Why Investors Are Bidding Up Deals
There’s so much debt and equity pushing to get into local deals that it’s common to hear battle cries of “I can’t lose another deal!” (Are you sure that isn't referring to fantasy football?) That was a recurring theme at Bisnow’s fifth annual DFW Capital Markets Summit last week at the Highland Dallas.
Cassidy Turley executive managing director Beth Lambert-Saul told the crowd of 350 she's seeing prospective buyers outbidding others 15% to 20% to get the deal.
The best news is the market is probably just about 75% of the peak, Beth says. There’s a lot of groups with dedicated spec development funds that want to get ahead of the market and if your fundamentals really work, you’re golden, she says. If you’re a long-term player, now’s the time to refinance, too, Beth says; life companies will do 30- to 40-year debt.
Here’s panel moderator, IPA Capital Markets director Brian Adams, bookended by Younger Partners’ Dustin Volz and Holmes Firm’s Ron Holmes. Brian tells us IPA, part of the Marcus & Millichap family of companies, raises debt and equity for its clients. Across the platform, the company did $25B in sales and financing last year. There were no wagers between the OU alum and fellow panelist, Beth (a Louisiana Tech alum) on the game this weekend. Good thing for Beth, since OU whipped ‘em 48 to 10.
Hospitality, multifamily, and land are the primary areas of focus for Hunt Realty Investments in the Dallas area, says SVP Geoff Osborn. Geoff says Hunt is mindful of the potential to overdevelop in certain markets and points to Uptown's multifamily as an area to watch because of so many units coming online. But, he says, there is room left in this cycle across the board in both development and acquiring value-add product.
TIAA CREF senior director of asset management Duane Hale (left, with Geoff) says over the last year or two, the national financial services organization has focused on multifamily, retail, and industrial deals with a concentration on core purchases. Rising prices have often caused TIAA CREF to sit on the sideline and watch the deals go by, he says. In Dallas, the firm is searching for the hard-to-find retail opportunities.
McAlister Investment Real Estate principal Paul Connor (left, prepping for the panel discussion before the event) says there was little, if any, land development going on during the recession. That has created a bottleneck in supply for single-family housing and the demand isn’t going away. It’s also getting harder to find the quality land deals for projects, he says. But, there's a long way to go before the housing market gets to the equilibrium status.
We caught up with Ready Cap’s Craig Barnes, Joe Gomez, and Jeff Bottoms between networking. The event sponsor is a small balance lender for loans in the $750k to $1M range. The guys tell us Ready Cap offers flexible pre-pay, non-recourse permanent and bridge loans for Class-B and C assets.
Here’s part of the Bury team: Jeff Baran, Asma Momin, Richard Nixon, and Deren Wilcox. We learned that Deren was recently promoted to director of business development and VP in the Dallas office. (Congrats Deren!) Bury is also serving as the structural engineer for the 44k SF $20M outpatient clinic for Parkland at the northwest corner of Hatcher Street and Scyene Road in South Dallas.
We snapped Gillham Golbeck & Associates’ Rick Gillham with CREW Dallas director of operations Kim Hopkins. Kim tells us CREW Dallas is hosting its 2014 outstanding achievement award dinner on Sept. 10 at the Belo Mansion in downtown. The award is the highest accolade given to a CREW Dallas member each year, she says. Award finalists include Bradford’s Leigh Richter, Lynous’ Julie Brand Lynch, B&J Financial Services’ Brenda Blake, and The LaSalle Group’s Brenda Brantley.