gc
10 October 2003, 02:00 AM
'A pent-up demand' boosts property sales
10:59 PM CDT on Thursday, October 9, 2003
By STEVE BROWN / The Dallas Morning News
http://www.dallasnews.com/business/columnists/sbrown/stories/101003dnbusrecol.32118.html
The local real estate market offers a good lesson in current economics. Or maybe it's just a case of positive thinking run amok.
During the worst economy since the 1930s, sales of homes and commercial buildings are hitting new highs.
Apparently bargain shoppers aren't turned off by acres of headlines about job losses and corporate failures. And the low cost of money – interest rates – outweighs even the weakest financial outlooks, it would seem.
Don't believe me? Just look at the latest commercial property sales figures.
Vacancy rates in office, retail, industrial and apartment buildings are at close to a 10-year high. Landlords are cutting rent to attract tenants.
But sales in these segments were up 9 percent during the first half of the year.
The biggest gain was in Dallas County, where sales were up a stunning 18 percent. Sounds like boom times are here again.
Does it make sense?
Even longtime Dallas property market researcher George Roddy was surprised that the six-month total was so robust.
"It seems crazy, but there is a pent-up demand to find decent real estate deals," Mr. Roddy said. "With all the crapola going on in the stock market, a lot of people are coming into real estate.
"It's kind of encouraging," he said.
The report wasn't all flowers and candy.
Collin County – ground zero for the region's high-tech industry meltdown – suffered about a 5 percent dip in commercial sales this year. Of course, that's just a fraction of the decline in employment in the Telecom Corridor.
The hottest property sector for investors has been the apartment market. Apartment sales are up by almost a third this year, compared with the first six months of 2002.
But sales of office buildings – always the whipping boys in any real estate downtown – were up 19 percent.
So where is it all headed?
At some point, without an improvement in local employment numbers, even the most ebullient building buyers will call it a day. Without jobs, the real estate market is fundamentally dead.
But a more likely scenario is that the property-buying binge will stall when interest rates start to go up.
And with the U.S. government borrowing every dollar in sight to pay for rebuilding Iraq, that may be sooner than anyone thinks.
Improving Inwood
When you start out with a landmark, where do you go from there?
That's what United Commercial Realty is asking about its latest assignment – Inwood Village, which was bought last month by pension fund investors.
The North Dallas shopping center has been a hit with shoppers since it opened in 1949. Back then, Inwood Village was "out in the country" on a two-lane farm road north of Dallas.
W.W. Carruth Jr. built one of the city's first "modern" shopping centers, with acres of paved parking and then-innovative glass storefronts.
The 235,000-square-foot retail project has been remodeled several times over the years and is still a top retail location, with tenants including Gap, Cantina Laredo, Chico's and Empire Bakery.
The center is anchored by the historic Inwood Theater.
"It's already a great center; we just want to make it better," said UCR president Mickey Ashmore. "We want to try and do one more restaurant and want to play off some of the home-accessories tenants that are already there."
United Commercial – which will lease Inwood Village for the new owners – is bringing in the same team, led by Lawrence Attaway, that worked on several of its Knox Street projects.
Remedy for a hole
Another local real estate landmark (can a hole be a landmark?) may soon be sprouting construction.
During the 1980s, the corner of Lemmon and Cole avenues was the most recognized flop in the Dallas real estate crash.
Developers who excavated the high-traffic corner for a tower went broke and left behind a deep pit filled with stagnant water. The "Hole on Cole," as it was known, had to be filled in at taxpayer expense.
Over the last few years, schemes to build everything from a seniors housing project to high-rise apartments have fallen through.
But now it looks as though the choice corner is destined for a less glamorous use.
CVS Corp. is eyeing the corner for a drugstore.
Duke eyes Dallas
Investor Duke Realty Corp.'s buying window is open.
The Indianapolis-based real estate investment trust says Dallas, Atlanta and Chicago are at the top of its shopping list for industrial building purchases.
Company executive vice president John Guinee even sent out an announcement saying, "We want commercial real estate brokers and corporate real estate executives in each of our markets to know we are actively seeking value-added acquisition opportunities."
Saying something like that around here is like showing a T-bone steak to a wild tiger. I hope they have extra phone help.
Duke has about 6 million square feet of warehouse space in North Texas.
Cencor's new pursuit
Dallas' Cencor Realty Services Inc., which manages and operates retail projects throughout Texas, has set up a division to create investment partnerships.
Fred Margolin is president of the real estate syndication division, which is called Amherst Equity Ventures.
Mr. Margolin is the co-founder and former chairman of Dallas-based U.S. Restaurant Properties Inc., a real estate investment trust. He also co-founded a company that is the largest franchisee of CiCi's Pizza.
