Of the many tax changes under discussion by the Trump administration, six measures pose material implications for commercial real estate, according to a Transwestern report that covers the global economy and commercial real estate. If passed, these measures would reduce the top corporate tax rate from 35 to 20%, allow immediate and full deduction of capital investment expenditures, eliminate interest deductibility on future loans, allow net operating losses to carry forward indefinitely, eliminate 1031 exchanges, and tax carried interest on capital gains as ordinary income.
“Elimination of interest deductibility is a particular concern for investors, although a reduced corporate tax rate could mute its impact,” said Tom McNearney, Transwestern chief investment officer and the report's author. “Yet it is difficult to imagine that President Trump, who has taken advantage of commercial real estate borrowing, would eliminate interest deductibility.”
Locally, leasing and disposition/acquisition activities continue as commercial real estate is expected to have a fairly steady course this year in this rising-interest-rate environment.—Lisa Brown
NEWS AND NOTABLES
AUSTIN, TX—The Real Estate Council of Austin announced the selection of Dianne Bangle as its new CEO, effective immediately. In this role, Bangle will be responsible for the development of RECA's overall strategy and the management of its day-to-day operations. She will also oversee the administration of the organization, including its annual budget and goals.
DALLAS—Commercial real estate professionals Kurt Griffin and Nathan Orbin have joined Cushman & Wakefield as executive managing directors. They will focus on growing the firm's industrial agency leasing business across North Texas.
COLORADO SPRINGS, CO—Steven Kohls has joined CBRE's office in Colorado Springs as a vice president. He will be focused on sales and leasing services for office, commercial land and new development projects. Kohls has 17 years of experience, including representing more than $350 million in sales and lease transactions and playing an instrumental role in 4.8 million square feet of class-A and mixed-use projects. Prior to joining CBRE, Kohls managed his own commercial investment and development consulting firm and was a principal/shareholder with Lee & Associates in Phoenix.
HOUSTON—Two CBRE Group managed properties received the Regional Outstanding Building of the Year (TOBY) Award at the BOMA International Southwest Regional Conference held in Dallas earlier this month. Memorial Hermann Southeast Hospital Medical Plaza 2 and HESS Tower were among the five regional TOBY Winners, which will advance to the International Awards in June 2017. Sherry Farrow and Janet Shipley serve as property managers for Memorial Hermann Southeast Medical Plaza 2 and HESS Tower, respectively.
HOUSTON—JLL continues the strategic expansion of its disposition business in Houston with the addition of three new experts Donna Kolius, Pierce Owens and Kaylie Walker. The group will join JLL's brokerage team focusing on multi-market dispositions, national portfolio strategies and sale leasebacks for corporations, private equity firms, real estate investment trusts, investors and retailers.
DEAL TRACKER
AUSTIN, TX—MJCX Professional Services leased 1,516 square feet at Springwoods Business Center located at 13581 Pond Springs Rd. The landlord was represented by Lee Ellison and Steve Pannes with ECR.
AUSTIN, TX—The Home Depot leased 8,722 rentable square feet at the Scarbrough Building, located at 522 Congress. The landlord was represented by Jason Steinberg and Matt Levin with ECR and the tenant was represented by Chris Perry with Aquila Commercial and Jimmy Sanders with Icon Commercial.
AUSTIN, TX—Cobb, Fendley & Associates leased 16,444 rentable square feet of office space at Centennial Towers located at 505 Huntland Dr. The landlord was represented by Matt Levin and Jason Steinberg with ECR and the tenant was represented by Jason Whittington with NAI Partners.
AUSTIN, TX—Outdoor Voices Inc. leased 4,991 rentable square feet of office space at Chavez Village, located at 110 Chalmers. The landlord was represented by Patrick Ley and Lee Ellison with ECR.
AUSTIN, TX—College Match Point leased 1,273 square feet at Sunday House Square located at 1000 Westbank Dr. Patrick Ley and Rebecca Zigterman represented the landlord in bringing occupancy back to 100% at the property.
AUSTIN, TX—Executive Association Management leased 2,839 rentable square feet at 823 Congress. The landlord was represented by Matt Levin and Jason Steinberg with ECR and the tenant was represented by Tim Jarvis with B-Bachs Development Inc.
