Real Estate Center Online News (RECON)
June 9, 2006
Copyright 2006. 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.
PUBLIC NOT BUYING HOUSING 'CRISIS'
COLLEGE STATION – Despite media reports that the housing market faces imminent collapse, a study released this week shows consumers are confident real estate values will remain solid even if mortgage rates increase.
Three-quarters of respondents to ING Direct's most recent homeowner study said they had very little concern about the future value of their homes. The study is based on a national survey conducted by Synovate, a global research firm.
Most survey respondents (85 percent) believe their homes increased in value during the last three years. While homeowners felt their homes have increased in value by approximately 6 percent in the last year, they only expect values to increase by about 4 percent in the next 12 months.
Real Estate Center Chief Economist Mark Dotzour said the survey shows many Americans are smart enough not to believe everything they see on television, such as media reports that a housing bubble is about to burst.
Dotzour said that not only is the housing market not tanking, but home price appreciation is a red-hot 12.54 percent for the entire nation.
“This is still extraordinary price movement,” he said. “You have to go back to 1979 to find this level of appreciation prior to the current boom.
“While the nation’s inventory of unsold homes was six months in April, homes typically continue to increase in value when inventories are at this level. Texas inventory levels are lower than the national average. With a five-month inventory, Texas homes are likely to continue their recent appreciation trends."
TEXAS A&M REAL ESTATE PROGRAM RECEIVES $1 MILLION DONATION
COLLEGE STATION (mays.tamu.edu) – John R. Carmichael III has committed a $1 million estate gift to create the Real Estate Excellence Fund in support of the Mays Business School real estate program. The real estate program includes a master’s degree program in land, economics and real estate.
Carmichael, a BBA finance graduate, is president of Plano-based Westwood Residential, a real estate organization that has developed more than 100,000 multifamily units.
AUSTIN CITY LIMITS ON HOME SQUARE FOOTAGE
AUSTIN (statesman.com) – After hearing public comments for four hours, the Austin City Council passed rules limiting homes to either 2,300 square feet or a square footage equal to no more than 40 percent of the lot size. Attics, small attached garages and first-floor porches are not included in the square-foot calculations.
Homes must sit at least 25 feet from the street with five-foot setbacks on the sides and ten feet in the back. Also, they cannot be taller than 32 feet, which is shorter than the current 35-foot height limit. The rules, scheduled to go into effect October 1, apply to new and remodeled single-family homes and duplexes in older, central-city areas.
Residents in these areas have complained about big houses that block sunlight, destroy trees and change the character of their neighborhoods. At the city council meeting, which lasted until 3:30 this morning, 226 people signed up to speak in favor of the restrictions, and 146 wanted to speak in protest.
The city plans to hire a professional firm that will translate the rules into pictures and graphics.
AUSTIN VOTERS TO DECIDE $567 MILLION BOND PACKAGE
AUSTIN (statesman.com) – A $567.4 million bond package, which would include $90 million for a new public library, will go before voters in November. A 250,000-square-foot central library has been proposed for a site downtown where the Green Water Treatment Plant is now.
Transportation would receive $103.1 million; drainage and water quality protection land, $145 million; parks facilities and parkland, $84.7 million; community and cultural facilities, $31.5 million; affordable housing, $55 million; and public safety facilities, $58.1 million.
Last-minute changes increased the amounts allocated to certain projects. The amount for aquifer protection land was increased from $30 million to $50 million. Affordable housing, the Mexic-Arte Museum and several historical renovation projects also got more funds than originally proposed.
If all seven of the propositions are passed, the owner of a $200,000 home would pay $37 more in taxes a year to cover the bonds.
EL PASO GROUP OPPOSES USE OF EMINENT DOMAIN
EL PASO (elpasotimes.com) – A group called Land Grab Opponents of El Paso has said it will sue the City of El Paso if the use of eminent domain is not taken out of El Paso’s downtown redevelopment plan.
The city is considering a plan for the redevelopment of 127 acres, including some residential areas. Mayor John Cook has said that the plan recommends the use of eminent domain only as a last resort. Dallas attorney Stuart Blaugrund, who is representing the group, said the use of eminent domain for private economic development is against Texas law.
For background information on the plan see, the April 4 edition of RECON at http://recenter.tamu.edu/news/recon040406.html. For more on El Paso’s growth and economic development, see “El Paso’s Home Field Advantage” by Harold Hunt in the April issue of Tierra Grande, online at http://recenter.tamu.edu/tgrande/vol13-2/1771.html.
SOUTH PADRE ISLAND (inspirecondos.com) – A 13-story, 99-unit high-rise development is coming to South Padre Island. Dubbed “Inspire,” the condominium development is on two beach-side acres on Padre Boulevard and off the Queen Isabella Causeway.
