Middle Market Digest: This Week in the South and Mountain Regions

The industrial market continues to be on fire, with conditions becoming ignited last year. According to JLL, low interest rates, healthy consumer spending and strong e-commerce are forming perfect conditions for industrial and logistics real estate growth in 2017. Potential investment in infrastructure and continued company expansion are also expected to fuel demand for warehouses and distribution centers despite global economic uncertainty, the brokerage firm says.

“We are leaving 2016 on a record high, with industrial real estate demand reaching new heights, with leasing in excess of 250 million square feet,” said Craig Meyer, president of JLL's industrial group. “Many companies continue to expand while others adapt and perfect their supply chains to be closer to urban cores and their customers, driving record low vacancy rates even further and increasing leasing rates in response. With new construction still trailing demand, not only will we see ground-up development across major markets, but we will see creative and adaptive re-use of assets, a rise of infill development and the introduction of multi-story construction in or near urban locations.” This bodes well for not only markets located near large-scale distribution routes but port cities as well.—Lisa Brown

BY THE NUMBERS

DALLAS—Ten-X released its top single-family housing markets report for winter, which ranks the nation's 50 largest housing markets according to current and forecasted housing fundamentals. Among the 50 largest US markets, the top five (in order) were first in Florida: Orlando, Palm Beach County, Fort Lauderdale and Tampa, ending with Dallas. Each demonstrated a vigorous combination of consistently strong demand, home price appreciation, and economic and demographic growth. Dallas climbed up to fifth, edging out Las Vegas. Dallas, for its part, is benefiting from a more diversified economy than most other Texas metros, allowing it to withstand pressures emanating from low oil prices.

NEWS AND NOTABLES

 DALLAS—The Weitzman Group and Cencor Realty Services are now simply Weitzman. The new name, as well as a new logo and color scheme, reflects the prominence the company has gained since it first opened its doors more than 25 years ago.

DALLAS—BBG has named a new chief executive officer and expanded its board of directors. Current president Chris Roach has been promoted to CEO. Former CEO Diane Butler has transitioned out of the business but will remain a member of the board of directors. BBG also announced that Joel Leitner, managing director of the firm's New York office and an appraisal industry veteran, has joined its board of directors.

DEAL TRACKER

COLORADO SPRINGS, CO—George Smith Partners has successfully arranged $41 million in financing for the acquisition of The Vineyards, a 300-unit class-A apartment community on behalf of a private real estate investment and development company. The financing, arranged by George Smith Partners' principal Jonathan Lee and provided by Walker and Dunlop, comprised 75% of the acquisition cost. The non-recourse loan closed at 4.31% with a 12-year fixed rate at nine years interest only.

CONVERSE, TX—Converse Business Park, a 20,000-square foot industrial property, has sold. It is located at 9314-9318 Converse Business Ln. This facility has performed at a near zero vacancy factor since its construction in 2006. Although performing as a stabilized asset for more than a decade, there remains upside with a rent roll that is more than 17% below market rates. It is located in the Northeast San Antonio industrial submarket. Joshua D. Murphy, an investment specialist in Marcus & Millichap's San Antonio office, had the exclusive listing to market the property on behalf of the seller, a private investor. 

PLANO, TX/ENID, OK—Element78 Advisors has advised on a custom-structured senior credit facility of up to $20 million for Cambium United LP, a construction services, building and equipment rental company headquartered in Plano with operations across multiple states, and the acquisition of Chem-Can Services Inc., a portable restroom and sanitation services company. 

BUILDING BLOCKS

WESTMINSTER, CO—Legacy Partners announced a joint venture with Diamond Realty Investments Inc., a company specializing in the investment and development of multifamily, student housing and industrial real estate properties, to develop Legacy on the Promenade, a luxury project consisting of 276 apartment homes and 24 townhomes. Construction will commence immediately and is projected to reach completion in the fall of 2018. Humphreys & Partners Architects designed the project. The apartments will be an average of 923 square feet and residents will have access to an internal structured parking garage and the 24 townhomes will have attached two-car garages.

