CRE Opinion: Four Potential Disruptors in DFW’s Booming Industrial Market

Without question, Dallas-Fort Worth’s industrial real estate market is among the strongest in the nation. According to Cushman & Wakefield research, the region closed 2017 with nearly 26 million square feet in occupancy growth—a new record. And construction deliveries for the year, at 27.4 million square feet, exceeded the 10-year historical average by 172 percent.

Industrial tenants continue to make North Texas a part of their supply chain and logistics strategies, and are growing their presence at a record clip. So, what could possibly get in the way of good times continuing? Here are four potential disruptors:

Labor

Industrial labor is in great demand in DFW, and there is at least a perceived shortage throughout the region. In a market growing as quickly as ours, it can be a challenge to find a deep bench of workers, whether you’re in South Dallas or North Dallas or Alliance. Every industrial tenant that comes to town wants to know where they can find good labor. And it’s not just about finding workers, it’s keeping them. Amazon is paying as much as $4 or $5 more per hour for forklift drivers than what most small, locally owned companies can afford, making it hard for them to compete.

Similarly, developers want to know how they can best position their projects so prospective tenants can feel confident about hiring prospects. Access to labor can be a huge differentiator in the market. Our research team has done in-depth labor studies and created heat maps that reveal where concentrations are centered. It’s a quantitative analysis, not qualitative, but it’s been very helpful on both the tenant and landlord side.

Land

A shortage of available land sites in Dallas is a phenomenon that’s new to this development cycle. Land in or near the majority of established industrial parks in North Texas has already been snapped up; only infill sites remain. That’s why so much of the new construction is happening in South Dallas, the last submarket with available raw land. But now even South Dallas is becoming a challenge.

The tracts of land that do remain throughout DFW are available for a reason; typically there’s some sort of extraordinary cost associated with developing them, such as a flood plain or infrastructure challenge. This is leading some investors to opt for redevelopment. The old Raytheon campus in Garland is an example of this, as is the former ST Microelectronics complex in Valwood. It’s not just former industrial space that’s getting repurposed. A golf course in Great Southwest has been turned into an industrial park, as was a church and the former Six Flags Mall. Due to the shortage of land, we will see a continuation of this trend.

Construction Costs

As industrial space becomes more sophisticated and the basic economic principles of supply and demand come into play, developers are paying more for everything from materials and land to labor. Today’s tenants not only want higher ceilings, they want increased car parking and trailer parking. This means more paving costs and, more important, it decreases the amount of coverage that developers can achieve on a site. The floor area ratio goes down, so there’s less building per foot, per site, for which they can charge rent. Developers are facing pressure from two different directions: higher costs and lower building coverage. All of this puts increasing pressure on rents.

Interest Rate Hikes

We are expecting to see three or four hikes in 2018. As rates increase, so will the cost of borrowing. Higher construction and financing costs have been offset over the past several years by cap rate compression. But as interest rates rise, some are betting that cap rates will eventually rise, too. At this point, we don’t anticipate that cap rates will be affected in the short-term, unless 10-year Treasury yields get to somewhere in the 3.50 range. There remains an abundance of capital for industrial real estate, which is still a preferred asset class for most investors.

Kurt Griffin is an Executive Managing Director within Cushman & Wakefield’s Logistics and Industrial Services group in Dallas. He specializes in industrial project leasing, tenant representation, and investment property and land sales.

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Missing man last seen driving in northwest Dallas may be a danger to himself, others

George Earnest Rollins (Dallas Police Department)

George Earnest Rollins, 58, was last seen around 10 p.m. Sunday driving in the 2300 block of Stemmons Trail, near West Northwest Highway.

Rollins is described as a white man who is 6 feet tall and 160 pounds, with black hair and blue eyes.

Ford 500

He was driving a red, four-door 2007 Ford 500 with Texas license plate FKB-2760.

Police say Rollins may be a danger to himself or others.

Anyone with information about Rollins’ whereabouts is asked to call 911 or Dallas police at 214-671-4268.

Source Article

North American Cannabis Holdings and Puration Signal Full Steam Ahead in Canada and California Recreational Marijuana Markets

DALLAS, TX / ACCESSWIRE / March 15, 2018 / North American Cannabis Holdings, Inc. (OTC PINK: USMJ) and Puration, Inc. (OTC PINK: PURA) are continuing to forge ahead with establishing operations in Canada and California to position both companies to benefit from the respective legalization of recreational marijuana. USMJ recently announced a letter of intent to acquire a company in California that would advance USMJ’s strategy to enter the recreational marijuana grow and dispensary markets in California. PURA has recently announced developments in California to establish an extraction operation and produce cannabis extract infused beverages for the legal California recreational marijuana market. Together, USMJ and PURA have been developing an opportunity to acquire a grow operation in Canada in advance of the pending nationwide legalization of recreational marijuana expected this coming July. Continue reading “North American Cannabis Holdings and Puration Signal Full Steam Ahead in Canada and California Recreational Marijuana Markets”

Cresa Dallas doubles its operations with move into new Dallas-Fort Worth office in North Dallas – Dallas Business Journal

It’s only been a few months since the re-established team behind Cresa Dallas moved into its new North Texas regional hub at the recently-renovated Pinnacle Tower near LBJ Freeway and the Dallas North Tollway, but, in that time, managing principal Scott Bumpas has more than doubled the size of his staff.