Developer CG Financial Group has begun preselling the condos. Luxury units will average 975 square feet, with a limited number of penthouses with 1,300 square feet.
Architecture firm A. Epstein and Sons International Inc. of Chicago is designing the project. Each home will have views of the bay and the Gulf of Mexico. Planned resort-style amenities include an outdoor entertainment area, party room, fitness center, swimming pool and assigned parking.
Personette & Associates of Houston is in charge of sales and marketing.
NJ INVESTORS DISCOVER WESTERN TERRITORY
EL PASO – A New Jersey investment group has purchased commercial property in El Paso. The Barton family sold the Cotton Valley Travel Center to an investment group called Deep Enterpises.
The property includes an RV park, gas station, restaurant and 20-unit motel on 18 acres. The selling price was $1.45 million. The broker was Fortune Real Estate Inc. of El Paso, and the deal closed at Sierra Title of El Paso. (News submitted by RECON reader James Salome.)
HIGH-END HEADING SOUTH
SAN ANTONIO (mysanantonio.com) – The southeast side will get a new gated community this summer. Southern Hills, which is being developed by Schaefer Homes and Arlington-based Classic Century Homes, is located outside Loop 410 and off U.S. 87 and Foster Meadows Dr. Grand opening is this weekend.
The first phase will include 200 homes to be built over the next 12 to 18 months, with another 200 to 300 homes to follow. The one- and two-story homes range from 1,400 to 2,700 square feet. Prices will range from $128,000 to the mid-$170,000s.
About 200 homes will be built with features many people associate with north side gated suburban neighborhoods: stone and brick facades, garden tubs, kitchen fireplaces and granite countertops.
Real estate developer John Schaefer, whose company purchased the land in 1999, calls gated communities an untapped market on the South Side. The area's proximity to Fort Sam Houston, Brooks City-Base and the new Toyota plant motivated Schaefer to start the neighborhood.
FLOWER MOUND (dallasnews.com) – Direct Development has broken ground on their $50 million, 450,000-square-foot shopping center on 40 acres at Dixon Road and FM 2499. Completion is targeted for March 2007.
The Robertson's Creek retail center will be anchored by JCPenney and Belk department stores. Other tenants will include Lane Bryant, Ulta Cosmetics, Kirkland's, la Madeleine, Red Robin and Starbucks.
This project is being built next to the developer’s three-year-old Highlands of Flower Mound shopping center, which includes a SuperTarget, World Market and Linens 'n Things. The two projects will total over one million square feet.
Retail Connection is leasing the center. Robertson's Creek will be the first project built with Dallas-based Direct Development's two new partners, former Dallas Cowboys quarterback Troy Aikman and Mike McCoy, a former minority owner of the football team.
Other developers are building an additional 700,000 square feet of retail space at the intersection.
NORTH WINDS BLOWING
DALLAS (dallasnews.com) – May’s home sales figures indicate some cooling in the North Texas housing market. Sales of affordable homes — those priced below $130,000 — have declined since February. However, overall home sales increased about 3 percent for the first five months of the year.
The number of houses coming on the sales market has also slowed. More than 45,000 single-family houses were on the market in North Texas, an increase of about 5 percent from last May.
Although the market may be cooling, prices are up 6 percent compared with May 2005, according to the North Texas Real Estate Information System (NTREIS). Sales of houses priced over $800,000 increased by more than 18 percent.
Agents attribute the drop in low-priced home sales to rising interest rates, which have increased since last year by more than a percentage point.
The median price of homes sold last month was $154,000.
BEACH FRONT BLUES
GALVESTON (galvestondailynews.com) – The Texas General Land Office (GLO) is making $1.3 million available to homeowners for the removal of houses that are now situated on public beach because of erosion. A two-year moratorium protecting the houses from legally enforced removal ended Wednesday.
Jerry Patterson, GLO commissioner, said state reimbursements will cover the cost of the move up to $40,000. They will not cover the cost of the lot. Available funds would be adequate to move about 32 houses. Applications will be accepted through Oct. 1 and will be prioritized based on the severity of the situation.
The GLO has identified nearly 100 homes that are now entirely on the public beach. More than 50 are on Galveston Island. The office has identified 20 more island homes that are at least partially on the beach.
Patterson has developed a plan for Texas open beaches with eight proposals, some of which include legislative measures for the upcoming 2007 session. The plan makes it clear that the GLO will continue to pursue litigation to remove houses from the beach, while also working on alternative means to address the problem.
One item on the plan’s legislative agenda is a law requiring detailed disclosure to prospective property owners about the implications of the Open Beaches Act. According to real estate records, 13 of the houses on the list changed hands since the moratorium took effect. The houses have sold for prices ranging from $95,000 to $395,000.
The Texas coastline loses an average of five feet a year, notes Patterson. He said he remains an advocate of coastal erosion projects.
