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

While struggling through international tariffs and a new tax framework, commercial markets are poised for positive results throughout 2018, according to the SIOR CRE Index. The majority of SIOR members expect conditions to improve. With a value of 100 on the index indicating a balanced market, the national index closed the first quarter of 2018 at an all-time high of 134, creating a positive expectation for the remainder of 2018. SIOR members experienced gain in fundamentals such as leasing activity, rent stabilization, new construction of office and industrial spaces, and development conditions shifting in favor of sellers. The addition of more than 230,000 new jobs in healthcare and business services position the market for an upswing.—Lisa Brown

BY THE NUMBERS

AUSTIN, TX—The Austin office market vacancy rate stands at 9% nearing the end of the second quarter, with year-to-date net absorption at 332,000 square feet and deliveries at 1.3 million square feet, according to NAI Partners Austin office monthly market snapshot for June 2018.

AUSTIN, TX—Austin’s retail market year-to-date occupancy rate rose slightly to 95.9%, 10 basis points, from a healthy 95.8% at the end of May. Year-to-date the market has recorded 827,000 square feet of positive net absorption, while new supply is somewhat ahead of demand, delivering 1 million square feet to the market so far this year, according to NAI Partners Austin retail monthly market snapshot for June 2018.

HOUSTON—Houston’s retail market year-to-date occupancy rate dipped slightly to 94.5%, 10 basis points, from a robust 94.6% at the end of May. In addition, the total amount of square feet occupied grew by 1.3 million square feet of positive net absorption, while new supply is somewhat ahead of demand, delivering 1.7 million square feet to the market so far this year, according to NAI Partners’ Houston retail monthly market snapshot for June 2018.

HOUSTON—Nearing the end of the second quarter, the vacancy rate dropped 10 basis points to 5.4%, compared to this time last month at 5.5%. Occupancy of the 4.3 million square feet delivered to the market year-to-date stands at 76%, and of the 96 properties with 11.7 million square feet currently under construction, 40% of that space has been spoken for, according to NAI Partners’ Houston industrial monthly market snapshot for June 2018.

HOUSTON—Nearing the end of the second quarter, the vacancy rate crept up by 10 basis points to 21.7%, from 21.6% this time last month. Year-to-date there has been 300,000 square feet delivered to the Houston market, with 40% of that space available for lease, according to NAI Partners’ Houston office monthly market snapshot for June 2018.

SAN ANTONIO—Nearing the end of the second quarter, 500,000 square feet of industrial/flex space has been delivered, year-to-date net absorption is at 123,812 square feet and vacancy rose slightly, registering at 5.8% compared to 5.7% at this time last month, according to NAI Partners San Antonio industrial monthly market snapshot for June 2018.

SAN ANTONIO—San Antonio’s retail market year-to-date occupancy remained at 95.6%, the same rate recorded at the end of 2017. The market has logged 58,163 square feet of positive net absorption, while new supply is outpacing demand, delivering 253,000 square feet so far this year, according to NAI Partners San Antonio retail monthly market snapshot for June 2018.

NEWS AND NOTABLES

DALLAS—Marcus & Millichap has partnered with Feeding America to provide those in need with 1 million meals. The project has been named the Million Meals Initiative (MMI).

DALLAS—JLL announced the appointment of industry veteran Mark Gordon to lead the project and development services’ restaurant, retail and entertainment initiative for JLL’s South Central Region. In his new role, Gordon will lead the firm’s development strategies for restaurant, retail and entertainment clients by providing oversight for project management services including site feasibility studies, re-branding and reinvestment strategies, planning, design, and construction for new and existing store locations across Texas, Oklahoma, Arkansas and Kansas.

DENVER—Tanner McGraw, founder and chief strategy officer of commercial real estate software company Apto, has launched a new podcast that explores the hidden traits that make top brokers successful in office, industrial, retail, multifamily and hotel real estate.

