April 2020 REDnews Magazine by RE Journals

APRIL 2020

REDnews & Awards Winners Announced Page 13 THE TEXAS COMMERCIAL REAL ESTATE NEWS SOURCE

UP TO 649 ACRES AVAILABLE Great residential / mixed use development opportunity Surrounds the private Bluejack National Golf Club Utilities available through Blake Tree MUD

Located on FM 1486, just south of Jackson Rd in Montgomery, TX CaldwellCos.com (713) 690-0000

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FRY RD., JUST SOUTH OF FM 529 TWO TRACTS AVAILABLE HOUSTON, TX Tract 1 •

±2 acres of land with ±260’ of frontage along Fry Rd. Ideal for retail, self-storage, or office use

•

Per initial site plan, two curb cuts are designated to serve Tract 1

Tract 2 •

±12 acres of land with ±520’ of frontage along Fry Rd. Ideal for multifamily development.

•

Shared lighted access at High Stone Ln. as well as plans for an additional curb cut along Fry Rd.

Utilities available through HCMUD 157 with an all in tax rate of 2.7943 Detention available Off-Site Zoned to Cy-fair ISD Contact Broker for Pricing Cars Per Day

FRY RD., south of FM 529

28,380

FM 529, east of FRY RD.

29,396

2019 ESTIMATED DEMOGRAPHICS within 5 miles

KRISTEN MCDADE Senior Director 713.469.4509 kristen.mcdade@berkadia.com

272,873

2018 Traffic Counts

POPULATION

$96,375 AVG. HOUSEHOLD INCOME

$223,588 AVG. HOUSING VALUE

MATT DAVIS Associate Director 713.974.2407 matt.davis@berkadia.com

© 2019 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. In California, Berkadia Real Estate Advisors Inc. conducts business under CA Real Estate Broker Lic. #01931050, Berkadia Commercial Mortgage LLC under CA Finance Lender & Broker Lic. #998-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx

IN THIS ISSUE 8

WINNERS ANNOUNCED

Market

Sales & Leases 1-3, 5, 7, 9, 11, 12, 25–27

Services

Environmental 35, 38, 51 Property Tax Management 10 1031 Exchange/DST 29, 52

APRIL 2020

Features Scoop

Events 40, 42, 44

“A Renaissance man” 8, 10 2020 CRE Awards Winners 13–24 Industrial & Logistics Recap 28–31 CCIM Forecast Recap 32–34 Real Estate Brokers: Leftover Equity 36

Social 41, 43, 45 Bulletin 46–48

RAY’S BUZZ CCIM Luncheon 50 O’Connor Hotel Forecast 50

TEE OFF & LAND IN THE GALVESTON-KEMAH-NASA TOURISM MARKET.

IN LA MARQUE. CITY OF MARQUE LA

La Marque Economic Development Corporation offering

DOUBLE EAGLE INCENTIVES FOR HOTEL, RESTAURANT AND GROCERY. I-45 FRONTAGE tracts from two to 400 acres. Federal Opportunity Zone & residential infill opportunities. 15.33 Percent city population growth since 2010. New schools, new neighborhoods, coastal lifestyle.

Letter from the Publisher

THE TEXAS COMMERCIAL REAL ESTATE NEWS SOURCE

Dear Readers,

PUBLISHER

Ginger Wheless ginger@REDnews.com

uring REDnews’ twenty-five years of existence, our industry has experienced the effects of three major hurricanes (plus a major tropical storm), a capital markets shut down that redlined investing in Texas, a U.S. terrorist attack, and now we’re faced with a health pandemic that has effectively pushed the pause button on all of our lives.

NATIONAL PUBLISHER Mark Menzies menzies@resummits.com

EDITOR Margie Gohmert info@REDnews.com

STAFF WRITERS Janis Arnold janisarnold1@gmail.com Ray Hankamer rhankamer@gmail.com

It brings to mind two clichés: what a difference a day makes and this too shall pass.

Brandi Smith info@REDnews.com

In this issue, you’ll find recaps of our Industrial and Logistics Summit that was held last month as well as Ray Hankamer’s recap from CCIM Houston/Gulf Coast’s February Forecast Competition. A recent special report from Marcus & Millichap highlights recent history as an indicator for how long and how far reaching this market correction might be – as well as the implication for the CRE sector. SARS, H1N1 and other recent pandemics also generated short-term market volatility. While it’s still too early to compare the full health impacts of COVID-19 with those strains, the markets stabilized in the range of three to six months on average during past events. In isolation from this new health scare, real estate supply and demand are largely in balance. It’s fair to assume that – barring a devolution into a far worse global health emergency – job creation and economic growth will both decelerate but remain positive. This should support real estate fundamentals and lead to a relatively stable outlook for the sector over the remainder of the year. All of these assessments are based on market responses to pandemics from the recent past. If consumer confidence levels plummet and/or stock market volatility swells out of control, the situation could be far different. However, the Marcus & Millichap report expects reduced, but still positive, economic growth even in the face of these uncertain times. And, in the meantime, stay healthy and safe, and continually remind yourself that this too shall pass. All my best,

WINNERS ANNOUNCED

MANAGING DIRECTOR Benton Mahaffey accounting@REDnews.com

EMARKETING DIRECTOR Sarah Evans Carter emarketing@REDnews.com

GRAPHIC DESIGN Corporate Imagination digital@REDnews.com

SALES Frank Biondo frank.biondo@rejournals.com Ginger Wheless ginger@REDnews.com

PRINT & DIGITAL DISTRIBUTION REDnews is directly mailed each month to commercial real estate brokers, investors and developers throughout Texas and the US. Texas Brokers: 8,150 Texas Leasing/Tenant Rep: 6,232 Texas Investors: 4,979 Texas Developers: 4,710 Outside Texas Investors, Brokers, Developers etc: 26,387

TOTAL QUALIFIED ONLINE REDNews DISTRIBUTION: 50,458 REDnews has gone green using recycled paper. Thank you Midway Press! To subscribe to REDnews call (713) 661-6300 or log on to REDnews.com/subscription.

Ginger Wheless

2537 S. Gessner, Ste. 126 Houston, TX 77063

APRIL 2020

www.rednews.com/awards

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“A Renaissance man”:

Meet the recipient of the 2020 REDnews Lifetime Achievement Award BY BRANDI SMITH Hundreds of Houston real estate professionals gathered at the Briar Club on March 12 for the inaugural REDnews Awards, highlighting the best and brightest of our industry. You can check out the full list of finalists and winners on page 13, but the most significant award of the night went to John Walsh. We honored him with the Lifetime Achievement Award for his decades of service to the Houston community. “I really wasn’t surprised because John has not only been successful, but it’s so well-deserved,” said longtime friend Howard Tellepsen, CEO of Tellepsen Builders. He and Walsh go back 50 years when the two attended Lamar High School together. “He’s very understated. He’s very humble. I’m just so proud that he is receiving this lifetime achievement award,” Tellepsen said. “I saw these characteristics of John in high school.” The pair graduated in 1962, going their separate ways. Walsh attended the University of Texas for undergrad, then received his MBA from the University of Houston before helping form Exxon’s real estate subsidiary, Friendswood Development. It was in his role there that he helped create several master-planned communities, including Kingwood. “I lived there back in the 1970s when I was in the Legislature,” remembered Ed Emmett, who went on to serve as a Harris County judge for more than a decade. “It was a great place to raise a family. I think Friendswood deserves a lot of credit for creating that kind of a place to live.” Walsh didn’t just create Kingwood; he raised his family there as well. “It gives me a huge sense of pride to know my dad was such a big force in that,” said Ryan Walsh, John’s son and executive director of the Harris County Sports & Convention Corp. and NRG Park.

APRIL 2020

The younger Walsh called John a “great dad,” but added that it was no secret to him or his sister that he loved what he did. “We always joked that he worked six days a week at the office, then worked Sundays at the office at the house,” said Ryan. “But he was always there for us. He was always at our recitals or sports events or school events. He always made a point to make sure he was there.” Now running a major organization himself, Ryan credited John being a shining example of how to be good at what you do while being a good person. “Whether it was mowing the yard or cleaning your room or washing the dishes, he’d always say, ‘You have to take pride in what you do,’” Ryan recalled. “I think he definitely takes pride in what he does. It shines through.” As brilliant as he was in his chosen field of real estate, Walsh’s closest friends shared that he’s incredibly creative and known for his love of poetry, photography and sketching. “I guess you might say, in my opinion, John’s like a Renaissance man,” Tellepsen said with a smile. “He’s a very special guy.” In his role as president of Friendswood, Walsh worked to make Houston a better place through communities such as Kingwood, Fairfield and Copperfield. That effort didn’t stop when he stepped down in 1996. Continued on Page 10>

CALL FOR OFFERS DUE APRIL 30

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FOR MORE DAVID HUSID INFORMATION: Director The information contained herein has been obtained from sources deemed reliable but has not been verified and no guarantee, warranty or representation, either express or implied, is made with respect to such information. Terms of sale or lease and availability are subject to change or withdrawal without notice.

713.599.8888 dhusid@ngkf.com

APRIL 2020

"A Renaissance man” < Continued from Page 8

“He’s always looking for the next adventure, looking for the next project,” the younger Walsh said. The next adventure came when he served as president of the Houston Chamber of Commerce, then in several of the chamber’s leadership roles. When friend Bill White became Houston’s mayor, White named Walsh deputy chief of staff for neighborhoods and housing. “When we worked together for the city, John was hands-on in creating affordable housing for the city,” said White. “He’s done a lot of things in a way that does not shed light on himself. He always gives credit to others, which is why he’s so effective.” It’s hard to say which of Walsh’s contributions to the Houston community were most substantial, but his next achievement is certainly a top contender. He accepted the challenge of creating a graduate real estate program in the University of Houston’s Bauer College of Business. “He had a vision for a practice-based program to educate the next generation of real estate professionals. He worked and worked and worked on that until it became a reality,” said Mary Lawler, executive director of Avenue CDC, with whom Walsh has worked for many years.

“He researched all the other graduate real estate programs in the country and he took the best of all of those. He did all of this work, very thoroughly, for no salary,” Tellepsen said. “His handprint is on that program. He started it from scratch. He raised money for it. He got an endowment that’s going to help it go forward.” The endowment came from the family of Drew Alexander, CEO of Weingarten Realty Investors, which created the Stanford Alexander Center for Excellence in Real Estate. “One of the things my father [Stanford] has always taught all of us and still teaches us every day is the importance of relationships,” Alexander said. “That very much is the spirit John embraces, looking at things very collegially, trying to determine best practices, trying to get to a solution that’s good for everyone.”

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Walsh assembled an advisory board that was a who’s who of Houston real estate, including leaders such as Welcome Wilson Sr., Paul Layne, John Hammond, Lawler, Alexander and Tellepsen, who highlighted the program’s lasting impact. “With the training people get in the graduate program, they can further their careers in real estate here in Houston,” he said. For years, he served as director of the program before passing the reins. Now retired -- or as much as a “hands-on doer” like him can be -- he still serves on the advisory board, helping steer the ship he built. “His whole life is an achievement, an achievement for this community,” said White. “John has done so much for the real estate profession, for the Houston community, so he is very much deserving of this honor,” Lawler added. Congratulations to our 2020 REDnews Lifetime Achievement Award winner, John Walsh! n

APRIL 2020

NEED TO TRACT DOWN GREAT SITES? GIVE CALDWELL A CALL.

