Colliers closed the sale of the 81,500-square-foot industrial park at 6002 W 34th St. in Houston.

The seller, represented by Jason Tangen and Paul Dominique of Colliers, was a local family that owned and operated the park since its original construction. 

The property is comprised of six buildings totaling 81,500 square feet on 3.84 acres. This multi-tenant industrial park is currently 95% leased.

Many economic reports in March came in stronger than expected, justifying the Fed’s current stance of being patient in making the decision to lower interest rates. Despite the downward trend in inflation readings since June 2022, the “last mile” in getting inflation down to the Fed’s 2% target is proving to be more challenging.

The ongoing resilience of the economy causes the Fed to be less concerned about the lagged impact of the tightening of the past two years, and more focused on the potential impact of lowering rates too soon.

Inflation and consumer spending

The February Core Consumer Price Index (CPI) increased 0.4% for the second month in a row. Although the year-over-year core CPI edged down to 3.8% from 3.9%, the three-month annualized rate has accelerated to 4.2%. The headline CPI also increased 0.4% for the month, causing its year-over-year growth rate to increase from 3.1% to 3.2%.

The Fed’s preferred measure for inflation, the core Personal Consumption Expenditure Index (PCE), recorded a 0.3% increase in February and remained at 2.8% year-over-year. It should be noted that inflation indices often show stronger readings at the beginning of the year due to many price adjustments that occur at the outset of a new year.

As for the consumer, despite a weaker than expected retail sales report, overall consumer spending was stronger than anticipated in February, driven by spending on services. The increase in spending occurred even though inflation-adjusted disposable personal income declined in February after a flat reading in January. With spending up and income down, personal savings declined to the lowest level since December 2022.

Economic indicators and GDP

The leading economic indicators (LEI) ticked higher in February following 23 consecutive months of decline. Further improvement in the LEI is needed to confirm that the economy is poised to re-accelerate, but at least this suggests that most of the factors that have been cited as holding back economic growth are stabilizing. The biggest positive contributor to the LEI was the improvement in the length of the average workweek, while the biggest negative contributor was interest rates.

Improvement was also seen in the manufacturing sector via the ISM survey for March. That index moved above the neutral level of 50 for the first time since September 2022. The Production, New Orders, and Employment components provided much of the strength for the overall survey. Expectations for stronger demand and low customer inventory levels suggest support for future production.

The final reading on real GDP in fourth quarter 2023 was revised up to 3.4% from 3.2%. Stronger consumer spending and business investment were drivers of the upward revision. Nominal corporate profits in fourth quarter 2023 were up 4.1% during the quarter and up 5.1% year-over-year.

The labor market

The March employment report provided further evidence of the strength of the labor market. Non-farm payrolls in the establishment survey rose 303,000 – the largest gain since May 2023 – and the household survey showed an increase of 498,000 jobs. The unemployment rate dropped back to 3.8% from 3.9%, the growth rate of average hourly earnings declined from 4.3% to 4.1% which was the weakest growth since June 2021, and the average weekly hours worked ticked higher.

In a separate report, the National Federation of Independent Business (NFIB) said that the net percent of firms planning to raise worker compensation decreased from 26% to 19%, not only fully reversing the jump in compensation plans that occurred in late 2023 but also hitting its lowest level since March 2021.

It is interesting to note that over the last 12 months, 1,347,000 full-time jobs have been lost while 1,888,000 part-time jobs have been added. Consequently, on a net basis, the yearly gain in jobs has come from part-time employment. Multiple job holders have increased by 492,000.

Interest rate expectations

As expected, at their mid-March meeting the Federal Open Market Committee (FOMC) kept the target range for the Fed Funds rate at 5.25% to 5.50%. Their official statement following the meeting said that they don’t “expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2.0%.”

Of particular interest was the economic projections that the FOMC updates on a quarterly basis. The median projection for real GDP growth (from fourth quarter 2023 to fourth quarter 2024) was revised up to 2.1% from 1.4%. The median projection for core PCE inflation in fourth quarter 2024 was revised up to 2.6% from 2.4%.

