Archive for May, 2010

Who is the Host Committee?

May 26, 2010

I’ve already talked about the Super Bowl Bid Committee, but what happened next?  Once North Texas was selected to host the game, it became the job of the Host Committee to take over.  It includes many of the original bid committee members, but the Host Committee is much larger.  Most cities in the past have had about 50 people and business leaders on the Committee.    We all wanted this to be much more inclusive than previous Host Committees, so the North Texas Host Committee ended up with approximately 250 business and government leaders, people from education, transportation, and others from across the region.  We wanted our Super Bowl to be a vehicle telling everyone about how great the whole North Texas region is.  Bill Lively says the game is going to be played on the 50 yard line of I-30 – with Dallas and Fort Worth as the end zones. 

The Committee also has within it special committees such as the Legislative Committee, Volunteer Services, and the Mayor’s Council.  The good thing is that these are not just honorary members. The attendance at Committee meetings averages 216 people – so it is a big, active group.

As part of the whole year of activity, the second concert in our series was this past weekend at the Winspear.  I got to introduce Sting, I reminded myself not to say “Stung”, and it was a great show – just like the Faith Hill concert was at Bass Hall.  I heard we had been trying to get Erica Badu, but apparently her shooting schedule was too busy!

How do the office fundamentals compare to industrial?

May 17, 2010
Notes from our researcher, Steve Triolet
After talking about the improving industrial sector in our last blog post, we are taking you through the office fundamentals, which tend to lag behind the industrial sector. This is largely due to the simple fact that the lead time for office construction is several years where a new industrial property can be completed in six to nine months.
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Because of this long construction cycle, the market may have speculative office properties deliver two to three years after the economy has gone into recession.  A prime example of this is 1717 McKinney, Granite’s 371,000 square foot speculative property in Dallas that is scheduled for completion this month.  Currently, only one major tenant, Huitt Zollars, has signed a lease for approximately 40,000 square feet. The remainder of the building is currently available; though rumors indicate one to two other sizable deals are in the works. 1717 McKinney is the last major speculative office project for this construction cycle – and with the recession coming to a close, office market fundamentals are expected to improve in the later half of 2010 which is what we have all been holding our breath for.
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Over the past year the market has been performing poorly with negative net absorption, a rising vacancy rate, and falling rental rates. The first quarter of 2010 did show a glimpse of recovery.  For example, the total vacancy rate dropped from 25.2 to 24.9 percent. This was primarily due to a few large tenants who opted to take advantage of the down market and purchase properties before the market recovered. Occupancy and average asking rental rates which had been steadily falling over the past several quarters had flat lined, decreasing less than one percent from the end of 2009, so the market had essentially hit bottom.
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According to many economists, the Central United States, specifically Dallas/Fort Worth, is leading the way to recovery. We anticipate the market to be looking up when the Super Bowl rolls into North Texas next February.  A lot can happen in nine months – we may even hear rumblings from developers contemplating their next office development. The old Texas Stadium site is looking like prime real estate from where I am sitting.

Will the economy recover in time for kick off?

May 10, 2010

Notes from our researcher, Steve Triolet
While we’re still around ten months away from the next Super Bowl, people are already asking if things will be better when the big game comes to town.  Let’s take a look the local economy today, and what we think the remainder of the year will bring.

According to most economists, Dallas/Fort Worth and other central region markets will lead the way in recovery from the national recession.  The local economy, despite a high number of residential foreclosures, continues to outperform most of the country. We’ve had the highest population growth in the nation over the past year and positive job growth in three of the four past months. The Dallas/Fort Worth unemployment rate currently stands at 8.3%, significantly lower than the national rate of 9.9%.  The current forecast for the local economy shows a 1 percent job growth rate in 2010 and 3 percent growth in 2011.

The DFW industrial market appears, as it often does, to be improving faster than the other commercial real estate sectors including office, retail and multifamily. Manufacturing, which was flat for most of 2009, is now showing signs of improvement. According to the Federal Reserve Bank of Dallas, the manufacturing sector of Texas has been expanding for five consecutive months and manufacturing job growth has likewise been positive, adding 4,700 jobs in the past two months.

Total industrial vacancy held steady at 12.3 percent in the first quarter of 2010. An increase in leasing activity, combined with limited new construction, is expected to push the vacancy rate down as the year progresses. Average asking rents actually edged up to $3.66 per square foot, but this increase was largely attributed to some cheaper blocks of space being leased up, as opposed to landlords raising their rates. A number of large lease transactions resulted in another quarter of positive total net absorption of 344,443 square feet in the period. This was the second consecutive quarter of positive net absorption.

Market fundamentals are expected to improve as the year progresses. Dallas/Fort Worth’s prime geographic location, along with its existing infrastructure, make the market an attractive location for companies looking to expand or relocate operations. Additionally, due to the low cost of doing business and an abundance of land for expansion, Dallas/Fort Worth will continue to strongly compete on nationwide searches. Economic indicators like population and job growth have been a positive catalyst for the local market. Almost all signs point to the fact that a recovery is currently underway. Our hope is that by the time the top two teams kick off next February, today’s encouraging signs will be realized and the market will be in full swing.

Why the Super Bowl came to North Texas (part 3)

May 3, 2010

Why did we win? The first reason for winning was Jerry Jones.  Jerry is very influential with all the owners, and he has become one of the strong voices of the league.  He has stood firm with the media and he understands the value of the NFL and how to translate that value into more income.

Secondly, the new stadium.  We were not going to get the game here without a covered stadium.  Not only did we get the new, really fantastic venue, but it can accommodate more people.  The NFL gets all the money from ticket sales, so the more tickets sold the greater the benefit to the NFL.  I think we saw from the NBA All-Star game what a great stadium it is.

And third, the North Texas region.  The committee had a great pitch involving the whole North Texas area, not just Dallas or Fort Worth.  The stadium is in Arlington, so all the area municipalities will be involved.  It was a true regional pitch.  North Texas is football country, afterall.