Texas Market Overview

Texas Market Overview
2014 Year End
 Dallas/Ft. Worth
 Houston
 San Antonio
 Austin
Population and Employment (Major Texas Metros)
Millions
MSA Population
(2014)
Source: www.census.gov
2014 Annual
Jobs Gains:
Actual & %
Change
000’s
Source: Texas Labor Market
Information - Tracer website:
LMCI Economic Profiles
(November 2014) [November
‘13 to November ‘14]
Total Non-Ag
Jobs & Annual
Unemployment
% (Actual for
Metros)
000’s
US Unemployment (6.6%)
(Seasonally Adjusted)
Source: Texas Labor Market
Information - Tracer website:
LMCI Economic Profiles
(November 2014)
Page 3
Population, Employment and Income
Texas Metro Area Population & Demographics
2014
National
MSA
Ranking
Population
Dallas-Ft Worth-Arlington
4
6,971,597
Houston-Sugar Land-Baytown
5
6,473,316
San Antonio
25
2,277,550
Austin-Round Rock
35
1,932,430
El Paso
58
862,350
McAllen-Edinburg-Mission
68
861,283
Corpus Christi
114
445,110
Killeen-Temple-Ft Hood
127
444,907
Brownsville-Harlingen
126
440,498
Beaumont-Port Arthur
132
414,576
Lubbock
162
304,523
Laredo
184
275,479
Amarillo
185
265,437
Waco
188
263,208
College Station-Bryan
192
246,591
Longview
198
226,149
Tyler
202
225,731
Abilene
240
169,687
Midland
284
150,528
Wichita Falls
263
153,005
Texarkana/TX-AR
288
93,848
Odessa
283
146,019
Sherman-Denison
313
127,097
San Angelo
326
113,820
Victoria
322
97,687
Metropolitan Area
Source: Texas Department Health Services
Source: www.census.gov
Page 4
Population, Employment and Income
Texas Metropolitan Statistical Areas
Page 5
Major Texas Office Markets Summary
Million SF
Total Inventory
And
Occupancy
Total Inventory
Occupancy Rate
Million SF
2014Y-T-D
Y-T-DNet
NetAbsorption
Absorption
2012
2014Current
CurrentConstruction
Construction
2012
And
And
CurrentConstruction
Construction
Current
Asaa%
%of
ofTotal
TotalSF
SF
As
Absorption
Current Construction
Current Const As a
% of total SF
Page 6
Occupancy %
Major Texas Office Markets Summary
Dallas/Ft. Worth
Total Inventory SF:
Current Occupancy%:
San Antonio
340,889,663
85.7% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:
70,921,584
89.6% (as of Year End 2014)

The DFW Office market ended the 4th Qtr 2014 with a vacancy
rate of 14.3%.

The San Antonio Office market ended the 4th Qtr 2014 with a
vacancy rate of 10.4%.

The vacancy rate was down over the previous quarter, with
net absorption totaling a positive 1,092,496 SF in the 4th Qtr.

The vacancy rate was down over the previous quarter, with
net absorption totaling positive 116,935 SF in the 4th Qtr.

Vacant sublease space increased in the Qtr, ending the Qtr at
2,537,065 SF.

Vacant sublease space increased in the 4th Qtr, ending at
157,945 SF.

Quoted rental rates ended the 4th Qtr at $21.62 PSF (fullservice gross), an increase over the previous quarter.

Rental rates ended the 4th Qtr at $19.59, an increase over the
previous quarter.

A total of 27 buildings were delivered in the quarter totaling
991,598 SF, with 7,750,552 SF still under construction at the
end of the 4th Qtr.

During the 3rd Qtr 2014, 2 buildings were delivered to the
market with 195,408 SF.


In the 3rd Qtr of 2014, 9 office building transactions were reported closed with an average sales price per SF of $179.53
PSF.
There were 972,246 SF of office space under construction at
the end of the 4th Qtr 2014.

Reported cap rates have been higher in 2014, averaging
7.63% compared to the same period in 2013 when they averaged 7.15%.
Houston
Total Inventory SF:
Current Occupancy%:
Austin
280,416,894
89.2% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:
89,097,948
91.4% (as of Year End 2014)

The Houston Office Market ended the 4 th Qtr 2014 with a
vacancy rate of 10.8%.

The Austin Office market ended the 4th Qtr 2014 with a vacancy rate of 8.6%.

The vacancy rate was down over the previous quarter, with
net absorption totaling a positive 2,562,772 SF in the 4th Qtr.

The vacancy rate was down over the previous quarter, with
net absorption totaling 136,619832 SF in the 4th Qtr.

Vacant sublease space increased in the 4th Qtr, ending at
1,762,556 SF.

Vacant sublease space increased in the 4th Qtr, ending at
738,190 SF.

Rental rates ended the 4th Qtr at $27.24, an increase over the
previous quarter.

Rental rates ended the 4th Qtr at $28.44, an increase over the
previous quarter.

During the 4th Qtr 2014, 20 buildings totaling 1,783,653 SF
were delivered to the Houston market area.

During the 4th Qtr 2014, 2 buildings were delivered to the
Austin market totaling 131,500 SF.

There were 17,902,821 SF of office space still under
construction at the end of the 4th Qtr 2014.

There were 3,235,427 SF of office space under construction at
the end of the 4th Qtr 2014.

In the 3rd Qtr of 2014, 12 office building transactions were
reported with an average sales price per SF of $179.38.

In the 3rd Qtr 2014, 3 office transactions were reported with
an average price per square foot of $180.73.

Cap rates have been lower in 2014, averaging 7.35%
compared to the same period in 2013 when they averaged
8.29%.

Reported cap rates have been higher in 2014, averaging
6.92% compared to the same period in 2013 when they
averaged 6.09%.
Page 7
Major Texas Retail Markets Summary
Million SF
Total Inventory
And
Occupancy
Total Inventory
Occupancy Rate
Million SF
2014Y-T-D
Y-T-DNet
NetAbsorption
Absorption
2012
2014Current
CurrentConstruction
Construction
2012
And
And
CurrentConstruction
Construction
Current
Asaa%
%of
ofTotal
TotalSF
SF
As
Absorption
Current Construction
Current Const As a
% of total SF
Page 8
Occupancy %
Major Texas Retail Markets Summary
Dallas/Ft. Worth
Total Inventory SF:
Current Occupancy%:
San Antonio
387,534,376
93.3% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:
123,626,817
94.7% (as of Year End 2014)

The DFW Retail market experienced an slight improvement in
market conditions in the 4th Qtr 2014. The vacancy rate went
from 7.5% in the previous quarter to 6.7% in the current
quarter.

The San Antonio Retail Market did not experience much
change in market conditions in the 4th Qtr 2014. The vacancy
rate was unchanged at 5.3% between previous and current
quarter.

Net absorption was positive 1,219,449 SF, and vacant
sublease space decreased by (49,541) SF.

Net absorption was positive 129,471 SF in the 4 th Qtr and
vacant sublease space decreased by (11,872) SF.

Quoted rental rates (all classes) increased from 3rd Qtr 2014
levels, ending at $14.11 PSF (NNN).

Quoted rental rates decreased from 3rd Qtr 2014 levels,
ending at $14.13 PSF (NNN).

A total of 38 retail buildings with 705,134 SF of retail space
were delivered to the market in the quarter.

A total of 9 Retail buildings with 162,252 SF of retail space
were delivered to the market in the quarter.

There were 3,652,781 SF under construction at the end of the
4th Qtr 2014.

There were 293,759 SF under construction at the end of the
4th Qtr 2014.

In the 3rd Qtr 2014, the market saw 11 retail sales transactions
with an average price per SF of $157.36.
Houston
Austin
Total Inventory SF:
Current Occupancy%:
348,325,086
94.4% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:

The Houston Retail market remained constant in the 4th Qtr
2014. The vacancy rate was 5.6% unchanged from the
previous quarter.

