MORTGAGE DELINQUENCIES HIT FOUR-YEAR HIGH
WASHINGTON (The Dallas Morning News) – Home loan payment delinquencies nationwide are now at the highest level in almost four years. Subprime home loans account for almost half of the current home foreclosures in Texas and nationwide, according to analysts with Freddie Mac.
With mounting foreclosures and many subprime lenders closing down, buyers who have relied on these mortgages will have a harder time finding a loan, said Freddie Mac's economist Frank Nothaft.
During the last two years, subprime mortgages have accounted for almost 20 percent of the home lending business, Nothaft said. The mortgage giant recently announced that starting later this year it will demand more income documentation and put in place tougher qualifying standards for some of the home loans it buys.
"Local builders and local Realtors should be somewhat worried that the number of potential buyers will decrease or at least shift into lower-cost submarkets as lenders start requiring equity down payments and tightening underwriting," said Dr. James Gaines, research economist with the Real Estate Center at Texas A&M University.
A slowdown in sales at the low end can spread upward in the market. If owners of entry-level homes can't find a buyer, they won't be moving up to higher-priced housing, Gaines said.
In January, Dr. Mark Dotzour, the Center’s chief economist, issued a statement reflecting concerns about the effects of subprime lending on Texas’ real estate market. His comments are available online.
EXISTING-HOME SALES RISE AGAIN
WASHINGTON (Realtor.org) – Reaching the highest level since last April and following January’s healthy gain, existing home sales rose strongly in February, according to the National Association of Realtors (NAR).
Total existing-home sales — including single-family, townhomes, condominiums and co-ops — rose almost 4 percent to a seasonally adjusted annual rate of 6.69 million units, down 3.6 percent from the same time last year.
David Lereah, NAR’s chief economist, said the strong gain is a bit of a surprise.
“Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically low mortgage interest rates and competitive pricing by sellers,” he said.
Total housing inventory levels rose 5.9 percent at the end of February to 3.75 million existing homes available for sale, which represents a 6.7-month supply at the current sales pace compared with a 6.6-month supply in January. Raw inventories peaked last July at 3.86 million, and supplies topped at 7.4 months in October.
The entire report is available online at Realtor.org.
GREEN ACRES
ROUND ROCK (impactnews.com) – Designated Tree Partners will break ground this spring on what it hopes will be the city’s first LEED-certified office complex.
Green Square will encompass more than 130,000 square feet on 13 acres off Greenhill Drive. The complex will incorporate natural light to cut energy costs, and xeriscaping and rainwater retention will be used to maintain the campus grounds.
The Williamson County Association of Realtors has committed to buying the first building in the seven-building complex, with plans to move in shortly after the complex is completed in early 2008.
NEW LEASE ON PARK
COPPELL (globest.com) – Universal Display & Fixture Co., headquartered in nearby Lewisville, has leased almost 275,000 square feet of distribution space — half of AmberPoint 4 — in the newly built AmberPoint Business Park.
The park at 200 N. Northpoint Dr. is now 50 percent occupied. Transwestern’s Dallas office represented owner Cabot Properties Inc. of Boston. Henry S. Miller Commercial represented Universal Display.
BAYOU CITY SURGES TO SIXTH
HOUSTON (Houston Business Journal) – New residents moving in from southern Louisiana following Hurricane Katrina have made Houston the sixth-largest metropolitan area in the United States, according to population estimates released by the Census Bureau.
Between July 1, 2005, and July 1, 2006, the 10-county Houston–Sugar Land–Baytown Metropolitan Statistical Area (MSA) gained more than 187,000 residents, bringing the total to almost 5.54 million. Only the New York, Los Angeles, Chicago, Dallas–Fort Worth and Philadelphia MSAs are larger.
Harris County, which grew 3.3 percent over the year, accounted for 66 percent of the area’s population growth, but three suburban counties grew faster: Fort Bend, up almost 6 percent; Montgomery, up just over 5 percent; and Brazoria, up 3.6 percent.
Look for the article “Howdy Neighbors: Katrina Boosts Texas Population” in April’s Tierra Grande magazine. It will discuss Texas’ population growth in the wake of Katrina.
TOWN CENTER COMING TO HIGHLANDS
DALLAS (The Dallas Morning News, globest.com) – Prescott Realty Group is buying three Class-C Lake Highlands apartment complexes totaling more than 1,400 units. The locally based developer will replace them with a mixed-use community.
