Commercial Real Estate

Jenni Stolarski is a North Oak Cliff resident, an environmental buff, a bike enthusiast, and a residential Realtor. And on her commute across the Continental Bridge each morning, she has watched the gradual progress of Dallas’ Margaret Hunt Hill Bridge.

Excited by the Trinity River project’s potential (for the real estate industry and for her personal enjoyment),  Stolarski shares her observations and expectations.

Q: Approximately $117 million is being invested in the bridge. What pay-offs do you predict?

A: The biggest boost so far has been the increase of positive press for the area. I expect to see additional creative and unique businesses that will draw people to neighborhoods like Kings Highway Conservation District and Winnetka Heights.

Unfortunately, a bridge in itself won’t solve Oak Cliff’s long-standing issues. We also need innovative entrepreneurs like Matt Spillers of Eno’s Pizza and Monte Anderson of the Belmont Hotel to do their magic and invest in the neighborhood.

Q: Real estate investor Larry “Butch” McGregor has bought dozens of acres in the area. He believes that “the real estate market is going to turn around. It’s just a matter of time.” Do you agree?

A: I’m a Realtor.  As such, I see possibility in vacant land, worn-out garages and abandoned buildings. The area where the bridge lets out in West Dallas could be great, in the right hands.

Projects of this scale can draw ingenious participants from around the world.  Larry Beasley, a world-class urban planner, just signed on to consult with the City of Dallas. Larry understands the Trinity River Corridor to be a unique asset that, done well, can attract residents and business to Dallas for decades to come.

Q: The bridge will link West Dallas and North Oak Cliff with downtown Dallas. What are these neighborhoods’ primary needs?

A: Home to approximately 300,000 people, North Oak Cliff is essentially a city in itself and thus has a wide variety of needs.

I see a huge need for complete streets that include lanes for cars, pedestrians, cyclists and public transportation (busses or street cars). Fortunately, residents Jason Roberts and Amy Cowan, along with City Councilwoman Delia Jasso, are addressing this issue from a grassroots level.  They are re-working antiquated laws in City Hall to be more conducive to the businesses and services needed.

Our hope is that the Trinity River projects and bridges will fan the flames!

Q: There are concerns that the current residents will be forced out once development begins. Any thoughts?

A: As a city, we have to come up with a better plan for addressing housing for all income levels.  Until we do that, we will always leave it to the forces of economics to set the pace.

Again, referencing Larry Beasley, his team has met with the families in La Bajada, West Dallas who are concerned about being pushed out of the area. Larry believes that if you are protecting and enhancing the neighborhood it will encourage the current residents to have pride and stay.

To explore opportunities to live in Oak Cliff or other Dallas neighborhoods, contact Jenni Stolarski. For further details about the Margaret Hunt Hill Bridge and the Trinity River Corridor, visit dallasnews.com.

Also follow @UpdateDallas on Twitter for regular real estate news.

Broker Robbie Briggs of Briggs Freeman recently joined commercial real estate leaders Newt Walker and Lou Leibowitz to hear AllianceBernstein’s Senior VP Greg Young expound on successes and setbacks in the commercial market.

Undoubtedly, transaction volume has plummeted and delinquencies have spiked over the last two years. Young reported that we have likely seen the worst of property value declines, though the cycle has not yet reached bottom.

After reporting significant challenges, Young called attention to the promising market movement not often conveyed by the media:

• The Organization for Economic Co-operation and Development (OECD) Leading Indicators Index confirms significant improvement since 2009 lows.
• U.S. exports are above the global average and corporations are poised to spend.
• Global mergers and acquisitions have begun to rise once more, pointing to increasing confidence. Young emphasized that the global economy is central to America’s commercial real estate stability.
• Publicly traded companies (REITs) have stronger capital positions and have reduced balance sheet leverage.

Dallas’ commercial market has undeniably experienced both ups and downs. For example, local condo sales have been making a comeback, but developers have not been buying lots.

Accepting the uphill battle ahead, local commercial real estate executives continue to embrace patience and optimism, especially encouraged by the latest global and national activity. Steve Brown of the Dallas Morning News also takes a positive stance: ”The freeze on commercial real estate investment is starting to thaw, and office and industrial leases are rising.”

For the latest real estate updates, follow @UpdateDallas on Twitter.