Net absorption was slightly positive 376,055 SF, and vacant
sublease space increased by 25,345 SF.





102,125,611
95.3% (as of Year End 2014)

The Austin Retail market experienced a slight improvement in
market conditions in the 4th Qtr 2014. The vacancy rate went
from 5.1% in the previous quarter to 4.7% in the current
quarter.

Quoted rental rates (all classes) decreased from 3 Qtr 2 2014
levels ending at $15.17 PSF (NNN).
Net absorption was positive 303,447 SF, and vacant sublease
space increased by 9,796 SF.

A total of 18 retail buildings with 377,127 SF of retail space
were delivered to the Houston market in the 4th Qtr.
Quoted rental rates (all classes) increased from 3rd Qtr 2014
levels, ending at $17.88 PSF (NNN).

There were 2,355,126 SF under construction at the end of the
4th Qtr 2014.
A total of 6 retail buildings with 55,788 SF of retail space were
delivered to the Austin market in the quarter.

In the 3 Qtr 2014, the market recorded 10 retail sales
transactions with an average price per SF of $146.64.
There were 387,769 SF of retail space under construction at
the end of the 4th Qtr 2014.

Reported cap rates have been lower in 2014, averaging 7.72%,
compared to the same period in 2013 when they averaged
8.47%.
In the 3rd Qtr 2014, the market saw 1 retail sales transaction
with an average price PSF of $132.49.

Cap rates have been lower in 2014, averaging 6.27%
compared to the same period in 2013 when they averaged
7.04%.
rd
rd
Page 9
Major Texas Industrial Markets Summary
Million SF
Total Inventory
And
Occupancy
Total Inventory
Occupancy Rate
Million SF
2014Y-T-D
Y-T-DNet
NetAbsorption
Absorption
2012
2014Current
CurrentConstruction
Construction
2012
And
And
CurrentConstruction
Construction
Current
Asaa%%of
ofTotal
TotalSF
SF
As
Absorption
Current Construction
Current Const As a
% of total SF
Page 10
Occupancy %
Major Texas Industrial Markets Summary
Dallas/Ft. Worth
Total Inventory SF:
Current Occupancy%:
San Antonio
802,075,462
92.7% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:
114,057,267
93.4% (as of Year End 2014)

The DFW Industrial market ended the 4th Qtr 2014 with a
vacancy rate of 7.3%. The vacancy rate was up over the
previous quarter, with net absorption totaling positive
1,317,713 SF in the 4th Qtr.

The San Antonio Industrial market ended the 4 th Qtr 2014
with a vacancy rate of 6.6%. The vacancy rate was unchanged
over the previous quarter, with net absorption totaling positive 108,551SF in the 4th Qtr.

Vacant sublease space increased in the quarter, ending the 4th
Qtr at 1,121,030 SF.

Vacant sublease space decreased in the 4th Qtr, ending the
quarter at 355,541 SF.

Quoted rental rates ended the 4th Qtr at $5.34 PSF (NNN), an
increase over the previous quarter.

Quoted rental rates ended the 4th Qtr at $6.06 PSF (NNN), an
increase from the previous quarter.

A total of 19 buildings were delivered to the DFW market in
the quarter totaling 6,965,084 SF.

A total of 8 buildings were delivered to the market in the
quarter totaling 131,940 SF.

There were 17,399,649 SF of industrial space under
construction at the end of the 4th Qtr 2014.

There were 818,028 SF of industrial space under construction
at the end of the 4th Qtr 2014.

In the 3rd Qtr of 2014, the market saw 17 industrial sales
transactions close with an average price per SF of $44.13.

Cap rates have been higher in 2014, averaging 8.47%
compared to the first nine months of last year at 6.58%.
Houston
Total Inventory SF:
Current Occupancy%:
Austin
535,490,714
95.2% (as of Year End 2014)
Total Inventory SF:
Current Occupancy%:
93,716,361
91.8% (as of Year End 2014)

The Houston Industrial market ended the 4th Qtr 2014 with a
vacancy rate of 4.8%. The vacancy rate was unchanged over
the previous quarter, with net absorption totaling positive
1,422,827 SF in the 4th Qtr.

The Austin Industrial market ended the 4th Qtr 2014 with a
vacancy rate of 8.2%. The vacancy rate was down over the
previous quarter, with net absorption totaling positive
533,602 SF in the 4th Qtr.

Vacant sublease space increased in the 4th Qtr, ending the
quarter at 308,226 SF.

Vacant sublease space increased in the 4th Qtr, ending the
quarter at 521,226 SF.

Quoted rental rates ended the 4th Qtr at $6.04 PSF (NNN), an
increase over the previous quarter.

Quoted rental rates ended the 4th Qtr at $8.15 PSF (NNN),
which was an increase over the previous quarter.

A total of 36 buildings were delivered to the market in the
quarter totaling 1,470,209 SF.

A total of 5 buildings were delivered to the market in the
quarter totaling 138,775 SF.

There were 9,115,977 SF of industrial space under
construction at the end of the 4th Qtr 2014.

There were 963,344 SF of industrial space under construction
at the end of the 4th Qtr 2014.

In the 3rd Qtr of 2014, the market saw 13 industrial sales with
an average price per SF of $56.89.

In the 3rd Qtr of 2014, the market saw 3 industrial sales
transactions closed with an average price per SF of $132.19.

Cap rates have been lower in 2014, averaging 6.17%
compared to the first nine months of last year when they
averaged 7.56%.

Cap rates have been lower in 2014, averaging 7.11%
compared to the first nine months of last year when they
averaged 7.89%.
Page 11
Major Texas Multifamily Markets Summary
Thousands (Units)
Total Inventory
And
Occupancy
Total Inventory
Occupancy Rate
Thousands (Units)
2014Y-T-D
Y-T-DNet
NetAbsorption
Absorption
2012
2014Current
CurrentConstruction
Construction
2012
And
And
CurrentConstruction
Construction
Current
Asaa%
%of
ofTotal
TotalSF
SF
As
Absorption
Current Construction
Current Const As a
% of total SF
Page 12
Occupancy %
Major Texas Multifamily Markets Summary
San Antonio
Dallas/Ft. Worth
Total # of units:
Current Occupancy%:
Total # of units:
Current Occupancy%:
617,175
92.6% (as of Year End 2014)

Rents per square foot in December increased by $0.027 over
the year to $0.973.
Occupancy for the San Antonio area multifamily sector
decreased by 0.13% points in December to 91.25%, and is
down .66% points over the previous year.

Monthly rental rates per unit in December 2014 increased
$1.76 over the previous month to $829.36, increasing $14.90
over the last twelve months.
Rental rates per square foot increased $0.005 over the month
of December and increased by $0.023 over the last twelve
months to $0.966.

At $786.15, rental rates per unit posted a monthly increase of
$3.23 in December and are up by $17.26 in the twelve month
rolling period.

Absorption in December was a negative (51) units, while yearto-date absorption totals negative 3,609 units.

As of the end of December 2014 there are 4,646 units under
construction with 2,991 units planned.

The DFW market saw occupancy levels decrease 0.01% points
in December to 92.79%.


159,597
90.3% (as of Year End 2014)

Absorption in December was a negative (168) units, while
year-to-date absorption was a positive 7,254 units.

There are 9,508 units under construction at the end of December 2014, with an additional 4,930 units in the planning
stage.
Houston
Total # of units:
Current Occupancy%:
Austin
617,790
90.5% (as of Year End 2014)
Total # of units:
Current Occupancy%:
174,276
92.9% (as of Year End 2014)

The Houston apartment market occupancy decreased 0.13%
points in December to 91.15% and is down .37% points from
last year’s level.

Austin apartment market occupancy decreased 0.07% points
in December to 92.92% and decreased .25% points since December 2013.

