The Boulder Group closes sale of Sonic property in Irving

The Boulder Group completed the sale of a single-tenant ground-leased Sonic Drive-In property at 900 W. John Carpenter Freeway in Irving, Texas, for $1.81 million.

The 2,450-square-foot building benefits from its position along West John Carpenter Freeway which experiences 131,467 vehicles per day and leads directly to downtown Dallas. Sonic is also a neighbor to a wide variety of retailers including, Chase, Walgreens, Chick-Fil-A, Starbucks, Bank of America and 7-Eleven.

Randy Blankstein and Jimmy Goodman of The Boulder Group represented the seller in the transaction. The Seller was a Florida based real estate fund and the buyer was a west coast individual in a 1031 exchange.

JLL Capital Markets closes sale of two-building office portfolio in Sugar Land

JLL Capital Markets has completed the sale of and arranged financing for The Offices at Kensington, a two-building, Class-A office complex totaling 171,055 square feet in Sugar Land, Texas.

JLL represented the seller, Buchanan Street Partners, in the sale of the property to DML Capital. In addition, JLL worked on behalf of DML to secure the fixed-rate acquisition loan.

The Offices at Kensington is located at 1600 and 1650 Highway 6, at the intersection of Highway 6 and Interstate 69, Sugar Land’s “main and main” intersection. The property is highly visible to the 157,000 vehicles per day that pass through this intersection and is close to many of Houston’s major thoroughfares, providing a convenient commute to the residential communities in the western and southern suburbs of Houston. Additionally, The Offices at Kensington are close to a variety of retail, restaurant and entertainment offerings in the Sugar Land area.

The four-story buildings are 84.1% leased to a diverse rent roll of tenants in the real estate, accounting, engineering and consulting industries, among others. The properties are comprised, primarily, of suites under 5,000 square feet, which fits the needs of smaller office tenants that dominate the Sugar Land market.

JLL’s Investment Sales & Advisory team representing the seller was led by Senior Director Rick Goings and Managing Director Marty Hogan.

JLL’s Debt Advisory team representing the borrower was led by Managing Director Michael Johnson and Director Michael King.

Longtime Montrose business owners furious over revival of once-dormant management district

Judy Adams, who co-owns Foelber Pottery at 706 Richmond with her husband, says she’s been “through thick and thin” in Montrose since the studio and gallery space opened in 1979. 

And now, a new challenge: Adams recently received an unsigned, undated missive, addressed generically, with a return address listed as a P.O. box: “It is with great regard and hope for the future of Montrose that we present to you the reintroduction of the Montrose Management District.” 

“If I didn’t know what was going on, because I’m involved, I would think this was a joke,” Adams said. “Everyone is just so furious and frustrated.” 

The Montrose Management District is back, revived in December after years of dysfunction and legal wrangling led to it going dormant in 2018.And its plans to tax commercial property owners has angered some longtime small-business owners in the historic Houston neighborhood. 

“All of us were stunned,” said Pat Greer, who has been serving homemade vegan cuisine at her restaurant, Pat Greer’s Kitchen at 412 W. Clay since 2005. “This is a real slap in the face.” 

Daphne Scarborough, owner of the Brass Maiden, a custom metal fabricator at 2016 Richmond, said she worked against the creation of a Montrose Management District in 2011 and has been consistently unimpressed by its management as well as its services.  

“It is taxation without representation,” Scarborough said. “They don’t have anything to offer our businesses. We wouldn’t run our business the way they run the district. They do absolutely nothing.”

The city of Houston includes a number of management districts funded by taxes on commercial property owners, with revenues used to supplement standard municipal services such as landscaping, public safety and sidewalk maintenance.

As an economic development tool, they are conceptually similar to Tax Increment Reinvestment Zones, in which a portion of property tax revenues collected in the zone are used for new projects within its borders. Some Houston neighborhoods have both: Montrose, for example, has a TIRZ created in 2015. 

When the Montrose Management District board voted to disband, commercial property owners who opposed it believed they’d unburdened themselves.  

“I was there the day it was dissolved,” Adams said. “We all cheered. It was great. And since then, it’s been wonderful.”

But Alan Bernstein, a spokesperson for the district, says the district never went away.

