ISIS continues to dominate the international news. Terrorist attacks all over the world, including the US, makes the radical Islamic group something that has to be dealt with and soon.

The common thought is that the numbers of immigrants coming into Europe and the terrorism is what caused the Brexit where Britain is leaving the European Union. The vote caught the leadership of England by surprise. The economic impact to England, Europe and to the US is yet to be determined. The US stock market certainly did not like it at first.


OK, as of this moment, it appears that it will be Hillary and The Donald in November. That is if Hillary does not get indicted or who knows what happens to Trump. Is this the best our nation has to offer?

The Consumer Confidence Index for June looks steady. We seem to be in a tight band.


The Consumer Price Index can help us look for potential rises in the Fed rate. The Fed has a 2% target for inflation and we have been way below it for quite a while. But the latest core is slightly above at 2.24%.


Now take a look at what makes up the Consumer Price Index. Note that the largest component is housing at over 42%.



With that in mind, look at the median value of new homes in the US. Compare that rise to the middle quintile income level, which remains flat.


In our area, and across Texas, one of the largest impediments to growth is that we are not putting enough housing, both single family and multi-family, on the ground. The Real Estate Center at Texas A&M believes that if we do not expand our available inventory, we could see slower growth. The second issue is that we are building very few starter or first time homes.

The US economy grew at its slowest rate in the first quarter in two years. That is not good for our retail development. The rate in Texas was better but we slowed down also.


The price of crude oil has recovered slightly to just over $50.00 per barrel. But the rig count in the Barnett Shale has dropped to a new low – “0”. There were no rigs working in the Barnett the first of this quarter. That is down from over 200 rigs active last year. Natural gas futures have jumped to just under $3.00 MMBTU because of the temperatures across the southern states, especially Texas where we now burn a lot of gas to generate electricity.


Volatility around the world is creating even more demand for US real estate investments. The favorable climate includes stable consumer confidence, strong real estate fundamentals, yields and attractive financing and income growth over time. The net lease market is the strongest.

Are the highest rents getting too high? Cushman & Wakefield’s latest Main Streets Across the World cited rents from New York’s 5th Avenue at $3,500 S/F, Hong Kong at $2,399 S/F to more average rents in the mid to upper hundreds of dollars per square foot per year. When do rents just get too high to make a profit?

According to David Senden, a principal at KTGY Architecture, there are over 500 million surface parking spaces in the US. That does not count multi-level parking structures. With only 250 million cars on the road, this equates to two spots for each vehicle. City regulations are only part of the cause but there is a lot that the cities could do to help. Letting the commercial users of real estate tell us how many parks they need is one.

JLL reports that demand for quality retail space is still outstripping supply. US retail sales have fully recovered from the 2007-08 crash and vacancy rates have fallen 120 basis points over the last year. Stand alone retail buildings, small neighborhood centers and grocery and power centers make up over 75% of the new space under construction.

Staples is doing something I think is interesting. The office supply chain is experimenting with adding open office space within select stores to attract small business customers. Workbar, an office network group, will operate the units. A similar situation is being offered by a group in Fort Worth as an addition to its office building. Their offering includes an outstanding coffee bar.

Kohl’s will close 18 of its 1,160 stores this year. This is the first time it has entrenched after several years of rapid growth.

Wolverine Worldwide, the popular owner of Hush Puppies & Keds, will close 100 stores in 2016 after closing 100 stores in 2015.

Hancock Fabrics will close all 180 stores in 37 states after its 2007 bankruptcy has failed to allow them to recover.

Buffets, LLC will file for Chapter 11. The restaurant chain operates over 150 stores under Country Buffet, Fire Mountain, Ryan’s and others. It will close its weaker stores for good under the filing.

Dave & Busters opened 10 new locations in 2015 and expects to do the same this year. Chipotle Mexican Grill filed for a trademark for the term “Better Burger”. I guess that tells us what it is going to try next.

Texas is the number one state for retail development. The top development markets and the square feet under development are listed below. Note the difference in #1 & #2.

  1. Texas: 7,949,419 S/F
  2. New York: 6,302,608 S/F
  3. California: 6,272,180 S/F

child-on-playgroundI love new trends in real estate. Chandler, AZ based Kids That Rip offers a broad venue of all kinds of indoor activities such as balance bar, cycling tracks, trampoline, BMX bikes and other types of sports activities. KTR programs start at a very young age and run into the teen years. It is based on a monthly fee basis. This idea will expand in my opinion.