Average rents per square foot increased $0.006 per square
foot in December and are up $0.047 per square foot over
December 2013 to $1.002. Average rent per unit increased
$4.42 in December to $866.13, which represents an annual
increase of $40.17.

Average rent per square foot increased $0.006 in December
over the previous month and $0.048 over the past twelve
months to $1.162. Average rent per unit posted an increase
of $6.51 in December; making the average rent $972.79 per
unit and is up $41.29 over the past year.

Monthly absorption was positive 118 units, while year-to-date
absorption totals a positive 13,136 units.


As of December 2014, there are 27,782 units under construction and 12,772 units in the planning stage.
Austin posted a negative absorption of (149) units in December while the year-to-date absorption was a positive 4,310
units.

There were 6,791 units under construction at the end of December 2014 with 2,461 units planned.
Page 13
Interesting Quotes
TEXAS
Oil the 'Big Unknown' for 2015 Texas Housing Market
COLLEGE STATION (Real Estate Center) – The Texas housing market is poised to start 2015 off strong, says a housing market expert with the Real
Estate Center at Texas A&M University. However, one key variable will impact the market in the second half of the year: oil.
“Oil prices are the number one issue facing the Texas housing market next year,” said Center Research Economist Dr. Jim Gaines on this week's
Real Estate Red Zone podcast. “It’s the big unknown. In the last six months the price for West Texas intermediate crude has gone down almost 50
percent, from about $107 per barrel to around $53 per barrel. The question remains: what does that mean for Texas?”
Gaines said he expects low oil prices will begin taking their toll on the state economy and housing during the second quarter.
“The first half of the year I doubt we’ll see layoffs or much job loss,” he said. “What we do expect to see in the second half are cutbacks in drilling
activity and capital budgets on upstream operations (exploration and drilling) and a decline in the rate of new jobs being created.”
Gaines said the cutback in drilling on the exploration and production side will be partially offset by capital construction in downstream operations
(refining and processing), particularly in petrochemicals and other industries that benefit from low energy prices, as well as growth in the overall
national economy.
“So one end of the spectrum gets hurt by low prices, and the other end gets helped,” he said. “Nobody knows how that’s going to balance out at
this point. It’s unclear to almost every economist that we talk to or follow. First of all, we don’t know how low oil prices are going to go. There’s a
very real possibility that prices will continue to fall for the next few months. We don’t know how far. We also don’t know how long they’ll stay
down. That’ll make a big difference.
“In general, the national economy is helped by lower oil and gasoline prices. And Texas gets buoyed up by a better national economy. So there are
a lot of things going on here that we’re going to have to keep our eye on.”
On the whole, though, Gaines said he expects the state’s housing market will be fine in 2015, but subject to a new category of unknowns.
“I don’t think it’ll collapse or anything,” he said, “but it might start to trail off during the second half of the year. If we do as well next year as we
did this year, it will be a great year. But even if it declines, hopefully it won’t be more than a small percentage.”
Income, Population Growth Spur Texas Luxury Home Sales
AUSTIN (Texas Association of Realtors) – Strong growth in luxury home sales continued in 2014 throughout Texas’ largest markets, according to
the 2015 Texas Luxury Home Sales Report released yesterday by the Texas Association of Realtors.
The report cited sales volume increases from 9 percent up to more than 25 percent for homes sold at $1 million or more in markets including
Austin, Dallas-Fort Worth, Houston and San Antonio.
"The overall economic growth and prosperity in Texas have contributed heavily to the luxury market, making it one of the strongest segments of
housing in Texas in 2014," said Real Estate Center Research Economist Dr. Jim Gaines.
Gaines said the state also benefited from people moving here from places like California, where a modest two-bedroom condo can be valued at
$1 million or more.
"Those people sell their home in California, move to Texas and realize their money goes much further in our market," Gaines said. "Thus, even if
they don’t have an income typical of a luxury homeowner, they have assets to purchase luxury homes and are stimulating that market."
In terms of volume, the Houston area had the largest number of luxury home sales in Texas, with homes valued at $1 million or more representing almost 2 percent of overall home sales. Luxury sales were up 13 percent over the prior year, which significantly outpaced the 2 percent
year-over-year growth seen in volume for the total market. Active listings for luxury homes in Houston were up 19.7 percent over the previous
year.
Austin showed similar trends, with luxury homes representing 2 percent of the overall housing market and increasing 9 percent over the previous
year.
In Dallas-Fort Worth, luxury sales represented a smaller percentage of the market at 1.2 percent, but the sales volume was the second highest in
the state and increased by double digits, up 15 percent over the previous year, when overall home sales were flat.
The most aggressive growth in luxury sales was in San Antonio, where homes valued at $1 million or more represented less than 1 percent of the
market, but volume increased 26 percent over 2013.
Page 14
Interesting Quotes
DALLAS/FORT WORTH
CBRE Forecast: DFW Commercial Market on Positive Track
DALLAS (CBRE) – Continued local economic expansion and job growth are fueling the North Texas commercial real estate market, CBRE market
experts said last week at the firm's 2015 market forecast event, “Moving Up the Risk Curve.”
They said DFW will see a healthy supply of new development, positive leasing demand and strong capital markets activity for the foreseeable
future.
With a steady influx of office-using companies, Texas has accounted for 30 percent of the nation’s payroll job growth over the past decade, said
Sara Rutledge, CBRE director of research and analysis for Texas.
“Dallas-Fort Worth saw the highest number of office-using companies expanding and/or relocating in Texas between 2010 and second quarter
2014, totaling 106 companies taking 12.5 million sf,” Rutledge said.
Other highlights from Rutledge’s presentation included:

The combination of strong current occupancy and healthy demand is expected to support rising rent growth across all DFW property types.

Office and retail demand are expected to accelerate, while tight availability could moderate industrial demand until new construction
delivers. Multifamily demand may also moderate as its recovery matures.

