A Strong Texas Market

Texas' middle market is the strongest in the country - May 2, 2014

Texas business conditions continue to improve and retail sales are rising, which is good news for the state’s middle market.

Monthly data from the Federal Reserve Bank of Dallas confirms labor market indicators, such as employment and numbers of hours worked, are improving. Perceptions of economic conditions also reflected more optimism in April, and retail sales continued to increase for the 10th consecutive month.

The National Center for the Middle Market, a collaboration of the Ohio State University Fisher College of Business and GE Capital, conducted a survey on the country’s middle market, which is made up of approximately 200,000 businesses with $10 million to $1 billion in revenue. Findings showed that these companies had more than $10 trillion total in annual revenue and created 1.2 million new jobs in 2012–2013.

“The U.S. economy for the middle market has grown rapidly,” NCMM academic director Anil Makhija said. “When you talk about national growth, it is in fact the middle market that’s being the driver behind that.”

Texas accounted for much of that success, named by the NCMM as the nation’s top growth market for mid-sized businesses. The state has approximately 10,000 middle market firms, which employ 4 million and generate $500 billion in annual revenues, NCMM said. Those numbers are higher than the same values nationally.

“Even though (middle market companies) make up less than 1 percent of all Texas firms, they apply 29 percent of the workforce,” Makhija said. “The middle market in Texas, in the last 12 months had revenue growth of 6.5 percent, and that’s impressive.”

And that prosperity is only expected to continue. The survey reported Texas middle market executives have strong confidence in the local economy.

“Ninety-one percent of middle market companies in Texas report confidence in their local economy, compared with 81 percent nationally,” the survey reported.

However, these companies are still facing the same problems as their bigger competitors. In NCMM’s survey, 75 percent of mid-size business executives say they are having a hard time attracting and retaining top talent. Still, job creation growth is still slated at 3.2 nationally percent and 5.3 percent in Texas.

“There is growth, and more so in Texas, but Texas and the U.S. are still facing some challenges,” Makhija said. “Nationally, we still have a pretty high unemployment rate. As a country, we are somewhat behind in producing science, technology, engineering and mathematics graduates, and that’s what’s needed.”

Korri Kezar - Dallas Business Journal.                     

How to Make More Money from Your Rental Property

An apartment complex in San Francisco is trying out a new strategy to
make some additional cash: parking space rentals for non-residents. 

While this isn’t a new idea, it encourages other landlords to
consider hidden income possibilities — this could be a great money maker
for other city apartment owners with unused spaces in their parking
lot.

Hunting for parking in a city like San Francisco can be very
difficult and frustrating. People vacationing to the area are often
surprised to find just how expensive it is to park. The savvy property
managers with Marina Cove Apartments saw this as opportunity to market
their idle spaces.

Monthly parking in San Francisco and similar areas can reach nearly
$400. Marina Cove is setting the rate at $250, taking advantage of a
highly desirable location near the Bay.

The complex offers luxury Marina District apartments for rent,
serving the needs of San Francisco residents who desire to live in one
of the city’s most prestigious neighborhoods.

William Harlow, marketing manager at Trinity Management Services,
says the policy will benefit residents. “We understand how important it
is for our tenants’ guests to be able to have a place to park when they
are visiting. No one wants to tell their Mom or Grandma or friend that
they have to park a mile away and hike up to the apartment complex to be
able to visit them. With the outrageous cost of scarce parking in the
city, $250 a month for a guaranteed spot is a deal.” That’s bound to
enhance tenant retention.

Marina Cove also benefits from diversification, offering furnished
apartments, short term leases, and corporate suite leases or rentals.
The company focuses attention on its friendly and professional staff.


American Apartment Owners Association offers discounts on
products and services for all your property management needs. Find out
more at www.joinaaoa.org.

Source: American Apartment Owners Association

America’s 10 Fastest-Growing Cities

When it comes to growing cities, Texas is booming. The Lone Star State boasts the highest number of cities on Forbes’ annual list of America’s Fastest Growing Cities. Three Texas cities made it into the top 10: Austin (at No. 1), Dallas (No. 4), and Houston (No. 10).

Forbes’ list of America’s fastest-growing cities rates the 100 most populated metros in the country based on several factors, such as the estimated rate of population growth for 2013 and 2014, year-over-year job growth for 2013, unemployment data, median salaries for local college-educated workers, and the rate of economic growth for 2013.

The following cities topped this year’s list:
1. Austin, Texas
 2013 population growth: 2.5%
2. Raleigh, N.C.
 2013 population growth: 2.15%
3. Phoenix
 2013 population growth: 1.67%
4. Dallas
 2013 population growth: 1.91%
5. Salt Lake City, Utah
 2013 population growth: 1.33%
6. Denver
 2013 population growth: 1.75%
7. Ogden, Utah
 2013 population growth: 2.05%
8. Charlotte, N.C.
 2013 population growth: 1.92%
9. Orlando, Fla.
 2013 population growth: 1.82%
10. Houston
 2013 population growth: 1.82%

Source: “America’s 20 Fastest-Growing Cities,” Forbes.com (Feb. 14, 2014)

25 Predictions for 2014

International capital will seek property returns around the globe.