BOULDER, CO—With the sale of 17 Walnut, ARA, A Newmark Company closes on the highest per-unit conventional multi-housing trade ever in the state of Colorado and the second-highest price per door for a non-coastal asset in the US since 2015. The property is located in the prestigious East End corridor in downtown. Senior managing director Andy Hellman and executive managing director Justin Hunt represented Boulder-based developer Element Properties in the sale to Rivendell Global Real Estate. The Manhattan-based firm purchased the 26-unit community for $15.6 million, making its $600,000 per-unit price and $654 per square foot price the highest within 750 miles of the property.
HARLINGEN, TX—KeyBank Real Estate Capital provided a $15.4 million FHA first mortgage loan for Regency-Windsor Atrium View. The 120-bed skilled nursing facility was built in 2012. John Randolph of Key's Healthcare Group arranged the financing with a 35-year amortization schedule. The loan was used to refinance existing debt.
HOUSTON—The Woodlands Development Company announced the opening of its second self-storage property at 32010 FM 2978 while also celebrating the ribbon-cutting ceremony at its initial self-storage facility, which recently opened at 6735 College Park Dr.
KATY, TX—Lee & Associates-Houston represented MCI Grand Parkway Ltd. in the sale of 1.96 acres off North Mason Road, near Clay Road. Lee & Associates-Houston's principals Taylor Schmidt and Reed Vestal represented the seller and Jay Garrison represented the buyer, Kinmax LLC. The site is located just off the Grand Parkway and the buyer will construct a Kids 'R' Kids daycare facility on the site.
LITTLE ROCK, CABOT AND MOUNTAIN HOME, AR—Sands Investment Group has completed three single-tenant Burger King transactions as part of a five-unit sale leaseback portfolio. The two additional properties are set to close by the end of April. SIG developed the strategy in conjunction with the owner Flis Enterprises Inc. Elan Sieder and Max Freedman of SIG represented the seller, Flis Enterprises Inc., in all of the transactions.
BUILDING BLOCKS
AURORA, CO—With pre-lease agreements taking up a majority of what was the largest speculative industrial project ever to be built in the metro-area, Majestic Realty Co. announced plans to beat its own record and build the state's largest individual speculative building at its Majestic Commercenter park in Aurora. Set to break ground in June, the 701,500-square-foot building #15 is anticipated for completion in the first quarter of 2018. The building will be constructed on 36 acres of the 1000-acre Majestic Commercenter, located at the intersection of I-70 and Tower Road, and will feature 36-foot ceiling clearance, 146 dock doors, 198 trailer parking spaces and 426 car spaces. The building will be divisible for multiple tenants down to 150,000 square feet.
FREDERICKSBURG, TX—The city purchased 52.23 acres of land for future park and recreation space. Patrick Ley and Matt Fain with ECR represented the seller in the transaction.
Of the many tax changes under discussion by the Trump administration, six measures pose material implications for commercial real estate, according to a Transwestern report that covers the global economy and commercial real estate. If passed, these measures would reduce the top corporate tax rate from 35 to 20%, allow immediate and full deduction of capital investment expenditures, eliminate interest deductibility on future loans, allow net operating losses to carry forward indefinitely, eliminate 1031 exchanges, and tax carried interest on capital gains as ordinary income.
“Elimination of interest deductibility is a particular concern for investors, although a reduced corporate tax rate could mute its impact,” said Tom McNearney, Transwestern chief investment officer and the report's author. “Yet it is difficult to imagine that President Trump, who has taken advantage of commercial real estate borrowing, would eliminate interest deductibility.”
Locally, leasing and disposition/acquisition activities continue as commercial real estate is expected to have a fairly steady course this year in this rising-interest-rate environment.—Lisa Brown
NEWS AND NOTABLES
AUSTIN, TX—The Real Estate Council of Austin announced the selection of Dianne Bangle as its new CEO, effective immediately. In this role, Bangle will be responsible for the development of RECA's overall strategy and the management of its day-to-day operations. She will also oversee the administration of the organization, including its annual budget and goals.
DALLAS—Commercial real estate professionals Kurt Griffin and Nathan Orbin have joined Cushman & Wakefield as executive managing directors. They will focus on growing the firm's industrial agency leasing business across North Texas.
COLORADO SPRINGS, CO—Steven Kohls has joined CBRE's office in Colorado Springs as a vice president. He will be focused on sales and leasing services for office, commercial land and new development projects. Kohls has 17 years of experience, including representing more than $350 million in sales and lease transactions and playing an instrumental role in 4.8 million square feet of class-A and mixed-use projects. Prior to joining CBRE, Kohls managed his own commercial investment and development consulting firm and was a principal/shareholder with Lee & Associates in Phoenix.
