October 2019 REDNews Magazine by RE Journals

OCTOBER 2019

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE

Corridor Cooperative:

Missouri City works together

1031 DST & Me:

An Investment Tool

Keyed into Houston: Custom Maps

Cane Island:

Last Parcel Snagged

For more information, see page 12.

CARTWRIGHT RD - 23,613 CPD

NORTH HOUSTON

LAND SITES

Located approximately three miles west of I-45, both sites are positioned to serve a variety of users with access to The Woodlands, Houston Intercontinental Airport, Kingwood and Champions.

±13 Acres | TC Jester, north of FM 1960

±9.94 Acres | FM 1960 & Welcome Ln.

±13 acres located on TC Jester Blvd., one block north of FM 1960, in Northwest Houston

±9.94 acres of land, located directly on FM 1960/Cypress Creek Parkway, the most trafficked street in Northwest Houston.

Utilities through Northwest Harris County MUD 20, with adequate utilities to site

±13 AC.

KRISTEN MCDADE Senior Director T: +1 713 469 4509 kristen.mcdade@berkadia.com

±224’ frontage along FM 1960 & ±545’ along Welcome Ln.

±9.94 AC.

MATT DAVIS Associate Director T: +1 713 974 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

Market

Sales & Leases 1-3, 5, 7, 9, 11, 13, 16-19

Services Environmental 22, 35 Financial 11 Legal 11 1031 Exchange 13

Scoop

Events 24, 26, 28, 33, 36 Social 25, 27, 29 Bulletin 30-32

Features

Corridor Cooperative: Missouri City 8, 10 Coming Up on Cane Island 12 1031 DST & Me: 14 -15 Keyed in to Houston 20 RAY’S BUZZ CCIM & O’Connor Luncheon Recaps 34

OCTOBER 2019

GATEWAY TO THE GULF

105,326 2024 Population Projection in RTA

$76,958

2019 RTA Average Household Income

15.33%

City Population Growth 2010 - 2019

14 miles of frontage on the expanding Interstate 45 corridor, two major rail lines and quick access to deep water ports, major airports and Houston’s petrochemical industry. And, all of it is behind a hurricane protection levee.

SEE RTA DATA AT LMEDC.COM.

Schedule a tour with ALEX GETTY 409-938-9258, agetty@lmedc.com Tap into Galveston Island expanding tourism and cruise industries. Growing residential development with 8,000 new single-family homes $IB in local infrastructure improvements over next 10 years. Direct road access from I-45, SH 146, SH 3, FM 519 Pro business & offering creative development incentives. Seeking industrial support, clean manufacturing, pharmaceutical, hotels, grocery

WE MEAN BUSINESS.

� 15 miles south of Houston, 4 miles north of Galveston � Global shipping from air, road, rail and port � Traffic Counts at Interstate 45 & FM 1764 - 98,226 AADP � Federal Opportunity Zone tracts with 45 frontage

Letter from the Publisher

YOUR COMMERCIAL REAL ESTATE MARKETING SOURCE

PUBLISHER Ginger Wheless ginger@REDNews.com

EDITOR Margie Gohmert info@REDNews.com

Dear Readers,

STAFF WRITERS

ast month I shared the news that REDNews is now part of Minnesota-based Real Estate Publishing Corporation (REPC). Benton Mahaffey, Houston’s Managing Director, and I just returned from an exciting two days in Chicago, meeting with the entire REPC team. We discussed REPC’s historical successes publishing commercial real estate magazines covering 16 states, their production of over 100 CRE events per year, shortterm and long-term plans. I am excited to now offer you advertising and marketing products that reach a growing national audience. If you’re of the baby boomer era, you will probably enjoy learning what happened to Key Maps on West Alabama that we frequented for many years either for the purpose of updating our Key Map books or to purchase maps. Steve Hubbs purchased the company which is now located on Durham Drive and is still going strong on page 20. Read all about InSite Realty’s big plans for the parcel they purchased in Cane Island on page 12 and the City of Missouri City’s booming activity on pages 8 and 10. We’ll be recapping our September 24th Women in Real Estate event in the November issue so if you were unable to attend, you’ll have an opportunity to read a recap of wisdom shared by twenty of Houston’s CRE female leaders. On November 22nd, we’re hosting a NET Lease and 1031 Exchange event in Houston and on December 11th in Dallas, so be sure to get them added to your calendar! Happy Halloween!

Janis Arnold janisarnold1@gmail.com Ray Hankamer rhankamer@gmail.com Brandi Smith info@REDNews.com

MANAGING DIRECTOR Benton Mahaffey accounting@REDNews.com

EMARKETING DIRECTOR Sarah Evans Carter emarketing@REDNews.com

GRAPHIC DESIGN Corporate Imagination digital@REDNews.com

SALES 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

OCTOBER 2019

LANDFOR FORSALE SALE LAND

PRIME RETAILCOURT & LAND TRACTS AVAILABLE IN MISSOURI CITY, TEXAS COURT RD, MISSOURI CITY,TX TX77489 77489 RD, MISSOURI CITY, 6.69 ACRES FOR SALE LAND FOR SALE

LEASE 1500 -FOR 2100 SF FOR LEASE

1701 - 1799 TX PKWY, MISSOURI CITY, TX 77489

COURTRD, RD, MISSOURI CITY, TX 77489 COURT MISSOURI CITY, TX 77489

1701 - 1799 TX PKWY, MISSOURI CITY, TX 77489

MAJOR TENANTS

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+/- 6.69 AC

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• Total Price: $1,151,094.78 Total Price: $1,151,094.78 • Price ••PSF: Price$3.95 PSF: $3.95 • Lot Size: 6.69 AC • Lot Size: 6.69 AC • Located at the hard corner of Court Rd & • LocatedColumbia at theBlue hard corner of • Excellent for Mixed-Use, Restaurant, Day Care, Court Rd Columbia Blue Car & wash, Professional use, etc.) • Accessible to Fort Bend • ExcellentTollfor Mixed-Use, Restaurant, Day Rd & Hwy 90 Care, Car Wash, Professional use, etc.

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• Accessible to Fort Bend Toll Rd & Hwy 90 Frontage: +/- 883.04’ FT on Court Rd • Frontage: +/- 883.04’ FT on Court Rd Near Houston Community College, Niagara Bottling & Rich Products • Near Houston Community College, • Up Coming Development Projects Near Buy: Sienna GrandBottling (42AC of development), Niagara & Rich Products Gas Station (less then 1 mile from subject • Upcoming Projects property, MissouriDevelopment City Branch Library renovation & extension ($19.8 million project) & Nearby: Sienna Grand (42AC of develVeterans Memorial (preliminary phase) opment), Gas Station • •

Property Description • Base Rent: $1.35 SqFt/Mo • Excellent for Mixed-Use (Dental, Hair • NNN: $0.35 SqFt/Mo Salon, Restaurant, Fitness Studio, • Excellent for Mixed-Use (Dental, Hair Salon, • Base Rent: $1.35 SqFt/Mo • SqFt Available Min: 1,500-Max: 2,100 Learning Tutoring Center, Office) • NNN: $0.35 SqFt/Mo Restaurant, /Fitness Studio, Learning / Tutor • SqFt Available Min: 1,500-Max: 2,100 ing Center, Office, Bubble Tea etc.) • Accessible to Fort Bend Toll Rd & Hwy 90 • Upcoming Development Projects • Accessible to Fort Bend Toll Rd & Hwy 90 • Up Coming Development Projects Nearby: • Great Visibility Nearby: Sienna ( 42AC of • Great Visibility Sienna Grand (42ACGrand of development), • Ample Parking Gas Station (approx. 1 mile from subject • Ample Parking development), Gas Station +/6.69 +/-Access 6.69 • Easy Property), Missouri City Branch Library • Easy Access (approx. from subject Property) • renovation 1&mile extension ($19. 8 million

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project) & Veterans Memorial (preliminary phase)

For Additional Information

FOR SALE

FOR SALE +/- 0.5 ACRES For Additional Information

Danny Nguyen, CCIM

FOR SALE

Broker M - (713) 478-2972 O - (713) 270-5400 dannynguyen@dncommercial.net www.dncommercial.net

Independence Blvd, Missouri City, TX 77477 CITY, TX 77477 INDEPENDENCE BLVD, MISSOURI

TEXAS PKWY, MISSOURI CITY, TX 77489 Jessica Atwood

PropertyDescription Description Property

The information contained herein while based upon data supplied by sources deemed reliable, is subject to errors and omissions and is not, in any way, warranted by Danny Nguyen Commercial, or by any agent, independent associate, or employee of Danny Nguyen Commercial. This information is subject to change without notice.

