To ensure delivery, please add firstname.lastname@example.org to your address book, learn how
May 28, 2014
Kennedy Wilson's Big Expansion
Kennedy Wilson just expanded in a big way, absorbing seven San Antonio members into its fold.
We snapped Kennedy Wilson co-managing directors Butch West and newbie Ernest Brown (new only to KW—both gents have more than 30 years under their belts). They tell us the influx of talent will help KW significantly grow its Central and South Texas presence, as well as expand to Houston soon. It's leaping from two to nine brokers in San Antonio initially, with the goal to have 14 by year's end. (The Austin office has seven and is looking to hire four this year—that way it can field a full soccer team.) Even better, the two firms had almost no service redundancy, so now KW can be full spectrum with property management, accounting, project management, sales and leasing brokerage, and capital markets (including investing with a client and build-to-suit development).
Regional senior managing director Steve Pyhrr hopped into the shot. Steve tells us KW has 39 projects totaling 4M SF and 7,000 multifamily and self-storage units in Texas. Ernest and Butch have extra reason to be thrilled; they've been close friends for 20 years. They bonded in a bar when one overheard the other talking about tickler chains—both were raised on shrimp boats—and they keep their love for the water alive through shared vacations to the Bahamas and South Texas fishing trips. Other NGKF-ers joining KW: Rick Stagers, George Harcourt, Barbara Crane, Cynthia Ellison, Clint Hennessey, and Jorge Rodriquez.
Developing in the Eagle Ford
At Bisnow's Impact of the Eagle Ford Shale event in San Antonio last week, panelists shared their success and challenge stories about developing in the shale region. Turner Busby Development partner Walt Busby is building retail in McAllen and says trying to develop in these small towns is very difficult. Some aren't inclined to support outsiders coming in and developing things that change their community, and others aren't prepared for it even if they accept it. (Walt wanted to build a hotel and multifamily in one city, and officials didn't know what their electrical and sewage capacity was... the latter is not something you want to find out after you reach it.)
National Property Holdings CEO Michael Plank says 10k to 15k SF metal buildings with outside storage are in high demand, and they don't require a lot of investment or time to build. That makes them lower risk in case demand dries up in a few years. He says there's tons of leasing activity among frack sand companies, which often will take five- to 15-year leases. Those need major rail capabilities (most require about 100 connected cars per load). Being dual-served rail is particularly attractive, like the 400-acre Alamo Junction park he opened a few months ago.
Colliers VP Barkley Peschel agrees supply is not meeting the industrial demand. He believes the sweet spot is three to five acres with a 6,000 SF to 10k SF building. Eagle Ford region towns also are starved for retail and hotel development. (They are so desperate that people are seeing mirages of The Gap.) In the 1604 corridor, that's starting to transition to single-family and multifamily construction. Our panelists agree that employment is the area's biggest challenge—Barkley says it's difficult to convince retailers to go into the Eagle Ford because they might not be able to staff their stores.
REOC SVP/partner John Turcotte (here between SandCan's John Sheesley and Reynolds & Lapp's Mikel Reynolds) sold a hotel in Cotulla last year where rooms averaged $242/night. There are very few barriers to entry or controls in place in some of these towns, which is how five hotels popped up in Cotulla practically overnight. (It's the new dehydrated hotel construction method... just add water.) He says the Eagle Ford is driving San Antonio's industrial market to new records, like our 95% warehouse occupancy and 8% rent jumps last year alone.
Kemosabe Development principal Robert Anthony (who says his hair rubbed off after 13 years in a football helmet and a handful in a military pilot's helmet) is building all property types in the region. He's preparing to develop mixed-use on I-35 in Cotulla. The property will include multifamily, retail, and 40 acres of industrial. He's looking at two to three times typical industrial rent because users just don't have anywhere else to go. (In the next 30 days, water and sewage will be in place and he can start building.)
Learn the ABCs of CRE
Bisnow Education offers commercial real estate training videos for your staff, your class, or yourself. Hosted by the founding chairman of the Wharton School of Real Estate, Peter Linneman, the informal, informative videos cover complicated ground like finance and development in easy-to-understand explanations (watch a sample). Even if you're a world-weary real estate vet or investor, you'll find new angles that will invigorate your passion; newbies will be able to digest the info in bite-sized, five-minute increments that can be watched anytime. They're digital friendly too: Watch or listen on your smart phone whenever/wherever. They're great for teaching and understanding financial models and industry lingo, and they'll be a tremendous asset to your corporate training program. Group rates available. Find out more about our premiere videos (with more to come) here or reach out to Bisnow's Will Friend, email@example.com.
"When I was born, I owed twelve dollars." — George S. Kaufman. We know the feeling! Send your news to Catie Dixon, firstname.lastname@example.org, or Tonie Auer, email@example.com.