Archive for the ‘Real Estate’ Category

A look at the market – heading into 2011

October 8, 2010

“It’s already the end of the 3rd quarter – and just like the 3rd quarter in football, it is time to see where we stand.  Last week I participated in 2 panel discussions about the market.  One was the 10th Annual North Dallas Chamber of Commerce Real Estate Symposium, and the second was our Jones Lang LaSalle Market Breakfast.  Here are my thoughts.

 Is our local market in recovery yet?  Maybe not quite, but getting pretty close.  In my talk for the North Dallas Chamber I looked at why companies are coming to Texas.  When you compare us to California our pro-business attitude, favorable tax structure and inexpensive housing makes us a clear choice.  That means more businesses locating to Texas, more jobs, more home purchases and greater demand for commercial real estate.  I think we’ll see positive absorption at the end of 2010 which is necessary for our market recovery. 

What submarkets will be strong next year?  We are bullish on Far North Dallas, Las Colinas, Central Expressway, Preston Center and Uptown.  We still see more of a bear market for Richardson/Plano, LBJ Freeway (construction on 635 will hinder this market for a long time), Stemmons Freeway, and the CBD.

We’ll have to see if we stall out at the November elections as people look to see what policy changes there could be for 2011.  There are transactions in the pipeline that have to move forward, but I think it will be 2011 before we see much “new” expansion.”

The value of teamwork

August 21, 2010

Preseason is in full swing, and I’m thinking back to when I was out at Valley Ranch earlier this summer to do an interview.  Wade Phillips called me over to speak to the team after practice and I was a little shocked.  A bunch of young guys were listening to an old guy on the practice field in 100 degree weather, and I was kind of on the spot for what to tell them.  I felt like the atmosphere reminded me of our 1971 team, so I told them a story about the importance of teamwork; it’s one of the same ones I tell our employees at Jones Lang LaSalle.  We had a great team and had the right things at the beginning of the year, but we got off to a slow start and weren’t really playing together like we should.  Right in the middle of the year we figured it out and started putting our personal agendas secondary to the big agenda and won 10 games in a row…and won the Super Bowl.  I had a few seconds to try and get that message to the players.  It’s important to have the right people in the right places pulling together to make miracles happen.  Then, I walked down the field and started throwing some footballs with Miles Austin.  I had a good time.  I’m really pulling for the Cowboys this year.  Later, I told Marianne that when I was talking with the team I was sure no one was listening.  That night I saw it on the news, and a couple of guys said they listened to Mr. Staubach talk about how we have to pull it together and that’s what we have to do.  And I said, Holy Cow they actually listened.  It’s the beginning of a fun time again.  Everybody is getting ready for the upcoming season, and we want to follow the season in our blog.

Its all about the little guy

August 14, 2010
Words from our guest blogger: Dave Richards – Jones Lang LaSalle
In the NFL, I suited up for eight seasons with four teams and capped my career with one unforgettable experience – the Super Bowl of ’96 as a New England Patriot [we played the Green Bay Packers in New Orleans]. And just like every other player, I had my fair share of highlights, but what I remember most is the noise. NFL fans get loud.  They also buy tickets year after year, wear official team merchandise with pride and eat wings because Troy Aikman is a sponsor. The game wouldn’t be what it is today without the fans – the little guy who writes a check to fund the “Greatest Show on Earth.”
 
After I retired and started working in commercial real estate, I noticed the same core fundamentals drove the industry because, again, it all comes back to the little guy.  Without clients in the market who write a monthly check, the commercial real estate industry would fail to profit and grow. A good broker, who puts the client first, knows that it takes a true team effort to complete a winning deal in commercial real estate.  And, today, everyone in the business is challenged to act more proactively and offer creative solutions.  To get that done, you can’t always be the quarterback, but you can always be part of a team who changed the game.
 

Timing is everything

August 5, 2010

In the NFL, teams kick off each season with months of practice and an arsenal of plays in hopes of securing a championship ring, but nothing guarantees a win. Eventually, it all comes down to timing – when to call a timeout, when to run the option and when to go long for a Hail Mary and a shot at greatness. Coaches and players alike recognize that the timing of their decisions can influence the outcome of each game. And, just like football, business decisions made in commercial real estate must be made with the same consideration to market timing and bottom-line results.

