FOUR SEASONS CHOOSES FALL
AUSTIN (Austin American-Statesman) – Locally based Ardent Residential and Atlanta-based Post Properties are targeting this fall to break ground for The Four Seasons Residences on the shores of Town Lake.
The hotel company, which is renovating the adjacent Four Seasons Hotel, will manage the 30-story, 166-unit, brick-and-glass condominium tower.
Condos will be priced from the upper $400,000s to $2 million for 1,000 to 2,700 square feet, with penthouse units on the 28th and 29th floors.
The project, expected to cost at least $100 million, is being financed by Post.
Michael Graves & Associates Inc. is the architect of record. Al Coker & Associates of Dallas will market The Residences, which is expected to open in late 2009.
ROYALTON HIGHRISE PURCHASED
HOUSTON (Group LSR) – A Canadian investor group operating as the Royalton Condominium LP has purchased the remaining inventory at The Royalton at River Oaks Condominiums for $40 million.
The 33-story highrise at 3333 Allen Pkwy. offers one-, two- and three-bedroom residences priced from $375,000 to $2 million.
The managing general partner of the investor group is a division of Group LSR, the Montreal-based real estate development company that will oversee building operations. Camelot Realty Group will handle marketing and sales. The sale was brokered by Camelot Realty.
DOTZOUR ROUNDTABLE SPEAKER
COLLEGE STATION (Real Estate Center) – Dr. Mark G. Dotzour, chief economist and director of research at the Center, will be the guest speaker at the latest installment of the Real Estate Roundtable Speaker Series, to be held Wednesday, April 18, in Houston.
Cost for “The Front Edge of the Real Estate Boom” is $65 and includes lunch. The program will be held from 11:30 a.m.–1:30 p.m. at the InterContinental Hotel, 2222 West Loop South.
To register, go to http://recenter.tamu.edu/register.
SOUTHERN COMFORT AT WATTERS CREEK
ALLEN (The Dallas Morning News) – Southern Land Co. of Nashville will build about 300 rental units in the 52-acre mixed-use Watters Creek development at North Central Expressway and Bethany Drive.
The apartments will be built above ground-floor retail, and the first units will be ready next spring.
Watters Creek retailers include Market Street supermarket, P.F. Chang restaurant, Borders books, Ann Taylor Loft and Eddie Bauer. An eight-screen Studio Movie Grill cinema and a 135-room hotel are also coming to the Creek.
Southern Land is also developing an 800-acre, 2,100-home project called Tucker Hill in McKinney on SH 380. In Keller, Southern Land is building 177 apartments in the Arthouse mixed-use project.
RENAMED DEGREE EMPHASIZES PREPARATION
COLLEGE STATION (Mays Business School) – The Master of Land Economics and Real Estate degree at Mays Business School at Texas A&M University has officially been renamed the Master of Real Estate degree.
School officials say the new name better reflects the program’s increasing focus on preparing students for work in commercial real estate and real estate capital markets while maintaining its strength in real estate valuation. It is intended to more clearly showcase the program's strengths to outsiders and to national employers who are actively recruiting from other universities.
“There was an issue before with the degree name being so uncommon,” said Cydney Donnell, the school's director of real estate programs. “The program has been around for over 35 years, yet prospective students and employers were confused about the emphasis of our program.”
Mays’ real estate degree is one of the only graduate real estate programs housed in a business school setting, with a heavy emphasis on preparation in finance and law. To earn their master’s degree, students must complete a rigorous program of 37 credit hours of real estate finance, agricultural economics, geography and land economics courses.
CRESCENT SELLS CENTRE
AUSTIN (Austin Business Journal) – Walton TCC Hotel Investors V LLC is buying the 16-story Austin Centre office building from Fort Worth–based Crescent Real Estate Equities Co. for $75.5 million.
Earlier this month, the fund, which is managed by Chicago-based investment firm Walton Street Capital, agreed to purchase seven hotel properties, including the 375-room Omni Austin Hotel Downtown, from Crescent for $550 million. The Omni hotel is inside the Austin Centre property.
Encore Development built the almost 344,000-square-foot, 95 percent occupied, Class-A building at 701 Brazos St. in 1986.
Crescent is selling its entire Austin portfolio as part of its strategy to become a leaner real estate investment trust. C.B. Richard Ellis assisted in the sale of Austin Centre.
INDUSTRIAL PARK EXPANDS
VICTORIA (Port of Victoria) – The Port of Victoria has purchased 1,800 acres for the expansion of its industrial park, a move that Port officials say will make it one of the premier sites in Texas for industrial and economic development.
