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

Investor optimism strengthened as recently enacted tax laws and economic durability sustain market confidence. And, the commercial real estate outlook remains positive. Marcus & Millichap survey responses indicate that approximately two-thirds of investors plan to increase commercial real estate investment activity in the next 12 months. More than 70% of respondents believe the new tax law will have a favorable impact on commercial real estate. Additionally, investors expect increased investment capital to enter the market as a result of tax reform. Downside risks at the top of investors’ minds include the potential for rising interest rates and increased inflation.—Lisa Brown

BY THE NUMBERS                                                                                                              

AUSTIN, TX—Austin’s retail market year-to-date occupancy rate dropped 30 basis points since the end of the first quarter at 96.1%. Year-to-date the market has recorded 210,000 square feet of positive net absorption, while new supply is about twice that of demand, delivering 525,000 square feet to the market so far this year, according to NAI Partners Austin retail monthly market snapshot for May 2018.

HOUSTON—Houston’s retail market year-to-date occupancy rate has remained steady at a robust 94.6% since the end of March. In addition, the total amount of square feet occupied grew by 1.6 million square feet of positive net absorption, while new supply is level to demand, delivering an equal 1.6 million square feet to the market so far this year, according to NAI Partners Houston retail monthly market snapshot for May 2018.

SAN ANTONIO—More than halfway through the second quarter, 418,615 square feet of warehouse/flex space has been delivered, year-to-date net absorption is at 222,297 square feet, and vacancy is inching downward, registering at 5.7% compared to 6.0% at this time last month, according to NAI Partners San Antonio industrial monthly market snapshot for May 2018.

NEWS AND NOTABLES

AUSTIN, TX—Eric DeJernett was recently awarded the Bruce Kaplan Honorary Award, a national CBRE award. This award is given to those who demonstrate creativity, courage and conviction in real estate while fostering and transforming retail within mixed-use environments.

DEAL TRACKER

ADDISON, TX—VAI Architects Incorporated leased 8,373 square feet at The Spectrum, 15301 Spectrum Dr. Ryan Evanich, Chase Lopez and Jackie Smith with Stream Realty Partners represented the landlord, G&I VIII Quorum North LP.

ARLINGTON, TX—Precision Interconnect renewed its 5,266-square-foot lease at 2211-2229 E Division St. Clay Balch of Holt Lunsford Commercial represented the landlord, ATCAP.

AUSTIN, TX—Z5 Inventory subleased 3,419 square feet at The Enclave, located at 303 Camp Craft Rd. The sublessee was represented by Hayden McCarty and Patrick Ley with ECR. The sublessor was represented by Lauren Spaeth, Brian Butterfield and Chris Peddie with Cushman & Wakefield.

AUSTIN, TX—Silicon Hills Wealth Management leased 2,295 rentable square feet of office space at Colina West, located at 8834 N. Capital of Texas Highway. The landlord was represented by Rebecca Zigterman and Matt Levin with ECR and the tenant was represented by Keith Zimmerman with Cushman & Wakefield.

CARROLLTON, TX—Fire & Life Safety America Inc. leased 11,440 square feet at 1100 Valwood Pkwy.  Blake Kendrick and Mackenzie Ford with Stream Realty Partners represented the landlord, GLP. Jamie Galati with Jones Lang LaSalle Brokerage represented the tenant.

CARROLLTON, TX—Caddo Valwood LP sold its 63,000-square-foot building at 1205 W. Crosby Rd. to Enginetech Inc. Eric Crutchfield with Stream Realty Partners represented the buyer.

CARROLLTON, TX—Raynor Marketing renewed its 58,880-square-foot lease at 1215 Crowley Dr. Andrew Gilbert of Holt Lunsford Commercial represented the landlord, TA Realty.

CYPRESS, TX—Lee & Associates–Houston represented Marwan Foteh in the lease of a 6,000-square-foot industrial building at 17803 Grant Rd. Patrick Wolford and Robert Noack of Lee & Associates–Houston represented the landlord, and David Claros with Caldwell Companies represented the tenant, Protective Concepts Inc.

DALLAS—S.V. Hardy LP sold its 15,900-square-foot building at 2303 Shorecrest Dr. to 2303 Shorecrest LLC. Jason Moser with Stream Realty Partners represented the seller and S.V. Hardy LP Mercer Company represented the buyer.

DALLAS—Fas Holdings Group LLC renewed its 20,258-square-foot lease at 10460-10490 Markison Rd. Josh Barnes and Ben Wallace of Holt Lunsford Commercial represented the landlord, Taurus Investment Holdings LLC.

