Press

August 31 , 2007

Despite Bumps, Commercial Real Estate Market Remains Strong

Despite Bumps, Commercial Real Estate Market Remains Strong

 

August 31, 2007- The Dallas Morning News
By Steve Brown, The Dallas Morning News

I've never been shy about reporting bad news.

It makes more sense to tell it as it is rather than try to sugarcoat things, I say. And no amount of bravado will make a set of bad statistics or property woes look better.

Back during the Great Real Estate Crash of the late 1980s and early 1990s, in fact, I had so many dreary stories in the paper that some people called me "Bad News Brown."

Certainly we've had a bit of bad buzz lately, what with the mortgage industry in turmoil and soaring home loan defaults.

I suppose some folks would rather we write every month about how many houses aren't in foreclosure. But that won't hide the fact that thousands of people are losing their houses when their adjustable loans ratchet up.

Still, I can't get worked up about recent alarms that commercial real estate foreclosures are taking off.

The percentage of commercial properties facing foreclosure has increased this year. But you have to look closer to see what's happening.

Percentages are a tricky thing. For instance, if you decide to have a second slice of pie, your dessert intake has just shot up by 100 percent. That sounds scary.

But even with more than a 50 percent increase, the number of office, apartment, industrial and retail buildings and the like in foreclosure this year is staggeringly small.

About 147 commercial properties are currently threatened with foreclosure, and only about 20 of those have loans of $1 million or more.

Almost all the larger commercial loans in default are for aging apartment houses. There have been a few old strip shopping centers on the list, too.

Compared with the residential market, where more than 3,000 homes a month are posted for foreclosure, the commercial property market is in great shape.

Of course, if the percentage increase in commercial property loan defaults continues to rise month after month, eventually there will be a problem.

And I'll be writing about it if that happens.

Industrial complex sold

Denver-based Baceline Investments LLC has purchased a Dallas industrial project as part of a $55 million deal for properties in three cities.

Baceline said it paid $11.7 million for Northaven Square, an eight-building, 151,388-square-foot industrial complex near LBJ Freeway and Interstate 35E.

The company also bought properties in Houston and Peoria, Ill., to add to its buildings in Dallas, Denver, Chicago, Minneapolis, Omaha, Neb., and Kansas City, Mo.

Lake Lavon project

Colleyville-based Realty Capital Corp. has bought 136 acres of land overlooking Lake Lavon in Lucas. The developer plans to build a residential project called Brockdale Estates on 206 half-acre lots.

Realty Capital plans to do the project in two phases, and Texas Capital Bank provided funding.

More Mansfield shops

Dallas-based Retail Connection LP has broken ground on a 16-acre, 157,000-square-foot retail center near the southeast corner of Debbie Lane and State Highway 287 in Mansfield.

The project will adjoin the 420,000-square-foot Mansfield Towne Crossing shopping center, which is anchored by Super Target, Home Depot, Staples and Ross.

The project is scheduled for completion next summer.

New international unit

Dallas-based Briggs-Freeman Real Estate Brokerage said Thursday that it's setting up an international brokerage division to serve executives and their families moving to and from the Dallas area.

The company said it plans to increase its marketing and provide customized services.

Briggs-Freeman partner Robbie Briggs has spent the last year living in China.

COMMERCIAL TRANSACTIONS

Sales

Austin International Ventures Inc. purchased 11 acres on Great Southwest Parkway in Grand Prairie from Lyons Equities Inc. Len Gertsner and Pete Richardson of Henry S. Miller Commercial arranged the sale with Ken Murchinson.

The Cedar Ridge Crossing shopping center at the intersection of Center Street and Cedar Ridge Drive in Duncanville has been bought by a Georgia investment corporation. The 64,492-square-foot strip center was built in 1986 and is 81 percent leased. Stephen Maulden and Howard Fuerst of Marcus & Millichap negotiated the sale.

The Beltline Regent Center in Irving, an 11,200-square-foot shopping strip on Belt Line Road, has been acquired by a Maryland-based private investor. Manuel Ramon of Marcus & Millichap negotiated the sale.

Realty Capital Corp. sold its newly constructed Hidden Lakes retail building in Keller to a Texas investor. The 6,277-square-foot building is on the southwest corner of Davis Boulevard and Bear Creek Parkway. Chad O'Neal of Realty Capital handled the sale.

Fort Worth Land, based in Oklahoma, bought 8.56 acres for investment in the Six Flags Business Park on the State Highway 360 service road south of Six Flags Drive. John St. Clair and Ray Utley of Henry S. Miller Commercial handled the transaction.

Leases

Imc2 LLC leased 51,973 square feet of office space at 12712 Park Central Drive in Dallas. Kathy Permenter and Burson Holman of CB Richard Ellis negotiated the lease with John Beech of Jackson & Cooksey.

The Neiman Marcus Group Inc. leased 30,255 square feet of office space at 1201 Elm St. in Dallas. Kathy Permenter, Russ Johnson and Burson Holman of CB Richard Ellis negotiated the lease with Steve Zimmerman of The Retail Connection.

Kemper Insurance leased 23,789 square feet of office space at Lakeside Square at 12377 Merit Drive in Dallas. Steve Thelen and Jeff Staubach of Staubach Co. negotiated the lease.

Delicate Moving Inc. leased a 23,000-square-foot office-warehouse space at 2829-2839 Blystone Lane in Dallas. Michelle Hudson with Burr & Temkin Commercial arranged the lease with Jim Svidron with NAI/Robert Lynn Co.

Michael D. King and Co. leased 20,000 square feet of office and warehouse space at 6740 Oakbrook Blvd. in Dallas. Jason Moser and David Duwe of Stream Realty negotiated the lease.

361 Group Construction Services Inc. leased 18,209 square feet of office space at 2542 Highlander Way in Carrollton. Michelle Hudson of Burr & Temkin Commercial negotiated the lease with Bob Hagewood with Stream Realty Partners.

Peter Piper Pizza leased 9,121 square feet of space in McKinney at Custer Road and State Highway 121. Lynn Dowdle and Jason Puig of Staubach Retail negotiated the lease.

This list is compiled by real estate editor Steve Brown.