According to the Real Estate Center at Texas A&M, four Texas Metropolitan cities together added more jobs from July 1, 2014 – July 1, 2015 than any state in the US other than Texas. Houston added 159,083, DFW added 144,704, Austin added 57,395 and San Antonio added 51,285.

But according to RECON, Texas only gained 169,400 non-agricultural jobs from May 2015 to May 2016, an annual growth rate of 1.4 percent, lower than the nation’s growth rate of 1.7 percent. All Texas industries except mining and logging, manufacturing and the transportation, warehousing and utilities had more jobs than a year ago. This is the effect of the fall in oil and gas employment.

Texas has become one of the country’s leading destinations for data centers. The business-friendly taxes, dependable electricity (much of it powered by abundant natural gas) and water have helped Texas attract what Ross Perot, Jr. describes as “the equivalent of America’s giant factories in the early 20th century.” And DFW, the nation’s fourth largest metro, ranks in the top five data center locations.

Texas won Site Selection Magazine’s Governor’s Cup again in 2015 for the fourth time in a row. The Lone Star State had more major corporate location and expansion projects in 2015 than any other state.


Texas’ housing prices and non-farm employment continue to out pace the nation.



Since the dawn of time transportation has defined economic development for civilization. It is all about trade of goods, ideas, education, etc. Being confined to a smaller group of people keeps groups of people from progress. Think rivers, trails, highways, railroads and more recently airports. The Dallas Fort Worth International Airport is over 40 years old and continues to be a main source of economic growth and development for the DFW Metroplex. It is the third in terms of operations and ninth in passengers of all airports in the US. It is estimated that DFW had an economic impact of $37 billion in expenditures last year and was responsible for 228,000 jobs. The airport generates about $1.1 billion in taxes to the state and an additional $534 million to local tax authorities. This cannot be over estimated.

DFW Metroplex retail ended 2015 with a 93 percent occupancy rate. The first quarter of 2016 absorption totaled approximately 1.6 million square feet with about half of that in new deliveries. The trend should continue into 2017.


Fort Worth’s Meacham International Airport continues to see renovations and expansions to its terminal and administration buildings plus several of the tenants are investing in their buildings. The airport gave up passengers with Fort Worth’s agreement to open DFW International Airport but private aviation continues to grow at a rapid rate. Meacham had a 22.37% increase in operations between 2014 and 2015 with over 117,000 planes flying in and out in 2015. Meacham currently employs over 1,000 people.


A new 220,000 S/F science and engineering building was recently approved for the University of Texas at Arlington. This will continue to solidify the school as a top ranked science and engineering campus.


The River District, a 276-acre development along the Trinity River between Robert’s Cutoff and White Settlement Road was officially announced this quarter. The development, being spearheaded by Fort Capital, LP, is set to offer single-family homes starting at $300,000 to about $1 million plus townhomes and other uses. The mixed-use community will have a total project expenditure of about $500 million. It is on the west side of the city near our Landmark Lakes and Landmark Quebec developments.

The On the Border Mexican Grill is scheduled to open July 11 in front of the Starplex Theater in our Landmark Quebec development.

McAllister’s Deli, National Vision (America’s Best) and 7 Day Dental are all three open at our development in the Lake Worth Marketplace.

We are about to close the Cheddar’s Scratch Kitchen deal west of Starplex Theater. Cheddar’s and the Marriott Towne Place Suites should both be under construction this month at Landmark Quebec.


Stoneleigh Companies will be the equity for Dallas-based Realty Capital’s The Dylan across Sycamore School Road from our Summer Creek Station development along the Chisholm Trail. The deal is expected to close this month with construction expected to begin soon.

Governor Gregg Abbott signed a bill to fund $40 million for the initial buildings of the Tarlton State campus on the Chisholm Trail Parkway just south of our Summer Creek Station.


Walton Group announced its line-up of homebuilders for Phase I of its Chisholm Trail Ranch. They are Dunhill Homes, History Maker Homes, Sandlin Homes and Antares Homes. All are very well respected and most are local. Phase I will include a 7,500 s/f clubhouse with a junior Olympic-sized swimming pool and a new Crowley ISD elementary school.



Texas continues to be one the best states to invest in throughout the US and Fort Worth is one of its best markets. There is still a positive gap between the current inventory of available space and new development of homes, retail and industrial and other commercial real estate. Banks are eager to loan money for developments that have good fundamentals and sponsorship and permanent money continues to be available for long term financing at rates around 4%. It is hard not to want to bring new and/or repositioned projects on line. I continue to be positive about our ability to find deals that make sense and bring them on line.

Thanks and have a great summer!


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