711 Rankin Rd. Houston, TX 77073

17102 Theiss Mail Route Rd. Spring, TX

I-45 Near Huntsville, TX

± 20 Acres For Sale

± 3.04 Acres For Sale

± 291 Acres For Sale

• Premier redevelopment site • Majority of land is stabilized • Located outside of the flood plain • Full utilities to site

• ± 21,484 SF - 3 buildings • Ideal for school, daycare, church or office • Campus has been beautifully maintained • Priced well below replacement cost

• Investment/development site • ± 6,000' of frontage on I-45 • Located out of the floodplain • Approximately 10 miles from Huntsville, TX

Bill Ginder, CCIM, SIOR 281.664.6641 | BGinder@CaldwellCos.com

Ron Roberson, CCIM, SIOR 281.664.6640 | RRoberson@CaldwellCos.com

Keith Edwards, CCIM, SIOR 281.664.6633 | KEdwards@CaldwellCos.com

SH 249 Near Spring Cypress, Tomball, TX

I-45 & Spring Stuebner, Spring, TX

I-45 N of League Line, Conroe, TX

± 25.61 Acres For Sale

Up to 40 Acres For Sale

± 18.85 Acres For Sale

• Located just north of Spring Cypress Rd. • ± 1,140' of frontage on SH 249 • Unrestricted site • Great retail location with strong growth

• Across from Springwoods Village • Water and sewer from Meadowhill MUD • Signalized hard corners • Perfect on/off freeway access from I-45

• Ideal for retail, office or industrial • ± 1,200' of frontage on I-45 • 0.5 miles east of The Woodland Hills • TXDOT approved curb cuts

Keith Edwards, CCIM, SIOR 281.664.6633 | KEdwards@CaldwellCos.com

Travis Smith 281.664.6663 | TSmith@CaldwellCos.com

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151172

On March 12, 2020, REDNews Announced the Winners for the 2020 REDNews Awards. Thank you to all who participated and made this a night to remember! See the winners on the following pages.

ÍMultifamily Lakeside Row - The Residences Camden McGowen Station Buffalo Heights Pearl Marketplace at Midtown

ÍWINNER!

About the Winner: Lakeside Row within the Howard Hughes’ master planned community of Bridgeland in Cypress, Texas is a Big House® concept designed by Humphreys & Partners Architects. With two eUrban (higher density four-story, 96-units) buildings and 12 Big Houses with 10 units per building, this suburban multifamily concept is a hybrid of traditional suburban apartment-style and denser urban-style living. The clubhouse for this 312-unit development overlooks the lake with a fitness center, children’s playroom, pool, fire pit and other amenities. The leasing office is separate from the clubhouse.

Lakeside Row - The Residences

Kim Phillips, Lorrie Parise, Paul Layne, Nancy Fairfield, Theresa Terrell Project Team: Michael Vaughn, Arch-Con® Corporation, Contractor Jim Carman, Howard Hughes Corporation, Developer Andre Warren, Humphreys & Partners Architects, Architect

ÍRedevelopment / Reuse / Historic AC Hotel Houston Downtown The Cannon Midtown Collection

ÍWINNER!

About the Winner: The AC Hotel Houston Downtown is an adaptive reuse of the historic 10-story Jessie Jones’ Gulf Oil Building. In 1914, Jessie Jones commissioned this building designed by the well-known architect Alfred Finn. During its lifespan, the building has served as the headquarters for Gulf Oil, the National Bank of Commerce and, most recently, the Houston Bar Association. In the 1960s, it went through a significant renovation modeled after the midcentury modern style.

AC Hotel Houston Downtown Michael Scheurich & Michael Vaughn Project Team: Steve Ziegler, Arch-Con Corporation, Contractor Mehul Patel, NewcrestImage, Developer Keith Carlson, Mitchell Carlson Stone, Inc., Architect Bill Franks, William R. Franks Professional Services, Consultant Eric Ullmann, Duncan Miller Ullmann, Other

APRIL 2020

REDNews 2020 Awards Winners

ÍMedical Property Grand Parkway Pediatric Dental Office

ÍWINNER!

About the Winner: Grand Parkway Pediatric Dental is a pediatric dental facility located in Richmond, Texas. The 5,500 square-foot office includes office space, a waiting area with game rooms attached, individual treatment rooms, an open-area dental space, and training room to provide continuing education to fellow dentists . The interior design is inspired by the owner, Dr. Faisal Khan, and his dream of an immersive, underwater themed environment. Each design decision was carefully thought out to match the theme; from the surfboards as dental chairs to the larger than life 3-D murals.

Grand Parkway Pediatric Dental Office Ashley Bettcher, Delaine Heim, Valerie Arnold Project Team: Delanie Heim, Method Architecture, Architect Dr. Faisal Khan, Grand Parkway Pediatric Dental, Owner Brandon Halbert, T&D Engineers, Engineer Jonathan Green, JA Greene Construction, Contractor Brad Foster, Patterson Dental, Other

ÍMortgage Broker / Banker of the Year Greg Young, Grandbridge Jeff Stein, CBRE

About the Winner: In the calendar year 2019 he closed 22 commercial loans with 16 different capital providers totaling over $280,000,000 in loan volume. In addition to managing a fiver person Production team and a total team of 12, he invested time in coaching West U Softball, UCAL soccer, and junior golf with his two daughters.

ÍWINNER! Greg Young, Grandbridge Greg Young with Grandbridge

APRIL 2020

REDNews 2020 Awards Winners

ÍBrokerage Firm Lee & Associates – Houston Newmark Knight Frank About the Winner: In 2019, Lee & Associates – Houston achieved several major accomplishments. Multiple additions were made to its service portfolio, including a new, multifaceted integrated services business

line

for

property

management,

construction

management, accounting, administration, leasing/marketing and building engineering/facilities. The firm also launched two other new business lines, including a medical office business line, with services such as market evaluation, site selection, purchase versus lease comparison, lease analysis, negotiation strategy and more, and a retail division with the addition of senior director Grant Walker from Transwestern, who specializes in tenant representation, with a focus on national food and beverage brands.

ÍWINNER! Lee & Associates – Houston Jill Nesloney, Pat Wolford & Reed Vestal

ÍProperty Manager (Individual) Janet L. Shipley, CBRE Sarah Sutton, Hines Stephanie Swanson, Transwestern Shane Cawood, Hartman Income REIT About the Winner: Janet L. Shipley is an Associate Director assisting with local Leadership of CBRE. She also serves as the General Manager of the AIG Houston Portfolio and oversight of both Hess Tower and Sage Plaza. Her responsibilities include day to day property management supervision, complex financial analysis, corporate operations, human resources, technology systems, marketing, construction management, tenant and client relations for over 3.6M SF.

ÍWINNER! Janet L. Shipley, CBRE Janet Shipley with CBRE

APRIL 2020

REDNews 2020 Awards Winners

ÍOffice The Cannon Egrets Landing, Sugar Land

ÍWINNER!

About the Winner: The Founders District is building a 36-acre entrepreneurial environment that will include expansive commercial office space, modern multifamily housing, unique and experimental retail, and

The Cannon

Rebekka Glass, Joey Jurkash, Jeffrey Abel, Ken Harry, Cullen Burton, Laura Burdone

diverse food and beverage, all in a walkable, environmentallyconscious campus. The Cannon, the first completed phase, is the flagship of the campus. Since The Cannon’s debut in the summer

Project Team:

of 2019, the building has become home to more than 278

Ken Harry, Abel Design Group, Architect Josh Young, Burton Construction, Contractor

startups, including 500 of Greater Houston’s most talented and accomplished entrepreneurs, creatives, and small business owners. It is successfully putting Houston on the map in terms of innovation and entrepreneurship, categories that have historically evaded our city.

Mark Toon, Puma Development, Developer

Nick Fox, Texas Citizens Bank, Bancorp South, Lender Mark Toon, Puma Development, Broker Dave Clark, I.A.Naman + Associates, Engineer Britt Gardner, CJG Engineers, Engineer Robert Markley, Abel Design Group, Project Manager

ÍInfrastructure Buffalo Bayou Park Christine Allen Nature Park About the Winner: With the leadership of Houston’s Kinder Foundation as the project’s $30 million catalyst funder, Buffalo Bayou Partnership (BBP) joined with the City of Houston through the Houston Parks & Recreation Department and Harris County Flood Control District to transform the 160-acre Buffalo Bayou Park.At the core of the design efforts for the park was the goal of providing access and recreation opportunities for a broad cross-section of Houstonians to experience the unique ecological character of the site. In doing so, the park repositions the identity of the City to one that promotes healthy lifestyles and embraces its unique physical relationship to the bayou system

ÍWINNER! Buffalo Bayou Park Trudi Smith

APRIL 2020

REDNews 2020 Awards Winners

ÍGeneral Contractor of the Year Arch-Con Corporation Angler Construction About the Winner: Arch-Con is proud of our 182 employees, our largest employee base to-date, and all we have achieved in 2019. Together, we celebrated our largest revenue to-date at $512 million • 61 active projects • $434 million in current backlog • 17,924,997 square feet under construction • The largest revenue year-to-date for our Dallas office • Building our first Los Angeles project • Promoting

ÍWINNER!

20 employees • Completing our largest multifamily project todate and breaking ground on an even larger multifamily project • Building our largest build-to-suit industrial development

Arch-Con Corporation

Michael Scheurich, Michael Vaughn, Maria Sanchez, Ruben Garcia, Patrick Berlshofer

ÍMost Significant Sale Transaction The Woodlands Towers at the Waterway SWN Sale/Leaseback Micha Van Marcke Retail Transaction Houston: Weiser Airpark About the Winner: On December 30, 2019, The Howard Hughes Corporation acquired 1.4 million square feet across two Class AAA office towers- rebranded The Woodlands Towers at The Waterway along with warehouse space and developable land in The Woodlands, Texas, from Occidental, providing Howard Hughes with highly sought-after, premium office space that will enable the company to meet ongoing demand in the market. The acquisition increases Howard Hughes’ office portfolio within the awardwinning master planned community by approximately 50% and reinforces the company’s standing as the community’s steward and largest stakeholder.

ÍWINNER! The Woodlands Towers at the Waterway

Kim Phillips, Nancy Fairfield, Paul Layne, Lorrie Parise, Theresa Terrell

APRIL 2020

REDNews 2020 Awards Winners

ÍEmerging Leader of the Year Ashley Casterlin, Davis Commercial Micha Van Marcke, Edge Realty Partners LLC

Janie Colin Rodriguez, Tarantino Properties, Inc. Taucha Hogue, Newmark Knight Frank About the Winner: I am a Houston born native and have lived in the inner loop all of my life, a true city girl! I have over 15 years of marketing real estate experience and in the last 7 years, I have held the position of Marketing Director for Tarantino Properties. My 2019 highlights and accomplishments include graduating with an MBA in Sales and Business Development from UH, an achievement that has transpired in developing exemplary practices for my professional career. In the last year, I have successfully marketed over 70 retail, industrial and office properties totaling 4 million square feet throughout Texas. As our company grows and acquires new properties, my responsibilities increase and I am responsible for developing a marketing plan that will be effective for the new acquisitions and their individual demographics and uniqueness.

ÍWINNER! Janie Colin Rodriguez, Tarantino Properties, Inc.

