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'Definite Recovery' for Texas Capital Markets

Dallas-Ft. Worth
'Definite Recovery' for Texas Capital Markets
Liquidity. Cash. Moula. It's back, according to CBRE vice chairmanJack Fraker. Exhibit A: In 2010, a CBRE Texas partnership of Gary CarrRussell IngrumJosh McArtor, and Jack closed 28M SF for$2B in sales with 13M SF in Texas, he tells us.
 
Jack Fraker
Jack (above speaking at Bisnow’s July 29 Capital Markets event) says he and his team have almost 5M SF of properties in escrow, totaling about $553M in deals. They’re also marketing another 2.4M SF valued at about $183M: “This is a pretty good barometer for capital markets in Texas, and things are dramatically different than they were just a year ago.” What things? Institutional and private capital have a renewed interest in real estate investing because of reliable yields that aren’t subject to the daily variations of the stock market, for one. In the past year, the debt market has dramatically improved, with lower interest rates and greater availability of debt capital, he tells us. Jack says CBRE financing guru Greg Greenepartners with the investment sales team and works with various lenders to get customized loan structures for each property.
Overton Centre
Texas is leading the way thanks to job growth, increasingpopulation, and no hangover from the single-family housing crisis, Jack says (because Texas never got overbuilt). Corporations are relocating here, too. Real estate fundamentals (leasing velocity,absorption, and rental rate growth) are favorable compared to other parts of the country, too. And it can be seen in the number of deals closed in 2010 in DFW, including the 448k SF Overton Centre(pictured). Some of the biggest area deals closed by the team in 2010 include the 400k SF Cowboys Distribution Center, the 421k SFPreston Commons, the 727k SF RiverPark 500 & 600, the 668k SFValwood/Metropolitan, and the 412k SF DFW Air Cargo portfolio.
One Legacy Circle
Jack tells us this recovery will stabilize, though spec projects will remain non-existent for a couple more years, and investment sales volume will gradually return to the levels we saw in ’05, ’06 and ’07. Another driver is the aging population. 80M baby boomers (the largest demographic segment of our population) want safe, reliable returns on their investments, which means pouring money into real estate, he says. Office properties, especially in the suburban areas of DFW are especially popular, like the 214k SF One Legacy Circle(pictured). On Nov. 9, we told you about it hitting the market. It’s now one of four local deals CBRE currently has in escrow with closing expected next month, Jack tells us. (No numbers yet.) Others in escrow are La Porte Logistics Center (313k SF), Hilltop Business Center (67k SF), and Trade Center III & V (485k SF).