Looking For Land

Here at REDNews, we’ve written at length about the development boom in the communities west of Houston, such as Waller County. In the past few years, that area has exploded with growth, a movement perhaps ignited by the construction of the Daikin Texas Technology Park in Waller. “That was a game-changer for the area,” says Keith Edwards, Senior Vice President of land brokerage at Caldwell Brokerage Company. His team helped negotiate that 491-acre land deal. Boasting 4 million square feet under one roof, Daikin’s facility employs approximately 4,000 people today, but that number is expected to grow to roughly 7,000, according to Edwards. “It was a great project,” he says. “It’s fulfilling to see what it’s done for the area — not only Waller County but Harris County too.” The Daikin deal, while significant, is one of many Caldwell Brokerage has closed in the northwest quadrant of the Houston metro area. “We have sold thousands of acres along US-290 and throughout Northwest Houston,” says Edwards. Click to read more at www.rednews.com.

Stocking Up on Industrial

Industrial real estate is no longer simply the steady workhorse operating quietly behind the scenes. The market sector has jumped to the forefront as the property everyone is talking about. That attention is well deserved, with secular shifts that are spurring steady demand for space and overall performance that is tough to ignore. According to the NCREIF Property Index, industrial is expected to generate returns of 10.3 percent this year, well ahead of the 6 percent returns expected in both office and apartments and 2.9 percent for retail. The market has been riding a significant tailwind from e-commerce, and that breeze is only expected to grow stronger. “Logistics real estate remains strong and, in most markets, customers are waiting for new supply to come online due to the limited availability of standing inventory in nearly all U.S. cities,” says Kim Snyder, president of the west region at Prologis. Industrial also is seeing demand coming from sources across the board – third-party logistics and logistics firms, manufacturers, light assembly, and even cannabis growers. According to the Urban Land Institute’s Real Estate Economic Forecast for Spring 2019, the industrial/warehouse vacancy rate is hovering around 7 percent, well below its 20-year average of 10.2 percent. CBRE puts warehouse vacancies even lower, at 4.4 percent. Industry sources agree that demand has been fueling a surge in warehouse development in recent years. Click to read more at www.ccim.com.

Officials Spar With Senators Over Plan For Mortgage Giants

WASHINGTON (AP) — Trump administration officials on Tuesday defended their plan to Congress for ending government control of mortgage finance giants Fannie Mae and Freddie Mac, clashing with Democratic senators on whether the change would raise home borrowing costs and neglect lower-income homeowners. The two finance companies nearly collapsed in the financial crisis 11 years ago and were bailed out at a cost to taxpayers of nearly $190 billion. Treasury Secretary Steven Mnuchin and Housing and Urban Development Secretary Ben Carson, along with regulator Mark Calabria, director of the Federal Housing Finance Agency, testified before the Senate Banking Committee on the plan for returning Fannie and Freddie to private ownership. The companies have become profitable again and have fully repaid their bailouts. Under the plan, their profits would no longer go to the Treasury but would be used to build up their capital bases as a cushion against possible future losses. Click to read more at www.marketbeat.com.

Lunch With D CEO: Shawn Todd, of Todd Interests

The lunch crowd is just beginning to stream in when developer Shawn Todd arrives at Mirador, the buzzy restaurant atop Forty-Five Ten, a tony boutique in the heart of downtown Dallas. He takes note of the interior table where I’m sitting and asks a waitress if we can move to a spot that’s closer to the windows. “I promise I’m not high maintenance,” he assures her. Then he turns to me and adds, “I just want to look out at the buildings. You can see the history and get a great sense of what’s happening downtown.” Our new table offers a view of Main Street and Elm Street corridors … a swimmer cooling off in the cantilevered pool at The Joule, the Pegasus-topped Magnolia Hotel, and, down a bit on the right, the former First National Bank Tower. The 52-story building occupies the largest vacant block downtown. Various resuscitation attempts have been made over the years, most recently by Drever Capital Management. But now, the property is in the able hands of Todd, whose Todd Interests took control in May. Click to read more at www.dmagazine.com.

The California Real Estate Boom Is Over. What Now?

If you had invested in a property in San Francisco five years ago and cashed out in 2019, you would have made a 50% profit, never mind the rental income. But if you had bought a year ago and sold today you would have made exactly zero. The California boom is over and investors need to switch to Plan B, which is the answer to the Jeopardy question: How do you deal with a market that at best will be moving sideways, but could also drop 20%? The end of the boom in California also poses troubling questions for investments elsewhere in the country. Will other tech economies follow suit? What are the prospects for booming markets in Arizona, Nevada, Utah, Texas, and Florida? And will panic selling drive down prices everywhere, as it did in 2008, pushing an already weakened national economy into recession? Click to read more at www.forbes.com.

Years Ago a Toronto Lawyer Paid $1.50 An Acre For Barren Texas Land. Now It’s Worth $7 Billion And His Family Won’t Sell

So much of the Permian Basin is under production that the lights glowing at night, on well pads and rigs and double-wide trailers, make the place look in NASA satellite photos like a giant Lite Brite. But there’s a spot where the Permian dims. It’s a big one, covering more than 250 square miles and loaded with enough oil and gas that it could, by some estimates, fetch US$7 billion. In an era where everything in the basin seems to be for sale, though, the Fasken ranch isn’t. The owners have no interest. They don’t even want to drill very much. That’s heresy in the busiest U.S. oil patch and almost as much of a curiosity as the lack of enthusiasm for cashing in. “As long as I have been alive, I have never known anyone to successfully negotiate any type of purchase from them,” said Kimberly Wurtz, a lawyer in Norman, Oklahoma, who grew up near the ranch in the 1980s and ’90s. Click to read more at www.business.financialpost.com.