ÍBroker of the Year Brandon Clarke, CBRE Reed Vestal, Lee & Associates – Houston Micha Van Marcke, Edge Realty Partners LLC About the Winner: I have been blessed to be in a partnership with some of the most experienced and creative brokers in Houston that have spent numerous hours of investment in my development. I am also surrounded by the best teammates in the business. I do not look at this award as individual merit but collective gain for CBRE and our Team. Without the support of our incredible cast and crew, our clients would not receive the excellent outcomes sought and I surely would not be nominated by our company for such a wonderful award.

ÍWINNER! Brandon Clarke, CBRE

APRIL 2020

REDNews 2020 Awards Winners

ÍArchitect / Engineer of the Year Ashley Frysinger, Kimley-Horn Jake Donaldson, Method Architecture About the Winner: Ashley Frysinger, P.E. has been a leader in Kimley-Horn’s Houston office since her move from Dallas in 2013. In her 20 years at Kimley-Horn, she has worked on a variety of land development projects, ranging from healthcare and residential developments to office and retail. Most notably, she has grown the firm’s singlefamily practice in Houston to include over 1000+ acres of development. In 2019, she was the President of Commercial Real Estate Women (CREW) Houston and is currently transitioning into her new role as Immediate Past President, completing her threeyear term as part of the organization’s leadership team

ÍWINNER! Ashley Frysinger, Kimley-Horn

ÍDeveloper (Individual) Steve Radom, Radom Capital, LLC

About the Winner: We had a busy 2019 - on the property front: Our Heights Mercantile development was awarded a ULI Development of Distinction Award. Across the street, we completed the renovation of 727 Yale, an industrial warehouse we converted into the new home of local maker consortium Forth & Nomad. We commenced construction on 707 Yale, a ground up 2-story building that will deliver in Q1 2020, and 733 Yale, a historic bungalow we are converting into a retail store in early 2020.

ÍWINNER! Steve Radom, Radom Capital, LLC Steve Radom of Radom Capital, LLC

APRIL 2020

REDNews 2020 Awards Winners

ÍIndustrial / Manufacturing / Science IDI West Little York

Lockwood Business Park – Building 2

ÍWINNER!

About the Winner: Lockwood Business Park – Building 2 is a heavily landscaped, modern industrial building that elevates flex industrial products in an office-like setting. The building touts 124,800SF of space in the heart of Lake Houston's Generation Park, located along the Northeast corner of Beltway 8. Generation Park is a growing mixed-use development with a lifestyle & entertainment district (Redemption Square), numerous corporate headquarters, light industrial zones, schools & luxury apartments.

Lockwood Business Park – Building 2

Jason Lantier, Jake Donaldson, Levi Hemmes, Mike Murphy Project Team: Levi Hermes, McCord Development, Project Manager Jake Donaldson, Method Architecture, Architect Mike Murphy, Burton Construction, Contractor Jason Lively, Woodforest National Bank, Other

ÍRetail / Restaurant Buffalo Bayou Brewing Company Garden Oaks 365 The Village at Riverstone The Market at Springwoods Village

ÍWINNER!

About the Winner: Buffalo Bayou Brewing Company is the newest gem in the Houston craft brewing scene. Located next to The Silos at Sawyer Yard in the Washington Avenue Arts District, this 28,000 square foot, 3-story brewery and restaurant has become a social hive for

Buffalo Bayou Brewing Company

Nick Kapple, Jason Lantier, Jake Donaldson, Keith Holley, Ashley Bettcher, Kimberley Terry

craft beer drinkers and foodies alike. Upon entering the brewery, you’ll pass through a unique archway featuring a cutout in the shape of a buffalo head – a portal to transport you into this craft

Project Team:

beer wonderland. As you enter the main level, you’ll find a

Steve Gibson, Western-General, Developer Jon Deal, The Deal Company, Developer Lance McIntyre, DMAC Construction & Development, Contractor

taproom with open views directly into the working guts of the brewery with towering steel vats and brewing apparatus.

Jake Donaldson, Method Architecture, Architect Rassul Zarinfar, Buffalo Bayou Brewing Co., Owner

Kenneth Bryant, H2B, Inc., Engineer Wes Daoust, Dawson Van Orden, Engineer Gin Braverman, Gin Design Group, Other Pete Dean, Pinnacle Structural Engineering, Engineer Ed Wong, Wong & Associates, Other APRIL 2020

REDNews 2020 Awards Winners

ÍMost significant Lease Transaction Conn’s Rankin Road About the Winner: Conn’s Home Plus leased a new 656,658-square-foot build-tosuit regional distribution center and took possession of the space in July 2019. NKF’s Executive Managing Director Rob Stillwell and Senior Managing Director Chris Malherbe represented Conn’s Home Plus in site selection and the lease transaction, which was one of the largest industrial lease transactions completed in the Houston area at the time of execution. The Conn’s Home Plus lease represented nearly half of the quarterly average leasing activity for the North Houston submarket over the past eight quarters, at the time of its signing, according to NKF Research. Liberty Property Trust, an owner and manager of 7.8 million square feet of space metropolitan Houston, is the owner and developer of the distribution center.

ÍWINNER! Conn’s Rankin Road

ÍReal Estate Lawyer of the Year Abe Goren, Wilson Cribbs + Goren

Theresa Terrell, The Howard Hughes Corp Mason L Mote, Williamsburg Enterprises Ltd About the Winner: Theresa Terrell serves as Senior Associate General Counsel for The Howard Hughes Corporation and is primarily responsible for managing office lease negotiations across the company’s portfolio spanning the Houston, Las Vegas, Chicago and Columbia, Maryland markets. In 2019, Ms. Terrell handled the negotiation of over 200 leases and amendments for HHC, highlighted by the completion of four major leases totaling approximately 450,000 square feet for the company’s Trophy Class building in Chicago with marquee tenants including Jones Day, Regus No. 18, Perkins Coie LLP and King & Spalding LLP.

ÍWINNER! Theresa Terrell, The Howard Hughes Corp Theresa Terrell of the Howard Hughes Corporation

APRIL 2020

REDNews 2020 Awards Winners

ÍExecutive of the Year Paul Layne, The Howard Hughes Corporation Jim Casey, Trammell Crow Company Edna Meyer-Nelson, The Richland Companies Anthony Tarantino, Tarantino Properties, Inc. About the Winner: In October 2019, Paul Layne was named CEO of The Howard Hughes Corporation to execute the company's new Transformation Plan, comprised of three pillars: (1) a $45 - $50 million per annum reduction in overhead expenses, (2) the sale of approximately $2 billion of non-core assets, and (3) accelerated growth in the Company's core MPC assets. In his new

ÍWINNER!

role as CEO and Board Member Mr. Layne is responsible for strategically positioning the company's acclaimed commercial, residential and mixed-use assets to drive sustainable, long-term growth and value for company shareholders.

Paul Layne, The Howard Hughes Corporation Paul Layne of the Howard Hughes Corporation

ÍInterior Design The Cannon Crawford Law McDermott International Houston Trust DCR

ÍWINNER!

Bravery Chef Hall

About the Winner: Bravery’s 9,000 square foot space will be a curated platform with five restaurant concepts under one roof, each with their own chefowners and dining experiences. Like the food hall model, each curated concept will be separately owned and will sign a lease for space within the chef hall. The food will be complemented by Bravery’s own extensive beverage operations which will include a wine bar, cocktail bar, and a patio bar that will serve both an evening crowd and weekend brunch. Bravery opened in July, 2019 as the anchor retail tenant at the new Aris Market Square.

Project Team: Jake Donaldson, Method Architecture, Architect Anh Mai, Silent Theatre Group, Owner Chris Harren, Hines, Developer Nicholas Badke, KCI Technologies, Engineer

APRIL 2020

REDNews 2020 Awards Winners

Ă?Woman of the Year Edna Meyer-Nelson, The Richland Companies

Lispah Hogan, Newmark Knight Frank Stephanie Swanson, Transwestern Jill Nesloney, Lee & Associates Tami Pearson, Waterman Steele Real Estate Advisors About the Winner: A 30-year commercial real estate veteran and tenant advisory specialist, Lispah Hogan, executive managing director at Newmark Knight Frank, has extensive experience in numerous regions throughout the southern United States, particularly in Texas and Louisiana, where she has completed more than 23 million square feet of transactions. Ms. Hogan is excellent at working with clients to strategize about their real estate holdings. She helps clients divest interests, execute sale-leasebacks of existing buildings to provide capital, as well as identify new spaces to lease. Her insight into the market is what ensures she keeps long-term client relationships. This past year Ms. Hogan was involved in an over $300 million sale/leaseback of an office building for a long-time client.

Ă?WINNER! Lispah Hogan, Newmark Knight Frank

Lifetime Achievement Award

John Walsh and Family

APRIL 2020

WE BUILD THIS B U S I N E S S . C O N N E C T I O N S . D I V E R S I T Y. S U C C E S S . CREW Austin is advancing the commercial real estate industryâ&#x20AC;&#x2122;s most talented and connected business professionals. The CREW Network Convention is coming to Austin, Sept. 15-17, 2020. For sponsorship opportunities, please contact Elena Cutshall: ecutshall@pagethink.com

JOIN US crewaustin.org

City Management APRIL 2020

Conroe, TX

Hwy 105 W & Tejas Blvd

Conroe, TX

Hwy 105 W & FM 3083

Houston, TX

B ELLAIRE C ROSSING 111 Travis Street, Houston Texas 77002

FM 1464 & Bellaire Blvd

PHASE 2 COMING SOON 40,000 SF

Waterfront Restaurant Available

Coming Soon! Q4 2020

End Cap Available COMMERCIAL DEVELOPMENT SH 105 WEST & WEST FORK BLVD CONROE, TX AUGUST 09, 2019

H o u s t o n , Te x a s

P h i l l i p C a ra m e ro s | ( 8 32 ) 937- 5 9 0 0 | p h i l l i p @ g o rd o n pa r t n e r s .co m

17339-02_RENDER-A

Houston, TX

Arlington, TX

Amarillo, TX

Hwy 290 & Jones Rd

7,600 SF Turn-Key End Cap Available

I-20 W & Green Oaks Blvd

Remodel Underway End Cap Available

Jr Anchor Available

Bell St & SW 45th Ave

APRIL 2020

P h i l l i p C a ra m e ro s | ( 8 3 2 ) 937- 5 9 0 0 | p h i l l i p @ g o rd o n pa r t n e r s .co m

REDnews Houston Industrial & Logistics Summit BY RAY HANKAMER

Industrial Real Estate Market Overview

Moderator: Debra Gilbreath, Dow Golub Remels & Gilbreath, LLP, Attorneys Panelists: David Hudson, Duke Realty; Kevin Sager, Eastgroup Properties; Charlie Strauss, JLL

Debra Gilbreath

David Hudson

• Regional distribution is overtaking oil & gas tenancy in Houston industrial space, and this is being driven by distribution of consumer items to growing population; in parallel, the Port has seen double digit growth in incoming containers • 1.3 million population growth in past ten years > new homes > new retail > need for product in brick and mortar stores, in addition to growth in eCommerce which now contributes about 13% of retail sales, and growing; eCommerce is about 35% of retail sales in China-is this where we are going? • I n addition to consumer eCommerce, we are seeing business-to-business eCommerce