Dog avenues and cat condos are some of the winsome spaces that will serve as temporary homes for rescue animals at the new planned SPCA facility – badly needed space that will help visitors see clearly the pet they just can’t live without. The large building off of I-30, west of downtown, will take $15 million to renovate, and the Rees-Jones Foundation has pledged a matching grant of $4 million.

Jocelyn White and Tricia Linderman are serving as co-chairs of the “Raise the Roof” committee, which must raise $2 million by the end of September for construction to begin, which will take $6 million. Enjoy images of the renderings – and help raise the roof!  To make donations or read more information about the SPCA and the Rees-Jones gift, visit spca.org.

Undoubtedly, Uptown is upbeat. Chic restaurants, artsy theatres, stylish boutiques, and dive bars – all spots to see and be seen. Adding an urban element to predominantly suburban Dallas, the swanky neighborhood is a treasure.

A treasure worth a fortune, in fact. More than 30 years ago, real estate investor M. Tom Lardner (who passed away last week) dreamed of turning an undesirable district into a high-density hub. The vision broke into reality when Lardner launched the Meridian building, Uptown’s first upscale apartments. A risky test case, the Meridian first proved that a strong market existed and then began attracting further developments.

Now, several years later, Uptown is where it’s at. Real estate agent Katye Sloan comments, “A vital urban transformation is underway in Dallas’ Uptown, attracting the perfect mix of retail, restaurants, residences, office spaces, and entertainment venues.”

Those wanting to join the fun can choose lofts, town homes, and condominiums, but lately realtors are finding high-rises to be especially popular. With numerous amenities, matchless housekeeping, high-level security, and no lawn care, “vertical living” is attracting young and old.

Catching eyes from all around town, the Azure – Uptown’s tallest tower – defines Dallas’ modern, urban lifestyle. Developed by Harwood International, the building is fancified with a jetted pool surrounded by resort-style cabanas, an entertainment room with a wine bar, a 17-seat movie theatre, a state-of-the-art health club…the list continues.

And there’s more. Designed by Susan Smith and Vicki Crew of Urban Interiors, a new model unit has just been placed on the market. Enhancing the Azure’s open floor plans, 10-foot ceilings, floor to ceiling windows, and sophisticated finishes, the talented team created an eclectic interior for a one-bedroom unit. Call for a tour (214-623-6682), but be forewarned: it’s simply dazzling, quite possibly irresistible.

For additional urban living opportunities, visit briggsfreeman.com.

For those who missed the recent real estate headlines, UpdateDallas has gathered key points to keep you current. Though last week’s 27 percent home sales surge is hard to top, Dallas continued to experience noteworthy market activity in the past few days.

Monday:

• Steve Brown of the Dallas Morning News reported that approximately 15 percent of Dallas-area mortgage holders owe more than their homes’ worth, which is significantly lower than the mid-2009 measure of 30 percent.
• Multiple Listing Services revealed that North Texas’ median home sales price has risen 5 percent.

Tuesday:

• BusinessWeek reported that 91 U.S. cities have experienced first-quarter home price gains. Lawrence Yun, economist for the National Association of Realtors, attributed the improvements to the recently expired tax credit. Nonetheless, chief economist for IHS Global Insight Brian Bethune commented, “In the second half of the year, employment growth and an improving economic situation should keep the housing recovery on track.”
• An article on CNNmoney.com explored the idea that real estate’s latest obstacle may be a shortage of housing inventory. Though the U.S. average is an eight-month supply of homes on the market, some areas have dipped to inventories as low as 4.5 months (Phoenix) and 3.2 months (San Francisco). Dallas boasts a 6-month housing supply, which is considered a balanced market, and need not worry about a shortage.

Wednesday:

• The Morning News informed readers that D-FW’s first-quarter home prices increased along with the 90 other U.S. cities mentioned above. The gain was minimal – 0.6 percent – but NAR is encouraged to see prices heading in a positive direction. NAR economist Lawrence Yun believes the nation’s small decline (0.7 percent) indicates a “flattening in home prices.”

Thursday:

• Frank Nothaft, chief economist for Freddie Mac, reported that interest rates on fixed-rate mortgages decreased for the fifth straight week. This week’s 30-year FRMs hit 4.93 percent, which is the lowest level seen in 2010.

Friday:

• Today, Steve Brown shared encouraging information regarding commercial real estate: North Texas is likely to see more business expansions this year. Brown relays a positive outlook from Jack Eimer, president of real estate service firm Transwestern’s central region:

“Our leasing velocity is up 25 percent from first quarter last year,” said Jack. “We expect this to be improved upon, with 2010 leasing revenues exceeding 2009 by at least 30 to 35 percent.”