TotalPrice: Price:$1,151,094.78 $1,151,094.78 Total Tract Tract 1 PricePSF: PSF:$3.95 $3.95 2 Price LotSize: Size:6.69 6.69AC AC Lot Locatedatatthe thehard hardcorner cornerofofCourt CourtRd Rd&& Located ColumbiaBlue Blue Columbia Excellentfor forMixed-Use, Mixed-Use,Restaurant, Restaurant,Day DayCare, Care, • • Excellent Carwash, wash,Professional Professionaluse, use,etc.) etc.) Car AccessibletotoFort FortBend Bend • • Accessible TollRd Rd&&Hwy Hwy90 90 Toll •• •• •• ••

TOTAL LAND +/- 12 AC TOTAL LAND +/- 12 AC 2 TRACTS TRACTS Tract 1 : +/- AC 26.85 • Tract 2 : +/- AC 5.16 Tract 1 : +/- AC 6.85

DANNYNGUYEN COMMERCIAL

Cell (832) 739-9353 JAtwood@DNcommercial.net

Office (713)270-5400 DNcommercial.net

The information contained he rein while based upon data supplied by sources deemed reliable, is subject to errors and omissions and is not, in m� Wl!)', ivmranted b)1 Dmmy Nguyen Commercial, or by any agent, independent associate, or employee ofDanny Ngr£yen Commercial, This information is subject to change without notice,

Frontage:+/+/-883.04’ 883.04’FTFTononCourt CourtRd Rd Frontage: NearHouston HoustonCommunity CommunityCollege, College,Niagara NiagaraBotBotNear tling&&Rich RichProducts Products tling UpComing ComingDevelopment DevelopmentProjects ProjectsNear NearBuy: Buy: • • Up SiennaGrand Grand(42AC (42ACofofdevelopment), development), Sienna GasStation Station(less (lessthen then11mile milefrom fromsubject subject Gas property,Missouri MissouriCity CityBranch BranchLibrary Libraryrenovation renovation property, extension($19.8 ($19.8million millionproject) project)&& &&extension • Veterans Price: $561,500 • Accessible to Fort Bend Toll Rd & Hwy 90 Veterans Memorial(preliminary (preliminary phase) Memorial phase) •• ••

• Land: Approx. 0.5 Acres • Located at the hard corner of Lexington Blvd & Texas Parkway

ForAdditional AdditionalInformation Information For

• Frontage on Texas Parkway • Near Houston Community College • Excellent for Mixed-Use (Retail, Restaurant, Professional, etc.) • Ample parking • Great visibility

FOR ADDITIONAL INFORMATION

Tract 2 : +/- AC 5.16 Danny Nguyen, CCIM

M - (713) 478-2972 O - (713) 270-5400 dannynguyen@dncommercial.net www.dncommercial.net

DannyNguyen, Nguyen, CCIM Broker CCIM DannyDanny Nguyen, CCIM Broker Broker

M (713) 478-2972 •478-2972 O (713) 270-5400 - (713)478-2972 MM- (713) - (713)270-5400 270-5400 OO- (713) dannynguyen@dncommercial.net dannynguyen@dncommercial.net dannynguyen@dncommercial.net www.dncommercial.net www.dncommercial.net www.dncommercial.net

The information contained herein while based upon data supplied by sources deemed reliable, is subject to errors and omissions and is not, in any way, The information contained herein while based upon data supplied sources deemed reliable, subject errors and omissions and not, in any way, information contained herein data supplied byby sources deemed reliable, is is subject to to errors and omissions and is is not, inchange any way, warrantedThe by Danny Nguyen Commercial, orwhile by anybased agent,upon independent associate, or employee of Danny Nguyen Commercial. This information is subject to without notice warranted Danny Nguyen Commercial, any agent, independent associate, employee Danny Nguyen Commercial. This information subject change without notice. warranted byby Danny Nguyen Commercial, oror byby any agent, independent associate, oror employee of of Danny Nguyen Commercial. This information is is subject to to change without notice.

Corridor cooperative:

How Missouri City leaders, developers and property owners are working together on new opportunities in the Texas Parkway/Cartwright Road corridor BY BRANDI SMITH One part of his solution was to team up with Pearson to launch the Texas Parkway/Cartwright Coalition. “The reason that I wanted to do this is because we wanted to hear directly from the constituents about the concerns or issues that they may have, as well as their wish list of things that they would like to see in the area,” Boney says. JEFFREY BONEY

DANNY NGUYEN

LOGAN HAVEL

REGINALD PERSON

So often when REDNews covers development in the suburbs, we’re highlighting growth in as-yetundeveloped areas. Think: massive master-planned developments, such as Grand Central Park near Conroe. However, many communities are reinvesting in existing areas. A key example of that is Missouri City, where city leaders are working with the real estate community to attract redevelopment and reuse.

The construction and/or expansion of Beltway 8, State Highway 6, US-59 and the Fort Bend Toll Road shifted traffic away from the Texas Parkway and Cartwright Road. For example, daily traffic on Texas Parkway totalled 32,137 in 2017. Texas Department of Transportation data reveals an additional 12,000 (44,712) traveled Highway 6 each day.

From his early memories of Missouri City, District A, City Councilman Reginald Pearson recalls a time when the corridor of Texas Parkway and Cartwright Road was the retail core of the community.

As traffic made a move away from Texas Parkway, so did retailers, such as Randalls, Kroger and Walmart.

“I’ve been in the community since 1991 and I can tell you that area had a movie theater, hardware store and some major retailers, including Walmart,” says Pearson. “It was basically the mecca of Missouri City at the time.” For decades before that, the intersection was the center of gravity for the bedroom community, which was “on the cusp of making the transition from a rural to a suburban community,” per Logan Havel, a broker with commercial real estate and development firm Read King. “In fact, when he retired from coaching and became a full-time rancher, Missouri City is where Bum Phillips decided to put down his roots and run cattle on over 2,000 acres,” says Havel, adding that the modern freeways we know so well had yet to be built. Times, as they do, changed and so did Missouri City. “Today, Missouri City is an amenity-rich community with award-winning schools and an all-around great place to live,” Havel says. 8

OCTOBER 2019

“People tended to gravitate toward Highway 6,” says developer Danny Nguyen of DN Commercial Real Estate. “For years, the area was underutilized because of the obsolete shopping centers. It looked old.” “Outdated” is the word Councilman Pearson uses to describe a lot of the retail properties in the corridor today. “It needs to be updated,” he says, echoing what he’s heard from his constituents. Pearson and District B Councilman Jeffrey L. Boney have made revitalizing the Texas Parkway/ Cartwright Road corridor a priority for the city. “I am passionate about it because I’ve heard the feedback from my constituents. I’ve heard the people say the same things over and over and over again. I don’t want our voices to be ignored, I don’t want us to have the same narratives used time and time again as to why redevelopment can’t happen,” Boney says. “We need to figure out ways in which we can make it happen.”

The wish list is a long one. In addition to retailers such as a wireless company and coffeehouse, as well as medical facilities, he says people who live in the area are hungry for more dining options. “We’ve never had a casual family dining location where families and individuals can go and have a nice sit-down meal,” says Boney, who built his home in the Quail Green subdivision nearly 20 years ago. “Many of those would-be customers have to go elsewhere to patronize those types of businesses instead of staying in their own neighborhood.” Nguyen, a former councilman himself, shares the goal of reinvigorating the area. “I want it to be fully developed because the people in that area deserve quality services and products,” he says. The veteran developer saw the corridor’s potential a decade ago when he bought property at 1655 Texas Parkway. “About three years ago, I was able to bring in Discount Tire. It opened in 2017 because of my effort, because I believed that one day Discount Tire would come to the area,” says Nguyen. He also owns a 65,000-square-foot building in the 1700 block of Texas Parkway, which he redeveloped. As a result, Nguyen has brought in retailers such as Citi Trends, Shipley Do-Nuts and Dollar General. “This area is underutilized and overlooked. It’s a great potential market. Developers and investors should take a bold step to put the money in and start to renovate, start to redevelop the market,” Nguyen says. “I believe in the project.”

Continued on Page 10>

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Corridor cooperative: < Continued from Page 8

So, too, does the team at Read King, which is marketing just more than 51 acres of raw land in the corridor. About 30 acres are zoned for residential, while the remainder is zoned for commercial.

The road is going to be widened so you’ll be able to make a legitimate U-turn without feeling as though your car’s going to fall off the side of the road,” Pearson stresses.

“The intersection of Texas Parkway and Cartwright, specifically, is a strategically located intersection that is completely surrounded by development and is prime for new first-class retail and new home development,” says Havel. “The strong demographics in the area, combined with excellent visibility, access, traffic counts, no floodplain issues, and favorable zoning means this site offers potential buyers a wide range of opportunities to develop a variety of product types and be successful.”

He says he’s also looking forward to the construction of a veterans memorial near City Hall on Texas Parkway. The city has been fundraising to get the project off the ground and hopes to reach its goal of $750,000 by the end of 2019.