Prescott will build the $300 million Lake Highlands Town Center, which will encompass about two million square feet, including a shopping center and office space. About 300,000 square feet of urban-style retail and more than 1,000 residential units are also planned on the 70-acre site. Also planned are a hike-and-bike trail, lakes, park areas and an outdoor amphitheater.
Architect RTKL Associates drew up the development’s master. Prescott Realty Group will oversee the project.
The 50 percent occupied complexes to be torn down are Whispering Creek, on the northeast corner of Walnut Hill Lane and Skillman Road; Sutter Woods, at the southeast corner; and Bella Palms, Sutter Woods' neighbor.
Closing is expected by May. The development’s first retail phase is expected to take about two years to complete, coinciding with the 2010 completion of DART’s light rail station.
TAKING CARE OF LOGISTICS
GRAND PRAIRIE (globest.com) – APL Logistics is renewing its lease on a 343,200-square-foot distribution center in the Great Southwest Industrial District.
The eight-year tenant has signed a three-year renewal on the center at 510 W. Trinity Blvd. The company occupies two of the park's five buildings. APL also has a lease on a 500,000-square-foot building located nearby at 610 W. Trinity Blvd.
CB Richard Ellis represented APL, while property owner ProLogis was assisted by NOL Group, APL’s parent company.
VINEYARD SPRINGS COMPLEX SOLD
SAN ANTONIO (San Antonio Business Journal) – Vineyard Springs Apartments has been purchased by California-based Triple Net Properties LLC from developer Arcanum at the Vineyard Springs Ltd. on behalf of tenant-in-common investors.
The 23-building complex, built in 2001, is 94 percent occupied with one-, two- and three-bedroom units overlooking Loop 1604 and the Hill Country.
In the last year, Triple Net, a subsidiary of NNN Realty Advisors Inc., has bought four area apartment complexes: Walker Ranch, Hidden Lake Apartment Homes, Woodbridge Apartments and now Vineyard Springs.
Financing for the purchase was arranged by Wachovia Bank.
SAN CARLOS MAKEOVER
DALLAS (globest.com) – San Carlos Associates LP has purchased the 153-unit San Carlos Apartments for more than the $6.5 million asking price.
The local condo converter plans to invest millions in rebuilding the 12-building complex at 5010 Maple Ave. San Carlos Apartments was fully occupied at the time of sale.
Sam Lewis, senior adviser for Hendricks & Partners, says the buyer will gut the buildings to renovate mechanical systems and build from the inside out so that the condos will be like new. San Carlos Associates plans to price the condos below the area's $300,000 and $400,000 bracket.
Built in 1963, San Carlos Apartments has two efficiency units, five three-bedroom units and 24 one-bedroom units. The rest have two-bedroom floor plans. Units range from 300 to 1,152 square feet. Monthly rents range between $350 and $950.
CEDAR PARK RETAIL ENDEAVOR
CEDAR PARK (Austin Business Journal) – Endeavor Real Estate Group LLC is breaking ground today on a $100 million retail center.
The 800,000- to 900,000-square-foot 1890 Ranch is scheduled to open its first phase in October. Tenants will include Super Target, Cinemark, Circuit City, PetSmart and OfficeMax. The center is on 85 acres at US 183A and FM 1431.
The project engineer is Bury+Partners Inc., and the architect is Nelsen Architects Inc. Both companies are based in Austin.
FOUR POINTS GROUNDBREAKING
AUSTIN (Austin Business Journal) – Workers broke ground this week on the first 275,000 square feet of office space at Four Points Centre.
Los Angeles-based Thomas Properties Group is developing the project, which includes two 100,000-square-foot, Class-A buildings with a parking garage and a smaller 75,000-square-foot tilt-wall building with surface parking. The buildings are slated for completion next spring.
The offices at Four Points Centre are part of the much larger 33-acre, master-planned development that already includes retail and multifamily components. Future phases could include up to 900,000 square feet of office or research and development space, 250,000 square feet of retail and a 250-room hotel.
According to Brett Arabie of Oxford Commercial, which is marketing the office space, the project is the first multitenant, speculative office in Austin to attempt to achieve LEED certification.
Page Southerland Page is the architect on the Four Points project and DPR Construction is the general contractor.
NEW HOME CONSTRUCTION RISES; PERMITS DOWN
WASHINGTON (The Dallas Morning News) – Nationwide construction of new homes and apartments rose 9 percent in February to a seasonally adjusted annual rate of 1.525 million units, the Commerce Department reported. Construction had fallen by 14.3 percent in January to the slowest pace in more than nine years.