• Brown goes on to comment that commercial real estate investment has begun to thaw, the apartment market is exceeding expectations, and investors are now viewing foreclosures as investment opportunities. Commercial conditions are improving, and most executives believe the market will get “back to business” by early 2011.
• This week’s foreclosure data includes both positive and negative components. The Morning News reports that the Metroplex’s June foreclosure filings have fallen for the 2nd straight month, and are 7 percent lower than June 2009. However, the Business Journal tempers that encouraging news: D-FW’s first-quarter foreclosures have risen 10 percent over 2009’s first-quarter rates.  What to make of this mixed report? Industry analysts believe it’s too early to say.

For regular real estate updates, follow@UpdateDallas on Twitter.

Mark Cuban, owner of the Dallas Mavericks, has plans to help revive a declining area east of Oak Cliff. His 176-acre “Wonderview” development will include corporate offices, homes, ball fields, and an indoor sports facility.

City Manager Mary Schum and Director of Development Theresa O’Donnell are both very hopeful, believing that Cuban’s project will help revitalize a struggling area of South Dallas.

The architects, Merriman Associates, have released the site plan and several sketches and drawings.

Visit dallasnews.com to read more.

Today the Dallas Morning News City Hall Blog posted the following video, a discussion between Mayor Leppert and Rev. Gerald Britt about South Dallas. The meeting, which occurred late last year, brought up important concerns that are still being addressed. In the words of DMN reporter Rudolph Bush, “It’s worth your 10 minutes.” 

Click to read Bush’s blog post.

Dallas-Fort Worth has risen to the top as a hot spot for corporate facilities. Site Selection magazine recently ranked DFW the third-best market in 2009, noting the 135 companies that relocated or expanded their facilities in the Metroplex. Closely trailing New York and Chicago, DFW now houses the corporate facilities of Advanced H2O, Alcon, Cisco, Coaire Corp., Kohler and Q-Edge.

In other positive news, Dallas also received the bronze medal in Forbes’ list of “Cities Where the Recession is Easing.”  Forbes attributes Dallas’ success to its thriving energy and technology industries, markedly affordable housing, and relatively mild housing bubble burst. 

For further details, visit dallas.bizjournals.com and forbes.com. 

While economists and market researchers may not always agree on the future direction of the real estate market, investors are making their opinions clear by making major acquisitions in what they clearly see as a buyers’ market.  CTMGT LLC, a Carrollton-based affiliate of Centurion American Development Group, has made a successful $4.55 bid for the residential high-rise, Heritage at the Stoneleigh in Uptown. Construction halted on the 20-story project, which adjoins the landmark Stoneleigh Hotel, in 2008. But CTMGT told the Dallas Morning News it plans to resume construction and says it already has more than a dozen people interested in buying the large condo units, which range in size from 2,500 to 8,000 square feet.

Meanwhile, Dallas-based Trigate Partners announced that it has joined with Regent Partners LLC to form a $400 million fund for commercial real estate acquisitions. TriGate’s principals have invested in more than $10 billion of real estate assets over the years, and they are now poised to take advantage of investment opportunities in the current market. “It is our belief that market participants will be looking to firms that have capital, but also have the ability to add value to real estate through intensive management and redevelopment,” David Allman, chairman of Regent Partners, said in a statement.

While construction has ground to a halt in many in many cities, cranes are dotting the landscape of Las Colinas with more on the way. Work has already started on a $130 million Convention Center and construction will start soon on a $255 million entertainment center. Water Street, a mixed-use development overlooking Lake Carolyn, is scheduled to debut next year with a movie theater and shops. Before long the 14-mile DART Orange Line will connect the area with downtown Dallas. What’s next? The Dallas Morning News reports that city officials are hoping all the new activity will attract even more development to the area. “The ones that are down there now are successful,” says Chris Wallace, president and CEO of the Greater Irving-Las Colinas Chamber of Commerce. “We just need more of them.” Billy Bob Barnett, owner of the famed Billy Bob’s in Fort Worth, is already planning to bring in restaurants near the new entertainment center. “In a traditional commercial development environment, you are dependent on the leasing of your retail spaces or your restaurant spaces,” says Irving real estate and development director Brenda McDonald. “Here, with one operator, we know that those facilities will be operating from day one.”