Officials say the park expansion was made necessary by the recent addition of the Lone Star Ethanol plant, Farmer's Co-op of El Campo and Valerus Compression Services. The $5.6 million purchase included 4,600 acres per year of senior surface water rights on the Guadalupe River. The Port purchased the property from descendents of Port O'Connor founder Tom O'Connor Jr.
The Port is developing a container on barge service that will connect Victoria to the rest of the world for the shipment of goods and cargo. The project is financed by nontax revenue and will have no impact on the tax rate.
MEMORIALIZING THE LEGACY
HOUSTON (globest.com) – Legacy Partners Residential Development Inc. of California plans to build a 334-unit apartment complex on the more than three acres it has purchased from Fairfield Residential, also of California.
Legacy at Memorial, at the intersection of Studemont Street and Memorial Drive, will consist of a 25-story tower with 274 apartments alongside a wood-frame building with 60 lofts. The average monthly rent will be around $2,400 for one- and two-bedroom units averaging about 1,180 square feet.
WDG Habid Architecture Inc. of Dallas has incorporated private garage boxes into the eight-level parking garage component and designed private balconies or garden terraces for the units.
Capmark Finance Inc. provided construction financing. EE Reed Construction LP from nearby Sugar Land is the general contractor. Sawyer Design Associates of Dallas is the interior architect, and local firm M2L Associates Inc. is the landscape architect. Dallas-based Milestone Management LP will lease and manage the project.
THREE'S A CROWD
AUSTIN (Austin Business Journal) – CNC Investments Co. of Houston has purchased three Class-A apartment complexes from Western Rim Investment Advisory Inc. of Coppell.
The portfolio includes the 583-unit Mansions on the Green I and II, the 502-unit Mansions at Steiner Ranch and the 332-unit Mansions at Canyon Creek. All three complexes are along the RM 620 corridor in north Austin and Round Rock, and all are more than 92 percent leased.
CNC Investments owned seven properties in the area before making this purchase.
Live Oak Capital Ltd. in Houston arranged financing for each of the transactions through Column Financial of Dallas.
OFFICE VACANCIES LOW; STICKER SHOCK HIGH
AUSTIN (Austin American-Statesman) – Office building vacancies are at their lowest level in six years while downtown rents for first-class space averaged $32.13 per square foot (psf), the highest rate since late 2001.
In the first quarter, rents for Class-A office space averaged $28.12 psf, according to Oxford Commercial, an Austin-based real estate brokerage firm. Class-A office space was 9.4 percent vacant, far from the 30.7 percent vacancy rate in late 2002.
Citywide, the vacancy rate for all types of office space averaged 11.8 percent during the first quarter, down from 16.4 percent a year earlier. Rents overall averaged $23.28 psf compared with $20.91 a year earlier.
Several projects will add more than 1.3 million square feet of space to the area this year. Last year, 220,000 square feet of office space was added.
"If I were about to break ground on a new building, I may want to sit back and see if absorption gets back on track before I start construction,” warns Ford Alexander, a partner and cofounder of Oxford Commercial.
Alexander said some tenants are experiencing "sticker shock" as they renew leases.
"Rates are considerably higher than they were five years ago, and the current rates are hard to swallow," he said.
THREE HOUSTON MPCS GRACE TOP TEN
HOUSTON (Damon Thomas Public Relations) – Three area master-planned communities (MPCs) made RCLCO's list of the top-selling U.S. MPCs for 2006, making Houston one of the brightest spots on the national real estate map.
Up three slots from last year was The Woodlands, which ranked third with 1,409 sales. Cinco Ranch moved up 14 notches to rank fourth with 943 new home sales reported for the 7,400-acre community in west Houston. New to the list was Eagle Springs. The 1,360-acre development in northeast Houston ranked tenth with 509 new home sales for 2006.
The top-selling community in the nation was Poinciana by Avatar Properties Inc. in Florida.
Newland Communities' Cinco Ranch and Eagle Springs also posted the largest percentage gains among the top ten U.S. communities. Cinco Ranch had a 30 percent sales increase over 2005, and Eagle Springs had a 25 percent increase. Only one other top ten community — Power Ranch in Phoenix — reported a positive sales gain for 2006 (15 percent).
Overall, sales among the top ten MPCs were down approximately 23 percent from 2005, according to the RCLCO study.
“Houston and Texas are showing signs of steady, healthy growth compared to other parts of the United States,” said Ted Nelson, regional president of the Texas Division of Newland Communities.