The tenant rep-only brokerage firm has taken its Dallas employee base from four executives to a team of nine brokers and employees focused on turning North Texas into a major market for Cresa. Continue reading “Cresa Dallas doubles its operations with move into new Dallas-Fort Worth office in North Dallas – Dallas Business Journal”

North Texas-based Bloomfield Homes plans to develop 750 new affordable homes in Mesquite – Dallas Business Journal

Mesquite has been experiencing “unprecedented new home construction” unlike the city has seen since the 1980s, officials say.

And on Monday, North Texas-based Bloomfield Homes announced it will add to the pipeline with plans to develop 750 new homes in the Ridge Ranch master-planned community near East Cartwright Road and Lawson Road.

City manager Cliff Keheley said the builder decided to continue its success in Mesquite on the heels of selling hundreds of new homes in another master-planned community in the city. Continue reading “North Texas-based Bloomfield Homes plans to develop 750 new affordable homes in Mesquite – Dallas Business Journal”

Dallas oilman Trevor Rees Jones sells $15.9 million University Park manse

Judson Plaza is a 60,000 sq ft garden office complex in Longview ...

Dallas oilman Trevor Rees Jones has sold his almost 2-acre University Park Mississippi GOP governor won’t appoint himself to US Senate | News …estate.

The 12,458-square-foot mansion on Turtle Creek was built in 1996. The English Tudor Revival house has five bedrooms, six and a half baths and eight fireplaces. It was built of limestone imported from England and assembled by English craftsmen.

The Volk Estates property was listed for sale for $15.9 million. Kathy Myers and Lacy Schultz of Dave Perry-Miller Real Estate sold the house for an undisclosed price. Continue reading “Dallas oilman Trevor Rees Jones sells $15.9 million University Park manse”

Dallas Lags Behind in Median Family Incomes

f11photo/shutterstock.com

Incomes vary for any number of reasons—education, skills and talent, type of job, productivity, work effort, wealth, industries’ ups and downs, bad or good luck. The simple truth about the labor market goes a long way toward explaining the wide and persistent income gaps among Dallas-Fort Worth cities.

In 2015, median family incomes ranged from a high of $211,847 in University Park to a low of $28,427 in Wilmer, a small suburb to Dallas’ southeast. With median family income of $46,902, Dallas ranks fourth from the bottom, behind Wilmer, Hutchins, and Seagoville. Continue reading “Dallas Lags Behind in Median Family Incomes”

Housing Boom Continues In North Texas

DALLAS, Texas (CBS 11 News) – The housing boom continues in North Texas, and it doesn’t seem to be slowing down anytime soon.

According to new numbers released by the U.S. Census Bureau the Dallas Fort-Worth metro area has seen the third largest population increase in the country behind Houston and New York. The area added more than 108,000 people between July 2012-July 2013. Since 2010, the whole area has grown to more than 6.8 million residents. Continue reading “Housing Boom Continues In North Texas”

As mortgage rates go up, will it be harder for Dallas-area homeowners to sell?

How rising rates would affect the mortgage market - The Globe and Mail

Staff Photographer

Worries about higher interest rates have sent Wall Street into a tailspin during recent days.

The housing market may face some turbulence, too. Home mortgage rates rose this week for the fifth week in a row. The cost of financing a home is now at one of the highest points in years.

Along with pulling down the securities market, higher interest rates are likely to slow the rate of home price appreciation in markets across the U.S., said Daren Blomquist, economist with Attom Data Solutions. Continue reading “As mortgage rates go up, will it be harder for Dallas-area homeowners to sell?”

North Texas gardening courses offer comprehensive ‘newcomer’ instruction

Graphicality-UK: Hot colours for a hot July

DALLAS — Two free public courses aim to equip new gardeners with the tools to establish lush lawns, vibrant landscapes and bountiful vegetable gardens in the unique and unforgiving growing conditions of North Texas, organizers said.

The first session of Newcomers Guide to Gardening in North Texas is Feb. 10, 8:30 a.m.-12:30 p.m., Texas Discovery Gardens at Fair Park, 3601 Martin Luther King Jr. Boulevard, Dallas.

The second installment is March 3, 8 a.m.-1:00 p.m., Collin College Conference Center, 2400 Community Avenue, McKinney. Continue reading “North Texas gardening courses offer comprehensive ‘newcomer’ instruction”