• Oil & gas has shrunk to 35% of industrial tenancy; some manufacturing, labs, and assembly are coming back to US from other countries; nonspecialized buildings can be customized to many tenant uses; Covid-19 virus is exposing cracks in supply chains to China, causing companies to re-think maintaining their operations there • Houston is evolving into an international trade center, connecting ‘lots of little parts’ including physical warehouses, delivery to warehouses, delivery from warehouses, staffing of warehouses and professional office space in them

• I n addition to developer build-to suit and spec warehouses, we are seeing substantial owner-built/owner-occupied projects; some tenants are leaving older building when they become obsolete for them, creating redevelopment options for new tenants for the vacated space

• Warehouses are moving close to consumers in SW, W, NW, and N to moderate costs of ‘last mile’ delivery of goods, while industrial development in SE and S hinges on incoming freight from Port, and exports of plastics base products; ships bring consumer goods into Port and leave with plastic

APRIL 2020

Kevin Sager

Charlie Strauss

feed product exports, which is attractive to shipping companies; but some industrial tenants resist the temptation to move to new parts of town for fear of losing their trained employees in their existing location

• On the investment side, there is a lot of cash seeking a yield; cap rates are being compressed while developer costs are inching up; rental rates have been more or less flat for 12-13 years; Blackstone recently purchased a $30 billion industrial portfolio; cap rates which three years ago were in the low 5% range are now in the high 4% range; REITs are buying more one-offs since fewer portfolios are available • Current tenant demands include higher clear heights, moving from 32-24’ and now up to 40’ in some cases; with greater volume buildings can stack more product with fewer SF, but parking ratios have zoomed, some megawarehouses needing parking for 1,000 trailers and hundreds of employee cars; this affects impervious cover and increases detention and drainage ditch costs for developers

• Houston is far more affordable for industrial development than large cities on the ‘other coasts’, where entitlement also takes much longer before construction can begin; in Houston all the submarkets have light oversupply of space and vacancy overall here is in the 6-7% rate, which is not impacting developers-yet • There are no major barriers to entry to industrial development in Houston, compared to the rest of the nation; in addition to development going further out, some infill locations are becoming economic for redevelopment to be near consumers; Class B industrial is becoming attractive to some categories of users • Some companies are pulling back manufacturing from Asian countries to Mexico and even the US, in order to be nearer the customer and to avoid the shipping time and cost from overseas

The State of Industrial Development

Moderator: Alfredo Gutierrez, SparrowHawk Panelists: Charlie Christ, Clay Development & Construction; Robert Wheless, Logistics Property Company; Gary Mabray, Colliers

Alfredo Gutierrez

Charlie Christ

Robert Wheless

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• The market is still strong here, and it remains cheaper to develop space here than in other markets-rents have been level for last twelve years, although land prices which maybe 13 years ago were $0.50-1.00 SF now may be $5.00 SF…even then we are cheap compared to say Los Angeles area

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• Ship Channel / Port market has grown briskly; the number of industrial developers has increased steadily in our market over the years

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• T he average deal size here is 70,000 SF (50100,000 SF); cities are starting to be concerned about tenants’ operations, to make sure they are safe; fire code and other safety issues arise • Developer challenges are flooding, detention, drainage…following Harvey regulations have been evolving from the different governmental entities but getting entitlements here takes half or less as long as in other large cities

• Spec warehouses are built somewhat generically so that eventual tenant can customize as needed, as to lighting, amount of paved parking, dock amenities, etc., and then the question arises: does landlord or tenant pay for improvements? • Developers are being squeezed between rising construction costs and persistently flat rents; leases range from 3-20 years and lease term affects building desirability for investors seeking long predicable return

• Some parks have regional detention and drainage systems which helps the individual developer • Railroads now prefer unit trains with 90-100 car single product trains, and are loath to do switching of 2 or 3 cars to individual tenants… but there are intermediate firms which will do the switching, and in the Port and other terminal areas this service is provided for cargo

Gary Mabray

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Continued on Page 30> APRIL 2020

Industrial and Logistics Summit < Continued from Page 29

Emerging Trends in Logistics and Industrial Real Estate

Moderator: Dallas Hall, Allied Fire Protection Panelists: Bruce Mann, Port of Houston Authority; Keith Holley, Method Architecture; Regina Lindsey, Economic Alliance Houston Port Region; R.D. Tanner, Port of Houston Authority

Dallas Hall

Bruce Mann

• 80% of eCommerce in our area comes in through our Port, so we should not discount its role in the overall scheme of things: water to rail to truck is the formula here; then, there are 15-20 million consumers living across Texas within a four hour drive from Port of Houston; and the Port has received a noticeable bump in cargo since the widening of the Panama Canal; currently the width and depth of our Ship Channel is an impediment to the larger cargo ships; we are promoting the idea that Houston is a better and more centralized port than either East- or West-coast ports • Warehouses vacated by O&G users usually get repurposed/re-leased within twelve months; lots of new warehouse space is being devoted (converted to) freezer-cooler space for food imports • Port of Houston has 3,000 acres of developed land and 3,000 available for development, and continues to make major investments to accommodate increasing cargo flow; Port has rail-served and non-rail served land available

Keith Holley

•W e have gone from net importer of petroleum to net exporter, and Port has adapted; we now receive 35% of our cargo from Asia; billions of dollars of chemical plants have recently opened in the Houston region, or will open in near future, enhancing export potential, not to mention big boosts to local economies from 2-3 year construction periods and corresponding job creation • E xpansion of commercial and consumer deliveries is delayed during the 6AM-6PM time period when roads are congested, so deliveries are being planned in future for nighttime hours when roads are clear; other means of delivery are in the works, including autonomous vehicles and drones; also there is a growing need for refrigeration in delivery vehicles • Taxing authorities are now being paid taxes for eCommerce as amazon and others now have physical presence in every state; as for employment, about three jobs are gained in

Regina Lindsey

R.D. Tanner

eCommerce for every one job lost in a brick and mortar store

• Residential development is coming to E and SE as communities there try to balance out their land use; school districts belatedly are moving to vocational training to prepare employees for eCommerce jobs where new categories of employees are needed; college education is not for all, as we are finally realizing; today’s warehouses have many more employees than older warehouses did and need specialized workers • T he Grand Parkway is being expanded in SE and so is State Hwy. 225…this in addition to the rebuilding of I-45 will give Houston a ‘new look’ mobility-wise • Our Port is 20% of Texas economy, and Texas is the 10th economy in the world if it were a country, so by extension our Port is a proven major force in the world economy

Working With Local Governments To Build Lasting Product

Moderator: Robert Eckels, Husch Blackwell Attorneys Panelists: B.J. Simon, Baytown-West Chambers County EDF; Ryan Cramer, City of La Porte; Vince Yokom, Waller County Economic Development Partnership • Waller County in the past was resistant to growth and that has changed since residents have seen the strong tax base which can come

APRIL 2020

from industrial users who need to grow out of Houston; the County realizes now that high-paying jobs can come with industrial

development as well; the County has few drainage issues since it has slightly rolling terrain; a new rail-served park is in place; the

Robert Eckels

B.J. Simon

world’s largest cricket field is coming to Prairie View, emblematic of Houston’s diversity; the conversion from Ag land to industrial tax base can have a huge economic benefit to the County, and the residents have realized the difference this makes

• La Porte works diligently to balance needs of citizens with needs of industrial users, but available land is dwindling, and remaining tracts in some cases are being hoarded for future use as City Fathers try to get it into ‘best hands’; high tax base from industrial users enables highend services to local citizens; the City realizes that ‘time is money to developers’ and it makes

Ryan Cramer

available meet-ups where a developer can come and sit down with all City department heads in one meeting to determine the level of support for his proposed land use

• Storm surge and inundation was minimal in La Porte during Harvey; nonetheless attention is being given to future weather issues; a Tri-County cooperative effort has been established including Baytown and Chambers County after severe flooding in the Cedar Bayou watershed from rain and rising water which saw 6-8 feet of water invade a large industrial development which had been recently completed; the cooperative group is seeking regional, state, and federal dollars for

W E SAN N

Vince Yokom

future deluge and storm surge prevention, while pre-Harvey there was minimal cooperation

• A ll of the smaller communities in the Houston Metro area realize that we are all in the same economic unit and cooperation among everyone should be the theme of the day • Communities are exploring the use of TIRZs, PIDs, management districts, tax abatement schemes, and Enterprise Zones-alone and in creative combinations- to attract quality developments which will attract good jobs and add to the local tax bases n

MARCOS

SHOPPING CENTER • 26,000 sf retail facility • 1/4 mile from 135 • Excellent traffic count • Dense Population

NOW LEASING Opens Spring 2020

Retail • Office • Medical Service • Restaurant

512-396-4500 • www.millstreetcrossing.com APRIL 2020

CCIM Commercial Real Estate Forecast Competition – February 2020 BY RAY HANKAMER

Keynote Speaker: Mark Dotzour, PhD

We should have a solid economy ongoing in Houston and Texas, with a few ‘clouds’, such as election year uncertainty, China trade issues, and the Covid19 virus scare. Energy exploration and production will be curtailed due to lack of capital from investor/lenders, which should eventually lead to an upward trend in oil prices. Our current economic expansion is into its 129th month, and going strong. 2020 will be a little slower but consumer confidence and most other economic indicators remain strongly positive. Commerce is so interconnected on the planet that trade disputes will inevitably need to be worked out. Even if 2020 is a little slower, it should create pent-up demand for 2021. Wages are up about 3.5% a year, and lots of job openings remain, despite steady increase of hiring, which has been in the range of 200-300,000 new jobs per year in recent years. Housing starts are up and household debt is down; corporate profits are leveling off-companies did not reinvest savings from last tax cut but instead bought own stock. Unemployment claims are way down, and interest rates are low and going lower. It is a ‘given’ that we will have a recession in next five years but it is not on the immediate horizon.