However, activity remained 28.5 percent below the level of a year ago. Marking the 12th decline in the past 13 months, builders’ applications for new permits continued falling in February. Permits dropped by 2.5 percent to an annual rate of 1.53 million units.
By region, the West led the gains in construction, posting a 26.4 percent jump, which was the best showing since January 1997. Construction activity was also up in the South, increasing by 18 percent, the biggest percentage gain in that region in nearly two years.
Construction fell by almost 30 percent in the Northeast, the biggest one-month plunge in that region since December 1990, while construction fell in the Midwest by 14.4 percent after a January decline of 16.4 percent.
NEW LIFE FOR FORMER AUTO DEALERSHIP SITE
HURST (globest.com) – Dmyterko & Wright Partners has purchased the former Freeman Toyota–Mazda dealership site at Northeast Loop 820 with plans to turn it into a retail center.
The 8.25-acre tract, previously owned by Ford Motor Credit Co., will be redeveloped with an LA Fitness, restaurant and hotel. Site work is set to begin next month, and LA Fitness should open in first quarter 2008.
Bob Ginsburg, vice president for CB Richard Ellis in Dallas, which brokered the transaction, says talks are underway with several national restaurateurs for the one-acre pad site and with a hotel developer for a 2.25-acre tract. The broker says Dmyterko & Wright's plan is to own the LA Fitness building and restaurant pad and sell the hotel site.
MUELLER PROJECT GETS SETON HQ
AUSTIN (Austin American-Statesman) – Seton Family of Hospitals is moving its headquarters and 700 employees to a new office complex at the site of the former Robert Mueller Municipal Airport, which was closed in 1999.
Seton plans to move into 150,000 square feet of office space on 3.25 acres in fall 2008. The new headquarters will consolidate Seton's administrative operations in one building and include the company’s administrative, human resources, legal services, communications and marketing departments.
Catellus Development Corp., which is in charge of the Mueller project, said this commitment by Seton was key to developing the proposed town center, a community hub that will link the commercial and residential areas.
The first retail stores are open, office space is under construction and the Dell Children’s Medical Center of Central Texas opens July 1. Construction on the first homes will start this summer (see RECON, March 6, 2007).
GROUPO CONSOLIDATING OFFICES
LAREDO (Laredo Morning Times) – Groupo Galvan will consolidate two warehouses and two offices in a new distribution center facility in the El Portal Industrial Park.
The 180,000-square-foot warehouse at 11905 Conly will have more than 10,000 square feet of office space, a 46-door dock with two ramp doors, and parking capacity for 180 trailers.
Groupo Galvan, an ISO 2000–qualified firm, was founded in 1921.
Modern Construction is the general contractor of the new building. Grand opening is scheduled for next month.
REMODELED, RENAMING, REOPENING SET
EL PASO (El Paso Times) – The vacant International Hotel will soon receive an $18 million renovation and be reopened as a 210-room Hilton DoubleTree Hotel.
Jim Scherr of Hotel Don Quixote LTD, which bought the property in 2004, said construction on the hotel at 600 El Paso at Missouri streets will probably begin in June, and the tentative opening date will be February 2009.
Houston architect Keith Carlson said the building will undergo a complete transformation, including the conversion of the seventh-floor pool deck into a sunset-viewing area with a new pool.
KOHL'S COMING TO LONGVIEW
LONGVIEW (News-Journal) – The city has issued a building permit for Kohl's in the new Longview Towne Center under construction on US 259 at Hawkins Parkway.
According to the building permit, the store will include more than 97,000 square feet. The store's construction value is listed at $4 million. Towne Center developers say the department store is expected to open later this year.
Kohl's has more than 800 stores in 46 states.
DIAMOND LOCH EXCHANGED
NORTH RICHLAND HILLS (svn.com) – Local private investors have purchased the 138-unit Diamond Loch Apartment community from California-based D Loch CP LP.
The 29-year-old complex on about eight acres at 6100 Glenview consists of one-, two- and three-bedroom units. At the time of closing, the complex was 96 percent occupied and purchased as part of a 1031 exchange.
Sperry Van Ness in Fort Worth represented the seller, while DFW Homes represented the buyers.
For more information on 1031 exchanges, read the Real Estate Center's “1031 Tax-Deferred Exchanges” and “Boom With a View.”
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