On the topic of interest rate cuts, the median forecast of the 19 members was for three interest rate cuts this year. Interestingly, 10 members forecast three or more cuts, while nine members forecast two or fewer cuts. In other words, although the median projection came out as three cuts, it was a close call that could have been changed by the forecast of a single committee member.

Undoubtedly, the Fed is leaning towards cutting rates this year at some point. However, the stickiness of inflation in some categories along with the strength of the labor market is causing them to be patient. The recent rebound in some economic metrics has reduced the urgency of a near-term interest rate cut. Further evidence that inflation is moving sustainably toward their target of 2.0%, along with the continued rebalancing of supply and demand in the labor market, will be necessary for the FOMC members to have the confidence to make the initial cut in rates. Markets have moved expectations for the timing of the first interest rate cut to July.

Newcor Development is nearing completion and delivery of a single-tenant building on one of the last remaining sites in the Tomball Business and Technology Park in Tomball, Texas.

The tilt-wall building consists of 27,375 square feet on a 2.4-acre site. The spec building has 30-foot clear height, ESFR sprinklers, two dock-high doors and one oversized grade-level door.

The building was designed to accommodate office space up to 7,000 square feet on two stories, which would increase the useable square footage to more than 30,000 square feet.

Rob Banzhaf with Newcor is marketing the building for sale or lease with shell delivery slated for May.

CapRock Partners recently acquired Peachtree Distribution Center, a 396,750-square-foot, 100% leased, Class-A industrial asset in Mesquite, Texas.

The warehouse property is within a preferred distribution business center in Dallas-Fort Worth’s East Dallas/Mesquite industrial submarket.

CapRock purchased the distribution facility from a Dallas-based investor-developer. Terms of the deal are not disclosed.

Peachtree Distribution Center is located at 510 N. Peachtree Road, adjacent to the I-635 freeway, with prime visibility and accessibility. The 24-acre property is less than one mile from freeway on/off ramps via Military Parkway and W. Scyene Road and is within close proximity to regional transportation routes such as HWY 80, I-30, I-20, and I-635. Corporate neighbors include big-box industrial users such as distributors and light manufacturers and the property is surrounded by institutional ownership.

Built in 2001, the distribution facility features a cross-dock configuration with 31-foot clear height, 66 dock-high doors and three drive-ins, minimal office space (3.2% of the property), abundant power and ESFR sprinklers. The Property also features 120-foot truck courts that are expandable to 175 feet, and easy in and out access to N. Peachtree Road.

Peachtree Distribution Center is leased to three high-quality tenants. CapRock plans to make capital improvements to enhance the property’s functionality and aesthetic.

CBRE National Partners represented the seller in the transaction, led by Randy Baird, Ryan Thornton, Jonathan Bryan, Eliza Bachhuber, Nathan Wynne, and Elliott Dow.

Larkspur Capital LP has hired a general contractor and is starting vertical construction on a multifamily mid-rise that will also bring needed retail, multi-level units, and flats to the growing east end of Deep Ellum known as Exposition Park in Dallas.

Dallas-based Larkspur has tapped Austin-based OHT Partners to build its 219-unit, seven-story development on a 1.4-acre site located at 4003 Commerce St. This community is the latest Larkspur concept to move forward in the Exposition Park micromarket. The company previously built The Willow, another seven-story apartment community, just northwest of The Juniper. Nearby, it is also planning 2^nd @ Ash, a 280-unit apartment community at 705 1^st Ave., where approximately half of the complex’s 280 units will be designated for workforce housing.  

The striking architectural design, by Dallas-based Corgan, represents a modern expression of the historic Art Deco influences in the surrounding neighborhood. The brick and stone façade is paired with floor-to-ceiling windows in some areas and inset nooks in others, creating defined ways for the public to interact with different aspects of the building’s ground level.

The Juniper will offer a wide range of units, from studios to two-bedrooms, as well as penthouse suites, flat-style homes, and luxury townhome units along a newly created, private park.

Apartment units will range in size from 567 to 1,992 square feet. Similarly, 18 flat-style homes will range in size from 556 – 1,992 square feet. The penthouses offer an impressive range of 1,108 – 1,632 square feet, while six, two-story townhome units range in size from 1,814 to 1,939 square feet. Rental rate ranges will be determined closer to The Juniper’s opening.

