The Texas Tea: Gearing Up For Battle

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Benjamin Franklin once said nothing in life is certain except death and taxes. Owners of industrial facilities in Dallas County are hoping to argue the second part of that theory by protesting sky-high property values handed down by the appraisal district last week.

In what property tax consultants told Bisnow is a historic jump, industrial values in Dallas County are up more than 70% in some cases. Bewildered owners are attempting to reconcile the slowdown in the market with such an extreme spike. 

Consultants will do their usual dance to try to convince the appraisal district its estimates are wrong, but that process is expected to be more of an uphill battle than in previous years. With business-friendly policies one of the region’s biggest draws, property owners and consultants said they worry about the impact on leasing, since tenants are the ones who will end up shouldering the cost. More on that to come next week.

Meanwhile, a Fortune 300 car dealer is moving its headquarters to Houston while Elon Musk is breaking up with Austin. Across Texas, commercial foreclosures are on the rise, but some asset types are faring better than others. Whoever said consistency is the key to success clearly wasn’t living in a post-pandemic world.

— Olivia Lueckemeyer, Bisnow Dallas-Fort Worth Reporter

What's The Big Deal?

McKinney is gearing up to carry a lot of clout after the city council officially greenlighted the development of Sunset Amphitheater, a $220M music venue from Colorado-based Notes Live. The 20,000-seat facility is expected to host major touring acts and be an economic boon for North Texas, creating more than 1,300 jobs and drawing both local and out-of-town patrons eager to see their favorite artists perform live. The open-air venue, which will include a range of seating options from lawn admission to luxe fire pit suites, is expected to open in 2026.

Read more here. 

The Best Of Bisnow

• Bigger Isn’t Better: Pain in the commercial real estate industry caused the number of statewide foreclosures to grow 129% in March from a year prior, according to Attom Data Solutions. Texas outpaced the nationwide rate, which came in at 117% year-over-year. California, New York and Florida were the only states to outnumber Texas for commercial foreclosures last month.
• Party’s Over: The Plano City Council voted Monday night to ban the creation of short-term rentals in single-family neighborhoods, ending a years-long saga that left the city fielding complaints of drug-fueled ragers, prostitution rings and excessive noise. Existing owners aren’t off the hook, either, with the city implementing an annual registration fee and other regulations.
• Embarrassment Of Riches: Is there such a thing as too much of a good thing? Panelists at a Bisnow event last week weighed the benefits and pitfalls of DFW’s explosive population growth on the region’s healthcare system and how providers are tackling the influx of demand for medical and behavioral care.
• Buying Spree Continues: Houston billionaire Tilman Fertitta is making more big moves and further expanding his local real estate portfolio. Last week, he bought 777 Post Oak Blvd., a Class-A office building adjacent to his Post Oak Hotel, and a 3.4-acre tract next to the River Oaks District shopping center, which he bought earlier this year. He hasn’t said what he plans to do with the sites.
• Friendly Development: The first public-private partnership of its kind in Friendswood is making a huge mixed-use development possible. Tannos Development Group and Wolfgramm Capital broke ground last week on the 106-acre Friendswood City Center, a project with plans for hundreds of thousands of square feet of medical and office space, retail, hospitality and multifamily, plus a full-service hotel and a 54-acre park.

Best Of The Rest

• Group 1 To 2: Fortune 300 car dealer Group 1 Automotive is moving its headquarters to 45K SF at Town Centre Two in West Houston. Moody Rambin broke ground in 2022 on the eight-story, 167K SF office building. Group 1 will complete a $7.25M build-out of its office space on the fifth and sixth floors, according to state filings reported by The Real Deal.
• See Ya Later: Tesla is breaking up with the city of Austin. The electric car giant has filed to de-annex about 2,100 acres along State Highway 130 and the Colorado River, land that includes its giant factory. The move takes advantage of a new law that allows property owners to remove land from a city’s outer reaches and sidestep the development approval processes. Tesla isn’t the only property owner filing for divorce — nearly 200 others had taken advantage of the law between the time it went into effect in September and the end of last year, The Real Deal reports. And yesterday, Oracle joined the fray, announcing it will decamp for Nashville only four years after naming Austin its HQ.
• NIMBY Surprise: Rudy Rasmus, pastor emeritus of St. John’s Downtown Church in Houston, told Chron he was quite surprised to learn a neighboring law firm had raised concerns over Rasmus’ planned housing development, saying he “didn’t know we had a NIMBY case.” While he fights to get a variance approved that would allow him to build a 14-floor apartment building for the city’s unhoused population, that part of town is seeing significant change.
• Fight The Fees: Added fees are driving up rents across the Lone Star State, according to a new report from the University of Texas at Austin School of Law, adding insult to injury for renters already among the most cost-burdened in the nation. Burdensome add-ons dubbed “junk fees” include costs for valet trash, pest control and even charges for boiler management and fire hydrants, KERA reports. Researchers say the practice is threatening Texans’ financial security and recommend state legislators pass laws requiring landlords to disclose all fees in rental listings.
• Long Time Coming: A multimillion-dollar project to expand the Dallas North Tollway will wrap up in 2025, ending a three-year timeline that will add a fourth lane in each direction between the Sam Rayburn Tollway and PGA Parkway, Community Impact reports. In the meantime, travelers through Frisco will have to endure a little more headache as crews install beams and prepare to pour concrete on the new bridge decks.

Photo Of The Week

Postel Group’s Oscar Martinez and WGA Consulting’s Steven Ramirez pummeled each other for a good cause at the Association of Commercial Real Estate Professionals’ second annual Bayou City Brawl at the Hilton Americas in Downtown Houston last Wednesday. Commercial brokers, engineers and more traded in their business suits for boxing gloves and duked it out to raise money for the Building Tomorrow Foundation, a Houston-based nonprofit that helps graduate students gain a college education in all degrees related to commercial real estate. Ramirez took home the belt in this match.