RECON
Real Estate Center Online News
November 10, 2009
Copyright 2009. All rights reserved.
Material herein is published according to the fair-use doctrine of U.S. copyright laws related to non-profit, educational institutions. Items attributed to sources other than the Real Estate Center at Texas A&M University should not be reprinted without permission of the original source.

TEXAS TOWER BUYS JPMORGAN CHASE CENTER

HOUSTON (globest.com) – Texas Tower Ltd. has purchased the 1.1 million-sf JPMorgan Chase Center.

The Class-A office building is at 601 Travis St. in the central business district.

Texas Tower, a Hines entity, also owns the adjacent 75-story JPMorgan Chase Tower.

Studley Inc.'s Houston office represented seller JPMorgan Chase.

MINERALS, SURFACE RIGHTS, ROYALTY PAYMENTS

COLLEGE STATION (Real Estate Center) – An oil and gas technical report that's been around since 1991 has been updated.

Minerals, Surface Rights and Royalty Payments by Real Estate Center Attorney Judon Fambrough updates court rulings regarding what are and are not minerals.

The present status of Texas law is that the term minerals or oil, gas and other minerals includes, as a matter of law, oil, gas and uranium. Sulphur and salt also are considered minerals.

Limestone, caliche, surface shale, building stones, sand, gravel and water cannot be reserved or conveyed. Coal, lignite and iron ore on or within 200 feet of the surface are not included if production would destroy or deplete the surface.

WIN OUR ANNUAL REPORT/CALENDAR!

COLLEGE STATION (Real Estate Center) – The Real Estate Center is expecting a huge shipment of its 2009 Annual Report this week, and we're looking to find homes for them.

If you'd like to adopt one, participate in our latest giveaway, which begins today and will continue through the next nine issues of RECON. Each issue will have a question taken from a Center publication or resource. The first ten to answer that day's question correctly will receive a copy of our annual report. That means you have 100 chances to win.

Oh, and did we mention that the annual report comes with a stunning 12-month calendar featuring Texas photographs taken by Center staff? Trust us, this is one annual report you'll want to display for your friends and customers to see.

Today's question: Which Texas industry had the greatest employment growth rate from September 2008 to September 2009? (Hint: You'll find it in our latest Monthly Economic Review.)

Send your responses to texrec@recenter.tamu.edu by 5 p.m. Thursday, Nov. 12.

Our annual report, minus the calendar, is also available on our website.

PRICE TAKES BROADSTONE

SAN ANTONIO (globest.com) – Price Development Group of Kansas City has purchased the 282-unit Broadstone Colonnade from Morgan Group Inc.

The Class-A complex sits on nine acres at 4330 Spectrum One and consists of ten buildings. It is 94 percent occupied.

Monthly rents average $965, with one-, two- and three-bedroom units averaging 826 sf.

Apartment Realty Advisors brokered the transaction.

WHAT CHALLENGES ARE YOU FACING?

COLLEGE STATION (Real Estate Center) – Center Chief Economist Dr. Mark Dotzour wants to know what challenges you encounter when trying to sell a house to a qualified buyer.

"For example, is the appraisal issue still a challenge?" Dotzour asks. "What about underwriting standards? If you could make a suggestion to HUD and FHA to improve their ability to serve qualified buyers in their pursuit of a home, what would you tell them?"

Your answers will help Dotzour and Research Analyst Gerald Klassen next week when they attend the U.S. Department of Housing and Urban Development's (HUD) strategic planning meeting in Fort Worth.

The meeting is intended to help HUD advance national housing objectives and address broader economic, social and energy needs.

E-mail your feedback to texrec@recenter.tamu.edu.

RISING ECONOMY DOES NOT EQUAL RISING OCCUPANCY

AUSTIN (Marcus & Millichap) – Although the economic downturn in Austin is expected to subside in the fourth quarter, Class-A apartment owners will face challenges into the first half of next year, according to a fourth-quarter apartment research report by Marcus & Millichap.

Homes are becoming increasingly affordable, which will likely entice some renters into ownership in the coming months.

Following are some of the most significant aspects of the Austin apartment research report:

Payrolls are anticipated to expand in the fourth quarter, limiting job losses in Austin this year to 5,000 positions, a modest 0.6 percent decline. Since the dot-com recession, the market has added nearly 130,000 jobs.
The pace of development in Austin will remain robust in 2009 as 9,900 units come online. A slowdown in permitting activity and thin development pipeline suggest a significant decline in construction in 2010.
The addition of new stock will underpin a 360-basis-point increase in vacancy this year to 11.3 percent. Despite the rise, demand for apartments is expected to tick up 2.5 percent.
Asking rents are forecasted to end the year at $852 per month, a 2.1 percent decline, while effective rents are projected to fall 4.7 percent to $747 per month.

MCALLEN BOND PROJECTS COMPLETE

McALLEN (The Monitor) – McAllen's school district recently celebrated the grand opening of the final piece of its 2005 $97.8 million bond projects.

The opening of the district’s $13.3 million district operations complex — consisting of the system’s warehouse, central kitchen and transportation building — followed the construction of five new elementary schools, a middle school and a new gymnasium for Lincoln Middle School.

The project’s completion came in on time and $10 million over the originally planned budget. The district paid for the extra costs through interest accrued from the bonds it sold.

TEXAS EMPLOYMENT FEELING PINCH

COLLEGE STATION (Real Estate Center) – The Texas economy lost 292,700 nonfarm jobs from September 2008 to September 2009, an annual job loss of 2.8 percent. Over the same period, the U.S. economy lost more than 5.7 million jobs, or 4.2 percent of its total nonfarm jobs.