Local cap rates should be somewhat insulated from a potential rise in interest rates, thanks to the positive outlook for fundamentals.
North Texas industrial construction nearly doubled in 2014
DALLAS-FORT WORTH - The North Texas industrial market just closed its biggest construction year in more than a decade.
At the end of 2014, 15.3 million sf of warehouse space was under construction, according to JLL.
Ongoing construction is up from 8.8 million sf at the end of 2013 and just 1 million sf at year-end 2012.
Only 5.8 percent of DFW industrial building space is empty, about the same vacancy rate as a year ago. Net warehouse leasing last year totaled
12.9 million sf, thanks to expanding and relocating industrial tenants.
Ulta Inc., the retailer of cosmetic and salon products, has agreed to an almost 700,000-sf warehouse lease on I-20 in the Mountain Creek business
park.
The biggest building to open last year was Procter & Gamble’s 1.4 million-sf warehouse in Wilmer.
Of the warehouse space that’s being built in North Texas, the largest chunk of construction is in southern Dallas County along I-20 and I-45.
Almost 7 million sf of warehouse building was underway in that market at the end of 2014, according to JLL.
State Farm is There . . . at Spring Creek Farms
RICHARDSON (Suburban Properties LP) – Owens Ranches Inc. has sold 23 acres to State Farm Insurance. The land will be home to the company's
planned 129,180-sf data center.
Developer KDC will build the data center just south of State Farm's campus at the vacant corner of Lookout Dr. and Plano Rd. The property is part
of Spring Creek Farms, which was previously owned by the Owens family.
Plans filed with the City of Richardson show that the data center — called Project Black Flag — will take up about 15 acres on the corner. The onestory building is being designed by Corgan Architects of Dallas.
Triumph Commercial Real Estate represented the seller.
Toyota set to break ground on $350M HQ
PLANO - Toyota Motor's headquarters will hold a ceremonial groundbreaking on Jan. 20, with actual groundbreaking occurring in first quarter
2015, according to CEO Jim Lentz.
The campus will be built in Legacy Business Park, just south of SH 121. The $350 million campus is expected to be completed in 2017.The Japanbased automaker is leaving Torrance, Calif., after 57 years for a new office campus in West Plano, where it will be able to consolidate all of its
divisions – now spread among California, Kentucky and New York. The new headquarters will be home to 4,000 employees when complete
Page 15
Interesting Quotes
North Texas home sales set new record in 2014
DALLAS-FORT WORTH - North Texas Real Estate agents sold a record number of houses in 2014. More than 90,000 preowned single-family homes
changed hands last year through the multiple listing service.
It was only a 1 percent increase in total sales from 2013, but that was enough to make it an all-time high for home sales in the area, according to
the latest data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.
North Texas home sales in 2014 were about 5 percent higher than before the recession in 2006. Sales have grown by more than 40 percent from
the bottom of the housing market slump in 2010 when only 83,832 houses sold.
Median home sales prices in North Texas at the end of the year were almost 40 percent above where they were in early 2010 when the recession
had reduced residential values.
Housing analysts and real estate agents say that recent declines in home finance costs helped boost sales in the final months of 2014.
“The mortgage rates have really come down again, below 4 percent generally available,” said Dr. James Gaines, an economist with the Real Estate
Center at Texas A&M University.
“Buyers for existing homes are jumping on board, especially if they think rates will start going back up in the coming months.”
In December, only 16,518 houses were listed for sale with real estate agents in the more than two dozen North Texas counties the Real Estate
Center tracks for its monthly report.
DTZ: Dallas No. 4 in U.S. in office leasing in 2014
DALLAS - Dallas ranked fourth nationally with 4 million sf of net office leasing in 2014, according to commercial real estate firm DTZ (formerly
Cassidy Turley).
Dallas landed behind only New York City, Houston and San Diego.
Along with strong leasing, Dallas was also one of the country’s fastest growing office rent cost markets with an average 5.5 percent increase in
rates in 2014, according to DTZ.
“If one annualizes the second half of 2014, the office sector has been absorbing space at nearly twice its historical average,” said DTZ economist
Kevin Thorpe. “Fundamentals still vary greatly by location, but the latest demand metrics can no longer be characterized as subpar. This is
robust.”
Nationwide there was 105 million sf of office space under construction — up 76 percent from 2013. About 6 million sf is under construction in the
Dallas area.
Total office leasing for the U.S. in 2014 was the highest since 2006 and rose 47 percent in fourth quarter 2014.
North Texas leads U.S. in apartment leasing
DALLAS-FORT WORTH - North Texas led the country in apartment rentals in 2014, and rents and occupancy levels in local apartments rose at a
feverish pace.
Net apartment leasing in North Texas totaled 15,226 units, according to year-end data from MPF Research Inc.
Rental activity in fourth quarter 2014 was about 15 percent higher than 4Q 2013.
Local vacancy levels are at a 13-year low, with only about 5 percent of rental units empty.
Average apartment rents in DFW area grew by a record 4.9 percent in 2014, slightly higher than the nationwide increase of 4.7 percent.
“Annual increases above 4 percent are rare in this market,” said MPF Research vice president Greg Willett. “Because we’re such a construction
hot spot, the flow of new product moving through initial lease-up normally holds rent growth below the national norm.”
Average apartment rents in the DFW area are now $919 a month. Apartments in Dallas’ more popular, close-in urban markets go for even more
— averaging $1,700 to $1,800 for recently built rental communities.
Developers completed 15,575 North Texas apartments last year.
At the end of 4Q 2014, 30,196 units were still under construction in the area, the largest DFW apartment building volume since 1999.
Page 16
Interesting Quotes
Census: Fort Worth fastest growing city in U.S.
FORT WORTH - Fort Worth came in as the top big city in the nation for population growth between 2000 and 2013, boasting a 42.3 percent
increase, according to the U.S. Census Bureau.
It dwarfed Austin, which came in third, by nearly 15 percent, and had more than double the gain of San Antonio, which came in fourth. Dallas
took 24th with 2.8 percent.
The data shows a mass migration to Texas and North Texas specifically.
The region is an attractive job hub, being home to 18 Fortune 500 companies across a variety of sectors. Toyota's move is expected to bring and
hire more than 3,000 workers.
"Dallas and Fort Worth have been leaders in the job gain category," said KC Sanjay, a senior real estate economist with Axiometrics. "Where there
are jobs, naturally you pull in people from all over."
Most of those packing their bags for DFW are from California, according to Chuck Ehmann, a real estate economist with Axiometrics. Omnitracs
and Active Networks, both headquartered in San Diego, have announced moves to Dallas.
Companies and individuals are also migrating from Florida and the Midwest.
When they arrive in North Texas, most migrants ages 36 and older are settling in suburbs to take advantage of better school districts. However,
ages 22 to 35 tend to settle closer to the cities' urban cores, such as in Dallas' downtown and Oak Lawn neighborhoods, to be closer to work.
Frisco boom largest in North Texas
FRISCO - With more than $5 billion in developments in the works, Frisco is arguably the most dynamic real estate market in Texas.
Ahead of Uptown, Plano, Richardson — Frisco has more huge developments these days than any other property market. Even if only half of them
get built, the one-time railroad town will be ground zero for the biggest commercial real estate boom ever in North Texas.
“Just about every tract of land from SH 121 to Main St. along the Dallas North Toll way (DNT) is having plans made or is under development,” said
Jim Gandy, CEO of the Frisco Economic Development Corp.
Hillwood Properties, VanTrust Real Estate and the Rudman Partnership are teaming up to build Frisco Station surrounding the Dallas Cowboys’
new headquarters at the DNT and Warren Pkwy.
The Cowboys’ 91-acre Star mixed-use project is already under construction next door to Frisco Station.
Thomas Land & Development is building its $1.6 billion Wade Park mixed-use complex on 175 just across the DNT on Lebanon Rd.
If you had to pick a point in time when the game changed for Frisco, it would be back in 1996, when developer General Growth Properties bought
130 acres at the northwest corner of Preston Rd. and SH 121 for a new shopping mall.
Some 18 years later, there is now 4.5 million sf of retail space within a mile of Frisco’s Stonebriar Center mall.
The other real estate milestone came in 1997, when developer Craig Hall broke ground on his 162-acre Frisco office park. Hall Office Park now has
2.2 million sf of office space that houses 180 companies with some 8,000 workers.
Hall Financial just finished its 16th building in the Frisco office park.
Plano ready for first phase of $2B Legacy West project
PLANO - The Plano City Planning and Zoning Commission has approved the first phase of the Legacy West development on the Dallas North Toll
way.
The first 35.4-acre phase of the $2 billion project will start in February, according to developer Fehmi Karahan.
Included in the first phase will be 784 luxury apartments, 280,000 sf of retail and 260,000 sf of office space. It also includes a 300-room, $82
million Renaissance Hotel that will be built on Legacy Dr. just west of the toll way.
All of this development is in the same area where Toyota Motor Corp. will build its new North American headquarters campus.
Page 17
Interesting Quotes
HOUSTON
Houston: 18-story Park Place at Buffalo Bayou underway
HOUSTON - An 18-story office building, Park Place at Buffalo Bayou, has broken ground. The building is located on 1.3 acres on Willia St., just
north of Spotts Park and near the intersection of Memorial and Waugh.
It will contain 250,000 sf of office space and have a fitness center with locker rooms on the first floor, as well as eight levels of parking.
Rents are expected to be in the low- to mid-$30-per-sf range.
The building will be close to Buffalo Bayou Park, which runs from downtown to Shepherd and is undergoing a $58 million restoration. Upgrades to
the park include new lighting, pedestrian bridges and separate bicycle and jogging trails.
Pinto Realty Partners is developing the project, which is scheduled for completion in summer 2016.
First Data Bringing 600 Jobs to Sugar Land
SUGAR LAND (Sugar Land Development Corporation) – First Data Corporation’s TeleCheck Services division is moving to town.
The Sugar Land Development Corporation recently approved an agreement with First Data Corporation that will bring $10 million in investment
and add 600 new jobs during a ten-year period.
First Data will take up 90,000 sf in the Sugar Creek on the Lake office building at 14141 Southwest Fwy.
An incentive package was created by the city’s office of economic development and approved by the Sugar Land Development Corporation to
secure the location.
PMRG invested more than $13 million to renovate the building, previously occupied by Unocal. The new facility is expected to be operational by
March 2015.
Most New Houston Homes Since 3Q 2007, Metrostudy Says
HOUSTON (Metrostudy) – The local new home market continued to surge in the third quarter, with builders starting construction on 8,531
homes, about double the annual increase from last quarter. This represents a year-over-year gain of 9 percent, according to Metrostudy. The
market research firm said Houston hasn’t seen this many new homes since third quarter 2007.
On an annualized basis, starts stand at 29,905, 8 percent above third quarter 2013.
“While annual starts have outpaced annual closings since 2012, closings have increased steadily over the last 13 quarters,” said Scott Davis,
director of Metrostudy’s Houston market. “In the third quarter, area builders closed 7,625 new homes, bringing the annualized total to 27,647.
This level of activity represents a 9.2 percent increase from the prior quarter, and a 9.4 percent gain from a year ago.
"During the expansion phase of a housing recovery we expect to continue to see closings lag behind starts activity given the timeline of home
construction and sales. The current annualized rate of new home closings is the largest since the first quarter of 2009 when builders were still
liquidating their inventory as quickly as possible. Needless to say, the sales occurring today are of a much healthier nature.”
Metrostudy’s third quarter survey shows 16,931 homes currently under construction. That's over 2,200 more than a year ago, which equates to
7.3 months of supply. Conversely, the supply of vacant new homes has increased 8 percent from a year ago to 3,453 units, although this level has
held steady for the last couple of quarters.
The number of finished vacant homes in the market remains at near historic lows as builders see their speculative homes purchased before
reaching completion. The relative supply of finished vacant homes in the market is 1.5 months, well below the ten-year average of 2.5 months.
CHI Building Class-A Houston Distribution Center
HOUSTON (GlobeSt.com) – Crow Holdings Industrial has broken ground on a new industrial business park.
CHI purchased a building and adjacent land, totaling 24 acres, on Tanner Rd. just west of Beltway 8 to develop Apex Distribution Center.
The center will offer about 410,000 sf of Class-A industrial space. It will consist of three warehouses: two new buildings with 204,000 and 66,000
sf, and an existing warehouse with 140,000 sf.
Stream Realty will handle leasing and property management of the new buildings. Boyd Commercial will handle leasing for the vacant building,
which was previously occupied by Goya Foods.
Page 18
Interesting Quotes
Pearland businesses pop as population booms
PEARLAND - Pearland's business picture is shining bright, as evidenced by the phenomenal growth in retail and office space as the city's population rises.
There are 106,500 residents in the city limits and another 26,900 in the city's extraterritorial jurisdiction, according to city figures updated in
January 2014.
Matt Buchanan, who heads the Pearland Economic Development Corp., said Pearland has become an "emerging market" in the realm of retail
and office space availability.
Construction is underway at the Memorial Hermann Medical Office, which will boast 110,000 sf of office space at Texas 288 and Memorial
Hermann Dr., according to the Pearland EDC.
Retail and office space that is completed and occupied, according to the Pearland EDC, include

