The Texas Tea: All We Need Is A Little Certainty
Reporting on commercial real estate can feel like a game of Whac-A-Mole, and this past week especially has my head spinning. Apartment occupancy is up for the first time in two years, and, apparently, office leasing is seeing a slight rebound. I checked, and Mercury isn’t in retrograde, so what gives?
Perhaps we are approaching the end of this pesky downturn. I heard at a Dallas event a few weeks back that the mere stability of interest rates, neither up nor down, is reinstating a level of confidence that is getting things moving again. They say you don’t know what you’ve got till it’s gone, and for commercial real estate, that’s certainly true of “certainty.” Now that it appears to be returning, things are looking up.
It isn’t all rainbows and butterflies. Geopolitical unrest in faraway lands is expected to drive up costs at Texas restaurants. Data centers could be starved for power in as little as two years, which would be bad news for Texas’ booming data center industry. The trend of retail bankruptcies continues to plague brick-and-mortar real estate, especially malls, as evidenced by the demise of Rue21 and Sam Ash Music.
So what comes next for CRE? I retired my crystal ball a long time ago, but if history is any indication, I expect it to be a wild ride.
— Olivia Lueckemeyer, Bisnow DFW Reporter
What's The Big Deal?
Florida-based firm The Wideman Co., with the help of an unnamed “family office” equity partner, dropped all cash to acquire two historical buildings in Downtown Houston known as The Jones on Main. The buyers did not disclose the price. Now the 794K SF, 1920s-era JPMorgan Chase Bank Building at 712 Main St. and the 95K SF, turn-of-the-century Great Jones Building at 708 Main St. are set to be modernized and upgraded, which means they will no longer be “your grandfather’s stodgy office building,” The Wideman Co. CEO Matthew Wideman said.
The Best Of Bisnow
- A Historic Win: Dallas voters during the May 4 election approved a landmark $82M in bond funds dedicated to housing relief. Though far less than advocates had originally hoped for, the money will start to make a dent in the city’s urgent housing crisis by paying for infrastructure and helping to curb homelessness.
- East Comes West: A first-of-its-kind hospitality experience is headed for Plano in early 2027 with the introduction of the Miyako Hotel, a Japanese mainstay that hopes to grow its presence in the U.S. The hotel will accommodate Japanese employees visiting Toyota’s nearby HQ and will allow American visitors to be immersed in Eastern traditions and culture.
- Get On Your Feet: What started as a pandemic-era initiative to give Downtown Houston businesses more outdoor dining room and foot traffic is now becoming permanent. Downtown Houston+ is in the final design and engineering phase of More Space: Main Street 2.0, which will make seven blocks of Main Street into a car-free pedestrian promenade.
- Proxy Face-Off: Whitestone REIT and an activist investor both have proxy advisory firms supporting their respective nominees for the company’s board, which will be selected at the annual stockholder meeting this month. This is the latest challenge to the shopping center-focused REIT’s effort to move on from its longtime CEO’s firing in 2022.
- Another One Bites The Dust: Rue21 is the latest in a string of mall-based apparel businesses to declare Chapter 11 bankruptcy amid plummeting sales. The teen fashion retailer will shutter more than a dozen stores in North Texas, which could add about 76K SF of vacancy to the region’s retail market.
Best Of The Rest
- Shoring Up Infrastructure: Nearshoring is becoming an increasingly important factor in the U.S. supply chain, and developers are taking note. Ocotillo Capital Partners is developing a 300-acre industrial park in the Lower Rio Grande Valley at the Pharr-Reynosa International Bridge, where more than 1,000 commercial trucks cross between Mexico and the United States each day, Freight Waves reported.
- Chasing Chips: Singapore-based PTW Group plans to capitalize on Texas’ growing number of chipmaking plants by opening a North American HQ outside of Austin, according to the Austin Business Journal.
- A Massive Win: A $265M production campus is headed for Bexar County following JCB’s purchase of nearly 400 acres in South San Antonio, the region’s largest job-creating project in 20 years. The UK-based company is one of the world’s largest manufacturers of construction and agricultural equipment, the San Antonio Business Journal reported.
- Lights, Camera, Action: Dallas’ economic development staff hopes to snag incentives to expand South Side Studios in South Dallas. The move comes as the city pursues a state designation as a media production hub that would translate to tax breaks for job creation and recurring capital investments, The Dallas Morning News reported.
- Billions For Beds: Harris Health is moving forward with the $1B expansion of the Lyndon B. Johnson Hospital in Houston, The Real Deal reported, citing state filings. The expansion, funded by a voter-approved $2.5B bond, will add 390 beds to the hospital.
Quote Of The Week
“I find it ironic that we've agreed to tear down I-345 and trench it so that we can stitch two key pieces of our core back together while, at the same time, many of the same players are talking about repeating that mistake with an elevated rail line.”
— Colin Fitzgibbons, president of Hunt Realty Investments, speaking at last week’s Bisnow event about why extending the proposed Houston to Dallas high-speed rail line into Arlington and Fort Worth is contradictory to the city’s plans to reunite downtown and South Dallas.
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So how's the Tea? As we brew up next week's edition, send us your feedback, including what kind of content you'd find valuable in this newsletter. And don't forget, we love news tips.
Katharine Carlon, Central U.S. Editor: katharine.carlon@bisnow.com
Olivia Lueckemeyer, Dallas-Fort Worth Reporter: olivia.lueckemeyer@bisnow.com
Maddy McCarty, Houston Reporter: maddy.mccarty@bisnow.com
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