While developers such as Read King and Nguyen are stepping up, a priority for Councilmen Boney and Pearson is addressing some of the eyesores in the area. Boney says the city is trying to work with those property owners to educate them about economic development incentives that would help them improve their product. “We try to explain to them that if they truly want to be a good community partner, they wouldn’t want, say, a strip center in this condition in their neighborhood,” says Boney. “We want them to treat us as they would want to be treated. The Golden Rule, you know?” Pearson says he’s heard constituents complain about the state of some properties, which he understands completely. Before he was elected to the city council, he admits he wondered if the city was even making an effort to clean up the area. He’s since learned there are limits to the steps the city can take. “We can’t fine property owners if their property doesn’t look nice. We can only fine if they’re in violation of something,” Pearson says. “We have been trying to work with these landlords and encourage them to do some things and holding them accountable. That’s been my priority since I joined the council.” Boney acknowledges, however, that responsibility doesn’t fall solely on the shoulders of property owners. “It takes all of us working together,” he emphasizes. “It takes the business owners, the property owners, the city staff, our leadership on council, the stakeholders, and the residents in the community. We all have to care enough about this area of town to make it a reality.” There are already signs of progress. In addition to the retailers Nguyen helped bring to the area and Read King’s property, Centex Homes is close to completing Mustang Trails, a 227-home development off Cartwright Road. The Quail Valley Shopping Center, which includes Foodarama as an anchor, has taken advantage of the city’s economic development incentives to improve its property, according to Boney. He also points to two senior housing projects that are under construction in the area. Pearson adds that there are a few parcels of property that are privately owned that are up for sale if developers or investors are interested. “There’s a lot of thriving economic development going on,” he points out. For its part, the city is stepping up its efforts as well. City leaders recently approved a $2.5 million beautification effort for the Texas Parkway/ Cartwright Road corridor. The project will improve the entrance to the parkway, update lighting and add landscaping. “I have to mention that we partnered with TxDOT to repair and improve turnaround spots. Right now, if you try to make a U-turn, you’ll fall off the lip. 10

OCTOBER 2019

The efforts of today will hopefully result in a brighter tomorrow for this part of Missouri City. REDNews asked Boney, Pearson, Nguyen and Havel how they would like to be able to describe the Texas Parkway/Cartwright Road corridor in 10 to 15 years. Here are their hopes: Councilman Boney: “I want it to be one of the key destination spots in Missouri City. Right now, little in the area is driving traffic. Development and redevelopment in the area will bring forth additional tax revenue for the city and potentially lessen the burden on residential property owners for years to come. So I’m excited about the area and what it’s going to look like in 10 to 15 years.” Councilman Pearson: “I would like to be able to describe it as having new life. It’ll be an updated, revitalized area of shops, businesses and entertainment. It will meet the demands of the community, providing the services that are needed.” Nguyen: “I’d like to see more new buildings, along with old buildings renovated in order to survive. Because of the pressure of survival, we’ll see some of older shopping centers step up and renovate because quality buildings will attract quality tenants. As a result, people who live in the corridor will have all the products and services that they need.” Havel: “Our hope at Read King is that in 10-15 years, the intersection of Cartwright and Texas Pkwy. is a regional hub that continues to not just meet the needs of the community, but provides shopping, dining, and experiences that bring the community together and enhance the quality of life for the residents of Missouri City.” If you can see yourself or your company as part of that vision, contact Joseph Esch at JosephEsch@MissouriCityTX.gov. n

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Coming up on Cane Island:

InSite Realty & Principal Real Estate Investors snag last parcel of West Ten Business Park BY BRANDI SMITH Building 2 is an 197,400 square foot building that features a cross dock configuration with dock-high loading and 32-foot clear height. It also has a flexible design suited for 1 to 4 tenants ranging from approximately 50,000 to 197,400 SF. Building 2 includes 22 trailer parking stalls as well as an acre of additional land that could be paved for more trailer parking or car parking if needed. InSite hopes to capitalize on the momentum of industrial distribution in the area spurred by several national and regional companies that are building or have already built large distribution centers in the area.

The Cane Island Parkway exit along Interstate 10 in Katy is tough to miss. A new Buc-ee’s, which boasts the world’s longest car wash, JOHN STAVINOHA RIVES NOLEN STEVE HAZEL draws a seemingly endless flow of traffic off the freeway. Less eye-catching to the casual traveler, but much more interesting to commercial real estate professionals, is what’s next door: West Ten Business Park, Parkside Capital’s 460-acre master-planned development. Parkside recently sold the final 17.26 acres of West Ten to Insite Realty, a Houston-based commercial real estate company, and joint venture partner Principal Real Estate Investors. “We were very excited to have the opportunity to buy this site,” says Rives Nolen, Vice President at InSite Realty Partners. Nolen went on to say, “It’s a well-established business park, and we think Parkside did an excellent job of creating an attractive corporate environment for businesses, clients and visitors. The park has direct access to and from Interstate 10 via the Cane Island Parkway interchange and offers an abundance of amenities, including new roads, utilities in place and attractive landscape features. It also offers convenient access to nearby restaurants, hotels, shopping and, of course, Buc-ee’s.” InSite and Principal hired Burton Construction to build the project and broke ground on two buildings in July. The 277,400-square-foot speculative distribution project called Cane Island Business Center is on track for shell completion in the first quarter of 2020. Building 1 of Cane Island Business Center is an 80,000-square-foot, dock-high, rear-load facility with 28’ clear height, 160-foot building depth with double row parking on the front side of the building “The building has a flexible design and can be divided easily,” Nolen says. “It’s suited for tenants anywhere from 8,000 square feet to the entire building and has frontage on Cane Island Parkway.” 12

OCTOBER 2019

“We know eCommerce is a big driver in generating demand for industrial space,” says Nolen. “But there’s also the growth of the entire Katy area. We think the rooftops and commercial development also fuels demand for the product that we’re building.”

Insite is very familiar with the Katy area, where it developed and owned office buildings, invested in land and helped clients with land acquisitions and industrial leasing. “The growth of the Katy area has just been phenomenal, so it’s a market that we’ve wanted to continue to be involved in,” Nolen says. People continue to flock to the community because of the quality of its schools, as well as the overall quality of life. The area is also benefiting from increased access via the Grand Parkway. “When you have that much growth, that many rooftops, you’re going to need some distribution space,” Nolen points out. “We are building a modern, professional and functional environment where we think companies will want to have a facility.” Katy’s city leaders have also demonstrated that they support development, offering incentives through the Katy Area Economic Development Council. “We’ve had great interactions with EDC President Lance Lacour,” Nolen says.

As construction progresses at Cane Island Business Center, Nolen, along with InSite colleagues John Stavinoha and Steve Hazel, are focused on finding tenants who will be the right fit for this promising project. “We really like the environment that Katy and West Ten offers,” says Nolen. “There are so many amenities for tenants that want to locate a facility here.”

For more information about Cane Island Business Center, contact Insite Realty at 713.339.1300 or visit www.insiterealty.com. n

About Principal Real Estate Investors

Principal Real Estate Investors manages or sub-advises $82.9 billion in commercial real estate assets (as of June 30, 2019.) The firm’s real estate capabilities include both public and private equity and debt investment alternatives. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.

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1031 DST & Me: The investment tool you need

to know about today BY BRANDI SMITH

When it comes to tools available for real estate investment, the options can be overwhelming. Every choice seems to come with stringent deadlines or severe limitations and, in some cases, both. Kay Properties & Investments wants to let investors know about an opportunity that seems to be flying under the radar. “A lot of people still don’t know about the 1031 DST structure,” says Dwight Kay, the company’s founder and CEO, who has published multiple white papers on the topic of DSTs as well as a book on the subject. After working for a national commercial real estate brokerage firm, Kay began focusing on 1031 exchanges, helping his clients move from management intensive properties, via the 1031 exchange, into more passive options. He started Kay Properties as a way to do that exclusively and has seen the company grow to 19 team members to date. “Business is booming,” Kay says. “Last year, we helped our clients purchase around $300 million-plus of investments in these 1031 DST vehicles.” So, what is a DST? It’s a Delaware Statutory Trust—a legal 1031 exchange structure through a trust that provides investors with a passive, diversified ownership opportunity. The IRS rules allow the DST structure as “like kind” for the purposes of a 1031 exchange under IRC Revenue Ruling 2004-86. “Our clients come to us because they are tired of being landlords. They are tired of managing their properties, yet they have a very real tax problem if they sell and don’t do an exchange,” says Kay. Over its history, Kay Properties has participated in more than $12 billion of DST real estate, providing the company with plenty of experience and know-how on the process that finally seems to be catching on in the real estate industry. “Even though it’s a part of the tax code, a lot of real estate professionals–CPAs, attorneys– they’ve never heard of it. They are not familiar with what is available with the DST structure,” Kay says. “Over the past ten years, more people are learning about it, so DSTs are growing in popularity.” He explains that in the past, his experience with many investors tended to go the triple net route, leasing their properties to tenants who are responsible for property 14

OCTOBER 2019

taxes, insurance and maintenance. That’s not a suitable choice for many investors who may have a net worth of, say, $5 million. Should they really be putting a major part of their net worth into one building in the middle of nowhere just because it has a long-term lease? “No,” Kay answers simply. “With DSTs, we’re able to provide a passive investment without the potentially disastrous concentration risk that buying one NNN property can potentially pose – think of the hundreds of dark dollar stores, video stores, book stores, electronic stores, grocery stores, etc.” He adds that DSTs are fully passive because the sponsor is the asset manager of the building, handling reimbursements from tenants and daily needs, repairing issues, processing rent and invoices, etc. “These are all tasks that a tenant might be responsible for in a traditional triple net, but, what many investors are unwaware of, are often a landlord’s responsibility to coordinate, then bill back to the tenant,” Kay says. “A DST really takes all that landlord activity out of the hand of the investor and puts it into the sponsors’ hand, so the investors now are in a much more passive situation and don’t have to deal with the tenants.” Another benefit of a DST is the opportunity to create a diverse portfolio of multiple properties. “Investors can take their $2 million and place, for example, $500,000 into a long-term net lease with FedEx at one facility, $500,000 into a 300-unit multi-family property in Austin, $500,000 into a multi-family property in Dallas, $500,000 into a portfolio of 3 multi-family apartment communities with a total of 1,000 units,” explains Kay. It’s possible to do that because each DST has already closed on those properties, which also expedites an investor's 1031 exchange whereby they can close

even prior to their 45 day identification window closing. The DST can also potentially provide a backup plan for investors as well. “A lot of investors are so focused on the property they are selling, they are not as focused on what are they going to exchange into,” says Kay. “Once they close, they talk to their CPA and find out a substantial portion of their sale is going back to Uncle Sam unless they go into a 1031 exchange.” But to capitalize on a 1031 exchange, investors must adhere to those strict timelines: a new like-kind property must be identified within 45 days and the investor must close on it within 180 days. That’s where the flexibility and ease of a DST becomes appealing. “An investor can typically 1031 exchange into one of our DSTs within two or three business days. We’ve done them as fast as 24 hours,” Kay says. His company’s website, kpi1031.com, is loaded with resources for potential investors to learn more about DSTs, as well as other investment tools, including qualified opportunity zone funds. “We are actually starting to work with qualified opportunity zone funds quite a bit. They are another tax-deferral strategy for investors to consider,” says Kay. “Investors who are selling properties, stocks, mutual funds, businesses and more with gains can use opportunity zone funds to defer and eliminate some of the capital gains taxes.” Once you register on the website, you can sign up for access to Kay Properties listings and schedule a call with a team member, who can help guide you through the potential pros and cons of various types of investments. “We’re very upfront with clients that real estate investing does have risk, which is why we stress thorough due diligence and diversification as well as rejection of certain asset classes altogether,” Kay stresses.