The industrial market continues to be on fire, with conditions becoming ignited last year. According to JLL, low interest rates, healthy consumer spending and strong e-commerce are forming perfect conditions for industrial and logistics real estate growth in 2017. Potential investment in infrastructure and continued company expansion are also expected to fuel demand for warehouses and distribution centers despite global economic uncertainty, the brokerage firm says.

“We are leaving 2016 on a record high, with industrial real estate demand reaching new heights, with leasing in excess of 250 million square feet,” said Craig Meyer, president of JLL's industrial group. “Many companies continue to expand while others adapt and perfect their supply chains to be closer to urban cores and their customers, driving record low vacancy rates even further and increasing leasing rates in response. With new construction still trailing demand, not only will we see ground-up development across major markets, but we will see creative and adaptive re-use of assets, a rise of infill development and the introduction of multi-story construction in or near urban locations.” This bodes well for not only markets located near large-scale distribution routes but port cities as well.—Lisa Brown

BY THE NUMBERS

DALLAS—Ten-X released its top single-family housing markets report for winter, which ranks the nation's 50 largest housing markets according to current and forecasted housing fundamentals. Among the 50 largest US markets, the top five (in order) were first in Florida: Orlando, Palm Beach County, Fort Lauderdale and Tampa, ending with Dallas. Each demonstrated a vigorous combination of consistently strong demand, home price appreciation, and economic and demographic growth. Dallas climbed up to fifth, edging out Las Vegas. Dallas, for its part, is benefiting from a more diversified economy than most other Texas metros, allowing it to withstand pressures emanating from low oil prices.

NEWS AND NOTABLES

 DALLAS—The Weitzman Group and Cencor Realty Services are now simply Weitzman. The new name, as well as a new logo and color scheme, reflects the prominence the company has gained since it first opened its doors more than 25 years ago.

DALLAS—BBG has named a new chief executive officer and expanded its board of directors. Current president Chris Roach has been promoted to CEO. Former CEO Diane Butler has transitioned out of the business but will remain a member of the board of directors. BBG also announced that Joel Leitner, managing director of the firm's New York office and an appraisal industry veteran, has joined its board of directors.

DEAL TRACKER

COLORADO SPRINGS, CO—George Smith Partners has successfully arranged $41 million in financing for the acquisition of The Vineyards, a 300-unit class-A apartment community on behalf of a private real estate investment and development company. The financing, arranged by George Smith Partners' principal Jonathan Lee and provided by Walker and Dunlop, comprised 75% of the acquisition cost. The non-recourse loan closed at 4.31% with a 12-year fixed rate at nine years interest only.

CONVERSE, TX—Converse Business Park, a 20,000-square foot industrial property, has sold. It is located at 9314-9318 Converse Business Ln. This facility has performed at a near zero vacancy factor since its construction in 2006. Although performing as a stabilized asset for more than a decade, there remains upside with a rent roll that is more than 17% below market rates. It is located in the Northeast San Antonio industrial submarket. Joshua D. Murphy, an investment specialist in Marcus & Millichap's San Antonio office, had the exclusive listing to market the property on behalf of the seller, a private investor. 

PLANO, TX/ENID, OK—Element78 Advisors has advised on a custom-structured senior credit facility of up to $20 million for Cambium United LP, a construction services, building and equipment rental company headquartered in Plano with operations across multiple states, and the acquisition of Chem-Can Services Inc., a portable restroom and sanitation services company. 

BUILDING BLOCKS

WESTMINSTER, CO—Legacy Partners announced a joint venture with Diamond Realty Investments Inc., a company specializing in the investment and development of multifamily, student housing and industrial real estate properties, to develop Legacy on the Promenade, a luxury project consisting of 276 apartment homes and 24 townhomes. Construction will commence immediately and is projected to reach completion in the fall of 2018. Humphreys & Partners Architects designed the project. The apartments will be an average of 923 square feet and residents will have access to an internal structured parking garage and the 24 townhomes will have attached two-car garages.