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The Texas Tea: The Highs, The Lows And Everything In Between

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It was the best of times, the worst of times, the age of big deals and the age of scams worthy of a Dickensian villain in a busy Texas commercial real estate week.


First, the good news. The state that has ranked the most desirable in report after report continues its rapid growth spurt, with new Census Bureau numbers on millennial migration revealing that 1 in 10 movers between 27 and 42 — nearly 400,000 of them — chose the Lone Star State as their new home last year. Most major Texas metros benefited from the trend, while states with higher taxes and costs of living like New York and California were the nation’s big losers among the millennial demographic.

But all that growth has come at a cost, as Bisnow Dallas Reporter Olivia Lueckemeyer found in her examination of affordable housing in DFW. Despite leading the nation in subsidized affordable housing investment, the city can’t build fast enough to house its fast-growing working-class population. According to estimates, Dallas is already short about 100,000 affordable homes and apartments — numbers that grow by the day and make it nearly impossible for those not earning top dollar to find secure housing.

Farther south, in Houston, it was also a week of contrasts. A development company known for its creative projects announced it would give a beloved corner of the Montrose neighborhood a major facelift. And KKR signed a massive deal to acquire a 1.8M SF industrial park, the second-largest industrial trade in local history and a major show of confidence in the area’s market strength. 

Yet confidence also cost one Houston-area investor $1M in a fraud scheme that proved once again that “trust but verify” is more than an old cliché.

This week, we invite you to pull up a chair, settle in and partake in all of this week's hot tea. As always, comments and tips are welcome. Please feel free to contact any of us at the email addresses below.

— Katharine Carlon, Bisnow Central U.S. Editor

What's The Big Deal?

Park 8Ninety

In one of the Houston area’s largest warehouse deals ever, global investment firm KKR has agreed to pay $234M to snap up the 1.8M SF Park 8Ninety industrial complex from Artis Real Estate Investment Trust. 

The sale comes as Artis REIT looks to offload assets to strengthen its balance sheet and KKR takes advantage of Houston’s “strong demand fundamentals and comparatively low supply,” according to KKR Managing Director Ben Brudney.

Although Houston saw a record amount of industrial space delivered in 2023, about 32.4M SF worth, demand is still strong, and new construction has dwindled.

“Starts have fallen off a cliff,” First Industrial Realty Trust’s Bradley Kluever said at a Bisnow event last month.

Read more here. 

The Best Of Bisnow

  • WeWork Woes: WeWork’s ongoing bankruptcy saga has big implications for the Metroplex, where four of the coworking giant’s leases are on the chopping block. The firm is weeks away from exiting Chapter 11, and if it fails to strike a deal with the properties’ landlords, the company intends to walk on those agreements, leaving millions of dollars of rent unpaid.
  • Overpriced Trips: A Houston real estate and private equity exec's vacations could land him in prison for up to 20 years and force him to pay a $250K fine after he pleaded guilty to using a portion of an investor’s $1M to help pay for them. The investor thought the money would go toward real estate development. Instead, it ended in a case of federal wire fraud. 
  • Hitting Home: Despite being the No. 1 metro area for affordable housing investment in 2024, Dallas is battling a crisis-level supply deficit that is pushing up costs. Without swift intervention, the shortage is expected to more than double by 2030.
  • Foreclosure Fight: Jetall Capital owner Ali Choudhri maintains ownership of the former Xerox headquarters at 1001 W. Loop S., managing to fend off moves from lender Romspen to foreclose on the building. The Galleria-area building is one of two Jetall-owned properties stuck in legal limbo amid courtroom maneuverings to avert foreclosure. 
  • Bargain Basement: Another beleaguered office tower in Dallas has been bought at a discount, this time by Costco Wholesale. The members-only retailer picked up North Central Plaza I for $14.25M and plans to spend millions more to rehab the Class-B building, which is next to one of its biggest DFW stores. 

Best Of The Rest

  • Tuning Up The Tower: Houston-based Radom Capital plans to redevelop an iconic portion of Montrose retail that most recently housed Acme Oyster House. Radom acquired the Tower Theater building at 1201 Westheimer Road, along with properties at 1111 Westheimer and 3224 and 3230 Yokum Drive, with plans to redevelop them into a retail center that will pay homage to Montrose’s quirky nature, the Houston Business Journal reports.
  • It’s A Flex: One of the world’s largest contract manufacturers has grown its Austin footprint to more than 1.3M SF with the signing of a new 152K SF lease in Round Rock. Flex Ltd. inked a deal to take over an entire building at the Settlers Grove industrial park, the Austin Business Journal reports, although what exactly the company will be manufacturing is top secret. At one point, Flex made many of Apple’s computers, according to the ABJ, but it also produces everything from ventilators to autonomous driving systems to hairdryers. 
  • Millennial Moves: Texas is the No. 1 destination for Americans age 27 to 42 seeking greener pastures, according to a new report covered by MySA. Nearly 400,000 millennials swarmed to the Lone Star State from other locales last year. Austin-Round Rock saw a 47% jump in millennial movers, the Houston-Woodlands area got a 39% bump, and the San Antonio-New Braunfels area saw an increase of 12%. Dallas-Fort Worth lagged the field, posting a mere 5% increase, and El Paso lost 29% of this age cohort to other locations.
  • Under Pressure: A group of contractors is asking a Fort Worth landlord to cough up $1.6M for what they alleged are unpaid renovations to Burnett Plaza in the city’s central business district. Meanwhile, another set of groups is suing for $1.6M in damages, the Dallas Business Journal reports. The 1M SF tower is battling a vacancy rate of 26.5% — much higher than its submarket’s 11.5% — in another example of financial woes forcing an office market reckoning in North Texas.
  • Building Up A Footprint: SRS Distribution Inc., the building materials company that Home Depot acquired last month for about $18B, signed a full-building lease for a Bush Airport-area warehouse. The 52K SF warehouse will be the McKinney-based company’s ninth branch in the Houston area, the Houston Business Journal reports

Quote Of The Week

“The demand is excruciatingly big. We haven’t really even dented what the true need is for affordable housing.” 

Roger Arriaga, executive director of the Texas Affiliation of Affordable Housing Providers, on a critical shortage of affordable housing in Dallas.


So how's the Tea? As we brew up next week's edition, send us your feedback, including what kind of content you'd find valuable in this newsletter. And don't forget, we love news tips. 

Katharine Carlon, Central U.S. Editor:

Olivia Lueckemeyer, Dallas-Fort Worth Reporter:

Maddy McCarty, Houston Reporter: 


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