Every investor’s situation is different, which is why Kay Properties’ personalized approach is so important. It’s also the reason so many clients stick with the company, which has offices in Los Angeles, San Diego, San Francisco, Seattle, New York City and Washington, D.C. “We love how pro-business Texas is, especially since there is no state income tax,” says Kay, adding that Kay Properties has many clients from the Lone Star State as well as many DST investment options in Texas. “We think it’s a great state; we think there is a lot of growth.” As a result, Kay anticipates opening a Texas office and relocating staff members here very soon. Until then, you can reach out to him and Kay Properties staff via the company’s website: kpi1031.com. n

About Kay Properties and Investments, LLC: Kay Properties and Investments, LLC is a national Delaware Statutory Trust (DST) investment firm with offices in Los Angeles, San Diego, San Francisco, Seattle, New York City and Washington DC. Kay Properties team members collectively have over 114 years of real estate experience, are licensed in all 50 states, and have participated in over $9 Billion of DST real estate. Our clients have the ability to participate in private, exclusively available, DST properties as well as those presented to the wider DST marketplace; with the exception of those that fail our duediligence process. To learn more about Kay Properties please visit: www.kpi1031.com.

This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. This email contains information that has been obtained from sources believed to be reliable. However, Kay Properties and Investments, LLC, WealthForge Securities, LLC and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. For an investor to qualify for any type of investment, there are both financial requirements and suitability requirements that must match specific objectives, goals and risk tolerances. Securities offered through WealthForge Securities, LLC, Member FINRA/SIPC. Kay Properties and Investments, LLC and WealthForge Securities, LLC are separate entities. There are material risks associated with investing in DST properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to see any securities. Please read the Private Placement Memorandum (PPM) in its entirety, paying careful attention to the risk section prior to investing. OCTOBER 2019

Lake Conroe, TX

Hwy 105 W & Tejas Blvd

PHASE 2 COMING SOON 40,000 SF

Houston, TX

FM 1464 & Bellaire Blvd

1,677 SF Available

Retail - Office Restaurants

End Cap Available

B ELLAIRE C ROSSING 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

Houston, TX

Hwy 290 & Jones Rd

7,600 SF Turn-Key End Cap Available

Houston, TX

Space Center Blvd & Bay Area Blvd

3,000 SF - 5,000 SF Available

Conroe, TX

Hwy 105 W & FM 3083

Coming Soon! Q2 2020

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

Amarillo, TX

Bell St & SW 45th Ave

Kenedy, TX

805 W Main St

Arlington, TX

I-20 W & Green Oaks Blvd

Jr Anchor Available

Pad Site or 10,000 SF Available

Remodel Underway End Cap Available

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

Midland, TX

Loop 250 & Midland Dr

12,000 SF Available

Midland, TX

Midland Dr & Neely Ave

Remodel Underway

Odessa, TX

E 42nd St & N Dixie Blvd

Remodel Underway End Cap Available

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

Keyed into Houston:

Key Maps creates custom maps as art & business tools BY BRANDI SMITH When Steve Hubbs began working at Houston-based Key Maps two decades ago, you could say the map-making industry was a little different than it is today. The company’s books of grid maps were the go-to navigational tool for everyone from emergency responders to pizza delivery drivers.

“I requested the data from the City. Once I got the GIS files, I was able to import them and make a beautiful wall map of those TIRZ,” says Hubbs.

“There was definitely a heyday when we were the only source in town for any kind of maps,” Hubbs laughs. “Then GPS came along.”

With the addition of a new plotter, Key Maps has been able to increase the size of its projects, now offering maps that can fill an entire wall.

These days, the grid maps can serve as an excellent backup when you’re in a pinch. “Throw a Key Maps book in your trunk or wedge it between your seats,” suggests Hubbs. “If your phone’s dead and you’re lost, you’ll at least be able to navigate your way through the streets.” When he acquired the company nearly three years ago, Hubbs understood the changing times meant he needed to adapt. The era of map books had faded, but the public’s fascination with cartography had not. “Maps are artistic and they’re such useful tools,” he says, adding that most of Key Maps’ business now comes from developing custom wall maps for local businesses. Every project starts with the company’s base map, which includes every street in the greater Houston area. “We can customize it. If someone comes in and says, ‘Oh, we want school districts on there,’ I can geocode the addresses and make the map accordingly,” says Hubbs. Those map can be turned into anything from wall art, to project boards, to calendars. “It’s a really great way to be more organized,” says Hubbs. “People are drawn to it. You put a map on the wall, you’re going to have meetings in front of this map.” He adds that they’re especially popular for conference rooms. Key Maps has added aerial photographs of Houston, Dallas and San Antonio to its repertoire, expanding into new territory since Hubbs took over. The maps can have a variety of finishes, including lamination, which can be written on with permanent marker. “That’s great for any company where employees are running routes. You can color code each one and then put them on the calendar,” Hubbs explains. Another popular product right now is Key Maps’ custom ranch and hunting maps. Aerial photography helps chart out different areas of a property. The printed map includes a key, as well as a calendar to help organize hunting and harvest periods. Hubbs’ maps, as you might imagine, are also popular within the commercial real estate industry. Hubbs says he recently completed a map of the City of Houston with tax increment reinvestment zones (TIRZ) highlighted for a client. 20

OCTOBER 2019

“We can print on a permanent adhesive material. We recently printed a 40-foot by 20-foot wall map for a new company in town. They placed it on a curved wall, like super wallpaper,” says Hubbs. Every map can be customized with specific colors, locations and logos. What might be most impressive, however, is Hubbs’ turnaround time. “The whole process takes about an hour or so to make a really nice custom map,” he says. “Before I owned Key Maps, it was a five- to 10-day wait. Now, we tell people, ‘Go grab some lunch, come back and we’ll have your map ready for you.’” It’s clear early in the conversation with Hubbs that cartography is a passion. “It’s a lot of fun every day. Every new project turns into an idea that turns into a standard or stock item that gets somebody else thinking,” he says. Hubbs’ creativity is evident when you pay a visit to Key Maps’ showroom along Durham Dr. The centerpiece is what used to be an old, 500-lb., steel light table. “We put together a mural of the City of Houston using aerial photography, then put a line down the middle and stretched a ping-pong net across it. Now clients and guests come in and say, “Oh, wow! That’s awesome! And they want to buy the ping-pong table,” laughs Hubbs. Another set of products also catches the eye of visitors to the showroom: antique maps of Texas and the U.S. discovered when Hubbs took over the company. “I found this sleeve of all these old maps. They were in a drawer, just forgotten,” he says. The originals are framed and hanging at Key Maps, though the prints are available online. “They are these 200-year-old, hand-watercolored prints of Texas and the Battle of Galveston,” says Hubbs. “I imagine some 15-year-old boy walking around in the sticker burrs of West Texas with this map in his pocket. Two centuries later, it ended up in my shop. That’s really cool.” To check out the products offered by Key Maps, you can visit KeyMaps.com or its showroom at 1212 Durham Drive in Houston. n

LAND FOR SALE 82 ACRES

LAND FOR SALE 2 - 14 ACRES

LAND FOR SALE 3 - 25 ACRES

I - 45 & FM 1764

LEAGUE CITY PARKWAY

BELTWAY 8 & KIRBY DR

LA MARQUE, TEXAS

LEAGUE CITY, TEXAS

HOUSTON, TEXAS

+/- 82 ACRES DIVISIBLE

LOT 11 - 14 ACRES LOT 12 - 13.18 ACRES FEATURES

FEATURES: • • • • •

Freeway visibility Pads available Adjacent to Lago Mar (4,000 Homes) Surrounding Walmart & Sam’s Club Development Zoned General Commercial

• • •

Water & sewer available from League City Adjacent to UTMB Victory Lakes Opportunity for Retail, Mixed-use, Commercial, Light Industrial, Medical & Professional Offices

FEATURES • • • •

Utilities to site: water, sewer, & underground electrical Regional detention available Located within Pearland, the largest growing city in Houstons Metro area Access to new 288 toll expansion

RETAIL FOR SALE 5,002 SQ. FT. RESTAURANT

RETAIL PAD AVAILABLE 62,500 SQ. FT.