HOUSTON—Two CBRE Group managed properties received the Regional Outstanding Building of the Year (TOBY) Award at the BOMA International Southwest Regional Conference held in Dallas earlier this month. Memorial Hermann Southeast Hospital Medical Plaza 2 and HESS Tower were among the five regional TOBY Winners, which will advance to the International Awards in June 2017. Sherry Farrow and Janet Shipley serve as property managers for Memorial Hermann Southeast Medical Plaza 2 and HESS Tower, respectively.
HOUSTON—JLL continues the strategic expansion of its disposition business in Houston with the addition of three new experts Donna Kolius, Pierce Owens and Kaylie Walker. The group will join JLL's brokerage team focusing on multi-market dispositions, national portfolio strategies and sale leasebacks for corporations, private equity firms, real estate investment trusts, investors and retailers.
DEAL TRACKER
AUSTIN, TX—MJCX Professional Services leased 1,516 square feet at Springwoods Business Center located at 13581 Pond Springs Rd. The landlord was represented by Lee Ellison and Steve Pannes with ECR.
AUSTIN, TX—
AUSTIN, TX—Cobb, Fendley & Associates leased 16,444 rentable square feet of office space at Centennial Towers located at 505 Huntland Dr. The landlord was represented by Matt Levin and Jason Steinberg with ECR and the tenant was represented by Jason Whittington with NAI Partners.
AUSTIN, TX—Outdoor Voices Inc. leased 4,991 rentable square feet of office space at Chavez Village, located at 110 Chalmers. The landlord was represented by Patrick Ley and Lee Ellison with ECR.
AUSTIN, TX—College Match Point leased 1,273 square feet at Sunday House Square located at 1000 Westbank Dr. Patrick Ley and Rebecca Zigterman represented the landlord in bringing occupancy back to 100% at the property.
AUSTIN, TX—Executive Association Management leased 2,839 rentable square feet at 823 Congress. The landlord was represented by Matt Levin and Jason Steinberg with ECR and the tenant was represented by Tim Jarvis with B-Bachs Development Inc.
BOULDER, CO—With the sale of 17 Walnut, ARA, A Newmark Company closes on the highest per-unit conventional multi-housing trade ever in the state of Colorado and the second-highest price per door for a non-coastal asset in the US since 2015. The property is located in the prestigious East End corridor in downtown. Senior managing director Andy Hellman and executive managing director Justin Hunt represented Boulder-based developer Element Properties in the sale to Rivendell Global Real Estate. The Manhattan-based firm purchased the 26-unit community for $15.6 million, making its $600,000 per-unit price and $654 per square foot price the highest within 750 miles of the property.
HARLINGEN, TX—KeyBank Real Estate Capital provided a $15.4 million FHA first mortgage loan for Regency-Windsor Atrium View. The 120-bed skilled nursing facility was built in 2012. John Randolph of Key's Healthcare Group arranged the financing with a 35-year amortization schedule. The loan was used to refinance existing debt.
HOUSTON—The Woodlands Development Company announced the opening of its second self-storage property at 32010 FM 2978 while also celebrating the ribbon-cutting ceremony at its initial self-storage facility, which recently opened at 6735 College Park Dr.
KATY, TX—Lee & Associates-Houston represented MCI Grand Parkway Ltd. in the sale of 1.96 acres off North Mason Road, near Clay Road. Lee & Associates-Houston's principals Taylor Schmidt and Reed Vestal represented the seller and Jay Garrison represented the buyer, Kinmax LLC. The site is located just off the Grand Parkway and the buyer will construct a Kids 'R' Kids daycare facility on the site.
LITTLE ROCK, CABOT AND MOUNTAIN HOME, AR—Sands Investment Group has completed three single-tenant
BUILDING BLOCKS
AURORA, CO—With pre-lease agreements taking up a majority of what was the largest speculative industrial project ever to be built in the metro-area, Majestic Realty Co. announced plans to beat its own record and build the state's largest individual speculative building at its Majestic Commercenter park in Aurora. Set to break ground in June, the 701,500-square-foot building #15 is anticipated for completion in the first quarter of 2018. The building will be constructed on 36 acres of the 1000-acre Majestic Commercenter, located at the intersection of I-70 and Tower Road, and will feature 36-foot ceiling clearance, 146 dock doors, 198 trailer parking spaces and 426 car spaces. The building will be divisible for multiple tenants down to 150,000 square feet.
FREDERICKSBURG, TX—The city purchased 52.23 acres of land for future park and recreation space. Patrick Ley and Matt Fain with ECR represented the seller in the transaction.
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