Houston Industrial

Moderator: Nathan Gaines, Clark Gaines Properties Speakers: Alexander Reilly, Boyd Commercial and Walter Menuet, Jr., Colliers

Takeaway: Houston industrial has been tied traditionally to oil & gas, but that is changing. We are having unprecedented new deliveries of space, with 26-30 million SF under construction. Some are immense projects, over 500,000 SF each. Pre-lease rate of new construction has been in the 25-30% range, and there are 8 million SF of owner occupied distribution projects such as Ross Stores, Costco, Dollar Tree, Ikea, and more. Pipeline of new product includes 56 buildings by 30 developers. Development strong in SE, NW, N, and SW markets, and as far out as Chambers County. Finding suitable sites has become more and more challenging. Land sellers have achieved higher and higher pricing as high as $7-8 SF in some cases, as REITs and others compete for prime sites. Consumables for distribution, e-commerce, chemical and plastics have been primary drivers for occupying new space. With big supply in place and in the pipeline, free rent and other concessions are beginning to creep into the market. Flight to quality is leaving some older facilities vacant and open to upgrading where possible. • Sophisticated tenant-users need to hire engineers to direct their move-in and new space utilization

• Lots of investors are looking for Houston industrial deals and this demand exceeds supply at the moment

• A 540 acre Kansas City Southern rail play is in development as far away as El Campo, including warehouse space • Large players such as Prologis and Blackstone are buying up sizeable portfolios in the area

Houston Medical

Moderator: Davis Griffin, Trammell Crow Company Speakers: Nelson Udstuen, CBRE and Justin Brasell, Transwestern

Takeaway: Growing overall population in Houston area, coupled with aging and longer life expectancy explain overall growth in medical real estate, although there are minor headwinds, including rising real estate and rent costs, declining government reimbursements to physicians, and contract disputes between insurers and health providers. Nevertheless, healthcare real estate overall is thriving with the trend toward more patient-friendly medical professional buildings with more amenities, ranging from more natural light to valet parking. Class A space has reached above $30 SF to as much as $35. Tenant buildout in these facilities is very expensive and sometimes the landlord, reluctantly, chooses to add financial back-up to the cost of physicians’ suite buildouts. • Patients’ experience in the building is now paramount; older medical office buildings were more functional and less patient- and staff-friendly • “We are very bullish on MOB rental rates”…although depending on the specialty of the physician, some cannot pay the highest rates

• The Woodlands is seeing high rental rates, with its well-insured population, 32

APRIL 2020

and high quality construction

• West Houston has plateau-ed for the moment, but is still a strong market

• Inner Loop needs great facilities, but they are expensive due to high land costs • The Med Center market is super-expensive due to scant availability

Houston Office

Moderator: Bill Brownfield, Brownfield & Associates Speakers: Matthew Goldsby, Belvoir Real Estate and Marty Hogan, JLL

Takeaway: Houston is still recovering from its energy hangover, and at a much slower rate than many of us would like. We continue to have around 20-25% vacancy, and owners of older buildings are forced to upgrade buildings to keep pace with the latest amenities that are included in new buildings, and even large remodeling expenditures will not guarantee new tenants, but not to renovate is to ‘retire from competition’. Mild positive absorption is expected to continue throughout this year. • Rents and concessions remain stable

• Class A rates in CBD are in $44 range and about $32 SF in suburbs

• The office segment is bumping along bottom, and-if cautious-it is a great time to buy office buildings • Many existing leases made in stronger times have yet to come due, and

tenants will expect to renegotiate them at current (lower) rates

• The traditionally accepted ‘stabilization rate” of Houston office market is considered to be 85% occupancy, and we have a ways to go to reach that

• The Greenspoint market remains at 60% vacancy and it alone accounts for about 1% of the overall Houston market office vacancy rate

Houston Retail

Moderator: Ed James, Streetwise Retail Advisors Speakers: Christie Amezquita, SHOP Companies and Kristen Barker, Wulfe & Co.

Takeaway: Lots of activity and re-concepting of vacated big box lease spaces. Many retailers looking to expand to Houston market. Brick and mortar stores are not going away, but adapting to the eCommerce climate. This includes big department stores, which are hosting mini retail ‘pop-ups’ on their premises to test out new products, such as renting of high-end clothing. Fast casual concepts abound now in retail centers in food, fitness, entertainment (such as bowling and small movie houses), and other concepts. Newly vacated big spaces are actually welcomed by landlords who can often convert them into higher yielding tenants. Lots of ‘ground floor retail’ is going in under vertical multi-family and in mixed use developments, of which there are several under construction along Allen Parkway. European style density is happening with retail within walking distance of residential units. Increasing use of Uber and Lyft is reducing dependency on cars, which reduces parking ratios needed. • Retail follows rooftops, so development is under way in far-flung suburbs such as Fulshear, Richmond, and Magnolia, to name a couple

• Outdated indoor malls are being converted to outdoor malls, with big success • When large stores like Randalls, Bed Bath & Beyond, and Pier 1 close, landlords can actually better their income by subdividing the space or finding new tenants for the full space such as government offices and community colleges

• Medical service tenants continue to locate in drive up retail centers • Occupancy in Houston retail is in mid 90s

• E-Commerce is at 16% of total retail and may go to 25%, BUT onlineonly stores are beginning to open brick & mortar stores…think Apple, and Amazon buying Whole Foods…online sellers are feeling the need to ‘know their buyers in person’ through brick and mortar interaction

Houston Multi-Family

Moderator: Blake Willeford, Greystone Co. Speakers: Ryan Terrell, Greystar and Swapnil Agarwal, Nitya Capital

Takeaway: There are 28,000 units under construction, with 2/3 of these inside the Loop and in the West Houston suburbs. Absorption of 8,800 units is forecast. Class A occupancy is 86% and Class B about 92%. 52,000 units will sell to investors in 2020. Houston has had job growth but disappointing amount of white collar jobs, and the recent downturn in O&G has impacted multi-family absorption. There is growing interest in affordable housing opportunities. Rent growth will be nominal this year, about 1.8%. There are more and more vertical projects in Houston, with retail on the ground floor. Class C projects are seeing a higher rent growth, in the 4% range. There are some deals being attracted to Opportunity Zones. Election years give some uncertainty. • There is a lot of capital looking for the right deal, and Houston sellers are holding out for higher prices compared to other Texas cities.

• Investment funds are buying projects here with no or low leverage. Better rent growth is expected in 2021 as new supply slows.

• Projects are upgrading with slick amenities, such as keyless entry and iPhone apps controlling in-unity gadgetry. Owners are installing ‘whistles and bells’ to justify pushing their rates. Continued on Page 34> APRIL 2020

CCIM Forecast Competition < Continued from Page 33

Houston Land

Moderator- Bill Byrd, Colliers Speakers: Keith Edwards, Caldwell Companies and Taylor Schmidt, Lee & Associates

Takeaway: Many Houston fortunes have been made through investing in land, but careful due diligence is required. Are you buying unimproved raw land, or land which has already been prepared for immediate development? Is the location the best, considering demographics, growth projections, and area amenities? Are you buying tracts for residential or industrial use? Have you done the due diligence that your eventual buyer will also do, so that your tract will fit his needs? Houston large tract activity is following expansion of the Grand Parkway and the “Aggie Expressway”, which is the extension of SH-249. Increased accessibility/mobility usually leads to population growth and demand for land. “Pricing on industrial land is the highest I have ever seen.” • Houston’s population predicted to grow by 3 million in next fifteen years, which should continue to push land values higher

• Risks in land speculation include surprise government regulations such as detention requirements and other flooding related issues, or inability to plug into an existing MUD • There continues to be lots of activity in retail, multi-family, and industrial in the region, and all of course need land

• “We are all as busy as we have ever been” and activity should remain strong for at least the next two years • Detention requirements can suddenly be expanded from say 15% to 40%, or

government authorities can require donation of large drainage ditch rights of way-all of this increases the cost of the usable remainder of the site

• Shovel-ready sites are very scarce, and conversion of raw land to shovelready status is time-consuming and expensive • There are industrial parks going into Brookshire, Waller, Hempstead, Conroe, Richmond-Rosenberg, Crosby, Dayton, Liberty, & Sealy

• Single family developers look first for good school districts; industrial/ distribution users look for easy road access and sometimes rail

• We are seeing land development 360 degrees around Houston, and farther and farther out n

WE BUILD THIS B U S I N E S S . C O N N E C T I O N S . D I V E R S I T Y. S U C C E S S . CREW Houston is advancing the commercial real estate industry’s most talented and connected business professionals. JOIN US crewhouston.org

APRIL 2020

YOUR ENVIRONMENTAL BUSINESS PARTNERS RSB Environmental is a full-service environmental consulting firm, specializing in turnkey environmental solutions and environmental compliance. Our staff is the key to our success; you will find them professional, knowledgeable and genuinely interested in your company’s success. If you have environmental challenges or opportunities, we would welcome the chance to assist you in developing solutions regardless of how big or how small your company is.

SERVICES • Phase I, Phase II, and Phase III Environmental Site Assessments • Multi-Media Compliance Audits • Litigation Support Services/Expert Witness Testimony • Due Diligence Investigations for Corporate Acquisitions and Divestitures • Brownfields Assessment and Remediation • Soil and Groundwater Remediation System Design, Installation, Operation and Maintenance

MISSION

RSB Environmental is committed to providing effective, efficient and timely, environmental compliance, assessment and remediation consulting to business and industry – nationwide. This is achieved by seamlessly integrating environmental factors with business goals and objectives in order to provide our clients with practical options for environmental compliance and business success.

• Air Quality Permitting and Consulting • Storm and Waste Water Permitting and Consulting • Hazardous and Industrial Waste Management/Permitting • Federal, State, and Local Regulatory Negotiations • Environmental Training • OSHA Structural Design

Highlights of our qualifications are: • 7 business days turnaround for Phase Is in Texas, starting at $1450 • Professional Engineering Firm • Combined experience of more than 30 years in environmental consulting • Ranks No. 2038 on the 2019 Inc. 5000 fastest growing private companies in the America • Local project offices and experience nationwide and Headquartered in Houston, Texas. • Professional Liability Errors and Omissions Insurance (Meeting or exceeding minimum Industry Standard $1,000,000 per occurrence.)

6001 Savoy Drive, Suite 110 Houston, Texas 77036

832-291-3473 www.rsbenv.com info@rsbenv.com APRIL 2020

Real Estate Brokers: What To Do with the “Leftover Equity” in a 1031 Exchange Don’t let your client pay the tax! As a Real Estate Broker, do you ever have clients who do a 1031 exchange, secure a replacement property but find that the amount of the new acquisition leaves them short of the total exchange amount? Maybe they are short by as little as $50,000 to $100,000? In most cases like this the client ends up paying taxes on the remaining amount (Boot) of the 1031 exchange. However, in many cases they pay quite a bit more than the current 15% capital gains tax on that remaining amount. In fact, when you consider the recapture (of depreciation) that the IRS requires plus any state tax, it ends up being significantly more. There is another option to explore. Present them with an acquisition of the OTHER real estate, mineral interests. What are mineral interests? Like the surface real estate, mineral interests are a titled position recorded in the county clerk’s office, often in the same instrument. The difference is, mineral title conveys the rights below the ground.

What value do they have? It can be significant value, especially in states like Texas where Energy Companies extract oil and natural gas from below the surface and pay the mineral owners a royalty off the gross production. There are millions of people who own mineral interest in the United States and billions of dollars are paid out to them each year in the form of royalty payments. The U.S. is the only country in the world where mineral interests can be privately owned. How do they qualify as like-kind property? The good news is there are years of precedent and IRS rulings that qualify mineral interests for a 1031 exchange regardless of what type of real property was relinquished at the sale. Most Qualified Intermediaries have experience in these transactions and can help guide clients through the legal requirements of using minerals in an exchange. Do they run out? Oil and gas wells can produce for decades but will eventually deplete. However, the long-term value is held in the ground in the form of reserves. Additional drilling can occur to tap those reserves, at no additional cost to the mineral owner, which can extend the economic life of the property for generations. What are the options with this asset class? Like traditional real estate, the options are plentiful and can move up and down the risk scale the same way as surface assets. Our firm is one that focuses on acquiring producing mineral interests with long term reserves and excellent current cash flow. We believe a diverse portfolio of royalty interests to mitigate risk is the best option for real estate investors looking to defer taxable gains while generating monthly income and creating diversity within their exchange.