Last year, when the economy crashed and many companies were downsizing or filing for bankruptcy, some of our clients preferred to observe from the sidelines. They were worried a wrong decision concerning their commercial space in such an unpredictable market could lead to financial issues. I found that when you arm those same clients with market research, a clear understanding of their situation, and the resources to evaluate and execute a plan – confidence returns and they’re ready to get back in the game. It’s our challenge to identify unique options, save money, exceed expectations and drive every transaction to the end zone. To get transactions done today, you truly have to be on the same team with your client.

Where we are 2 years post merger

July 24, 2010

It was two years ago this month that the Staubach Company merged with Jones Lang LaSalle.  Just like in sports, it’s important to put the team agenda ahead of the personal agenda.  Despite our great 30 years as The Staubach Company, I felt we needed a broader global platform to fully service our clients.  We are very fortunate to have made such a good match with Jones Lang LaSalle.  Two years later, I know it was definitely the right decision.  Here in Dallas, we are all together in one office, and so far the two firms have  transitioned smoothly into one team.

Being an ex-football player working in real estate

July 16, 2010

Being a former football player is an icebreaker – it’s a commonality I have with people.  If they are over 35, they might remember me playing, especially if they are Cowboys fans. 

The thing a lot of people don’t realize is how long I have been in the real estate field – 40 years, which is much longer than I played football. I started working for Henry S. Miller here in Dallas in the off-season when I was still a back-up quarterback.  In those days, they did not pay football players near what they do now.  We already had 3 little girls (3, 4 and 8 years old), and I needed to work to earn money.  I have often thought that was a blessing.  Lots of the athletes today don’t have to work – and if I had been single I might not have had to.  But you can’t play golf everyday.  You’ve got to be doing something – and investing and building in something. 

When I started at Henry S. Miller, they gave me a key and a phone.   I would make calls and try to get something done, but being the backup quarterback of the Cowboys does not give you credibility in real estate.  So, I learned how to work with the right people in the company and use my strength, which was calling, and their strengths, understanding the complexity of the deal.  The longer you are involved in it, the more credibility you have.  If I had not started when I did, it would have been a lot harder for me once I was retired.  It would have been starting from scratch.

Next week I’ll discuss more about how Jones Lang LaSalle is doing now, 2 years post merger.

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.

What’s in store for the old Texas Stadium?

April 14, 2010

I was just a kid when my dad was tossing around touchdowns.  Most of my memories are tied to Troy Aikman when it comes to Texas Stadium quarterbacks, but as a spectator, I had the pleasure of enjoying countless games sitting beside my dad. Later in its life, Texas Stadium made memories for my son as well.  He was now the one holding his dad’s hand, walking through the same turnstiles, sitting in the same seats I did.  The old stadium might be gone, but we won’t forget the wins and losses. 

So now that Texas Stadium is gone, the next question becomes, what will happen to the old site?  It’s a premium location with three major freeways and average daily traffic counts of over 900,000 vehicles per day.  The 80-acre site would be well suited for a number of potential uses, but currently there are no formal plans or proposals on the table.  The city of Irving has indicated that they’ve received some interest from multiple legitimate developers, but with construction work on the adjacent freeways scheduled to take place over the next eight years, it’s likely that any official announcements on using the site are still years away.

I still haven’t driven by the site, but  I’m sure it will be an odd experience when off to the right I see a pile of rubble instead of the former home to America’s team.

Showcasing our resources to the World

March 1, 2010

If you didn’t know everything about Vancouver two weeks ago, I bet you do today. Like the Olympics, the Super Bowl gives the host cities an opportunity to showcase their resources to the world. In North Texas, one of our prized possessions is real estate. We have an abundance of available land near great communities, schools, colleges, sports facilities, airports, shopping, and restaurants. North Texas provides an opportunity for corporate America to lower their cost of doing business while allowing all employees a low cost of living. Currently, North Texas is pursuing several large corporations considering the region for their future home. We have over 30 Class A buildings that can accommodate up to 300 employees with several poised for a 1,000 employee relocation. At first that sounds a bit scary for this market, but as of Q409, we are holding at 76.8% occupancy overall with Class A at 74.4% occupancy. Compared to other major markets we are still pretty healthy.