The state’s seasonally adjusted unemployment rate rose from 5.1 percent in September 2008 to 8.2 percent in September 2009, while the U.S. rate rose from 6.2 percent to 9.8 percent during the same period.

Only three Texas industries (education and health services, other services, financial activities) and the government sector had more jobs in September 2009 than in September 2008. Eight other industries experienced net job losses over the same period.

Only one Texas metro area, McAllen-Edinburg-Mission, posted a positive employment growth rate from September 2008 to September 2009. Twenty-five metro areas had net job losses.

The state’s actual unemployment rate in September 2009 was 8.3 percent. Lubbock had the lowest unemployment rate followed by Amarillo, Midland, Abilene and College Station–Bryan.

The Real Estate Center's complete update on the Texas economy is available online.

SHELDON SCHOOL OPENS

SHELDON (Houston Chronicle) – Sheldon Independent School District has opened its 200,000-sf Michael R. Null Middle School at 12117 Garrett Rd.

SHW Group was the architect, and Houston-based Dyad Construction was the general contractor.

The school incorporates several green features at its 100-acre site.

TARRANT COUNTY'S FIRST KROGER MARKETPLACE

FORT WORTH (Hillwood) – Hillwood and Kroger are bringing the first Kroger Marketplace to Tarrant County.

The 123,000-sf store — the fourth Kroger Marketplace in Texas — is scheduled to open toward the end of next year. It will be at Heritage Trace Pkwy. and Riverside Dr. in the Alliance Town Center.

In addition to being a grocery store, the Kroger Marketplace will have a Fred Meyer Jeweler store and a home-furnishing section with Ashley Brand furniture.

TEXAS ENERGY STAR HOMES SHINE

WASHINGTON (U.S. EPA) – Houston and Dallas top the list of 20 U.S. markets with the most Energy Star homes, according to an announcement released today by the U.S. Environmental Protection Agency (EPA).

San Antonio and Austin also made the list.

The EPA also announced that it reached a milestone for the Energy Star program by passing the one millionth Energy Star–qualified–home mark.

According to the EPA, families living in Energy Star–qualified homes will save more than $270 million on their utility bills this year while avoiding greenhouse gas emissions equivalent to those from about 370,000 vehicles.

ULI ECONOMIC FORECAST CONFERENCE TOMORROW

HOUSTON (Urban Land Institute Houston) – It's not too late to register for tomorrow's Economic Forecast Conference sponsored by Urban Land Institute (ULI) Houston and the Real Estate Center.

The half-day conference at the Hilton Americas Hotel will feature current intelligence about market forces driving investment and development in the greater Houston area.

Following a keynote address from Joe Griffith of JPMorgan Chase Bank, the Center's Chief Economist Dr. Mark Dotzour will moderate an economist panel consisting of Angelos Angelou of Angelou Economics, Bill Gilmer of the Federal Reserve Bank of Dallas and Jefferson Duarte of Rice University.

A local response panel moderated by Jones Lang LaSalle Houston President Dan Bellow will follow. The panel will include Dan Pickering of Tudor, Pickering & Holt; John Kajander of the Texas Medical Center; and Eric Potts, representing the Houston Airport System.

More information is available on ULI Houston's website.

NAR LAUNCHING CONSUMER WEBSITE

WASHINGTON, D.C. (National Association of Realtors) – The National Association of Realtors is launching a new website with information for homeowners and more tools for Realtors.

The site, called HouseLogic, is intended to help homeowners protect, maintain and enhance the value of their homes, and to provide business-building tools for Realtors. The site will also allow homeowners to speak together with Realtors to federal legislators on public policy issues where homeowners and the real estate industry have a common interest.

HouseLogic will be promoted to consumers in earnest starting in February. Until then, the site is in beta and is being promoted primarily to Realtors, giving them a chance to explore the site and provide feedback.

DFW'S APARTMENT SECTOR FACES CHALLENGES

DALLAS (Marcus & Millichap) – The Metroplex's Class B and C apartment segments will face challenges into 2010 because of significant layoffs in traditional blue-collar industries like construction and manufacturing, according to a fourth-quarter apartment research report by Marcus & Millichap.

Following are some of the most significant aspects of the DFW apartment research report:

Employers are projected to sharply reduce the rate of job cuts through the end of the year. As a result, marketwide employment is forecasted to decline by 2.5 percent — or 73,000 positions — in 2009.
After adding 10,300 apartments to the Metroplex in 2008, builders are expected to bring 13,300 units online this year.
New construction will push up vacancy to 9.5 percent by the end of this year, 220 basis points above the rate in 2008. Despite the rise, apartment demand will remain essentially flat.
Rents are expected to recede as owners attempt to fill vacant new units. Asking rents are projected to finish the year at $780 per month as effective rents fall to $697 per month, annual declines of 0.9 percent and 3.1 percent, respectively.

POST UP IN HOUSTON, AUSTIN

HOUSTON (globest.com) – Los Angeles–based Post Investment Group has purchased the local Serrano Apartments and Austin’s Longhorn Station Apartments, and will spend a combined $40 million in renovations on the complexes.

The Serrano Apartments at 14723 W. Oaks Plaza St. were built in 1999 and have a current occupancy of 30 percent.

Cushman & Wakefield negotiated the deal.

In Austin, renovations of the 1970s Longhorn Station Apartments will be just short of a complete overhaul, ranging from a full amenities package on the apartments’ interiors to replacement of wood-rot and exterior painting.

@ THE CENTER
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