REC Annual Scott Walker Memorial Golf Tournament May 11, 2020 Ridglea Country Club

Visit our website for more info: RECouncilgfw.com

APRIL 2020

Other benefits of royalty interests are there are no capital calls, no liability exposure and no management responsibilities. It is simply mail-box money. Like every asset class, there are pros and cons to it, but before you let your client pay unnecessary taxes and forego a commission, help them understand how minerals and royalties can offer a solution for filling their 1031 exchange. Partnering with an experienced group in this space can introduce clients to an alternative asset class that can not only help them financially but set you apart from competitors that are unaware of this option. Dirk Todd President, Oak Tree Minerals, LLC Author: The 1031 Solution dirk@oaktreeminerals.com n

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Frank Biondo 713.661.6316 frank.biondo@rejournals.com

SCOOP The following pages contain a calendar of Texas CRE events, networking photos, and deals/announcements. For more updates, log on to REDnews.com

APRIL 2020

CENTRAL SOUTH TEXAS

Publishers Note: I recognize that some of these scheduled events will change due to the impacts of COVID-19. Please check with event hosts for confirmation. Thank you, Ginger Wheless.

APRIL

2020

Wednesday

2 Thursday

BOMA Austin - Membership Committee Meeting *Invitation Only [11:30am - 12:30pm]

17 Friday

IREM San Antonio - Certification Candidate Guidance Breakfast [8:30am - 10:30am]

IREM Austin - Future Leader Exclusive Event *Invitation Only [11:30am - 1:00pm]

20 Monday

STCAR - Board of Directors Meeting *Invitation Only [11:00am - 12:00pm]

IREM San Antonio - Luncheon [11:30am - 1:00pm]

6 Monday

BOMA Austin - Communications Committee Meeting *Invitation Only [11:30am - 12:30pm]

REDnews Newsletter [4:00pm]

9 Thursday

CTCAR - Property Information Exchange & Breakfast: "Property Tax Protests" [7:30am - 9:00am]

21 Tuesday

13 Monday

22 Wednesday

ULI San Antonio - 11th Golf Tournament & 19th Hole Happy Hour [11:00am - 5:30pm]

CREW Austin - Members Only Dine Around [5:00pm - 7:30pm]

15 Wednesday

IREM Austin - Spring Social [5:00pm - 6:30pm]

16 Thursday

23 Thursday 27 Monday

CCIM South Texas - Networking Luncheon [11:30am - 1:00pm] CREW San Antonio - PropTech: The Rapid Change in the Future of Commercial Real Estate [11:30am - 2:00pm] REDnews Newsletter [4:00pm]

CBA Austin - Luncheon with JLL [11:30am - 1:00pm] CTCAR - Governmental Affairs Committee *Invitation Only [2:00pm - 3:00pm]

CTCAR - TAR Commercial Contracts: In-Depth Analysis [9:00am - 11:00am] TABB San Antonio - Luncheon [11:30am - 1:00pm]

REDnews May Issue Deadline [5:00pm] IREM Austin - Luncheon [11:30am - 1:00pm]

ULI Austin - Breakfast [7:30am - 9:00am]

REC Austin - Luncheon [11:30am - 1:00pm]

REDnews Newsletter [4:00pm]

14 Tuesday

CREW Austin - Luncheon: Smart Cities [11:30am - 1:00pm] TABB Austin - Luncheon [11:30am - 1:00pm]

BOMA Austin - BOMI Course: The Design, Operation and Maintenance of Building Systems, Part 1 [8:00am - 5:00pm] ULI Austin - 11th Annual Marketplace [5:30pm - 7:30pm]

CREW Austin - New Member Orientation [10:30am - 11:00am]

28 Tuesday

ULI Austin - Luncheon with a Visiting Leader - Jane Page, Lionstone Investments [11:30am - 1:00pm]

BOMA Austin - Emerging Professionals Committee *Invitation Only [11:30am - 12:30pm]

29 Wednesday

CCIM Central Texas - Luncheon [11:30am - 1:00pm]

REC Austin - Charity Spring Swing [1:00pm - 5:00pm]

30 Thursday

BOMA Austin - Energy Efficiency Program Workshop (BEEP) [9:00am - 12:00pm]

ULI Austin - April Coffee Chat (Happy Hour Addition) [5:30pm - 7:00pm]

CCIM Central Texas - Luncheon with Steve Brown, editor for the Dallas Morning News [11:30am - 1:00pm] CREW Austin - Architecture Boat Tour hosted by CREW & AIA [5:00pm - 8:00pm]

APRIL 2020

REC Austin - Networking Happy Hour [5:30pm - 7:00pm]

BOMA AUSTIN: bomaaustin.org/ BOMA SAN ANTONIO: bomasanantonio.org CBA: cbaaustin.org/ CCIM CENTRAL TEXAS: ccimtexas.com CREW AUSTIN: crewaustin.org

CREW SAN ANTONIO: crew-sanantonio.org CTCAR: ctcaronline.com IREM AUSTIN: iremaustin.org IREM SAN ANTONIO: iremsanantonio.org

RECA reca.org RECSA: recsanantonio.com/ RETAIL LIVE: retaillive.com STCAR: www.stcar.org TABB AUSTIN: tabb.org/austin_chapter.php

TABB SAN ANTONIO: tabb.org/san_ antonio_chapter.php ULI AUSTIN: austin.uli.org ULI SAN ANTONIO: sanantonio.uli.org

what’s going on

CCIM Central Texas CI 101 instructed by Todd

e Park Low-Rise category BOMA Austin TOBY winner in the Suburban Offic III && II s Las Cima

REC Austin Kn ockO

rris has iana Ha bush, T ! ll o r Fur on a nald M. ustin is IREM A awarded a Do Scholarship! n n just bee EM Foundatio IR , ® M P C

Kuhlmann, CCIM in Austin, Texas

CREW Austin 's Amanda Aar on was promoted to Branch Execut ive for the Southstar Ban k Leander Bran ch.

Dr. Jim Gaines presented at CREW San Antonio

ut Night 2020!

APRIL 2020

last month.

NORTH TEXAS

Publishers Note: I recognize that some of these scheduled events will change due to the impacts of COVID-19. Please check with event hosts for confirmation. Thank you, Ginger Wheless.

APRIL

2020 1

Wednesday

CREW Fort Worth - Luncheon: Change for Multifamily [11:30am - 1:00pm]

16 Thursday

NTCAR - Office Academy [3:00pm - 6:00pm]

20 Monday

REDnews Newsletter [4:00pm]

23 Thursday

NTCAR - Industrial Tour: N. Fort Worth/Alliance Industrial [9:30am - 2:00pm]

REC of Fort Worth - 9th Annual Meeting [6:00pm - 9:00pm]

2 Thursday

CORENET North Texas - Black, White & Blue Awards Gala [6:00pm - 9:00pm]

6 Monday

REDnews Newsletter [4:00pm]

7 Tuesday

BOMA Fort Worth - Allied Council Meeting *Invitation Only [10:00am - 11:00am]

ULI North Texas - Center for Leadership Presentation & Recruiting Event [4:00pm - 6:00pm]

CREW Fort Worth - EmpowerMENT-CREW Network White Paper Discussion [5:30pm - 7:00pm]

TABB Dallas - Luncheon [11:30am - 1:00pm]

BOMA Fort Worth - Luncheon [11:00am - 1:00pm]

IREM Dallas - Servant Leadership with Dr. Debbie Phillips, CPM [4:00pm - 5:00pm]

BOMA Fort Worth - SAC Meeting *Invitation Only [2:00pm - 3:00pm]

BOMA Fort Worth - Top Golf Outing [5:00pm - 8:00pm]

8 Wednesday

TREC Dallas - FightNight XXXII [7:00pm - 12:00am]

IREM Fort Worth - Luncheon [11:30am - 1:00pm] BOMA Fort Worth - Volunteer Day [4:00pm - 8:00pm]

27 Monday

REDnews Newsletter [4:00pm]

13 Monday

REDnews Newsletter [4:00pm] REDnews May Issue Deadline [5:00pm]

28 Tuesday

BOMA Fort Worth - Board Meeting *Invitation Only [12:00pm - 2:00pm]

14 Tuesday

IREM Dallas - College Case Competition Luncheon [11:30am - 1:30pm]

29 Wednesday

ULI North Texas - Local Product Councils Present: What's New, What's NEXT [7:30am - 11:00am]

15 Wednesday

BOMA Fort Worth - Community Service Committee Meeting *Invitation Only [11:30am - 12:30pm]

30 Thursday

CCIM North Texas - Luncheon with Steve Brown, editor for the Dallas Morning News [11:30am - 1:00pm]

CREW Dallas - Luncheon [11:30am - 1:00pm]

APRIL 2020

CORENET North Texas - Women of North Texas Golf Clinic [2:00pm - 3:00pm]

BOMA DALLAS: bomadallas.org BOMA FORT WORTH: bomafortworth.org CCIM NORTH TEXAS: ccimconnect.com/ ccimnorthtexas CORENET NORTH TEXAS: northtexas.

corenetglobal.org CREW DALLAS: crew-dallas.org CREW FORT WORTH: crewfw.org GFWAR: gfwar.org IREM DALLAS: irem-dallas.org

IREM FORT WORTH: fortworthirem.org LADIES IN CRE: ladiesincre.com NAIOP: northtexasnaiop.com NTCAR: ntcar.org SCR: scr-fw.org

TABB DALLAS/FORT WORTH: tabb.org/dallas_ ft_worth_chapter.php TREC DALLAS: recouncil.com REC GFW: recouncilgfw.com ULI NORTH TEXAS: northtexas.uli.org

what’s going on

CCIM North Texas' university outreach progr am helping students and graduates achieve

s A Dallas' YP Bring Your Bos Big night at Eno's for BOM Happy Hour!

inCRE an #Ladies

d Hu

rk sters wo n g er B u

ing toge

their career goals.

nter Den Winners! REC Fort Worth Pa

ther!

TREC 2020 Yo Timothy Veler, CCIM, Dr. Jim Gaines, Howard Fuerst, CCIM – at CCIM North Texas' recent luncheon

ung Guns Ca sino Night

APRIL 2020

SOUTHEAST TEXAS

Publishers Note: I recognize that some of these scheduled events will change due to the impacts of COVID-19. Please check with event hosts for confirmation. Thank you, Ginger Wheless.

APRIL

2020 1

Wednesday

BOMA Houston - Foundations of Real Estate Management [8:00am - 4:00pm] BOMA Houston - Building Automation Seminar: Building Management Systems & IoT [11:30am - 1:00pm]

3 Friday

IREM Houston - CPM Certification Exam [8:00am - 12:30pm]

6 Monday

REDnews Newsletter [4:00pm]

8 Wednesday

13 Monday 14 Tuesday 15 Wednesday

BOMA Houston - Foundations of Real Estate Management [8:00am - 4:00pm]

BOMA Houston - Crawfish Boil [4:30pm - 8:00pm]

22 Wednesday

BOMA Houston - Foundations of Real Estate Management [8:00am - 4:00pm]

CREMM - M-K-T Hard Hat Tour [6:00pm - 8:00pm]

CREW Houston - Annual Distinguished Leaders Dinner [5:00pm - 8:00pm]

ACRP Gulf Coast - Breakfast [7:00am - 8:30am]

24 Wednesday

REDnews - Capital Markets Summit: Houston @ Briar Club [8:00am - 12:00pm]

27 Monday

CREW Houston - 19th Annual Houston Golf Classic [9:30am - 4:00pm]

30 Thursday

TABB Houston - Chapter Meeting [11:30am - 1:00pm]

REDnews Newsletter [4:00pm]

REDnews Newsletter [4:00pm] REDnews May Issue Deadline [5:00pm]

CORENET Houston - Breakfast Meeting [7:30am - 9:00am]

IREM Houston - Executive Council Meeting *Invitation Only [3:30pm - 4:30pm] BOMA Houston - Bank of America Tower [4:30pm - 7:30pm]

BOMA Houston - Foundations of Real Estate Management [8:00am - 4:00pm]

16 Thursday

BACREN - Luncheon [10:30am - 1:00pm]

20 Monday

IREM Houston - Golf Open [9:00am - 4:00pm]

FBSCR - Monthly Meeting [8:00am - 9:00am]

23 Thursday

C.R.E.A.M. The Woodlands - Luncheon [11:30am - 1:00pm]

9 Thursday

21 Tuesday

REDnews Newsletter [4:00pm]

APRIL 2020

The events listed are confirmed at the time of printing. Please make sure to check with the event host for any changes. For the full listing of events, visit REDnews.com.