RCLCO, formerly Robert Charles Lesser & Co., is a leading independent real estate advisory firm.
GROUNDBREAKING AT STONECREEK
SAN MARCOS (Austin Business Journal) – StoneCreek Crossing, a 900,000-square-foot retail center, is slated to rise near the area outlet malls.
The Austin office of Direct Development will break ground this summer at the northwest corner of I-35 and McCarty Lane. According to a preliminary site plan, the development will include anchors JCPenney (104,000 square feet) and Target (136,000 square feet), along with junior anchors such as Bealls and PETCO in a heavily landscaped, upscale setting.
Carol Barrett, director of planning for San Marcos, says the project is approved for up to 1.25 million square feet of space. Direct Development is expected to complete the purchase of the property from the Texas General Land Office this month.
Dallas-based Direct Development has two other projects underway in Central Texas (see RECON’s “5th Street Commons” and “Market Heights”).
KENSINGTON DUO SOLD
SUGAR LAND (Houston Business Journal) – KBS Real Estate Investment Trust Inc. has purchased two four-story office buildings from ING Clarion.
The Offices at Kensington total 170,500 square feet and sit on roughly ten acres at Hwy. 6, just north of the Southwest Freeway. The offices were built in 1998 as part of the First Colony master-planned community.
The buildings are 85 percent leased. Among the tenants are Noble Drilling, Progressive Insurance, Morgan Stanley, Fidelity National Title and Humana.
Bill Rogalla represented California-based KBS, while Holliday Fenoglio Fowler representated ING Clarion.
KBS Capital Advisors is the adviser for KBS. Both companies are affiliated with KBS Realty Advisors.
INDUSTRIAL STRENGTH OUTPACES OFFICE SECTOR
DALLAS (Dallas Business Journal) – While North Texas industrial vacancy decreased, office vacancy increased during this year's first quarter, with new construction heavily affecting absorption in both sectors.
Office vacancies rose about one-third of 1 percent to 20.2 percent. About 36.3 million square feet of leasable office space was available at the end of March, compared with 35.8 million square feet at the end of 2006, according to statistics released by CB Richard Ellis Inc. (CBRE).
Net absorption, a measure of the amount of space leased less space vacated, fell sharply. Tenants leased more than 391,200 square feet of additional space in the first quarter of 2007, compared with almost 1.5 million square feet in the fourth quarter of last year, CBRE's analysis shows.
Industrial space vacancies dropped to 8.6 percent from 8.9 percent with 55.7 million square feet vacant compared with 57.1 million square feet at the end of last year. About 11.3 million square feet of warehouse and distribution space is under construction, compared with 9.6 million square feet three months ago. A quarter of the industrial space is preleased.
On the office side, nine new buildings totaling almost 794,600 square feet were delivered in the first quarter of 2007. About half of the space was preleased. An additional 35 office buildings totaling almost five million square feet remain under construction. Space in those buildings is about 28 percent preleased.
Job growth of 95,200 jobs for the 12-month period through January and expected continued strong job growth are positive signs for leasing, said a CBRE spokesperson.
HOME TO STAY
CARROLLTON (globest.com) – Home Interiors & Gifts Inc. has renewed its lease on more than 244,500 square feet of auxiliary warehouse space in the Frankford Trade Center.
Robert Deptula, principal for Transwestern in Dallas, said the five-year tenant did not shop around because the five-year-old, 150-dock Frankford warehouse at 2828 Trade Center Dr. is so close to the company's main campus at 1649 Frankford Rd.
Transwestern negotiated the renewal directly with CalWest's portfolio asset manager, San Francisco-based RREEF.
BIG D'S BIG DEAL
DALLAS (globest.com) – GE Real Estate North America Equity has paid $256 million to FirstWorthing Corp. of Dallas and Principal Financial Group for a 3,532-unit, ten-property portfolio that includes six properties in Dallas and one in Austin.
The Dallas portfolio includes the Cityville properties at 2819 N. Fitzhugh Ave. (226 units), 1333 N. Peak (238 units) and 1811 Greenville Ave. (128 units). It also includes the 324-unit Worthing Bend at 3701 W. Pioneer Dr. in Irving; 622-unit Worthing Pointe at 1319 Cavalier in Richardson; and 500-unit Spring Creek at 5501 Naaman Forest Blvd. in Garland.
The Austin property is the 223-unit Worthing Ridge at 1817 E. Oltorf St.
The package of Class-A, -B and -C complexes is currently 75 percent occupied.
South Carolina–based Greystar Real Estate Partners LLC will manage all seven properties.
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