Kelsey Seybold headquarters (170,000 sf) at 11511 Shadow Creek Pkwy.,

Kelsey Seybold Medical Office (52,000 sf) at 2515 Business Center Dr.,

Ref-Chem (39,000 sf) at 3014 S. Sam Houston Parkway East, and
Shadow Creek Business Center-Phase 1 (80,000 sf) at 11233 Shadow Creek Pkwy.
Spike in Houston rents outpaces U.S. average
HOUSTON - Renters in the Houston metro area this year paid about $600 more on average than they did in 2013 as rents have increased at twice
the national rate, according to data analyzed by San Francisco-based Apartment List.
In November, Apartment List found that Houston one-bedroom rents averaged $910 and two-bedrooms averaged $1,040. Rents here are 9
percent more expensive than the national average based on two-bedroom rents.
Even Houston’s suburbs are seeing sky-high rents, although they vary. Renters in The Woodlands pay 75 percent more than those in Pasadena.
The Woodlands, Katy and Pearland are the most expensive markets, with two-bedrooms averaging more than $1,330 a month. Tomball, Houston
proper and Spring average $1,050.
Humble and Pasadena — at $900 and $760, respectively — are the only two suburbs where rents are below the $950 national average.
In Houston, Downtown is the most expensive neighborhood, with the average rent at $2,600 per month.
The least expensive neighborhoods in the city are Northshore, Sharpstown and greater Greenspoint, where rents hover at $750 per month.
HAR: Houston history-making home sales in 2014
HOUSTON - The year 2014 was a record year for the Houston housing market, according to the Houston Association of Realtors (HAR).
There were 75,319 single-family closings and 91,202 total closings, representing the most transactions in the history of Houston real estate.
The December 2014 monthly report prepared by HAR shows that housing inventory decreased to a 2.5-months supply, the lowest level of all
time.
Housing inventory has been below a four-month supply since November 2012. It first fell below a three-month supply in November 2013.
The single-family home average price rose 6.6 percent year-over-year to $280,863 while the median price rose 11.2 percent to $209,590,
representing historic highs for a December in Houston. They did not top the all-time record prices (average of $284,569 and median of $215,000)
reached in June 2014.
December sales of townhouses and condominiums rose 7.3 percent from one year earlier. Rentals of single-family homes jumped 11.7 percent
compared to December 2013, while year-over-year townhouse/condominium rentals increased 11.5 percent.
Page 19
Interesting Quotes
Houston: 127-acre Fallbrook Pines Business Park underway
HOUSTON - Fallbrook Pines Business Park is now the largest industrial park project underway in Houston, according to Trammell Crow. The 127acre park is located near the intersection of Beltway 8 and Hwy. 249 on Fallbrook Dr.
The first phase is scheduled for completion first quarter 2015. It will be composed of four tilt-wall office/warehouse buildings totaling 709,045 sf.
The project will incorporate 28 to 32-foot clear heights, 52-foot-wide column spacing, extra trailer parking/outside storage, ample car parking,
wide truck courts and ESFR sprinkler systems.
Dallas-based Trammell Crow Co. and New York-based Clarion Partners are developing the project. They expect the project's versatile design to
target a wide range of tenants, including consumer goods distributors, oilfield service companies and light manufacturers.
The remaining 66 acres in the park are available for build-to-suit projects.
Automaker to drive into Galveston's $10M Pier 10 facility
GALVESTON - Plans for development of a $10 million-plus vehicle-processing center on nearly 18.9 acres of Port of Galveston property advanced
considerably late November with the hiring of an engineering firm for an amount not to exceed $275,000.
Wallenius Wilhelmsen Logistics, which leases the property at the public docks, will split the costs of building the vehicle-processing center with
the landlord port, which is kicking in $5.8 million for the project.
Port officials aren’t naming the tenant of the building at Pier 10. Wallenius will sublet the property to an automaker, which is expected to process
about 20,000 cars a year from the facility.
The vehicle-processing center would provide 30 to 35 well-paying jobs, Port Director Michael Mierzwa said. And, it would be good for the island
port’s image, he said.
Last year, the city’s seven-member Industrial Development Corp. agreed to contribute $1.4 million for the vehicle processing center and paving
The port owns most of the 18.9 acres needed for project, but will have to negotiate to lease about four from the Sealy & Smith Foundation.
11,000-Acre sale! One of Houston area's biggest land deals
BAYTOWN - Cedar Crossing, a 10,897-acre industrial park, has been sold to Trans-Global Solutions (TGS) Cedar Port Partners. Also included in the
transaction was a 312,000-sf on-site warehouse. The Park is located 20 miles east of Houston in Chambers County.
Cedar Crossing is considered the fifth largest industrial park in the world and it is equal to three-fourths that of New York’s Manhattan Island,
according to Cushman & Wakefield.
Approximately 65 percent of the park remains undeveloped and is available for future expansion.
Cedar Crossing offers dual rail service (Union Pacific Railroad and BNSF) with considerable rail infrastructure — 57 miles of rail within the park,
with existing storage for over 2,000 railcars.
TGS will expand the industrial park’s rail capacity to 3,000 railcars by 2018 to accommodate increasing petrochemical and refining demand.
Cedar Crossing has water access for barges and docking facilities. It is not far from the Port of Houston, Bayport and Barbour’s Cut, which are
major shipping outlets. The site is a few miles from the Exxon Mobil Baytown Refinery, which is the largest refinery in America.
TGS will have approximately 1,500 plastic pellet railcars committed to the facility. The many chemical plants on the Gulf Coast produce plastic
pellets which are shipped around the world for manufacturing consumer products and other plastic goods.
Prior to the acquisition, TGS executed a ten-year extension of a railcar storage agreement with Union Pacific Railroad that originally dates back to
the 1990s. TGS will continue to operate the railroad and assume operations and development of the industrial park.