LAND FOR SALE 1.375 ACRES & 3.5 ACRES

500 WESTHEIMER RD

FM 288 & HWY 35

STUDEMONT ST

HOUSTON, TEXAS

ANGLETON, TEXAS

HOUSTON, TEXAS

62,500 SQ. FT.

5,002 SQ. FT. RESTAURANT 11,100 SQ.FT LAND

FEATURES

FEATURES: • • • • •

TRACT 1 - +/- 24.8 ACRES TRACT 2 - +/- 11 ACRES TRACT 3 - +/- 7 ACRES

2nd Generation Montrose Restaurant No historic restriction Private Event room Wine Cellar FF&E Contemplated with sale

•

Pad available adjacent to new residential community

•

FM 288 visibility

•

High Traffic Counts

TRACT 1 - 1.375 ACRES TRACT 2 - 3.5 ACRES FEATURES • • • •

Rare Infill Development Opportunity Walking distance to grocers, restaurants, retailers, medical, multifamily & the Washington Arts District Central location to all Houston Signalized Corner

The information herein has been obtained from sources believed to be reliable. However, this does not guarantee, warranty or make any representations to its completeness or accuracy. The information contained herein is subject to errors, omissions, and change of price or conditions.

Justin Patchen

(713) 222-1400

Justin@BuffaloREP.com

www.BuffaloREP.com

SCOOP Amanda Knapp From: Sent: To: Subject:

The following pages contain a calendar of Texas CRE events, networking photos, and riverwaytitle.com> erway Title <aknapp@ Rivdeals/announcements. For more updates, 9 10:38 AM 201 20, ber tem Friday, Sep Amanda Knapp log on to REDNews.com ment - Riverway Title Poker Tourna

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Shack Cadillac Bar - Party , 2019 23 r be Wednesday, Octo 5:00 pm

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I can't make it

onsors

2019 Tournament Sp Driving Directions

OCTOBER 2019

CENTRAL SOUTH TEXAS

OCTOBER

2019

Tuesday

CCIM Central Texas - Introduction to CRE [8:30am - 4:30pm] CTCAR - Introduction to CRE [8:30am - 4:30pm]

15 Tuesday

IREM Austin - Board Meeting *Invitation Only [11:30am - 1:00pm]

2 Wednesday

CCIM Central Texas - Advanced CRE Analysis [8:30am - 4:30pm] CTCAR - Advanced CRE Analysis [8:30am - 4:30pm] REC Austin - Policy Briefing *Members Only [12:00pm - 1:00pm]

3 Thursday

REC Austin - Christmas in October Committee Meeting *Members Only [12:00pm - 1:00pm]

7 Monday

CCIM Central Texas - CI 101 Course [8:30am - 4:30pm]

8 Tuesday

REDNews Newsletter [4:00pm] CTCAR - Qualified Opportunity Zones [11:00am - 1:00pm] IREM Austin - Luncheon [11:30am - 1:00pm] CCIM Central Texas - Networking Social and Happy Hour [5:30pm - 7:30pm]

9 Wednesday

ULI Austin - UrbanPlan Exchange for Public Leaders [8:00am - 4:00pm] CTCAR - Property Information Exchange & Lunch [11:30am - 1:00pm] CREW Austin - Hard Hat & Heels Tour of the Texas Facilities Commission [4:00pm - 6:00pm]

10 Thursday

CTCAR - Property Information Exchange [7:30am - 9:00am]

16 Wednesday

ULI Austin - 2019 Butler Game Day [1:00pm - 5:00pm]

17 Thursday

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

14 Monday

18 Friday

BOMA Austin - 5th Annual Shoot Out & Ranch House Games [1:00pm - 5:00pm]

19 Saturday

REC Austin - Christmas in October [8:00am - 5:00pm]

21 Monday

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

22 Tuesday

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

23 Wednesday

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

REDNews Newsletter [4:00pm] 24

OCTOBER 2019

REDNews Newsletter [4:00pm]

IREM Austin - Building Tour [11:30am - 1:00pm] TABB San Antonio - Luncheon [11:30am - 1:00pm]

24 Thursday

REC Austin - Charity Golf Classic [12:00pm - 5:00pm] CCIM Central Texas - Porks for Pins [2:00pm - 7:00pm] CREW Austin - Wine Tasting Event [5:00pm - 7:00pm]

28 Monday

CTCAR - CIPS Designation: Certified International Property Specialist [8:00am - 5:00pm] REC San Antonio - Council Open Golf Tournament [11:00am - 5:00pm]

CBA Austin - 2019 Real Estate Challenge [1:00pm - 6:00pm] ULI San Antonio - Insider's Tour of the SOTO [5:30pm - 7:30pm]

CTCAR - Splitting Profits in Commercial Real Estate [9:00am - 12:00pm] REDNews November Issue Deadline [5:00pm]

CTCAR - Understanding BOMA Measurement Standards [1:00pm - 3:00pm]

CREW Austin - Members Only Dine Around [5:30pm - 8:30pm]

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

CCIM Central Texas - Splitting Profits in Commercial Real Estate [9:00am - 12:00pm]

REC Austin - Luncheon [11:00am - 1:00pm] CREW Austin - Annual Members Only Meeting [4:00pm - 6:00pm]

ULI Austin - October Get Involved Happy Hour [5:30pm - 6:30pm]

11 Friday

IREM Austin - Ethics for the Real Estate Manager [8:30am - 5:00pm]

IREM San Antonio - Assett Management Track (ASM603, ASM604, AM605) [8:00am - 5:00pm] REDNews Newsletter [4:00pm]

29 Tuesday

CREW Austin - Joint Recruitment Event & Committees Expo [5:00pm - 7:00pm]

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.

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

what’s going on

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

District Cooling Plant Tour at Mueller Ener gy Center hosted by the BOMA Sustainability Committee and Austin Ener gy.

IREM San Antoni o’s August mem ber spotlight is Broo ke Kasperkhan.

l CREW Austin donated 10 backpacks with schoo supplies for children at Saint Louise House.

RECSA members heard an excellent review of the 2019 state legislative session from State Rep. Steve Allison.

l Ab RECA RE AL YP Al

out LDC Happy Ho

ur.

of Huston-Tillotson Dr. Colette Pierce Burnette President and CEO Vision Award. 2019 n Austi ULI the nted University was prese OCTOBER 2019

NORTH TEXAS

OCTOBER

2019

Tuesday

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

16 Wednesday

BOMA Fort Worth - SAC Meeting *Invitation Only [3:00pm - 4:00pm]

CREW Dallas - Luncheon [11:30am - 1:00pm] BOMA Fort Worth - CSC Meeting *Invitation Only [11:30am - 12:30pm] CORENET North Texas - Executive Exchange Dinner - The ROI of Workplace [6:00pm - 9:00pm]

2 Wednesday

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

3 Thursday

TREC - Market Matters: Industrial Revolution [7:00am - 9:00am]

7 Monday

REDNews Newsletter [4:00pm]

9 Wednesday

NAIOP North Texas - Annual Golf Tournament [8:00am - 5:00pm]

21 Monday

REDNews Newsletter [4:00pm]

23 Wednesday

NTCAR - Office Event: Flexible Work Spaces [4:00pm - 6:00pm]

24 Thursday

CREW Dallas - Generational Leadership Dynamis: "Overcoming Generational Bias for Success" [8:30am - 4:00pm] TABB Dallas - Luncheon [11:30am - 1:00pm]

10 Thursday

BOMA Fort Worth - Sporting Clays Tournament [8:00am - 1:30pm]

NTCAR - 2nd Annual Industrial Academy [3:00pm - 6:00pm]

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

TREC - Giving Gala [6:00pm - 10:00pm]

ULI North Texas - 2019 Impact Awards [5:30pm - 9:30pm]

11 Friday

BOMA Dallas - BOMI Course: Real Estate Investment & Finance (Accelerated) [9:00am - 4:00pm] REDNews November Issue Deadline [5:00pm]

25 Friday

NTCAR - Young Professionals Volunteer Event: Habitat for Humanity [8:00am - 9:00am]

28 Monday

CORENET North Texas - Golf Tournament [9:00am - 2:00pm] REDNews Newsletter [4:00pm]

12 Saturday

CREW Fort Worth - Family Day [9:00am - 2:00pm]

14 Monday

REDNews Newsletter [4:00pm]

15 Tuesday

REC Fort Worth - General Meeting: What is the Mobility Innovation Zone? [5:00pm - 7:00pm]

29 Tuesday

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

CORENET North Texas - Mercedes-Benz Financial Services Tour [5:30pm - 7:30pm]

OCTOBER 2019

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.

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

what’s going on

BOMA Dallas is at Bowlmo

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

ULI North Texas discusses Transforming

America’s Dying Malls.

r Lanes.

