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TRC Blog

November 07 , 2011

Collaboration, Texas Style

Collaboration, Texas Style

By Steve Hefner | President | Connected Acqusitions Texas has made it thru the recession better than any other state in our nation. There were more jobs created in Texas in the last 12 months than any other state (and those just weren’t quality-dilution jobs that have been created elsewhere), there is a continued low cost of living that prevails, housing values are holding better than other states, plus, more companies seem to be relocating to Texas for the unique dynamics and characteristics that make Texans proud. It is undeniable that Texas is doing something right. Houston is the apex energy, aeronautic and land-sea-air leader. Dallas/Ft. Worth is the corporate headquarter leader. Austin is where government and technology collide and San Antonio is becoming the gateway city for Mexico and a growing military base. All of these cities are flourishing without any direct competition of each other. In short, Texas is the #1 state for doing business today and I think Texas intends to continue that trend for the next 20 years. According to the US Census Bureau, Texas will lead the nation in population by adding an additional 14 million people to the state…and that is a forecast for just the metropolitan areas of Dallas/Ft. Worth, Houston, Austin and San Antonio alone! How are we going to manage all those new Texans and their impact on the economy? I’m not sure I can answer that if I were speaking on behalf of the state of Texas. However, as it relates to The Retail Connection, I would say it would be by continuing to collaborate with our retailers, the landlords we represent and our equity partners for acquisition, development and redevelopment pursuits. Here at The Retail Connection, we have made inroads in this improving economy with new acquisitions and are positioned for several more in the coming months. Some ground up development is even getting attention today. By collaborating with the entire real estate network out there (both internal and external), we are able to find quality properties with which to pursue and it is all because of collaboration. By collaborating with retailers, we know where they want to be in our markets, both from a new store perspective and relocating or expanding existing locations. That kind of collaboration creates opportunities for new acquisitions. If we know a certain retailer wants to be in a particular location, we can either find them space through ownership means, thru traditional brokerage means, or build it for them. If we know where tenants want to be located, that is fodder for us wanting to own those same locations or in those same markets. We want to be in the trenches with our partners, not just hold their hand until they get to the trench. By collaborating with other landlords, we provide a service of leasing and/or property managing centers for them. However, we can also be the take-out source for turning over a property that a landlord doesn’t want to continue to hold long-term. Whether it be because his loan is maturing, or he simply doesn’t want to continue to hold until he finds that last tenant, we can be his answer for a successful take-out. We have the ability to lease-up the vacancies over more time, as that is what our brokerage group is in the business for. As any broker will tell you, it seems to take forever today to get a lease to execution stage. If an owner is not ready or willing to hold on for what seems like an eternity, we can be the logical group to see the property to conclusion for them. By collaborating with our equity partners, we can jointly uncover opportunities. The line of communication works both ways. We have joint venture partners who own other properties, as do we and the real estate community is smaller than anyone thinks. Opportunities abound out there and two heads are always better than one. I recall an opportunity a long time ago that was a “one-off” deal, where I was negotiating the purchase of a single hotel property and the seller was interested in remaining as an equity partner in the deal. By the time it was finished, we had purchased the entire portfolio of 27 properties from this company! Of course, we collaborate internally all the time. Our tenant and landlord reps are great sources of opportunities for acquisition. They are our “eyes and ears” because they know our markets like the backs of their hands. Our internal collaboration gets stronger and stronger every day and that’s going to be a real plus as this Texas market heats up even more in the next few years. At The Retail Connection, it’s the perfect storm. Texas growth is happening with the economy and with new people. That creates opportunity for more retail in our great state and The Retail Connection is poised to synchronize those opportunities with our great partners. We collaborate to ensure that our partners are happy and that we can continue to be a leader in retail real estate. The next 20 years in Texas should be very good for all of us in the retail sector!
3 Comments Investment 
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