Home Depot’s 755,000-sf distribution hub,

Walmart’s 4.2 million-sf import center (their largest in the U.S.),

JSW Steel’s plate and pipe manufacturing facilities, and

Borusan Mannesmann’s $148 million steel pipe manufacturing facility. Energy Fabrication.

Other occupants include Exel, S&B Engineers, National Oilwell, GE Water, TMK-IPSCO, Century Asphalt, Samson Controls and LS
Page 20
Interesting Quotes
Katy Raising Cane Island with 2,000 homes
KATY - Cane Island, Katy’s first master-planned community, designed for a 1,000 tree-lined site, will add 2,000 new homes to the area.
The homes will be priced from the $200,000′s to more than $1 million.
Developer Rise Communities said the community was named after the 1872 settlement that later became Katy.
The new development will be four miles west of the Grand Pkwy. and off I-10 at the Cane Island Pkwy., which is expected to open around the
same time. The community is slated to open mid-2015.
The Cane Island development team will complete the community’s first phase with 13 model homes, including traditional family and luxury patio
homes, in seven neighborhoods.
Home builders include Coventry Homes, David Weekley Homes, Perry Homes, Ryland Homes, Shea Homes, Toll Brothers and Trendmaker Homes.
The first phase of development will include an amenity center with an outdoor amphitheater, a family pool with an adjacent splash pad, an adult
pool and a two-story fitness center including a health spa and yoga studio.
Construction to begin on Brazoria County LNG export plant
BRAZORIA COUNTY - Freeport LNG has secured financing for two of three natural gas liquefaction units, clearing the way for construction to begin
on one of only a handful of natural gas export terminals authorized by federal regulators.
The privately owned company plans to pay for most of the project — about $8.4 billion — with loans from an array of Japanese banks. The
remaining $2.5 billion will come from two Japanese companies — Osaka Gas Co. and Chubu Electric Power Co.
The first of the production units, called trains, is scheduled to be operating by third quarter 2018. The second is to come online five months later.
The debt and equity financing commitments add up to nearly $11 billion. That's $1.4 billion more than the two trains are expected to cost, giving
Freeport LNG a buffer for potential cost overruns, the company said.
At its peak, construction will generate more than 4,000 jobs. Once open, the plant will employ 300 full-time workers.
Freeport LNG received final approval from federal regulators earlier this month to export domestically produced liquefied natural gas to countries
that do not have free trade agreements with the United States. Each train has the capacity to produce 4.6 million tons of LNG per year.
The company has secured use-or-pay tolling arrangements with Osaka Gas, Chubu Electric, BP Energy Co., Toshiba Corp. and SK E&S LNG for 13.2
million tons per year.
Manvel handful: 2,700-acre master-planned Meridiana to rise
MANVEL, BRAZORIA COUNTY - Rise Communities is planning Meridiana, a 2,700-acre master-planned community just east of Hwy. 288 near Hwy.
6 and County Rd. 57.
The project is projected to have more than 1,300 acres for single-family home building, more than 60 acres for commercial, about 25 acres for
multifamily and other significant development.
Rise anticipates having Meridiana underway in 2015.
In addition to Meridiana, Rise is developing a 1,000-acre community called Cane Island in Katy. See previous story Katy Raising Cane Island with
2,000 homes
CHI 400,000-SF Houston industrial park underway
HOUSTON - Crow Holdings Industrial (CHI) has broken ground on a new 24-acre industrial business park. CHI purchased an existing building and
adjacent land located on Tanner Rd., just west of Beltway 8, to assemble the acreage to develop the 410,000-sf, Class A Apex Distribution Center.
The park will consist of three warehouses. The park’s two new buildings will be 204,000-sf and 66,000-sf front-load, light-industrial warehouses.
The buildings will offer the option for divisibility and the site will provide trailer parking and options for outside storage. Stream Realty will handle
leasing and property management.
The third building is an existing 140,000-sf warehouse. Previously occupied by Goya Foods, the building offers potential distribution or manufacturing tenants more than 16,000 sf of office space and 21,000 sf of cooler/freezer storage, in addition to 100,000 sf of warehouse space.
Page 21
Interesting Quotes
SAN ANTONIO
Fortune 500 company to build $40M facility in Selma
SELMA, BEXAR COUNTY - A national auto parts company is planning to build a $40 million distribution center, bringing 250 jobs, according to city
officials.
City Administrator Ken Roberts told the Selma City Council that the company’s plans call for a 388,000-sf distribution center on a 25-acre site in
the Titan Industrial Park at Lookout Rd., near the Amazon Fulfillment Center.
Officials are expected to break ground on the project in February.
Citing a nondisclosure agreement, Roberts declined to identify the company and would only say that it is a Fortune 500 company. The city
administrator said he would reveal the company’s name at the Selma City Council meeting in February.
San Antonio's 2015 job growth projected to exceed state’s
SAN ANTONIO - Despite the economy being thrust into uncertainty due to the ongoing plunge in oil prices, the San Antonio area’s job growth
prospects for this year still look relatively good.
Keith Phillips, Fed senior economist and research officer, projected 3 percent job growth, or 28,000 net new jobs, for this year.
That is less than the 38,000 net new jobs, or 4.2 percent, San Antonio is projected to record for 2014 when the December report comes out later
this month.
The reason San Antonio will not be hit as hard by a projected slowdown in energy drilling is that the city never received a significant boost in
employment between 2010 and 2014 because of the Eagle Ford Shale activities, Phillips said.
San Antonio’s mining sector growth never exceeded state job growth in general for the 2010 to 2014 period, he explained.
Even now, it only accounts for about 4 percent of the area workforce. Logistics, such as truck and pipeline shipments, also is not a large employment sector in the San Antonio area.
San Antonio multifamily market steady; units coming
SAN ANTONIO - CBRE reports Texas' occupancy rate hit 91.7 percent third quarter 2014, slightly up from the same time last year. San Antonio's
multifamily occupancy rate is slightly less, at 90.5 percent.
According to CBRE's research, the Stone Oak/Thousand Oaks/San Pedro community saw the most multifamily growth in 3Q with 416 units built.
An additional 433 units are under construction in that neighborhood.
Compared to Austin, Dallas and Houston, San Antonio has the smallest number of multifamily units at about 159,400.
San Antonio touted the highest number of Class A units at 18 percent of its overall offerings. Dallas came in second with 16 percent of its multifamily units being categorized as Class A.
San Antonio had the highest share of Class B units at 36 percent of its 159,400 units. Dallas came in second once again.
The report also predicts that the hottest activity expected next year are on two opposite sides of San Antonio — downtown and the UTSA/La
Cantera/Bandera Rd. areas. Those communities are expected to build more than 1,000 units combined over the next several months.
San Antonio: health care/biosciences industry eclipses $30B
SAN ANTIONO - The economic impact of health care and the biosciences was $30.6 billion in 2013, up from $23.5 billion in 2012, according to a
study by Trinity University professors Richard Butler and Mary Stefl.
More than 32 percent of the economic impact from health care and the biosciences is driven by the city's highly competitive hospital sector.
Pharmaceutical, research and education activity accounts for another 21 percent of the estimated impact.
Employers in the health care/bioscience industry paid out nearly $8 billion in wages in 2013, according to the study. More than one in six San
Antonio workers are employed by the industry.
In the last ten years, San Antonio's health care and biosciences industry has added more than 41,500 net new jobs — an increase of 40 percent.