“Discussions with property owners about reactivating the district have been taking place since not long after its dormancy began,” said Bernstein, who is also director of communications for Hawes Hill and Associates, an economic development agency that works with a number of Houston’s management districts. “Major developers that are relatively new to the scene stated their support for resumption of services, as did city government officials.” 

Houston Mayor John Whitmire, who was inaugurated in January, did not respond to a request for comment on the revival of the district. 

The new iteration of the district aims to be relatively streamlined, focused on essential tasks and allocating 60% of its budget to public safety. Its new service and assessment plan stipulates that the tax rate will drop to 9 cents per $100 of property value from 12 cents. The values are determined by the Harris County Appraisal District. And property values in Montrose and other Houston neighborhoods have risen significantly since the district went dormant.

The assessments will be levied against commercial property owners rather than small-business owners, many of whom own the properties in which they operate, Bernstein said. Residential complexes with 25 or fewer units will be exempt, as will mixed-use properties where the business portion is less than 40 percent of the total valuation. The midrise and high-rise properties that have popped up in Montrose in recent years will pay assessments based on the valuation of four floors of the complex, not the entire building. 

The district has not yet begun providing services, Bernstein said. The board plans to hold a retreat to discuss its operations and procedures on April 3 at Cafe Brasil at 2604 Dunlavy; the meeting will be public, but no public comments will be taken. 

The board is awaiting city approval on nominations to fill six vacant board seats, he said, There are several active board members, including Dimitri Fetokakis, owner of Niko Niko’s, the Greek restaurant at 2520 Montrose Blvd., who also served on the district’s board during its previous iteration.

That wasn’t always a pleasant experience, he acknowledged, given the tension the management district caused among his longtime neighbors. Still, he agreed to serve again after being approached several years ago. He said the district’s functions are necessary given concerns of some over public safety and trash. In addition, he said, maintenance of projects being pursued by the Montrose TIRZ will likely fall on the management district. 

But Fetokakis isn’t oblivious to the concerns of his fellow business owners about the district’s revival.  

“I get it,” he said. “Everybody’s like, I already pay my taxes. Why isn’t the city doing this?’ Well, in reality, it’s not happening, so now what?”

“Montrose has always been that eclectic place in Houston, but that doesn’t mean that we have to not take care of it,” Fetokakis continued. “We have to make sure it’s clean. We have to make sure it’s safe, as much as we can. We have all these bike trails in the middle of the street that are all crooked, and missing poles and things like that. Well, guess who’s going to have to take care of that?” 

He said that the revived district’s board plans to do more to address the “disconnect” the community experienced last time: “We obviously need to do a better job in communicating.” 

Many commercial property and small-business owners remain unpersuaded. About two dozen residents and business owners gathered for a meeting at Cafe Brasil this week, Adams and Greer said, where many focused on what they said was underwhelming services, even as the assessments took a bite out of their margins.

“In theory I could see how it could help, and yet we already get the services that they say they’re going to provide,” Greer said. “We are not blighted. It’s Montrose.” 

Finial Group closes industrial property sale in Houston

Jason Gibbons and Tyler Holt with Finial Group closed a sale at 12543 Perry Road in Houston.

The industrial property in Northwest Houston totals 21,250 square feet with 5,420 square feet of covered outdoor storage area.

The property features 11 grade-level roll-up doors and has frontage on Perry Road. Holt and Gibbons represented the seller. Jim Rock with Avison Young represented the buyer.

Gov. Greg Abbott wants the Texas Legislature to rein in investors behind large-scale home purchases

Gov. Greg Abbott called on state lawmakers Friday to try to limit Wall Street’s presence in the Texas housing market.

As the nation’s housing affordability crisis continues unabated, lawmakers and housing advocates have increasingly concentrated scrutiny on so-called institutional homebuyers, meaning investors big and small as well as corporations who buy single-family homes to rent them out. They accuse corporations and hedge funds of playing an outsized role in the homebuying market and outbidding would-be first-time homebuyers, even though estimates show investors own only a small percentage of the nation’s overall housing stock.

