HUD Secretary Ben Carson Wants More Cities to Ditch Single-Family Zoning

As cities across the U.S. grapple with severe housing shortages that send prices soaring and would-be buyers fleeing, Ben Carson said he’d like to see more cities address the zoning regulations that contribute to the problem. Carson — who leads the U.S. Department of Housing and Urban Development (HUD) — made his comments Tuesday during a visit to Minneapolis, where lawmakers voted last year to ditch single-family Zoning, which had previously dominated the city limits. Speaking to reporters, Carson suggested more cities should follow Minneapolis’ example and drew a connection between zoning and homelessness. Click to read more at www.inman.com.

U.S. Finance Execs Hold on to Positivity

U.S. business leaders remained significantly more confident in the domestic economy than the global economy, but the gap narrowed slightly in the second-quarter Business & Industry Economic Outlook Survey released Thursday by the Association of International Certified Professional Accountants. The survey’s CPA Outlook Index (CPAOI) dipped one point to 75 out of 100, reflecting slight easing in expansion, revenue, and profit expectations. The index peaked at 81 in the first quarter of 2018. The most recent survey, conducted in May, included 785 responses from CPA decision-makers such as CFOs, CEOs, and controllers. Fifty-seven percent of respondents were optimistic about the U.S. economy, consistent with the first quarter. Their views were boosted in part by lower taxes and less regulatory burden. Click to read more at www.journalofaccountancy.com.

The Future of the Parking Garage

By Rand Stephens (Houston)

It is no longer a matter of “if” driverless cars will be on the road, it’s a matter of “when.” And, that “when” is sooner than most people think. Some grocery stores in the Houston area are already delivering groceries to homes using autonomous vehicles and in June, METRO along with Texas Southern University (TSU), will launch Phase 1 of their first driverless vehicle dubbed Generation 2. It won’t be long before private autonomous vehicles hit the road. Personal mobility will have implications reaching beyond the automotive industry. Some speculate that the parking landscape in metro areas will be fundamentally restructured, which can lead to new challenges and opportunities for commercial real estate.

Theoretically, a driverless car will rarely need to park because it will drop off passengers at their destination, then drive off to pick up another passenger or collect your groceries. Street parking could be replaced with drop-off/pick-up zones, and parking garages could become “urban mobility hubs” where autonomous vehicles will refuel, recharge and undergo cleaning and maintenance. All this is still dependent on how many will actually use this new technology. We know it’s coming, but it will be a while before it becomes an actual way of life. Cell phones have been around for a couple of decades, but not everyone has given up their land line yet.

Source: DowntownHouston.org
Almost 160,000 people work in Downtown Houston and roughly 60% drive to work. There are approximately 100,000 parking spaces in 42 existing properties classified as parking garages in the Central Business District, totaling 10,190,359 square feet.

With the population growth on the rise, it’s hard to imagine that parking areas will become obsolete. And, adaptive re-use of parking garages is much too costly. Some estimate it can cost as much as $90 to $100 per square foot. It would make more sense to tear it down.

It will be a gradual transition. It is likely to start with transforming street parking into mobility drop-off/pick-up spots, delivery zones, etc. Perhaps that will be the next “must have” amenity that tenants will be looking for. Parking lease clauses will be augmented with language providing for mobility usage that ensures building and garage access by autonomous electric vehicles. It will be interesting to see how developers, landlords, tenants and brokers will respond to this transportation revolution and what innovative solutions will emerge.

(Rand Stephens is a Principal of Avison Young and Managing Director of the company’s Houston office.)

Real Estate Lures Investors as Safe Haven Among Trade War

Amid the stock market volatility fueled by the drama of U.S.-China trade negotiations, real-estate stocks and ETFs beckon investors as a relatively safe haven. The Vanguard Real Estate ETF (VNQ +0.9%) has risen 16% YTD, outperforming the S&P 500’s 13% increase during the same time period; and in the past month, the ETF is up 1.3% while the S&P 500 has declined 2.2%. Click to read more at www.seekingalpha.com.

Renovation and Amenities

In this issue of Insights, we offer perspectives to capitalize on opportunities that continue to be created in a growing economy, and to maintain a house in order, with preparations made to weather market corrections or flattening economic growth, should those changes occur. Our cover story on office renovations and office amenities samples current building features and services, and discusses why many tenants not only desire, but require, amenity-rich workplaces to support their business strategies. Click to read more at www.transwestern.com.

Only Ripples Likely From Next CMBS Maturity Wave

What begins, must end, one way or another. As loan originators gradually ramped up after the Great Recession, and the packaging of commercial mortgage-backed securities grew apace, so the CMBS sector now faces a wave of maturities from 2020 through 2023 that totals more than $170 billion. According to a new Morningstar research report, the good news is that the on-time payoff rate is likely to remain in the range of 80 to 85 percent. This would be stronger than the payoff rate than during 2015 and 2017, when $222.48 billion in CMBS hit maturity, “because of more selective underwriting standards, rising valuations, and the Fed’s dovish interest-rate outlook amid a slowing economy,” the company says. Click to read more at www.cpexecutive.com.