Global
1. Much of the world will see slow growth
2. Global investors will push into new property markets

Europe, Middle East & Africa
3. Second tier cities will be back on the radar
4. European economy to emerge from recession
5. UK economy will strengthen through further government stimulus
6. UK regional markets and secondary assets will be back in play
7. Large-scale infrastructure investments across the GCC
8. Foreign companies will expand to South Africa and beyond

Asia
9. Modest growth in office rentals in Asian Financial Centers
10. Chinese investors will buy overseas in a big way
11. JREITs will expand

India
12. More supply deferrals in 2014
13. Regulatory changes will boost investments

Singapore
14. Singapore's prime office rents will jump by 10-16%

Australia & New Zealand
15. Domestic property investors will take back Australia
16. Leasing conditions will improve in all sectors
17. New Zealand development activity will rise

Latin America
18. Mexican Investment will be Drive by New REITs
19. More Foreign Investors will target Colombia

USA
20. U.S. GDP growth will struggle to average 2%
21. QE will end and interest rates will rise
22. U.S. Home prices will rise as much as 9%
23. Secondary U.S. markets will see expanded demand
24. Industrial will be top U.S. performer in 2014

Canada
25.  The Prairie Provinces will be real estate hot spots

Full story here http://www.colliers.com/en-us/insights/market-news/2014-commercial-real-estate-predictions#.UuvNrU2A0y8

Credit: Colliers International

21.26 Acres Rudd Road Industrial Land Available in Industrial Park in Ennis TX

Click on the image below to learn more about this parcel of land.

Commercial Real Estate

Rudd & Highway 287

Call for Offers August 9th: Fully Furnished Nursing Facility in Matador, TX

Vacancy Rates Continue Decline in Second Quarter 2013

Economic activity posted a steady pace of growth over the past few months, as consumers and businesses seemed committed to moving forward. Gross domestic product rose 2.4 percent in the first quarter of the year. Riding the moderate temperature of a mild winter, consumers opened up their wallets at the fastest pace since the fourth quarter 2010.

Behind an improving economy lies a subtle uplift in consumers’ wealth. Consumers have been paying off debt over the past few years, while cutting back on discretionary spending. At the same time, household wealth tied to financial assets has been rising steadily post-recession, with the Dow recently crossing the 15,000 threshold. Household wealth tied to housing has seen a noticeable improvement in 2012 and the first quarter of 2013. Sale of existing homes rose 9.8 percent in the first quarter of this year, following the 9.0 percent rise in 2012. Due to very tight inventories, multiple bids have returned to the market, and price escalation clauses are pushing home prices up. Based on NAR data, the median sales price of existing homes jumped 11.2 percent in the first quarter of the year.

With vacancy rates falling and rents rising, market fundamentals have improved. National vacancy rates over the coming year are expected to continue declining in most property sectors. The average multifamily vacancy rate is forecast to rise 0.2 percentage point, although the sector still shows the tightest availability and largest rent increases.

Net absorption of office space is projected to total 31.7 million square feet by year end. Office vacancies are expected to decline to 15.6 percent by the end of 2013. The markets with the lowest forecasted office vacancy rates are Washington, D.C., New York and Little Rock, with availability rates of 9.4 percent, 9.9 percent and 12.0 percent, respectively. Rents for office properties are expected to increase 2.6 percent over the year.

Industrial markets are benefiting from rising international trade, which drives demand for warehouse space. Net absorption of industrial space is projected to total 107.1 million square feet by the end of 2013, driving vacancy rates to 9.3 percent. The metro areas with the lowest industrial vacancy rates are Orange County, at 3.9 percent, followed by Los Angeles with 4.1 percent, and Miami, at 5.8 percent. Rents for industrial buildings are expected to grow 2.4 percent this year.

With consumers continuing a cautiously optimistic approach to spending, retail spaces have been on the rebound. Net absorption of retail buildings is expected to total 12.5 million square feet this year. With the supply of new buildings still constrained, vacancies are expected to drop to 10.4 by year-end. Markets with the lowest retail vacancy rates are led by San Francisco, at 3.6 percent. Rounding the top three are Fairfield County, CT, at 4.1 percent, and Long Island, NY, along with Orange County, CA, both at 5.3 percent. Rent for retail properties are projected to increase 1.4 percent over the year.

The apartment market has seen the strongest demand and lowest vacancies, driven by a recovery of household formation towards long-term averages. Net absorption is expected to total 276,320 units this year. Against a supply of only 136,342 new units, vacancy rates are estimated to decline to 3.8 percent by the end of 2013. Metro areas with the lowest vacancy rates are New Haven, CT, at 2.0 percent and New York City, at 2.2 percent. Sharing the number three spot, Minneapolis and San Diego, each record 2.3 percent. Apartment rents are projected to increase 4.6 percent in 2013.

For the full Commercial Real Estate Outlook report, visit http://www.realtor.org/reports/commercial-real-estate-outlook.

Reported by George Ratiu, Research Economist

Vacancy Rates Continue Decline in Second Quarter 2013