A spike in investor activity in the housing market in the COVID-19 pandemic era has since prompted lawmakers to try to curtail or even ban it as a means to bring down home prices and give first-time homebuyers a leg up in the market.

Abbott joined the fray Friday.

“I strongly support free markets,” Abbott wrote on the social media site X on Friday afternoon. “But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home. This must be added to the legislative agenda to protect Texas families.”

Abbott didn’t detail the scope or what kind of action he would like lawmakers to take. His office did not return requests for comment Friday.

Investors ramped up their home purchasing noticeably during the pandemic, when interest rates were at historic lows. Texas, in particular, was a major hotbed for investor activity in the homebuying market as demand for housing skyrocketed amid the state’s robust growth.

Texas led the nation in home purchases by investors in 2021, according to the National Association of Realtors — 28% of all homes sold that year went to an institutional investor. That share was even greater in exceptionally high growth markets like Tarrant County, where investors accounted for some 52% of home sales.

Those figures prompted state lawmakers last year to try to rein in investor activity in the Texas housing market, or to at least calculate the scale of that activity. Those efforts went nowhere.

Texas lawmakers approved a bill to commission an annual report from the Texas Real Estate Research Center at Texas A&M University to track institutional buyers’ moves in the state’s housing market. But Abbott vetoed the bill — part of a rash of vetoes he used to pressure then-warring Republican legislators to agree on a massive property tax cut package.

Economists and housing experts questioned Friday whether limiting investors from buying and owning homes would improve the housing market and benefit first-time homebuyers. Institutional investors’ share of single-family homes in some parts of the country can be high, researchers say, but it’s unclear how much they distort the overall housing market. An estimate from the Brookings Institution pegs institutional investors’ share of the nation’s single-family rental stock at about 3%.

Limiting or barring institutional investors from purchasing homes, who then rent out those homes, would mean fewer rental units overall, said Daryl Fairweather, chief economist at Redfin. That could potentially bar renters, who tend to have lower incomes, from living in wealthier neighborhoods with access to better school districts and job opportunities, she said.

“If you say none of these single-family homes can be rented out, or you make it harder for them to be rented out, you make it harder for families to live in the neighborhoods that have the best schools or have the best parks, amenities, transit, whatever it is that single-family neighborhood has going for it,” Fairweather said.

Institutional investors aren’t buying as many homes as they did during the pandemic, owing to high interest rates. Investors with at least 1,000 homes in their portfolio made up 0.4% of U.S. home purchases at the end of the fourth quarter last year, according to figures provided by John Burns Research and Consulting, a firm that tracks the housing industry. That’s down from a peak of 2.4% in 2022.

That trend was apparent in some parts of Texas. In the Dallas area, the number of investor purchases peaked in early 2022 at around 40,000, figures from John Burns show. By the end of 2023, those purchases had fallen to a little more than 20,000, in line with pre-COVID levels.

Amid higher interest rates, Texas has more homes on the market now than it did during the hot pandemic-era housing market.

“Investors have not sucked all of the inventory out of the market,” said David Jarvis, principal at John Burns.

But inventory is still tight. Instead of going after institutional investors, Fairweather said, Abbott should throw his weight behind statewide zoning reforms aimed at loosening local land-use regulations to allow more homes to be built.

Texas lawmakers flirted with those kinds of measures last year, but they died quietly in the Texas House. Meanwhile, Austin officials have enacted policies to allow up to three homes to be built on single-family lots — and are expected to vote to allow homes to be built on smaller parcels.

Rise48 Equity buys 323-unit apartment complex in Fort Worth

Rise48 Equity acquired Copperfield Apartments in Fort Worth, Texas.

This 323-unit complex marks the company’s 49th acquisition since 2019 and its ninth in the Dallas market, further strengthening its Texas portfolio.

Rise48 Equity has plans to invest over $9 million in revitalizing Copperfield Apartments, which will soon be rebranded as Rise Spring Pointe. The property renovations include:

  • Platinum-level interior upgrades: White shaker doors, Quartz countertops, plumbing fixtures, stainless steel appliances, vinyl flooring, and updated lighting.
  • Transformative exterior: Fresh 3-tone paint, pool area improvements, a redesigned leasing office, landscaping enhancements, and a new LED-backlit monument sign.