CJ Marchain and Sco

CoreNet Globa Regional l North Texas at T Real Esta h te Pursuit e Art of s event.

t Farber at CCIM at

CREW Fort Worth

NTCAR Expo.

er East.

at The Post at Riv

OCTOBER 2019

SOUTHEAST TEXAS

OCTOBER

2019 3 Thursday 4 Friday 5 Saturday 7 Monday 8 Tuesday 9 Wednesday 10 Thursday

CREN Gulf Coast - Happy Hour [4:30pm - 7:00pm] CREW Houston - Annual Signature Forecast Luncheon [11:00am - 1:30pm] BOMA Houston - Engineer All Stars: Maintenance Olympics [9:00am - 11:00am]

BOMA Houston - Engineer All Stars: Maintenance Olympics [9:00am - 1:30pm]

21 Monday

BOMA Houston - Top Golf Challenge [11:00am - 1:00pm] REDNews Newsletter [4:00pm]

24 Thursday

IREM Houston - Leadership Series Seminar [8:30am - 11:30am] CREN Gulf Coast - Luncheon [11:00am - 1:00pm] CREW Houston - Member Only Game Night - BUNCO! [5:30pm 8:30pm]

REDNews Newsletter [4:00pm] CCIM Houston/Gulf Coast - Scholarship Golf Tournament [10:00am - 5:00pm] C.R.E.A.M. The Woodlands - Luncheon [11:30am - 1:00pm] BOMA Houston - Building Engineering Management 101 [2:30pm - 5:30pm]

28 Monday

REDNews Newsletter [4:00pm]

31 Thursday

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

CCIM Houston/Gulf Coast - Luncheon [11:30am - 1:00pm] IREM Houston - Fashion Fundraiser [5:30pm - 9:00pm] CREMM - Charity RYDE [6:00pm - 8:00pm]

11 Friday

REDNews November Issue Deadline [5:00pm]

14 Monday

REDNews Newsletter [4:00pm]

15 Tuesday

FBSCR - Monthly Meeting [8:00am - 9:00am] CREN Gulf Coast - Property Information Exchange *Invitation Only [11:00am - 1:00pm]

16 Wednesday

Galleria CRE Real Estate Prayer Luncheon "Live out your Faith at Work" [11:30am - 1:00pm]

17 Thursday

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

18 Friday

OCTOBER 2019

lty (L - R) with Stream Rea ssen && Kaâ&#x20AC;&#x2122;Lisia Hagwood nt. eve g rkin wo net s Maira Santos, Cassidy Ne nal sio Houston young profes Par tners enjoying IREM

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

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OCTOBER 2019

Design.

CENTRAL SOUTH TEXAS AUSTIN, TX

SCALEFACTOR LEASES 53,000 SF

Culture Map

ScaleFactor, Inc leased 53,000 sf for their new headquarters at 979 Springdale Road, which had formerly been occupied by Drink Daily Greens. Collier International handled the transaction. RED BLUFF MIXED-USE DEVELOPMENT PLANNED

Source: Foursquare.com

CHASE TOWER SOLD Los Angeles, CA-based CIM Group purchased the 390,000 sf Chase Tower located at 221 W. 6th Street from Goldman Sachs Asset Management & Lincoln Property Company. Cushman & Wakefield represented the seller.

Ashmore Real Estate Advisors, HN Capital Partners, Lifestyle Resort Solutions, & Eberly & Stubbs’ hospitality team are the developers for the planned Red Bluff which will be located at 4713 E. Cedar Chavez Street. The project will include a 74,000 sf office building & 13,000 sf of first level retail & restaurant space. A 63-room boutique hotel is also planned for the property. Construction is projected to begin first quarter 2020.

RASTEGAR PROPERTY BUYS 56,628 SF Rastegar Property purchased a twoparcel, 56,628 sf tract of land to develop 76 residential units with 115 underground parking spots at 5402 S. Congress. The seller was World Class Capital of Austin, dba WC 5402 South Congress LLC.

BIGCOMMERCE ADDS 32,000 SQ TO HEADQUARTERS BigCommerce added 32,000 sf to its headquarters in Four Points Centre located at 11305 4 Points Drive. The company now occupies 70,000 sf which is approximately 75% of the building.

CEDAR PARK, TX

Sabot West Park, LLC purchased a 6.8 acre tract located at 400 W. Park from an undisclosed seller. The buyer will consider development of a multi-family project on the site.

LIBERTY HILL, TX

SABOT DEVELOPMENT BUYS 12 ACRES Sabot Development purchased 12 acres at 223 Craigen Road from an undisclosed seller. Sabot will utilize the site for boat, RV & equipment storage while evaluating the future redevelopment of the site. Nathan Pinson of Realty Austin represented the buyer. 100,000 SF SELF STORAGE UNDERWAY

135,000 SF OFFICE BUILDING SOLD Riverside Resources sold their 135,000 sf office building located at 1801 E. Sixth Street to an entity associated to AEW, an affiliate of Natixis Investment Managers.

Extra Space Self Storage is constructing a 100,000 sf climate-controlled storage facility at 13609 Ranch Parkway which is scheduled to open summer 2020.

SAN ANTONIO, TX

LANDMARK PROPERTIES TO DEMO UNIVERSITY TOWERS

CAMPUS AT ARBORETUM SOLD Starwood Capital Group & Vanderbilt Partners purchased the 219,000 sf northwest Austin office building located at 10415 Morado Circle near The Domain. 30

OCTOBER 2019

Source: HKS Architects

CONCORD PARK III UNDERWAY Concord Property has broken ground on Concord Park III, a 101,000 sf office building located on E. Sonterra Blvd. The building is scheduled for occupancy first quarter 2021. Endura Advisory Group will be handling leasing. U.S. REALTY BUYS FORMER ANDEAVOR HEADQUARTERS NY City-based U.S. Realty Advisors LLC purchased the 618,017 sf former Andeavor headquarters base which includes 15 acres located at 19100 Ridgewood Parkway from Newton, MAbased RMR Group, Inc. The building is leased through May 2029 to Marathon Petroleum Corporation. TRADEWIND PROPERTY BUYS LEASEHOLD INTEREST

Source: Austin Business Journal/Arnold Wells

Landmark Properties is demolishing the 50-year old student-housing project located at 801 W. 24th Street in order to build a 975-bed Mark at Austin which will include a parking garage & 2,900 sf of ground-level retail space. Landmark plans to develop the Standard at Austin on the site of the University Towers’ former garage.

The buildings included Alamo Tower at 901-909 N.E. Loop 410 for $13.1 million; Petroleum Towers, 8626 -8700 Tesoro Drive for $15 million;1800 Plaza at 180901802 N.E. Loop 410. Carrie Caesar, Todd Mills & Hunter Mills with Cushman & Wakefield represented the seller & Robbie Casey with Robbie Casey Commercial represented Windmill Investments.

6.8 ACRES SOLD AT 400 W. PARK

NEW BRAUNFELS, TX Source: 1801E6th.com

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800 DOLOROSA SOLD

Source: ConnectMedia

JUUL LABS LEASES 62,000 SF Juul Labs, Inc, a manufacturer & distributor of electronic cigarettes, leased 62,749 sf at 210 South Lamar which they will occupy in 2020. The facility will serve as a regional office for the San Franciscoheadquartered company.

Weston Urban purchased the 51,508 sf office building located at 800 Dolorosa from GTRM Washington Square LTD. Chuck King & Ben Jordan with JLL represented the seller. WINDMILL INVESTMENTS BUYS COTTER & SONS OFFICE PORTFOLIO Windmill Investments purchased a six-building, 523,255 sf office portfolio formerly owned by Cotter & Sons. The transaction revolved around a bankruptcy.

Tradewind Properties purchased the leasehold interest in the 206-unit Upton at Longhorn Quarry apartments located at 4906 Wurzbach Parkway from The NRP Group, the developer of the property. The buyer signed a 75-year lease on the property which is owned by the San Antonio Houston Trust Public Facility Corporation. As long as 50 percent of the units are leased to individuals making 80% or less of the area’s median income, the developer & subsequent owners aren’t liable for property taxes.

NORTH TEXAS ARLINGTON, TX

with CBRE represented the landlord & Nick Talley with Bradford represented the tenant. HEALTHCARE TRUST BUILDING 107,000 SF OFFICE

Source: johnsondevelopment.com

VIRIDIAN ADDING 400 MORE HOMES Johnson Development Corporation is adding nearly 400 more home sites to their Viridan Community located off N. Collins Street. The new phase will include homes priced from $300,000 to $1,000,000. Viridian opened in 2008 & was purchased by Johnson in 2015.

Healthcare Trust of America is building a $55 million, 107,000 sf, Class A building on the Medical City Heart Hospital & Spine campus located off US 75. HTA also purchased 6 acres adjacent to the property for future development. The project is scheduled fro completion in 2021.

Source: Loopnet.com

MID-AMERICAN SUPPLY LEASES 45,000 SF

BRENNAN INVESTMENT SELLS 129,061 SF BUILDING

Mid-American Supply Corporation leased 45,000 sf at 10430 Shady Trail from ICON Owner Pool 1 Texas LLC. Tucker Cason with Mercer Company represented the tenant and Trevor Atkins & John Hendricks with CBRE represented the landlord.

Chicago-based Brennan Investment Group sold their 129,061 sf industrial property located at 8220 Ambassador Row to an undisclosed buyer. The property has been utilized as the corporate headquarters for Delivery Unlimited.