Upon entering, residents and guests will be greeted by a grand entry curved staircase with a double-height lobby. Other shared amenities include co-working spaces with views overlooking downtown, an indoor/outdoor clubhouse and a large, ground-level private park with a dedicated dog park. The third floor features a pool deck offering breathtaking views of downtown Dallas as well as gathering areas featuring fire pits, club kitchens, and outdoor grill stations.

Inside, residents will find contemporary interior designs, with upscale features such as mud rooms, dry bars with open shelving, quartz countertops, stainless steel appliances, and Bluetooth locks.

Construction for The Juniper is scheduled to begin in early April and wrap up in mid-2026.

One of the most indispensable, yet often overlooked elements of commercial real estate construction is the building envelope. Building envelopes stand as silent guardians, protecting investments, ensuring occupant comfort and enhancing energy efficiency. By recognizing their significance and investing in their optimization, developers and builders can create properties that not only withstand the test of time, but also contribute to a more sustainable and resilient built environment.

Comprising walls, windows, roofs and foundations, the building envelope is more than just a physical barrier. It serves as the primary defense against external elements, a regulator of indoor environments and a determinant of energy efficiency. Understanding the significance of building envelopes is crucial for developers and builders aiming to create sustainable, comfortable, and structurally sound commercial properties.

At its core, the building envelope acts as a shield, protecting occupants from the vagaries of weather. Rain, snow, wind and temperature fluctuations are kept at bay, ensuring a comfortable indoor environment regardless of external conditions. But its significance extends beyond mere protection; it’s also a cornerstone of energy efficiency. With envelope technologies accounting for approximately 30 percent of the primary energy consumed in residential and commercial buildings, optimizing these structures becomes paramount in reducing energy consumption and operational costs.

One of the primary functions of the building envelope is to maintain structural integrity. Walls, roofs and foundations form a cohesive system that not only shelters occupants but also supports the entire structure. By withstanding external forces and distributing loads effectively, the envelope ensures stability and longevity, safeguarding investments for years to come.

Moisture intrusion poses a significant threat to buildings, causing deterioration, mold growth and compromising indoor air quality. The building envelope serves as a fortress against moisture, employing various strategies such as barrier systems, drainage mechanisms and diversion systems to keep water out and maintain a dry interior environment.

Controlling air infiltration is essential for both energy efficiency and indoor comfort. The building envelope regulates the movement of air, minimizing drafts, reducing heat loss or gain and preventing moisture buildup. Through proper specification and installation of air barriers, insulations and sealants, builders can create airtight envelopes that enhance energy performance and occupant well-being.

Few regions present as unique challenges and opportunities as the state of Texas. From the blistering heat of its summers to the occasional icy chill of its winters, the Texas climate is characterized by extremes that demand careful consideration when designing and constructing building envelopes.

Texas summers are notorious for their scorching temperatures, often surpassing 100 degrees Fahrenheit. In such conditions, the importance of an effective building envelope cannot be overstated. Proper insulation, air sealing and solar control measures are essential to keeping indoor spaces cool and comfortable while minimizing reliance on mechanical cooling systems. Additionally, selecting materials with high thermal resistance helps prevent heat transfer, reducing energy consumption and utility costs.

Conversely, Texas winters, although generally milder compared to northern states, can still bring periods of cold and inclement weather. A well-designed building envelope acts as a barrier against chilly drafts and moisture infiltration, maintaining interior warmth and protecting against structural damage caused by freezing temperatures. By incorporating robust thermal barriers and moisture control measures, builders can ensure year-round comfort and resilience in the face of fluctuating weather patterns.

In commercial real estate, where every detail counts, understanding the components of a building envelope is crucial. Cladding, control layers, insulation and structural framing work together to create a robust barrier that shields against external elements and maintains optimal indoor conditions. By carefully selecting materials, considering climate factors and adhering to best practices in design and construction, developers can create buildings that are not only aesthetically pleasing but also efficient, durable and resilient.