E-mail stevebrown@dallasnews.com
10:59 PM CDT on Thursday, October 9, 2003
By STEVE BROWN / The Dallas Morning News
http://www.dallasnews.com/business/columnists/sbrown/stories/101003dnbusrecol.32118.html
The local real estate market offers a good lesson in current economics. Or maybe it's just a case of positive thinking run amok.
During the worst economy since the 1930s, sales of homes and commercial buildings are hitting new highs.
Apparently bargain shoppers aren't turned off by acres of headlines about job losses and corporate failures. And the low cost of money – interest rates – outweighs even the weakest financial outlooks, it would seem.
Don't believe me? Just look at the latest commercial property sales figures.
Vacancy rates in office, retail, industrial and apartment buildings are at close to a 10-year high. Landlords are cutting rent to attract tenants.
But sales in these segments were up 9 percent during the first half of the year.
The biggest gain was in Dallas County, where sales were up a stunning 18 percent. Sounds like boom times are here again.
Does it make sense?
Even longtime Dallas property market researcher George Roddy was surprised that the six-month total was so robust.
"It seems crazy, but there is a pent-up demand to find decent real estate deals," Mr. Roddy said. "With all the crapola going on in the stock market, a lot of people are coming into real estate.
"It's kind of encouraging," he said.
The report wasn't all flowers and candy.
Collin County – ground zero for the region's high-tech industry meltdown – suffered about a 5 percent dip in commercial sales this year. Of course, that's just a fraction of the decline in employment in the Telecom Corridor.
The hottest property sector for investors has been the apartment market. Apartment sales are up by almost a third this year, compared with the first six months of 2002.
But sales of office buildings – always the whipping boys in any real estate downtown – were up 19 percent.
So where is it all headed?
At some point, without an improvement in local employment numbers, even the most ebullient building buyers will call it a day. Without jobs, the real estate market is fundamentally dead.
But a more likely scenario is that the property-buying binge will stall when interest rates start to go up.
And with the U.S. government borrowing every dollar in sight to pay for rebuilding Iraq, that may be sooner than anyone thinks.
Improving Inwood
When you start out with a landmark, where do you go from there?
That's what United Commercial Realty is asking about its latest assignment – Inwood Village, which was bought last month by pension fund investors.
The North Dallas shopping center has been a hit with shoppers since it opened in 1949. Back then, Inwood Village was "out in the country" on a two-lane farm road north of Dallas.
W.W. Carruth Jr. built one of the city's first "modern" shopping centers, with acres of paved parking and then-innovative glass storefronts.
The 235,000-square-foot retail project has been remodeled several times over the years and is still a top retail location, with tenants including Gap, Cantina Laredo, Chico's and Empire Bakery.
The center is anchored by the historic Inwood Theater.
"It's already a great center; we just want to make it better," said UCR president Mickey Ashmore. "We want to try and do one more restaurant and want to play off some of the home-accessories tenants that are already there."
United Commercial – which will lease Inwood Village for the new owners – is bringing in the same team, led by Lawrence Attaway, that worked on several of its Knox Street projects.
Remedy for a hole
Another local real estate landmark (can a hole be a landmark?) may soon be sprouting construction.
During the 1980s, the corner of Lemmon and Cole avenues was the most recognized flop in the Dallas real estate crash.
Developers who excavated the high-traffic corner for a tower went broke and left behind a deep pit filled with stagnant water. The "Hole on Cole," as it was known, had to be filled in at taxpayer expense.
Over the last few years, schemes to build everything from a seniors housing project to high-rise apartments have fallen through.
But now it looks as though the choice corner is destined for a less glamorous use.
CVS Corp. is eyeing the corner for a drugstore.
Duke eyes Dallas
Investor Duke Realty Corp.'s buying window is open.
The Indianapolis-based real estate investment trust says Dallas, Atlanta and Chicago are at the top of its shopping list for industrial building purchases.
Company executive vice president John Guinee even sent out an announcement saying, "We want commercial real estate brokers and corporate real estate executives in each of our markets to know we are actively seeking value-added acquisition opportunities."
Saying something like that around here is like showing a T-bone steak to a wild tiger. I hope they have extra phone help.
Duke has about 6 million square feet of warehouse space in North Texas.
Cencor's new pursuit
Dallas' Cencor Realty Services Inc., which manages and operates retail projects throughout Texas, has set up a division to create investment partnerships.
Fred Margolin is president of the real estate syndication division, which is called Amherst Equity Ventures.
Mr. Margolin is the co-founder and former chairman of Dallas-based U.S. Restaurant Properties Inc., a real estate investment trust. He also co-founded a company that is the largest franchisee of CiCi's Pizza.
E-mail stevebrown@dallasnews.com