hulen. Transwestern principal Whit Kelly and associate Jason Harrell represented the landlord in the transaction. Emily Hoffman, Liz Osborne and Tim Callahan of Cushman & Wakefield represented the tenant.

FORT WORTH—Capital Title has signed a new lease for 3,320 square feet of office space at 5825 Edwards Ranch Rd. Transwestern principal Jack Huff and senior associate Grant Huff represented the landlord, Worthington National Bank, in the transaction. Michael Berkowitz of Colonial Commercial Real Estate represented the tenant.

FORT WORTH—Transwestern announces Bank of Texas has signed a lease for 21,328 square feet of office space at 777 Main. Transwestern principal Whit Kelly and associate Jason Harrell represented the building owner, The Brookdale Group, in the transaction. Pat McDowell and Brooke Armstrong of JLL represented the tenant, a division of BOK Financial.

FREDERICK, CO—Mass Equities, Inc., a private equity real estate investment firm based in Santa Monica, CA, has announced that Ursa Major Technologies has signed a lease to anchor MEQ’s first building at Park 4040, MEQ’s new, creative flex/office park. Located at 4040 Salazar Way, fronting I-25 highway in Weld County, Park 4040 is part of the continuing expansion into promising Colorado markets that is a top priority for MEQ.

GRAPEVINE, TX— Holliday Fenoglio Fowler Announces the $23.375 million acquisition financing for a two-property hotel portfolio totaling 190 rooms, near the Dallas/Fort Worth International Airport. Working on behalf of the borrower, Dallas-based Atlantic Hotels Group, the HFF team placed the three-year, fixed-rate loan with two one-year extensions with a subsidiary of Resource Capital Corp.  Loan proceeds were used to acquire the portfolio.

HOUSTON—NAI Partners recently arranged a 10,800-square-foot industrial lease expansion for tenant Houston Installation Services Inc. after previously renewing the company in its original space last year. Houston Installation Services now occupies a total of 42,488 square feet at 421 West Crosstimbers St.

HOUSTON—Transwestern has been retained to continue providing leasing services for the 575,731-square-foot Loop Central office complex on behalf of the new ownership, a joint venture of Griffin Partners and Wheelock Street Capital. Transwestern’s executive vice president David Baker, senior managing director Doug Little, vice president Kelli Gault and senior associate Amanda App are leasing the property at 4828-4888 Loop Central Dr.

HOUSTON—NAI Partners’ Retail Services team recently arranged a 1,050-square-foot retail lease for tenant Copy, Ship and Print at 3824 Atascocita Rd. NAI Partners’ Chris Holder represented the tenant Copy, Ship and Print in the transaction.

HOUSTON—NAI Partners recently arranged a 15,000-square-foot industrial sale in Logistics Park at World Houston at 5812 Hamblen Rd. NAI Partners’ John Ferruzzo, Nick Peterson and Ryan Searle represented the seller, Avausa Investments LLC in the transaction.

HOUSTON—NAI Partners recently arranged the sale of 14875 Waterloo Dr., a 20,300-square-foot industrial facility. NAI Partners’ Joel Michael represented the seller of 14875 Waterloo Dr., FWG Partners Ltd., in the transaction.

HOUSTON—NAI Partners recently arranged an 8,956-square-foot office lease located at 770 Post Oak Ln. NAI Partners’ Dan Boyles and Liz Westcott-Brown represented the tenant, US Well Services LLC, in the lease at 770 Post Oak, and Bobbie Bozarth with Transwestern represented the landlord during the transaction.

HOUSTON—NAI Partners recently arranged a 3,695-square-foot office lease for tenant Element Architects at 1250 Woodbranch Park Dr. NAI Partners’ Jason Whittington represented Element Architects and Derek Beck with The Beck Group represented the landlord in the transaction at 1250 Woodbranch Park Dr.

IRVING, TX—Texican Court is slated to open in fall 2018. The retro-inspired boutique hotel across from the Irving Convention Center at Las Colinas and Toyota Music Factory will include 152 rooms and 3,500 square feet of indoor meeting and event space.

OKLAHOMA CITY—Vanguard Real Estate Advisors, a Dallas based real estate advisory firm, announces the sale of Parkview Village Apartments. The Vanguard disposition team, led by Jordan Cortez, represented the Chicago based Seller, AMG Parkview LLC, as well as procured the purchaser, a North Texas based private investor, that was looking to add to its expanding multifamily portfolio throughout Oklahoma. The off-market transaction was attractive to the seller given a substantial initial non-refundable earnest money deposit and expedited due diligence and closing timeframes. The 241-unit community is well located within the Oklahoma City market, southwest of downtown along SW 22nd Street approximately 1.5 miles from the historic Stockyards City.

SAN ANTONIO—ARA, A Newmark Company announces the sale of The Flats at Big Tex, a 336-unit luxury asset on the River Walk in burgeoning the Southtown area, for an undisclosed price. Vice chairman Pat Jones and managing director Matt Michelson represented the seller, The NRP Group, a Cleveland-based developer, builder and property management company. The asset traded to Chicago-based real estate investment firm, Accend Capital LLC.

BUILDING BLOCKS

TEXAS CITY, TX—Edifis Group, a Houston-based real estate development company with a focus on developing assets in the retail marketplace, recently announced the redevelopment plans for Palmer Plaza.