DALLAS—Southern Wealth Management LLP expanded 7,537 square feet at Pinnacle Tower, 5005 Lyndon B. Johnson Fwy. J.J. Leonard, Sara Terry and Chase Lopez with Stream Realty Partners represented the landlord, 5005 LBJ Tower LLC. NAI Robert Lynn represented the tenant.

DENVER—CIM Group acquired LoDo Towers, a two-building office campus located at 1331 and 1401 17th St. and two adjacent parking garages comprised of approximately 1,140 stalls in Lower Downtown (LoDo). 1331 is approximately 220,000 square feet and features 13 stories with 17,000-square-foot floorplates. 1401 is approximately 190,000 square feet and features 16 stories with 13,000-square-foot floorplates. The buildings offer unobstructed views of the Rocky Mountains and notable sites in LoDo including Union Station and Coors Field, and offer the best parking ratio in the LoDo submarket.

DENVER—CBRE’s Brady O’Donnell, Jeff Halsey and Jill Haug recently arranged $58 million in refinancing for the Sugar Block, a 189,145-square-foot mixed-use development located along the 16th Street Mall between Blake and Wazee in lower downtown. The namesake of the block—the Sugar Building—was originally constructed in 1906 for the Great Western Sugar Company (designed by the same architectural firm as Union Station) and is on the National Register of Historic Places. Urban Villages developed the Sugar Cube next door in 2008, followed 10 years later by Sugar Square, just completed earlier this year. CBRE represented the property owner and worked with Urban Villages, the developer and property manager, on the transaction. The lender is Principal Real Estate Investors (on behalf of an advised separate account) based in Des Moines.

EL PASO, TX—CBRE announces the sale of Merchant Industrial, a four-building, 245,945-square-foot industrial portfolio located at 7155, 7157, 7177 and 7189 Merchant Ave. Arturo De La Mora, with the local CBRE El Paso team, and Jonathan Bryan, with CBRE Capital Markets, represented the seller, Phoenix based ViaWest Group. Bill Caparis, also with CBRE in El Paso, represented the buyer, Stonelake Capital Partners.

GARLAND, TX—Sunburst Coverings Texas LLC renewed its 18,480-square-foot lease at 10990 Petal St. Josh Barnes and Ben Wallace of Holt Lunsford Commercial represented the landlord, Rialto Capital.

GARLAND, TX—Arch Metals LLC renewed its 13,440-square-foot lease at 10990 Petal St. Josh Barnes and Ben Wallace of Holt Lunsford Commercial represented the landlord, Rialto Capital.

HOUSTON—Lee & Associates–Houston represented S.E.T. Industries LC in the sale of a 113,000-square-foot industrial building on 13827 West Hardy Rd. Mike Spears and Robert McGee of Lee & Associates– Houston represented the seller, and Clay Pritchett with NAI Partners represented the buyer, Quasar GP LLC.

HOUSTON—NAI Partners recently arranged a 17,500-square-foot industrial sale for seller McDonough Construction Rentals Inc. at 8411 Villa Dr. NAI Partners’ Chris Caudill represented the seller McDonough Construction Rentals Inc. in the transaction.

HOUSTON—NAI Partners recently arranged a 16,008-square-foot industrial lease for tenant TS Moly-Lubricants Inc. at 6205-6245 Brookhill Dr. NAI Partners’ Chris Caudill represented the tenant TS Moly-Lubricants Inc. in the transaction.

HOUSTON—Lee & Associates–Houston represented Entech Civil Engineers in the lease expansion of a 3,069-square-foot office space at 15021 Katy Fwy. Rob Johnson of Lee & Associates–Houston represented the tenant, and Kevin Wyatt with Lincoln Property Company represented the landlord, EP Owner 1 LP.

HOUSTON—NAI Partners recently arranged a 25,739-square-foot industrial renewal for tenant Elway Industries at 8339 Kempwood Dr. NAI Partners’ Darren O’Conor and Jake Wilkinson represented Elway Industries in the transaction.

HOUSTON—Lee & Associates–Houston represented Nazar Invest Inc. in the sale of a 4,550-square-foot industrial building on 11718 North Garden St. Preston Yaggi and Cameron Hicks of Lee & Associates–Houston represented the seller, and Michael Butler with KW Commercial Texas Gulf represented the buyer, Mike & Pat Inc.

KATY, TX—Thor Equities announced several new long-term leases at The Shoppes at Cinco Ranch in Katy. The company also began construction of a new 12,000-square-foot ground-up building onsite, scheduled to be completed in November.

SPRING, TX—Lee & Associates–Houston represented Beacon Pitkin Properties in the lease of a 1,350-square-foot office space at 25100 Pitkin Rd. Robert Noack of Lee & Associates–Houston represented the landlord. The tenant was Jacob Gordon & Associates LLC.