JONA REAL ESTATE BUYS 48,993 SF

DALLAS HABITAT FOR HUMANITY SALE/LEASEBACK Habitat for Humanity sold & leased back their 133,134 sf industrial building located at 2800 N. Hampton Road. Jared Aubrey, Michael Austry & Brad Benjamin with CBRE represented the seller and the buyer. 300,000 SF TOWER PLANNED Kaizen Development Partners is planning to construct a 300,000 sf office tower called The Link at Uptown on N. Akard Street near Cedar Springs. The building is scheduled to open in 2021. MUELLER WATER LEASES 26, 250 SF Mueller Water Products leased 26,250 sf of industrial space at 774 North Royal Lane from East Group Properties. Steve Trese

& Chad Albert with NAI Robert Lynn handled the sale along with Cullen Dickey with Dickey Property Company.

FORT WORTH, TX

FIRST RESIDENTIAL HIGH RISE IN DOWNTOWN MGW Enterprises has secured approval for the construction of a 17-story, 300-unit residential high rise at l000 Weatherford Street with plans for a future commercial development.

FRISCO, TX

JMJ DEVELOPMENT ADDS UNITS TO HOTEL-CONDO TOWER

DALLAS, TX

Jona Real Estate LLC purchased the 48,993 sf industrial building located at 410-440 Hillburn Drive. Ryan Boozer & Drew Feagin with Stream Realty represented the undisclosed seller & CBRE represented the buyer.

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ORIX CORPORATION LEASES 100,000 SF ORIX Corporation USA has leased 100,000 sf in the Trammell Crow Center located at 2001 Ross Avenue. The center recently underwent a $130 million renovation & Steam Realty Partners is handling leasing & management of the property.

DENTON, TX

HEALTH CLUB LEASES 55,606 SF Health club chain, Fitness Connection, leased 55,606 sf at Golden Triangle Mall located at 2201 S. I35 in space formerly occupied by Designer Show Warehouse (DSW). The Retail Connection represented the tenant & Weitzman represented the landlord.

FARMERS BRANCH, TX 47,280 SF OFFICE BUILDING SOLD

A California partnership sold the 47,280 sf Midway Crowne Center office building located at 14240 Midway Road to Twinrose Investments. Jim Hancock

Dallas-based JMJ Development has proposed to add 131 residential units to its planned hotel-condo tower at The Gate, the $700 million, 41-acre mixed-use development located at the northwest corner of Dallas Parkway & John Hickman Parkway.

GRAPEVINE, TX

DFW AIRFIELD LOGISTICS CENTER UNDERWAY Seefried Industrial Properties & Clarion Partners have started construction on a 356,518 sf speculative warehouse development at the southwest corner of East Glade Road & Airfield Drive. Completion is projected for second quarter 2020.

phases in underway with PhaseOne to be delivered in 2020. FACILITY SOLUTIONS LEASES 72,000 SF Facility Solutions Group leased 72,900 sf at 2800 Valley View Lane. Stream Realty Partners represented the landlord & NAI represented the tenant.

LEWISVILLE, TX

BENJAMIN MOORE LEASES 237,926 SF Benjamin Moore & Company leased 237,926 sf at 121 Lakepointe Crossing. Blake Kendrick & Mac Hall with Stream Realty represented the landlord & Mark Collins with Cushman & Wakefield represented the tenant.

MCKINNEY, TX

RAYTHEON BUILDING NEW OFFICE FACILITY Ratheon is building a 200,000 sf office facility at its Space & Airborne Systems headquarters at 2501 W. University Drive. The building is scheduled for completion in late 2020.

PLANO, TX

RIBBON COMMUNICATIONS LEASES 107,000 SF

GRAND PRAIRIE, TX

Ribbon Communications leased 107,000 sf in Legacy Central located at 6635 Declaration Drive. CBRE represented the tenant & Transwestern represented the landlord.

150,000 SF OFFICE BUILDING UNDER CONSTRUCTION

J.C. PENNEY’S HQ BECOMES THE CAMPUS AT LEGACY WEST

Cawley Partners is building a 150,000 sf office building in the Mayfield Groves mixed-use development located at SH 161 Toll Road & Forum Drive. Construction is projected to begin late 2020.

The 1,000,000 sf former J.C.Penney’s corporate campus situated on 110 acres at Legacy & Headquarters Drives will be converted into offices, apartments, residential, hotel, restaurants, etc. Silos Harvesting Partners has received approval to add almost 800 apartments to the site.

IRVING, TX

MACABOR INVESTMENTS SELLS RETAIL CENTER Fremont, CA-based MacAbar Investments LLC sold their 32,254 sf retail center located at 10010 N. Mac Arthur Blvd to an undisclosed local buyer. Weitzman handled the transaction. CARIS LIFE DEVELOPING CORPORATE PARK Caris Life Sciences is developing a 115,000 sf corporate park on West John Carpenter Freeway which will add 500 jobs. Construction on the first of three

ROCKWALL, TX

COL-MET SELLS/LEASES BACK INDUSTRIAL BUILDING Col-Met Engineered Finishing Solutions sold & leased back their 145,375 sf industrial building located on 12 acres at 2975 Discovery Drive. Marcus & Millichap handled the transaction.

OCTOBER 2019

SOUTHEAST TEXAS Reid Wilson was named a recipient of Texas Lawyer magazine’s Lifetime Achievement award.

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Jason Dillee, Andrew Jewett, Cape Bell, Nathan Wynne & Harper Gully have joined CBRE Houston’s Industrial Team. JASON DILLEE

Houston’s first central headquarters for the city’s affordable housing programs.

BELLAIRE, TX

PARK TOWERS SELL The two 18-story, 545,242 sf office towers located at 1233 & 1333 West Loop South sold to Los Angeles-based Regent Properties for $89.5 million. Transwestern will provide leasing services for Regent Properties. EMPYREAN BENEFIT LEASES 108,109 SF Source: Loopnet

FORMER CHEVRON CAMPUS BUILDING LEASED SLS Properties has leased 100,812 sf at 4800 Fournace Place to Houston Methodist Hospital for administrative office space. Danny Sheena with SLS Properties is seeking approval from the Bellaire Planning & Zoning Commission to turn the 30-acres, 547,370 sf former Chevron Campus into a mixed-use community that will include apartments, retail, a movie theater, etc. To date, the project has received community support . THREE-STORY MEDICAL BUILDING UNDERWAY Houston-based Jacob White Construction has started development of a three-story, 52,000 sf medical office building located at 4460 Bissonnet Street. Construction is scheduled for completion fourth quarter 2020.

HOUSTON, TX

MCGINNIS LOCHRIDGE RELOCATING TO 609 MAIN McGinnis Lochridge plans to relocate their law firm from 711 Main to 14,000 sf at 609 Main. Anthony Fritsche with Fritsche Anderson Realty Partners & HPI Tenant Advisors represented the tenant. AFFORDABLE HOUSING OFFICE BUILDING UNDERWAY Construction has started on a $23 million, five-story office building located at 3131 Emancipation Avenue which will serve as 32

OCTOBER 2019

Empyrean Benefit Solutions, Inc. leased 108,109 sf in Pinnacle Westchase located at 3010 Briarpark Drive. David Husid, Derek Myers & Taylor Scheps with Newmark Knight Frank represented the tenant. 5.71 ACRES SOLD ON LOCKWOOD DRIVE CDAB IV, LP purchased 5.71 acres at 1010 Lockwood Drive from Flint CPS Inks North America, LLC. Rob Stillwell with Newmark Knight Frank represented the sellers & Moody Rambin Interests represented the buyer. IMPERIAL WHOLESALE LEASES 46,950 SF Imperial Wholesale Inc has leased 46,950 sf at 8700 Clay Road in the Clay Hempstead Business Park. The tenant was represented by Lee & Associates & the landlord was represented by Moody Rambin Interests. PHASE ONE OF THE GRAND AT ALIANA UNDERWAY NewQuest Properties has started construction on phase one of their 200,000 sf, The Grand at Alaina development located at the northeast corner of West Airport Blvd & Grand Parkway. The development is expected to open in the second quarter of 2020. 25,000 SF MIXED-USE PROJECT AT 1324 N. SHEPHERD HER Development LLC has secured building permits for a 25,000 sf,two-story, mixed-use project at 1324 N. Shepherd Drive. Village Emergency Center has leased 6,500 sf on the first floor. Sluco Realty has been hired to lease the space.

ANDREW JEWETT

CAPE BELL

NATHAN WYNNE

HARPER GULLY

CROW HOLDINGS ADDING TO LAYNE CROSSING

ENGIE NORTH AMERICAN RELOCATES HQ TO SUBLEASE SPACE

Dallas-based Crow Holdings is planning to construct two additional buildings in Layne Crossiing located near I45 & Beltway 8. The buildings include a 85,502 sf warehouse at 11123 Beltline Road & a 56,211 sf warehouse located at 11103 Beltline Road. Three other buildings are currently under construction.

ENGIE North America Inc is relocating their corporate headquarters to 109,667 sf at 1360 Post Oak. Eric Anderson, David Baker & Tyler Garrett with Transwestern represented the landlord, a joint venture between Nuveen Real Estate & Allianz. Bruce Rutherford & Louis Rosenthal with JLL represented ENGIE & TimRelyea & Morgan Relyea with Cushman & Wakefield represented the prior lessee.