To view the GLO proposals, click on: http://www.glo.state.tx.us/news/archive/2006/docs/Press-Release-June7-FINAL-06-07-06.pdf
THIRD TIME’S A CHARM?
AUSTIN (bizjournals.com) – Seller Claydesta LP of Midland has found a third potential buyer of The Terrace, a 109-acre office park located in Southwest Austin. Behringer Harvard Operating Partnership I LP, a Dallas real estate investment trust, plans to buy four buildings at the Terrace totaling nearly 620,000 square feet for $167 million.
Once completed, the Terrace is expected to encompass more than one million square feet, including seven office buildings, a 200-room hotel and retail space.
In the past seven months, Austin's Aspen Growth Properties Inc. and Brandywine Realty Trust of Pennsylvania each put the Terrace property under contract, but both contracts fell through.
Behringer has already made an earnest money deposit of $2 million and planned to make another earnest money deposit of $6.2 million by the end of May.
The sale is set to close within 30 days.
WILLIAMSON SNAGS LARGE MIXED-USE PROJECTS
ROUND ROCK, AUSTIN (statesman.com) – Texas-based developer Simmons Vedder & Co is planning two large mixed-use projects for Williamson County. Each project is expected to add more than one million square feet of office space as well as hundreds of apartments. The company expects to spend $375 million to $475 million on the projects, said John McKinnerney, a partner with Simmons Vedder.
The Round Rock mixed-use project will be on 43 acres within the La Frontera development. Preliminary plans call for about two million square feet to be built along Texas 45 at the southwest corner of La Frontera. The majority of the project will be office space but will also include some shops and an undetermined number of apartments.
The Lakeline Station project will be 1.5 million square feet on 63 acres near Lakeline Mall and adjacent to a Capital Metro Park & Ride station scheduled to become a rail stop in mid-2008. Lakeline Station will have offices, shops and about 800 apartments ranging from moderately priced to luxury units.
Simmons Vedder expects to file plans this summer with the City of Austin for the Lakeline project and with the City of Round Rock for the La Frontera development, McKinnerney said. Groundbreaking is slated for early next year with segments opening in early 2008.
Both projects are tied to the late-2007 opening of Texas 45, a toll road that will link U.S. 183, MoPac Blvd., I-35 and Texas 130.
ALBERTSON CLOSING UNDERPERFORMING STORES
DALLAS (dallasnews.com) – Newly formed Albertsons LLC, which is owned by investors led by private equity firm Cerberus Capital Management and Kimco Realty, is closing 11 unprofitable stores in Dallas-Fort Worth, ten stores in Austin and five in Oklahoma. Stores in Louisiana and four other divisions from Northern California to Florida are also closing. The Fort Worth-based division will have 158 Albertsons locations after the closings.
This summer, Albertsons will shutter four stores in Plano, two in North Dallas and one each in Frisco, Carrollton, Lewisville, DeSoto and Dallas near Duncanville.
Most area stores slated for closure are in direct competition with Wal-Mart Supercenters. Wal-Mart Stores Inc. has the highest concentration of stores in the Dallas-Fort Worth area, with more than 100 Supercenters, Neighborhood Markets and Sam's Clubs.
The closing stores in Texas, Oklahoma and Louisiana comprise 16 percent of Albertsons' three-state region and have accounted for only 9 percent of sales, division president Williams Emmons said.
HISTORIC WEST END MARKETPLACE CLOSING
DALLAS (dallasnews.com) – The West End Marketplace, which opened in 1986 as Dallas' first festival marketplace, is shutting down at the end of June. The former Brown Cracker and Candy Co. building, constructed between 1902 and 1908, had been converted to shops, eateries and nightclubs with an interior atrium.
Since the 1990s, the historic building on Market Street has lost several major tenants, including Planet Hollywood and a ten-screen movie theater.
At 240,000 square feet, The West End Marketplace is the biggest retail building in downtown's West End district. However, Ecom Real Estate, which manages the building, is studying alternatives besides retail for the building, Ecom President Bill Nabors said.
The management company expects to have a new plan for the property in place by late summer.
SHOP TILL WE DROP
SAN ANTONIO (mysanantonio.com) – Construction begins in December on The Fountains at Live Oak, an 850,000-square-foot retail center at the northwest corner of Loop 1604 and I-35. The first phase will be about 400,000 square feet, according to developer Mark Granados of Hill-Granados Retail Partners LP.
Granados said the project is 50 percent preleased but did not reveal the names of the retailers. When the project is complete in a few years it could have up to 70 stores and eight anchor tenants.
MDN Architects are giving the project a South Beach type of design featuring pastel colors, fountains throughout the center and a central public area.
Hill-Granados is developing other area projects including the City Base Landing center on the South Side, Park North at the former Central Park Mall, and a 350,000-square-foot retail project at Loop 1604 and Northwest Military Highway.
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