Over the last decade, the economic impact from San Antonio's hospital sector has increased by 130 percent. That growth rate can be tied to a
number of factors, including continued infrastructure expansion. Methodist Healthcare, for example, has continued to invest in its infrastructure. The health care system and has begun work on a $250 million project that will involve the expansion of two of its South Texas Medical
Center hospitals.
Page 22
Interesting Quotes
Schertz Doerr Lane Industrial Park adding 214,000 SF
SCHERTZ - Conor Commercial Real Estate, a member of The McShane Cos., has acquired a 15-acre site just outside San Antonio for the development of Doerr Lane Industrial Park.
The 213,864-sf, Class A, facility is being developed near the intersection of Doerr Lane and Lockout Rd.
Doerr Lane Industrial Park will feature contemporary industrial space in a cross-dock configuration. The 32-foot clear facility will have expanded
staging bays and an ESFR sprinkler system.
Distribution efficiencies are supported with the building’s 54 dock-high loading doors and two ramp-served doors.
The speculative development will be available for occupancy in the fourth quarter of 2015.
Seguin: Spanish snack giant to open $58 million factory
SEGUIN - Grupo Siro, a food industry giant from Spain, plans to open a $58.5 million manufacturing plant and research center.
The production of cookies, pastries and other snacks by Siro Group USA should commence in 2016 at its new plant, which will employ 200.
The 275,000-sf plant will be built on 50 acres beside I-10 provided by the Seguin Economic Development Corp.
A research and development center, employing a dozen more workers, is slated to open by 2018 beside the plant.
The factory will be Siro Group’s first in the Americas but likely not its last, said Rut Aranda Carmona, the chief operating officer for the Madridbased firm that has 19 factories, mostly in Spain, but also in Portugal and Italy.
H-E-B is currently the largest distributor in Texas of the firm's cookies, crackers and cakes.
San Antonio's East Kelly Rail port hauls in record growth
SAN ANTONIO - The 350-acre Port San Antonio East Kelly Rail port set a new record during fiscal year (FY) 2014 by handling nearly 10,000 railcars.
Logistics service providers at East Kelly Rail port processed 9,983 railcars in FY 2014 — an increase over the 9,693 railcars handled in FY 2013.
About two-thirds of the products shipped were sand, pipe and equipment that arrives by train and transferred onto trucks for delivery to well
sites throughout the shale-producing region.
The rail port has direct access to tracks owned by Union Pacific Railroad and BNSF Railway. East Kelly has the loading and unloading capabilities at
Port San Antonio to ship cargo in the energy, retail, construction and manufacturing industries.
The Eagle Ford Shale is a 21-county geological formation that crisscrosses a wide swath of Southwest Texas. A recent report pegged the economic
contribution in the Eagle Ford region to Texas at $87 billion.
Producers in this region are directly responsible for supporting 155,000 full-time jobs.
San Antonio's $13.4 billion hospitality industry
SAN ANTONIO - The hospitality industry employs nearly 125,000 people and pumps an estimated $13.4 billion into the San Antonio economy
annually, up from a record $12.2 billion set in 2012, according to a Trinity University study.
Trinity professors Richard Butler and Mary Stefl found that, of the total $13.4 billion that the hospitality industry generates for the local economy,
nearly $350 million ends up in the city's and county's coffers.
The study reveals 122,500 local residents — or one in eight San Antonians — work in the travel and tourism sectors, which span hotels, taxis,
theme parks, museums and more. Their annual payroll exceeds $2.49 billion, an increase from $2.23 billion in 2011 when about 112,500 employees worked in the industry.
An estimated 31 million people visit San Antonio each year, with 24.9 million of them traveling to the city for leisure.
Page 23
Interesting Quotes
AUSTIN
RR 620 boom: Lakeway
LAKEWAY, TRAVIS COUNTY - With plans in the works for major projects in Bee Cave, Lakeway, Hudson Bend and Four Points, a wave of new
construction along the RR 620 corridor during 2014 points to continued growth for the region in the coming year.
Below is a snippet of completed and upcoming projects in Lakeway.
Construction on the city’s largest project, the 175,000-sf Oaks at Lakeway, began in late 2014, said Jon Andrus of Stratus Properties, the project’s
developer.
The 90-acre development is expected to be a “true neighborhood retail center” driven by anchor H-E-B that is anticipated to open Oct. 30.
The 65-acre Lakeway Medical Village is also under construction, with its Goddard School — a preschool and after-school care program —
expected to be up and running in April, school owner Raul Alvarez said.
The Harbor at Lakeway, a 150-room, assisted-living and memory-care community in Lakeway Medical Village, is expected to open in 2015.
Lakeway witnessed the opening of its first acute medical rehabilitation facility — Vibra Rehabilitation Hospital — on November 24.
This is one part of a four-part story on the boom occurring along the RR 620 corridor. See similar stories about Bee Cave, Four Points and Hudson
Bend at Newstalk Texas.
Central Texas ranks No. 2 in U.S. for STEM jobs
CENTRAL TEXAS - Central Texas ranks No. 2 in the nation for workers in jobs involving science, technology, engineering and mathematics (STEM),
according to the latest analysis by WalletHub.
The Austin area ranked No. 5 for the largest percentage of STEM workers and No. 7 for STEM-related employment growth. It also ranked No. 7 for
the annual median wage of STEM workers factoring in the adjusted for cost of living, according to the report.
Central Texas ranked No. 13 in the number of job openings per capita for STEM graduates and No. 21 for the annual growth of median wages for
such workers.
In the overall STEM job ranking, Dallas-Fort Worth ranked No. 23 and the San Antonio area ranked No. 48.
In Central Texas, 47 percent of the area's job openings were found to require STEM skills — the ninth-highest percentage in the study that
compared 100 U.S. metro areas. Overall, local job openings took an average of 35 days to fill — the 41st-longest time in the study.
2,400 Homes set to rise in Sun City Texas
GEORGETOWN - Del Webb, a national home builder, will develop an additional 1,100 acres at its Sun City Texas active adult community in
Georgetown.
Some 2,400 new homes will be built mostly on two parcels — one along SH 195 and another along Ronald Reagan Blvd.
Infrastructure work is scheduled to begin in early 2015 with construction of the new homes projected to begin next summer.
Del Webb will introduce 11 new home designs, ranging in size from 1,300 sf to more than 3,500 sf. Prices will begin near $190,000.
Sun City Texas, which caters to the 55 and older demographic, currently encompasses 4,100 acres with 7,500 home sites and 11,500 residents.
Austin employment drops to second-lowest rate of 2014
AUSTIN - Austin's seasonally unadjusted unemployment rate dropped to 3.9 percent in November, its second-lowest level in 2014, according to
the Texas Workforce Commission.
The rate is also down from the 4.7 unemployment rate recorded in the Austin area in November 2013. Austin's lowest unemployment rate in
2014 — 3.8 percent — arrived in April.
The decline in November mirrors a seasonal trend seen in previous years in the Austin area, where unadjusted unemployment levels typically
drop to their annual low-water marks in the last months of the year before trending upward in January.
Texas as a whole added 34,800 seasonally adjusted total non-farm jobs in November. So far in 2014, 441,200 jobs have been added across Texas.
Statewide, the unemployment rate dropped to 5.1 percent, down from 6.1 percent unemployment in November 2013.
Page 24
Interesting Quotes
Up! Home starts, inventory, sales all up in Austin
AUSTIN - New home inventory in Austin has increased dramatically in the past year but demand could still outstrip supply if population growth