ACRP: acrp.org BACREN: bacren.us BOMA HOUSTON: houstonboma.org CCIM HOUSTON: ccimhouston.org CETA: cetalliance.com

CORENET HOUSTON: houston.corenetglobal.org C.R.E.A.M.: creamtx.com CREN: crengulfcoast.com CREW HOUSTON: crewhouston.org FBSCR: fbscr.com

GREATER HOUSTON PARTNERSHIP: houston.org HAA HOUSTON: haaonline.org HRBC: houstonrealty.org HREC: houstonrealestatecouncil.org IREM HOUSTON: iremhouston.org

NAIOP: naiophouston.org O'CONNOR & ASSOCIATES: poconnor.com SIOR: sior.com TABB HOUSTON: tabb.org/houston_chapter.php ULI HOUSTON: houston.uli.org

what’s going on

p A Houston's To ns to our BOM ! ok Congratulatio Co k Champion, Mar

A nice turn-out at ACRP's “Kic

k-Off to Cook Off” Happy

Hour

CREMM Working

Shot

Together

lly, Nathan Ke ustee and Tr C B R H r, ank am e M em b er Emerson H BC Advisory Board IREM Ho HR usto Tammie n HH-Proper ty N CPM wit orris, ACoM wit Managers enjoy h Transw n h estern, S Shorenstein, N etworking: icole Fos heryl Gre te e n , CP M Proper t with Cam r, y Trust d en

Zieben Founder and CREN luncheon featuring Lee en Group! Zieb the of President

APRIL 2020

CENTRAL SOUTH TEXAS AUSTIN, TX Culture Map

PEARLSTONE PARTNERS BUILDING 103,000 SF OFFICE BUILDING

100,000 SF ROBOTICS ARENA TO BE BUILT

Austin-based Pearlstone Partners, in conjunction with New York-based ATCO Properties & Management, plan to build a 103,000 sf office building at 2700 E. Fifth Street. Groundbreaking is expected in the third quarter of 2020.

Robotters & Gensler are developing a 100,000 sf robotics arena to host robotic build challenges, drone races & other competitions. The development will include 30,000 sf of competition space, 35,,000 sf of spectator seating, 6,000 sf of lab space, 5,000 sf admin space & 9,000 sf of meeting, classroom & conference space.

Source: Levy Architects

TBA REPLACING OLD HEADQUARTERS

MIXED-USE DEVELOPMENT PLANNED

The Texas Bankers Association will demolish their existing headquarters at 203 W. 10th Street & build a ninestory,100,000 sf office building. Construction is expected to commence first quarter 2021.

Trammell Crow Company & High Street Residential plan to build a 280,000 sf mixed-use development at 2900 East Martin Luther King Jr. Blvd which will include 302 residential units as well as 68,000 sf of office & retail space. Construction is projected to begin June 2020.

Source: College Station, TX

NEW CITY HALL UNDER CONSTRUCTION

Rastegar Property Company purchased the 52,751 sf retail center located at 6607 I-35 North from WCRE Group, Inc. Source: Google Maps

HEWLETT PACKARD CAMPUS REVAMPED

BARTHOLOMEW BUILDING TO BECOME HOTEL Houston-based Trend Hospitality LP & William R. Franks have purchased the Bartholomew-Robinson building from the Texas Osteopathic Medical Association & plan to build a 12-story Motto Hotel by Hilton on the site at 1415 Lavaca Street. TECHNICA LEASES 12,900 SF Technica Corporation leased 12,900 sf at 913 Billy Mitchell Blvd from Port Authority of San Antonio. Newmark Knight Frank represented the tenant.

APRIL 2020

SAN ANTONIO, TX AACG LEASES 58,000 SF The Alamo Area Council of Governments leased 58,000 sf of office space at 2700 NE I410 as their new headquarters. CBRE represented the landlord & Newmark Knight Frank represented the tenant. ST. PHILIPS BUILDING NEW FACILITIES St Philip’s College is constructing a 55,000 sf recreation & wellness building & a 25,000 sf Bowden Campus Center. Construction is projected to be completed by July 2021. UT SAN ANTONIO BUILDING TRAINING CENTER

RASTEGAR BUYS RETAIL CENTER

Source: Texas Osteopathic Medical Association

COLLEGE STATION, TX

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The former Hewlett Packard campus located at 14231 Tandem Blvd on 52 acres is projected to be redeveloped with apartments, a hotel, & office buildings. No specific plans have been submitted to the city of Austin for approval at this time.

CEDAR PARK, TX BELL BOULEVARD DEVELOPMENT PLANNED RedLeaf Properties LLC has been approved for the development of Bell District, a 100,000 sf mixed-use project at 183A toll road & RM 1431 which is an older area of Cedar Park. The project is projected to include a public library, residential units & more than 100,000 sf of office & retail space as well as 16 acres of green space.

The city of College Station has broken ground on a $39.3 million, three-story city hall facility that will house 200 employees. Construction is projected for completion in 2022.

KYLE, TX ENDEAVOR EXPANDING KYLE TOWN CENTER Endeavor Real Estate Group plans to construct retail, office & apartments as part of the Kyle Town Center’s 65 acre mixed-use development. Currently Home Depot & EVO Entertainment are anchors for the development.

LEANDER, TX 500 HOME DEVELOPMENT PLANNED SEC Planning LLC will develop Horizon Lake, a 201-acre project, with 500 single family homes & 75,000 sf of retail & office space. The project will have 89.5 acres of parkland.

The University of Texas at San Antonio has started construction on a 95,000 sf athletic training center on 11 acres on Babcock Drive near the southwest corner of the university's campus. Completion is expected for summer 2021 BORDEN DAILRY TO BE REDEVELOPED The 70,000 sf Borden Dairy plant located at 875 Ashby Place has been approved for redevelopment to 55,000 sf of office space with the remainder retail & event space. Embrey Partners & Area Real Estate will start renovation July 2020 with completed projected for July 2023. 1.8M SF LA CANTEERA TOWN CENTER BREAKS GROUND Cambridge Development & USAA Real Estate have started development on the 1.8 million sf La Cantera Town Center located adjacent to the Shops of La Cantera. Phase One will include an outdoor amphitheater, trail system & two parks. Future phase will include a 100-unit senior-living community.

TEMPLE, TX BAYLOR SCOTT & WHITE BUILDING ONCOLOGY CENTER Baylor Scott & White is developing a 27,000 sf oncology facility adjacent to its Vasicek Cancer Center at 2401 S. 31st Street. Completion is projected for summer 2021.

NORTH TEXAS Trey Caldwell has joined The Multifamily Group (TMG)

bulletin Karla Smith has joined SRS Real Estate Partners as a senior vice president.

Bo Bond & Ali Greenwood have joined Cushman & Wakefield as executive managing director & executive director, respectively.

Randy Cooper, Dan Harris Craig Wilson, Kate Sudol & Wills Bauer have joined Stream Realty’s office tenant team in Fort Worth.

CARROLLTON, TX

DESOTO, TX

$300M MIXED-USE PROJECT PLANNED

ALLIED STONE LEASES 226,000 SF

Namhawk LLC is planning its first project which is a $300 million, mixeduse development on 11.2 acres between North Broadway Street & I35 on both sides of Dickerson Parkway. The development will include an apartment project with ground floor retail & an office building in the first phase. The Ratliff Group LLC will be program manager for the development.

Allied Stone Inc leased 226,000 sf at 1240 Centre Park Blvd. Matt Dornak & Drew Feagin with Stream Realty Partners represented the landlord.

DALLAS, TX

HARWOOD NO. 12 PLANNED Dallas-based Harwood International is planning to build a 40 story, 500,000 sf office building on a 1.27 acre parking lot between Caroline, Payne & North Fields Streets. MIXED-USE PROPOSED FOR EAST LEVEE STREET Barrow, Hanley, Mewhinney & Strauss LLC’s Mark Biambrone recently purchased his fifth property along the 1100 & 1200 blocks of East Levee Streets which totals more than 2.5 acres. The area has been zoned to include density of up to 20 stories & mixed-use is projected for the property. WINDMASS BUYS 1,656 MULTI-FAMILY UNITS Dallas-based WindMass Capital Partners purchased the Beacon Hill & Vineyards at the Ranch apartment projects located near Skillman Street & I635 which includes 1,656 apartment units. Taylor Snoddy, Philip Wiegand & James Roberts with NorthMarq represented the seller & Steve Whitehead & Will Hancock with NorthMarq handled debt & equity for the sale. .

EL PASO, TX

IDI BUYS INDUSTRIAL PORTFOLIO Equity Industrial partners & Raith Capital Partners purchased the IDI Logistics industrial portfolio & the Hanson industrial portfolio which includes a total of nineteen industrial buildings in El Paso & New Mexico with approximately 2 million sf of space.

FARMERS BRANCH, TX MORH CAPITAL BUIYS OFFICE BUILDING Mohr Capital purchased the 12-story, 200,000 sf office building located at 4851 LBJ Freeway from Dallas-based Champion Partners. CBRE handled the transaction.

FORT WORTH, TX 169 ACRES SELLS

Jackson- Shaw purchased 169 acres at the intersection of Altamesa Blvd & Campus Drive for the development of a 2.2 million sf project to be known as 46 Ranch Logistics Park. The first phase of the development will include a 560,000 sf Class A industrial project which is expected to be completed by first quarter 2021.

from Saudi Arabia-based SEDCO Capital. The building is currently leased to Galderma Labs. JACKSON-SHAW DEVELOPING LOGISTICS PARK Jackson-Shaw plans to build a 2.2 million sf logistics park on 124 acres near the intersection of Campus Drive & Oak Grove Road. The first phase will include 560,000 sf in three buildings with construction expected to begin in June & completion second quarter 2021.

FORT WORTH/WILMER/ LANCASTER, TX

WPT INDUSTRIAL BUYS 26-PROPERTY PORTFOLIO Toronto-based WPT Industrial REIT purchased three North Texas warehouses as part of a 26-property, $730 million transaction. The Texas properties included 2101 Reeves Place & 4800 N. Sylvania Avenue in Fort Worth & 201 S. I45 in Wilmer which total over 1.7 million sf. The acquisition also included 84 acres of land at the corner of Millers Ferry & Lavender Roads in Lancaster. The seller was Toronto-based Pure Industrial Real Estate Trust.

