Let’s see if I understand this situation correctly. Iran has in the past and continues to publicly state “Death to Israel” and to the “Great Satan”. Iran has cheated on its nuclear mandates of the United Nations in the past and we are supposed to believe that they will obey the demands of a new set of restrictions. Iran is the biggest sponsor of terrorism in the world. President Obama says one thing and the leadership of Iraq has a completely different public statement. And this deal with Iran is supposed to be good.

Evidently the other nations in the region do not think so. Israel is very vocal in stating its opposition to the deal. Iran’s neighbors are stating that if Iran gets the bomb, they are going to demand the technology too. And even if they do not have one, should Iran threaten to use the bomb, it will surely drag the USA into conflict. Then there is the very real possibility that Iran or one of the Islamic terrorist groups it supports actually uses a bomb against one of its neighbors or us.

Personally I think Obama wants another Nobel Peace Prize. Heck, he got the first one for doing absolutely nothing! Why not?


  • March hiring disappointed with just 126,000 new jobs created and January and February both revised downward. March broke a several month run of over 200,000 new jobs per month.
  • jobs-feb2015

  • While the federal government brags about an unemployment rate of 5.5%, we continue to hand out free “stuff” like candy at Halloween. It is no wonder that people are not looking for work.
  • The labor participation rate is as low as it has been in years.
  • labor participation

  • But despite a federal government that continues to spend money like a drunken sailor (and I apologize to my Navy buddies), we are moving forward.
  • US home sales are holding their own according to the Census Bureau. Some of this may be weather related but punitive lending rules are also to blame.
  • new home sales

  • US retail and restaurant activity is a big part of our economy. When we can get our population out spending money on general retail, in restaurants and just having fun, it makes a huge difference to the economy.
  • retail

  • Consumer Confidence ended at 93.0 this quarter.
  • consumer confidence

  • Janet Yellen started talking about raising interest rates in March.
  • inflation

Oil Prices

Oil prices are still low. But many in the business expect the price to slowly increase. Contingent upon nothing drastic happening, like a really bad agreement with Iran, I am looking for pricing in the $50.00 to $70.00 per barrel range for quite some time.


  • BIG BOX COMEBACK – One thing that is apparent now is the lack of o RadioShack, a Fort Worth company for decades, finally succumbed to the vacant big box retail stores to lease. When the 2008 crunch took hold, retailers like Borders, Circuit City and Linens & Things all shut their doors. But over the last 2-3 years, the spaces that were in good retail areas have been occupied by users like Flight Deck, a trampoline park, emergency medical facilities, soft goods retailers HomeGoods, Marshalls and T.J. Maxx and exercise chains like Crunch and LA Fitness. When you add in the big liquor stores like Total Wine and other users, the stock of vacant boxes in Class A areas is much the same as other retail vacancies in that general area. It was much higher three or four years ago.
  • RadioShack, a Fort Worth company for decades, finally succumbed to the market and declared bankruptcy. General Wireless is buying 1,500 to 2,400 of the company’s US stores. Sprint may open mini-shops in many of the 1,760 former RadioShack stores.
  • Speaking of big boxes, At Home is in a growth mode. The former Garden Ridge Pottery chain is going national and is taking advantage of the fact that Sears and J.C. Penny are both closing stores.

And according to Shopping Center Today, retailers and restaurants plan to open hundreds of new stores in 2015. Some we are watching are:

  • Subway – 2,500
  • Dollar General – 635
  • Five Guys Burgers – 600
  • Pizza Hut – 350
  • 7 Eleven – 300
  • CVS Pharmacy – 300
  • Jimmy John’s – 300


  • The drop in the price of crude oil is likely to hurt the Texas economy. The last time I checked, a drop from $107 per barrel to less than $40.00 is about 60%! That is huge. Employment in the oil fields will be hurt by layoffs of rig hands and there will be some empty space in some of the office buildings in big cities like Midland and Fort Worth. Houston will likely suffer some also.

DFW Region

  • Nebraska Furniture Mart opened its 560,000 square foot retail center in The Colony (North Dallas) in March. The company, 90% owned by Berkshire Hathaway, is based in Omaha, Nebraska where it has its 1.7 million square foot flagship store. Not everything in Texas is bigger!
  • That being said, DFW International Airport has one of the largest land holdings of any airport in the US. As a result, it has land it can ground lease to developers and joint venture with. The airport joined forces with Hillwood Development (Ross Perot, JR.) to build a distribution center on 60 acres of airport land that will be over 1 million square feet. Look for more of this in the future.

Fort Worth

  • According to Axiometrics, Inc., Fort Worth multi-family occupancy continues to rise faster than Dallas. And it is one of the fastest growing in the country. Fort Worth’s rent growth exceeded 6% last year.
  • Tarrant County is hitting on all cylinders right now. Multi-family, industrial, office and retail construction are all on the upswing. Thankfully there is not much speculative development in office and retail and most of the spec space going up in industrial is huge projects in excess of one million square feet.
  • Jetta Operating Co., a 24-year-old privately held oil and gas company, is about to break ground on a 26-story office project in downtown. The CBD office market is strong. Hopefully there will not be a lot of layoffs in downtown because of the drop in oil prices.
  • The City of Fort Worth has finally broken ground on the replacement of all utilities down South Main Street. This area has been overlooked for years and with almost 30,000 employees in the medical district alone, it is a major employment center for the city.
  • Race Street, an inner city area just east of the CBD, is also undergoing a huge amount of revitalization with apartments and townhomes driving retail development. Criterion Development is taking a huge risk in the area. If it works, Criterion will be paid handsomely.

Chisholm Trail

About 50 years ago, TXDoT and the city started talking about an extension of State Highway 121 from downtown south to Cleburne. The state roadway would have to go through the Edwards Ranch. After four decades of fighting, the roadway is finally open as the Chisholm Trail Parkway, a limited access toll road between the CBD and Cleburne. The toll road opened in mid-2014 and it is going to cause quite a bit of development along the portion in Fort Worth immediately.

Northwest Fort Worth / Lake Worth

  • Gander Mountain enjoyed a great holiday season according to the store manager.
  • The Lake Worth market continues to be very tight with few vacancies available. One new speculative retail building is being planned on Azle Avenue east of Loop 820.


Arlington has approved the $30 million Champions Park, a development of Greenway Investments of Dallas. The first phase, 84,000 square feet, will be restaurants and retail space with a large outdoor festival area. Phase II will have more retail, offices, hotels and a theater. This will be the first real development in Arlington’s Entertainment District, something the city has long sought after.


So where are we today? Are the tea leaves trending up, down or just more of the same? It appears to me that we are in a long-term trend of slow growth with the Fed continuing to be accommodating. But the Texas economy is one of the best in the country and thus the world. So I think we cautiously move forward. We are looking at new opportunities but they must have a margin of profit built in on the acquisition. We will not look at deals just to say we have a deal.

Is it time to take some of the chips off the table? CAP rates remain historically low. There is a huge amount of money seeking quality property and the decision must be made with transaction costs, including very high capital gains taxes and recapture of deprecation, taken into the equation.

If the decision is disposition of real property, do we 1031 into another opportunity or do we pay the taxes and then what do we do with the cash? Investing in bonds or money market funds certainly does not excite me.

Do we wait until the 2016 presidential election and try to time the market? Absolutely no. Market timing is rarely the answer.

We must do the homework and then make decisions.

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