DENVER—Jennie Rodgers has joined Enterprise Community Partners Inc. as vice president and Denver market leader. She will focus on leading Enterprise’s programmatic, capital and policy work to increase opportunity and economic mobility for residents throughout the Denver region, including priority initiatives such as the Denver Regional TOD Fund, the City of Denver’s new housing plan, the West Denver Renaissance Collaborative and the Denver Social Impact Bond/SIB, one of the first city-level SIBs in the US to address chronic homelessness.

SAN ANTONIO—Worth & Associates announced the addition of Charles Fulton to the company’s development team and the promotion of Chad Case. Both men will hold the title of vice president of development.

DEAL TRACKER

ADDISON, TX—SVN | Dunn Commercial announces the sale of a 24,190-square-foot semiconductor manufacturing building. The building also contains a credit tenant on a long-term lease along with substantial recent tenant improvements. David & Courtney represented the seller in a recent auction, which was held by Ten-X.

AUSTIN, TX—RightQuest ShadowGlen Flats LLC, an affiliate of Dallas-based developer RightQuest, has broken ground on The Flats at ShadowGlen, a 248-unit luxury apartment community located on the eastern edge of town. The property is being constructed within the 1,400-acre ShadowGlen masterplan development, which includes the 18-hole ShadowGlen Golf Course. The recently completed 290 Toll Road/Manor Expressway has led to greater employment in and around the area with downtown Austin only a 15-minute drive southwest from the site.

BASALT, CO—CBRE recently completed the $12.4 million sale of an income-restricted, newly completed multifamily property. About three hours from Denver, the town is within 30 minutes of three of Colorado’s primary mountain resort towns including Aspen. The property, called the Willits Seven Apartments, met a community need for affordable workforce housing. CBRE’s Dan Woodward, David Potarf, Matthew Barnett and Jake Young represented the seller, Platform Investments of Fairway, KS. The buyer was Virtu Investments LLC of Carlsbad, CA.

BAYTOWN, TX—JLL’s Capital Markets announced the sale of Safe Keeping Self Storage, a 782-unit self-storage facility in this Houston suburb. New York-based Merit Hill Capital purchased the property from Houston-based Weiss Realty Group Inc. Steve Mellon and Brian Somoza led the JLL team on the sale.  The property at 120 S. Alexander Dr. is comprised of one single-story building. The facility is 93% leased. Features of the property include climate-controlled units, electronic access control, 24-hour video surveillance, a covered loading area and eight office/warehouse units that generate additional revenue from non-storage tenants.

DENVER—CBRE is reporting the $23.4 million sale of 1515 Flats, a newly constructed 82-unit multifamily development located at the corner of West Colfax and Vrain Street in central Denver. It’s a unique property that combines luxury amenities with smaller unit sizes (493 square feet on average) to achieve accessible rents. CBRE’s Dan Woodward, David Potarf and Matthew Barnett represented the seller, Vrain Street Investments of Denver. The buyer, Cardinal Group Acquisitions, also of Denver, purchased the property as part of a 1031 exchange.

DRIPPING SPRINGS, TX—Headwaters, the 1,035-acre community under development by Freehold Communities, includes extensive amenities: broad greenbelts, five protected hilltops, split-level pool, Wi-Fi café and eight miles of trails. It also has something likely no other US community has: A star-gazing amphitheater. As the first Dark Sky Community in Texas and a member of the International Dark-Sky Association, Dripping Springs requires smart lighting solutions that reduce glare and sky-glow to protect the night sky. Headwaters has carefully chosen lighting options that comply with stringent light-pollution-reducing guidelines without sacrificing the community aesthetic.

FARMERS BRANCH, TX—Greysteel, a national commercial real estate investment services firm, has arranged the sale of Villa Gardens, a 142-unit multifamily property. Greysteel managing directors, Doug Banerjee and Boyan Radic, senior investment associate, Andrew Mueller and investment associate Andrew Hanson, who are based in the company’s Dallas and Fort Worth offices, negotiated the sale on behalf of the seller and secured the buyer. Villa Gardens is a 142-unit multifamily asset located at 2730 Fyke Rd.