FRISCO, TX

ADDUS HOMECARE LEASES 75,000 SF Addus HomeCare Corporation is relocating its office to just under 75,000 sf at the newly built Office Two at Frisco Station located at 6303 Cowboys Way.

IRVING, TX

MACFARLAN CAPITAL BUYS OFFICE PROPERTY

ADVENTUS REALTY BUYING OFFICE BUILDING

Dallas-based Macfarlan Capital Partners purchased a 170,000 sf office/industrial property located at 14501 N Freeway

Vancouver, British Columbia-based REIT Adventus Realty Services Inc has purchased the 18-story, 415,123 sf

office building, The Point at Las Colinas, located at 300 E. John Carpenter Freeway. The seller was Fortis Property Group & the sales price was projected to be approximately $245/sf. 2.4 MILLION SF DFW PARK 161 UNDERWAY Perot Development & Invesco Real Estate have started the first phase of their 2.4 million sf DFW Park 161 logistics parks located along the George Bush Turnpike. The first phase of the development will include three spec warehouses totaling almost 1 milllion sf which are projected for completion by early 2021.

LEWISVILLE, TX

CROWN CENTRE BREAKING GROUND Bright Realty is ready to break ground on their 140-acre Crown Centre development at the southwest corner of SH 121. The project will have 2,000 apartment units, 3 million sf of office space & a 500-room hotel.

PLANO, TX

1 MILLION SF OFFICE PARK PLANNED Cawley Partners & Rosewood Property Company plan to build a 1 million sf multi-phase office park within Heritage Creekside, the master-planned community located at W. Plano Parkway & Custer Road.

RICHARDSON, TX

MYGRANT GLASS LEASES 93,079 SF Mygrant Glass leased 93,079 sf & Section Stack leased 31,458 sf at Parc NorthEast located at 2920 Telecom Parkway east of Bush Turnpike. Joshua Barnes with Holt Lunsford represented the landlord. APRIL 2020

SOUTHEAST TEXAS

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Avison Young has hired a seven-member office & industrial tenant representation team including Anthony Squillante Drew Coupe, Dustin Devine, Josh Morrow, Collin Roach, Jack Wagner & Michelle Goynes.

Bob Berry has joined Savills Inc along with a six-member team. The tea includes Executive Director Garrold Parratt, Corporate Managing Director Lesa Nickelson, and Managing Director Robby Winston.

BEAUMONT, TX

MISSOURI CITY, TX

BAKER KATZ BUYS RETAIL CENTER

LOGISTICS PROPERTY COMPANY DEVELOPING 1.7M SF

North Park Plaza, a 139,926 sf retail center located at 5870 Eastex Fwy, has been acquired by Baker Katz. Ryan West with JLL represented the seller, Weingarten Realty Investors.

HOUSTON, TX

Source: Trammell Crow Company

352,303 SF INDUSTRIAL DEVELOPMENT A joint venture of Trammell Crow Co and Clarion Partners has broken ground on the 352,303 sf Rankin 45 Distribution Center at 13800 North Freeway at Rankin Rd. Faron Wiley, VP and Joseph Smith, VP at CBRE are handling project leasing.

Source: Loopnet.com

ALPHALETE ATHLETICS BUYS CAMPUS Alphalete Athletics purchased an 87,700 sf corporate campus at 13927 South Gessner. ICO Commercial’s Peyton Easley and Andrew Kaskow represented the buyer while the seller was represented by Cresa’s Sue Rogers and Andre Granello. CLASSIC CHEVROLET BUYS INDUSTRIAL BUILDING Classic Chevrolet purchased a 49,100 sf industrial building located at 10000 West Airport Blvd. NAI Partners’ Chris Caudill and Griff Bandy represented the seller, SES Properties, while Re/Max Vintage’s Tiffany Sebastian represented the buyer. MICRO-UNITS WITH RETAIL PLANNED

RETAIL CENTER SOLD CF Investments LLC purchased a 108,700 sf retail center located at 10966 Grant Road from WP Norchester LP. David Luther with NewQuest Properties represented the buyer. DAVITA DIALYSIS BUILDING SOLD

Hunington Properties received a $38M construction loan from Los Angelesbased Parkview Financial for the development of an apartment complex/ retail. The 126,500 sf project is located at 1107 Shepherd Dr. Greystone Capital Advisors arranged the financing.

Westside Management LLC purchased a 14,500 sf Davita Dialysis facility located at 12606 Westpark Dr from NewQuest Properties. Kelly Workman from NewQuest Properties represented the buyer and David Luther with NewQuest Properties represented the seller.

PRODUCTION FACILITY PLANNED

WELCOME GROUP BUYS 117,000 SF

We Have a Solution LLC has acquired a 67,161 sf office/warehouse at 14211 Industry St. Skywalker Property Partners represented the buyer. The seller listed the property with JLL.

Welcome Group purchased a threebuilding complex totaling 117,000 sf at Sam Houston Parkway E and Highway 288. Welcome Realty’s Ryan Wasaff and John Wilson represented Welcome Group.

APRIL 2020

Texas Injection Molding purchased a 6.78 acre tract at 11015 Bay Commerce Drive from Wycoff Development Corp. Texas Injection Molding plans to build a 94,000 sf manufacturing facility at the location. INDUSTRIAL SALE/LEASEBACK

Source: Texas A&M University

TEXAS A&M BUILDING $550 PROJECT The Texas A&M University System will build a $550M complex in the Texas Medical Center near the corner of Main St and Holcombe Boulevard. The development will include two new towers & one renovated building. TARGET TAKING OVER RANDALL’S SITE Target Corp has leased 63,000 sf at 2075 Westheimer Rd, the former Randall’s storefront.

Logistics Property Company is developing a 1,700,000 sf business park near Beltway 8 & US 90. The first phase will include a 78,527 sf warehouse, a 176,319 sf & a 199,170 sf cross-dock facilty. At build out, the 97 acre park will include seven building. Phase One is projected for completion Q4 2020.

PASADENA, TX

DUNAVANT LEASES 137,300 SF Dunavant Distribution Group leased a 137,300 sf industrial building at Bay Area Business Park, 10619 Red Bluff Rd. The landlord was represented by Stream Realty’s Justin Robinson and Jeff Pate. The tenant was represented by Colliers International’s John Nicholson.

SPRING, TX

METRONATIONAL STARTS OFFICE PROJECT MetroNational broken ground on a 190,000 sf office tower in Memorial City at 9753 Katy Freeway. The building will have retail & restaurant space on the first level. TA REALTY BUYS EAST BELT BUSINESS PARK East Belt Business Park, a 350,000 sf industrial project located at 1455-1485 E Sam Houston Parkway, sold to Boston’s TA Realty. A JLL Industrial Capital Markets team led by Managing Director Rusty Tamlyn, Director Charlie Strauss, and Analyst Tom Weber marketed the property.

KATY, TX

VILLASPORT ATHLETICS OPENS VillaSport Athletic Club and Spa opened its third Houston location, a 130,000 sf facility at 9930 Gaston Rd.

Source: Loopnet.com

SPORTS COMPLEX SOLD Legends Sport Complex, a 100,000 sf facility located at 602 Pruitt Rd in Spring, was sold to Church Project. Jeff Beard, CCIM of the J. Beard Real Estate Company represented the seller. The buyer was represented by Kevin Barr of Mohr Partners.

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ray’s buzz BY RAY HANKAMER rhankamer@gmail.com

CCIM March Luncheon-Cost Segregation Strategies-Understanding the Details of Increase Cash Flow Speaker: Brian Bigham, Madison SPECS Takeaway: By taking advantage of IRS rules allowing for accelerating depreciation on the various components of a commercial building which have a shorter economic ‘life’, developers and investors can increase their cash flow/ROI. Brian Bigham

•C ompanies specializing in cost segregation studies can help developers show potential equity investors how their returns can be maximized, before they invest

• T his cost segregation strategy can be employed by individuals, estates, corporations, partnerships, and LLCs

•C ost segregation front-ends tax losses by classifying everything in the building: chattels, carpet, light fixtures, etc., and assigning an economic life to them, and then amortizing each of them over that life

• T here was a special limited term act passed in 2017 called “Bonus Depreciation” that increased benefits to property owners even more than the basic Act allowing cost segregation which was passed in 1987

• L and is excluded and is not depreciable

• T he age of the building does not matter-what does is the year in which it is acquired-cost segregation can begin then on it and on capital improvements installed by the new owner-so the formula becomes: Buy, Renovate, Hold for appreciation, and Sell

•D ifferent categories of assets may be depreciated over 5, 7, 15, 25, or 39 years •S avings can be reinvested in other real estate ventures, by rolling them forward into new deals

•C ost segregation can even be applied retroactively

on a building some years following its acquisition • T here is schedule of recapture of depreciation due upon sale of the building, but the owning entity comes out way ahead compared to just taking straight-line depreciation on the entire value of the asset •D ue to the specialized experience required in categorizing all the different and minute components of a building and carefully assigning each of them ‘depreciable lives’, the speaker said ‘this is not something just to hand over to your CPA’ • T he studies are customarily performed on a fixed fee basis, in the $4,500 range, and not on a percentage or sliding scale

O’Connor Hotel Forecast Luncheon Speaker: Rahul Bijlani – CBRE

Rahul Bijlani

Takeaway: The slowdown in oil & gas around 2014 crimped hotel operating results in the Houston Metro area, in some submarkets more drastically than others. Hurricane Harvey gave an occupancy boost that saved some owners from default. Room night demand has remained flat to slightly up during the last six years or so, but non-stop arrival of new supply of rooms has tempered any real growth in REVPAR (revenue per available room), a metric of hotel performance. Going forward, REVPAR should improve as new development moderates, barring any unforeseen negative events. Some buyers are acquiring Houston hotels now since the price per room is at a favorable place relative to replacement value. Absent unforeseen events we are looking at a stable and slowly strengthening market.

• T here is cautious optimism among local hotel owners overall, although with at least ten ‘downtowns’, the large Houston METRO area has many different individual sub-markets, each with a different set of dynamics (to be summarized later in this article)

•N ew supply is driven not always by hard business statistics but often by the sheer availability of abundant equity seeking a return and by the willingness of lenders to loan money at historically very low rates, not to mention eagerness and optimism of owners

• T he Covid19 virus could have a negative effect on hotel occupancy, since there are many unknowns regarding it, and hotel occupancy depends on incoming flyers to Houston, from national and international points of origin

•N ew supply growth is influencing REVPAR now more than demand growth…that ratio should change as new rooms supply begins to moderate

•H ouston is mostly a business destination, with some sub-markets such as the CBD attracting more leisure travelers than others •O verall the projected job/population growth should drive future REVPAR up, but pain will be inflicted on older hotels by the new supply coming online 50

APRIL 2020

• T he hotel industry suffers from overbuilding nationwide as franchisors push new brands •O pportunity Zone tax laws are encouraging new development • T here can be a many months lag time between the announcement of a new hotel development and the actual opening of its doors for business, during

which the supply/demand dynamics may have shifted • T he Houston hotel market generally follows the national market in its cycles, with occasional exceptions • T here have been steady sales of hotels these last years across the Houston market, for a wide variety of reasons: some stress sales, and some sales by successful owners taking their profit •2 020 should see hotel room demand returning to pre-2014 levels •H ouston in general offers very competitively priced hotel rooms to individual and leisure and convention travelers, making our city a highly competitive destination when compared to other large cities in the U.S.

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