remains robust and building cycles continue to increase, according to a report from Residential Strategies Inc.
Home starts, home closings and inventories were all up in 2014 compared to a year earlier.
New home inventory — which includes model homes, homes under construction and finished vacant homes — stood at 7,279 units at the end of
2014, up 46 year over year.
Here are some other highlights of the report:
•
•
•
•
•
Builders reported that sales activity through fourth quarter 2014 surpassed their own business projections.
There were 12,354 new home starts through Dec. 31, up 24 percent from 2013.
There are 20,828 vacant but entitled home sites at the end of 2014, a 20.2-month supply.
At the end of the year, 9,284 lots were under development, considered a record pace by Residential Strategies.
Resale listings remain tight with a 2.4-month supply, though the inventory at the end of November was 8 percent higher than in 2013.
Austin home sales, median price set Nov. records
AUSTIN - The holiday season has arrived but Central Texas isn’t seeing the typical slowing that occurs in many housing markets late in the year,
according to local agents and the latest market figures.
November marked the third straight month that home sales volume and the median sales price hit record territory in the Austin area, according
to the Austin Board of Realtors (ABoR).
Home sales rose 5.6 percent in November compared with the same month in 2013, and the area’s median sales price was up just over 11 percent.
The median price set a November record, with half of the homes selling for more than $245,000 and half for less than that amount, according to
ABoR.
The 1,934 sales in Austin also were the most on record for a November, up from 1,831 sales in November 2013.
The supply of available homes continued to lag demand, even though listings increased 9 percent year-over-year.
Showtime: 239,000 SF kicks up in Austin's Expo Business Park
AUSTIN - Trammell Crow Co. and Clarion Partners have broken ground on two buildings totaling 239,205 sf in the Expo Business Park Phase II in
Southeast Austin.
Expo 10 and Expo 11 will measure 109,263 sf and 130,002 sf, respectively, and consist of warehouse, flex and manufacturing space with 28-foot
clear heights and 24 dock-high doors per building.
The facilities are expected to be move-in ready by June 2015.
New York-based Clarion Partners is a joint venture partner on the two-building project and has been since the first phases of the 15.5-acre park at
6231 E. Stassney Lane were built in 1996.
Some of the largest tenants in the business park currently are Calendar Club, Goodwill Industries, Crawford Electric Supply, Dakota Hardwoods,
USA Cable and Wire, Otis Spunkmeyer, Shelton Keller Group, Chaparral Distributors and Illumitex.
The 'inn' crowd: Austin braces for hotel multiplicity
AUSTIN - Austin's inn crowd is very inclusive. Hotel options abound and are about to multiply — from contemporary Zen-like havens in the midst
of downtown to soaring skyscrapers with floor-to-ceiling views of the city.
Prices run the gamut, too. Austin's average daily room rate across the city has been escalating rapidly and edging up to the $200 mark — but
some unembellished but new rooms are closing in on the $800-per-night mark.
Some 8,649 rooms are in the development pipeline within the metro area, adding what would be a significant 28 percent increase of the current
supply of 31,316 rooms, according to Lodging Econometrics, a hotel research company.
Austin is in the top ten markets for new hotel construction though markets with much larger population bases — New York and Houston, for
example — lead the pack.
The Central Business District will post the most significant increase of rooms.
Downtown room supply could grow by more than 55 percent in the next few years — from about 8,600 rooms to more than 13,000.
Page 25
Interesting Quotes
The 'inn' crowd: Austin braces for hotel multiplicity
AUSTIN - Austin's inn crowd is very inclusive. Hotel options abound and are about to multiply — from contemporary Zen-like havens in the midst
of downtown to soaring skyscrapers with floor-to-ceiling views of the city.
Prices run the gamut, too. Austin's average daily room rate across the city has been escalating rapidly and edging up to the $200 mark — but
some unembellished but new rooms are closing in on the $800-per-night mark.
Some 8,649 rooms are in the development pipeline within the metro area, adding what would be a significant 28 percent increase of the current
supply of 31,316 rooms, according to Lodging Econometrics, a hotel research company.
Austin is in the top ten markets for new hotel construction though markets with much larger population bases — New York and Houston, for
example — lead the pack.
The Central Business District will post the most significant increase of rooms.
Downtown room supply could grow by more than 55 percent in the next few years — from about 8,600 rooms to more than 13,000.
Downtown dirt turnover: Austin's 500,000-SF office tower
AUSTIN - Trammell Crow Co. is set to begin work on a 29-story tower at 500 W. 2nd St. The tower will have 489,403 sf of office space and 11,033
sf of ground floor restaurant and retail space.
The project is the second of four phases of a master-planned development on land that formerly housed the Green Water plant.
The tower will be built just north of Northshore, the three-tiered tower that constitutes the first phase, that is already under construction at W.
Cesar Chavez St. and San Antonio St. and which will have about 440 apartments plus office and retail space.
Construction on Northshore is scheduled to be completed in late 2015.
When the entire project is completed, it will add more than 1.7 million sf of mixed-use commercial development downtown, bringing added
revenue to the city’s tax base.
Will new supply ease Austin’s apartment rents?
AUSTIN - Although a record number of new units are opening in Central Texas this year amid an ongoing apartment-building boom, rents are
continuing to rise due to robust job creation, particularly in the high-tech sector, according to Marcus & Millichap's fourth quarter 2014 report.
Builders are due to wrap up construction on more than 14,500 apartment units in Central Texas this year, the highest level of new supply since at
least 2000.
As of the end of September, rents averaged $1,078 a month, a 6.2 percent increase from September 2013.
“While high-tech salaries in the Austin area among the most generous in the U.S. relative to the cost of living, many workers in the industry prefer
the flexibility and lack of maintenance associated with apartment living,” Marcus & Millichap said.
Meanwhile, the growth in Austin’s population of 20- to 30-year-olds — who are more likely to rent than buy — is projected to grow by 2.6
percent this year, compared to a 1 percent gain forecast nationally, the firm reports.
The year should close with the region’s apartment complexes 95.5 percent full on average, just a smidge lower than the 95.8 percent average
occupancy at the end of 2013, according to MPF Research.
Rent growth has slowed a bit as landlords try to quickly fill the estimated 3,500 new units that MPF says will be completed in 4Q 2014.
However, the Austin area is on track for annual rent growth this year of about 3.6 percent, down from 4.8 percent in 2013, according to Greg
Willett, vice president of research and analysis at MPF.
New record set! Leander issues over 1,000 home permits
LEANDER - The City of Leander has issued more than 1,000 permits for new homes this year — setting a new record for the city — and the
number is still climbing.
City staffers said by the end of 2014 the number of permits could exceed the city’s total permits issued from 2009–2012.
The demand is leaving staffers struggling to keep up and planning to reorganize the Leander Building Inspection Department.
From 2009–2011 the City of Leander issued builders 943 single-family housing permits. In 2012, the city issued 418 permits, and in 2013 the city
issued 666 permits. As of Oct. 31, the city’s issued permits in 2014 had reached 1,016.
Page 26
Houston
San Antonio / Austin
1300 Post Oak Blvd., Suite 1200
Houston, TX 77056
(713) 871-5800
402 East Ramsey Road
San Antonio, TX 78216
(210) 828-2112
www.q10kdhco.com
Year End 2014