GRAND PRAIRIE, TX—Institutional Property Advisors (IPA), a division of Marcus & Millichap, announces the sale of Villas Central Park, a 249-unit multifamily property. Will Balthrope, IPA executive director, Drew Kile, IPA senior director, and Joey Tumminello, IPA director, represented the sellers, Texas-based Carleton Residential Properties and M.R. Development, and procured the buyer, Virginia-based Weinstein Properties. Constructed in 2016, the community is nine miles from Dallas/Fort Worth International Airport, 16 miles from Fort Worth’s central business district and 14 miles from downtown Dallas.

HASLET, TX–Marcus & Millichap announced the sale of Metrotex Business Park, a multi-building industrial property. Cody Payne, senior associate in Marcus & Millichap’s Fort Worth office, had the exclusive listing to market the property on behalf of the seller, a private investor. The buyer, a limited liability company, was also secured by Payne. Metrotex Business Park is divided into four single-tenant buildings and was constructed in three stages; 2014, 2015 and 2017. At the time of sale, the park was 100% occupied.

HOUSTON—Lee & Associates–Houston represented Griffin Partners Nassau Bay LP in the sale of a 43,222-square-foot building at 1275 Space Park Dr. Drew Lewis of Lee & Associates–Houston represented the seller, and Craig Guidry with BHCRE represented the buyer, Transitional Learning Center.

HOUSTON—Reed Vestal, Taylor Schmidt and John Erck of Lee & Associates–Houston represented Bering Oil Company in the sale of a 9,825-square-foot industrial space at 6718 Northwinds Dr.

HOUSTON—Lee & Associates –Houston represented Nazar Invest Inc. in the sale of a 6,020-square-foot industrial space at 11718 North Garden. Cameron Hicks and Preston Yaggi of Lee & Associates–Houston represented the seller, and Zhuying Wang, PY Realty Co. represented the buyer, Houston Lab Office & Warehouse Management LLC.

HOUSTON—NAI Partners recently arranged a 10,750-square-foot industrial lease for Fikes of Houston Inc. at 18702 Kieth Harrow Blvd. NAI Partners’ Jake Wilkinson and Chris Caudill represented the landlord DDJ Properties Inc. in the transaction at 18702 Kieth Harrow Blvd.

HOUSTON—NAI Partners recently arranged a 25,000-square-foot industrial lease for Enchanted Rock Electric Ltd. at 418 Clifton. NAI Partners’ Chris Kugle and John Ferruzzo, represented the landlord Harrisburg Investments LLC in the transaction.

HOUSTON—NAI Partners recently arranged a 20,291-square-foot industrial lease for tenant OMAC USA, Inc. at 5670 Guhn Rd. NAI Partners’ Darren O’Conor represented the tenant OMAC USA Inc. in the transaction at 5760 Guhn Rd.

NEEDVILLE, TX—Lee & Associates–Houston represented a private family investment fund in the purchase of 122.25 Acres at 8211 Bockhorn Rd. Reed Vestal and Taylor Schmidt of Lee & Associates–Houston represented the buyer and the seller was Forster Land Company LLC.

OKLAHOMA CITY—CBRE announces the marketing of Project 3810, a 45,231-square-foot warehouse and coworking space at 3810 N Tulsa Ave. Project 3810 was founded by the Langford family, who also founded Resonance Inc., and is being marketed by Randy Lacey and Austin Lacey with CBRE’s Oklahoma City office. The space offers small, medium and large offices, multi-office suites, shop space and light assembly or manufacturing areas, allowing for users of all types. In addition, tenants have access to common areas for breaks, meeting, events or training along with warehouse space for distribution needs. This warehouse space can be built to suit.

BUILDING BLOCKS

HOUSTON—The Howard Hughes Corporation announces the grand opening picnic of The Woodlands Hills, Houston’s newest master planned community. The picnic is set for the weekends of July 21-22 and July 28-29.