UT SELLING ALMOST 300 ACRES The University of Texas (UT) has engaged JLL to sell or ground lease 216 acres located just south of the 610 Loop bisected by Buffalo Speedway. UT also has 80 acres west of Buffalo Speedway that is bisected by Willowbend Blvd available for sale. RETIREMENT COMMUNITY STARTS $52 MILLION EXPANSION Eagle’s Trace Senior Living community is building a third independentliving residential building at 14703 Eagle Vista Drive which will add 150 residential units to its existing development. The $52 million expansion project is scheduled for completion late summer 2021. DOGGETT INDUSTRIES BREAKING GROUND ON FORD SHOWROOM Houston-based Leslie Doggett Industries has broken ground on a new $24 million Ford dealership located at 9225 North Freeway. Doggett Auto Group, an affiliate of Doggett Industries, acquired Lone Star Ford last year & has also purchased numerous Freightliner & truck dealership businesses. The family-owned company has over $1 billion in sales & over 1,300 full-time employees. LUXURY CONDOS PLANNED FOR 2323 W. MAIN Pelican Builders has opened a sales office for Westmore, a seven-story condo project which will include 33 units that is being built at 2323 W. Main, one block east of Kirby.

MOMENTUM BMW MOVING TO SEARS STORE Houston’s Momentum BMW is relocating its dealership to the former location of a 186,000 sf Sears department store located at 9570 Southwest Freeway. Relocation is scheduled for the first quarter of 2020 which will also include the company’s Mini Cooper dealership.

PASADENA, TX

PANATTONI STARTS CONSTRUCTION ON 642,994 SF FACILITY Panattoni Development & their development partner, MetLife Investment Management, have started construction on Bayport South, a 642,994 sf, crossdock industrial facility located at 10575 Red Bluff Road. Estimated completion is first quarter 2020.

SUGAR LAND, TX

TOWN CENTER MEDICAL BUILDING SELLS The 29,903 sf Town Center Medical building located at 16545 Southwest Freeway sold to an undisclosed buyer. The building is 100% occupied by Houston ENT & Allergy. Eric Johnson, Robby Winston, Lisa Bovermann & Brooks Creech with Transwestern Healthcare Advisory Services group represented the seller. CHI ST. LUKE’S MEDICAL PLAZA SELLS The 120,596 sf medical office building, CHI St. Luke’s Health Sugar Land Medical Plaza ,has sold to Pisula Development Company & Harrison Street. Pisula Development will lease & manage the property.

advertiser index AA Realty Company...............................................9 Berkadia...................................................................3 Buffalo Real Estate Partners............................. 21 DN Commercial......................................................7 Gordon Partners..........................................16 - 19 InSite Realty, Inc..................................................... 1 Kay Properties & Investments.......................... 13 La Marque EDC........................................................5 National Environmental Services.....................35 Phase Engineering................................................22 Read King.................................................................2 Richland Companies..............................................9 Showalter Law Firm..............................................11 Southwest Realty Group.....................................11 Texas Funding Corporation.................................11 The Real Estate Council - Greater Ft. Worth........11 Worth & Co............................................................ 13

SEPTEMBER 2019

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

O’Connor & Associates Industrial Forecast Luncheon

Speaker: John S. Moody, Jr.-Moody Law Group

Takeaway: Industrial development (warehouses) in the Greater Houston area is booming. Drivers of this growth are E-commerce/logistics, the Port, and petrochemical and plastics users. Vacancy is slightly higher, but absorption is strong and over 12 million SF were delivered in last 12 months and 18 million SF are currently under construction. •$ 6.23 SF is the ‘blended” asking lease rate for new state-of-the-art warehouse space • The average warehouse being built today is materially larger than those built in the past • Delivered already this year were 730,000 SF to Grocer’s Supply and 500,000 SF to Plastics Bagging and Packaging • Users like amazon, Ikea, & WalMart already have facilities in place over 1 million SF each • The lion’s share of development is taking place in SE Houston / Port area, but Coca Cola has a new 1 million SF facility on the north side • Also driving construction is a flight from older facilities, which leaves vacated buildings to be re-purposed into lofts, offices, breweries, restaurants, filming production studios and other uses-for example Netflix is desperate for more production space • US is world’s largest logistics market, as E-commerce grows at 3X the rate of bricks and mortar retail • Chicago, Dallas, Atlanta, and now Houston, are among the largest E-commerce hubs • The formula for E-commerce warehousing needs is: 1.25 million SF for each $1 billion in sales

• E-commerce and warehouses to service it will continue to grow at a high rate • With robotics and other dense utilization, warehouses of today have high energy usage, so solar panels are going onto the expansive rooftops • Companies like Target, WalMart, Prologis, Apple, and Kohls have pioneered in utilizing their huge roofs for solar panels • Weingarten Realty leases space on its rooftops for panels and then buys back excess energy at a reduced rate • Using warehouse roofs for solar brings some issues, like invalidating the roof warranty with too much weight or foot traffic-these factors need to be dealt with • Tenant use, in general of interiors of warehouses, has to be carefully monitored by landlords to ensure there is not overloading of slabs or of structural members-also hazardous storage and waste removal must be watched by landlords – bottom line: landlord must hold tenants responsible for maintaining the integrity and the ongoing value of the building • As rail becomes more clogged inside the Beltway (and the Loop), more industrial users are requesting rail access outside the core in far suburbs • Railroads are difficult to deal with and have little flexibility, so negotiations between them and landlords and tenants are often fraught

CCIM Luncheon: Medical Real Estate

Moderator: Beth Young, Colliers. Panelists: Tom Pisula, CEO, Pinecroft; Justin Brasell, EVP, Transwestern; Jon Foulger, MedProperties. Takeaway: Interest is at an all-time high in this sector, which is the fastest growing sector in commercial real estate. Demographics and urban sprawl are combining to bring medical services to the patient, instead of requiring the patient to go to a centrally located medical center. •B aby boomers make up 28% of U.S. population and in ten years 1 in 5 Americans will be over 65, and that percentage will grow from there • T he chronic health conditions associated with aging will require more caregivers and buildings to house them • Health care is becoming more convenient to patients’ homes and less centralized, with the big providers ‘going to the suburbs’ with high quality facilities: Clear Lake, The Woodlands, Sugar Land, Katy…just a few of the markets experiencing lots of construction • T he suburban medical providers look for high-visibility feeder road locations, just like major retailers •W here the hospitals and clinics go, so go the physicians’ offices •M any medical office buildings (MOBs) contain a network of general practitioners, labs, specialists, and day surgery centers who all cross-refer within the building and work as a team for the convenience of the patient • F urther real estate is required for imaging centers, rehab facilities, emergency care, and nursing homes •M edical tenants are a stable base and good long-term tenants, due in part to the heavy upfront investment they must make in their tenant build-out •O ur Texas Medical Center In Houston is spawning lots of construction in the surrounding markets, as physicians ‘follow rooftops’ just like retail developers • I f the Texas Medical Center were a ‘downtown’ it would be the 8th largest in the US, with 55 million SF and 50 institutions and 109,000 employees • I n Houston the medical industry is a serious rival to the oil & gas industry, and less cyclical •V acancy in MOBs averages 4% •D ue to costs and falling reimbursements from insurance and Medicare and Medicaid, 34

OCTOBER 2019

many doctors are going from a “Nordstrom’s practice to a WalMart practice”, practicing frugalities which they did not have to follow before; doctor’s offices are becoming more efficient and compact • MOB rents are lower per SF for the most part but the tenants are more ‘sticky’, or less likely to move once established, so landlords have lower turnover costs • Unaffiliated emergency and urgent care facilities are slowly moving out of retail locations into more medically defined areas-retail centers can pose parking and neighboring tenant problems which are a turn off to patients, who prefer name brand medical service • The physician as an entrepreneur is becoming more common as they seek to create new revenue streams to make up for falling reimbursement levels • Some diverse doctors groups are combining to share receptionists and waiting rooms in the same master lease space • The Memorial Hermann MOB in the medical center recently sold for $405 million, or $794 per SF • Investment sales of MOBs are highly sought after, since tenants are usually ‘sticky’ and have good credit, and they bring on average a 7% premium on sales of regular office buildings • The next paradigm shift in delivery of healthcare services will be to the home itself, and there are already home dialysis units in use • Rural areas are seeing ‘micro hospitals’ with an operating room, basic diagnostic services, and maybe 15-20 beds • Doctors are at a disadvantage in negotiating reimbursement rates from insurers and the government since they are independent practitioners and except for some instances do not have the strength of collective bargaining

A 360° APPROACH TO E N V I R O N M E N TA L S E R V I C E S NATIONAL ENVIRONMENTAL SERVICES Houston, Texas GABRIEL ENVIRONMENTAL GROUP Redlands, California

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• Asbestos & Lead-Based Paint Inspections (Licensed Texas Asbestos Consulting Agency)

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National Environmental Services LLC 5773 Woodway Dr, Suite 96 Houston, TX 77057 Phone (281) 888-5266 Toll Free: (833) 4-Phase1 hgabriel@nationalenv.com www.nationalenv.com

* Performed in Texas in partnership with Terrain Solutions, Inc.,Texas Geoscience Firm Registration # 50018

Gabriel Environmental Group 700 East Redlands Blvd, Suite U618 Redlands, CA 92373 Phone (951) 545-0250 Toll Free: (833) 4-Phase1 hgabriel@gabrielenv.com www.nationalenv.com

POSTMASTER: PLEASE EXPEDITE TIME SENSITIVE MATERIAL 5909 West Loop South, Suite 2537 S. Gessner, Suite 135, Bellaire, TX 77401 Houston, TX 77063

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OCTOBER 2019

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