North Korea continues to thumb its nose at the rest of the world. The rogue nation claims to have the capability to hit the United States with a nuclear tipped ICBM. Everyone seems to think China will take care of its client state. What China does not want is hundreds of thousands of North Koreans pouring across its border.

As I write this report, the G-20 nations are meeting in Brussels. There are protests but for the life of me, I do not think the protesters know what they are really protesting. Maybe we could send them to North Korea for a while and they might figure it out.


Trump is back on Obama Care again. It appears that Texas Senator Ted Cruz might have a way to get the Republicans united under a plan that will allow lower cost insurance that does not force men to pay for mammograms and the ladies to skip the prostate exams!

The Consumer Confidence Index for June came in at 95.1, down from the final number in May of 97.1. But this is still very favorable.

Two other indicators I like to watch are the Labor Force Participation Rate (LFPR) and long-term capital investments, 20 years or more. These two statistics tell us what portions of the work force are actually participating in creating “things” and what business thinks about investing in our country.

I find it disturbing that the young people ages 16 – 24 are not recovering (or do not want to participate) in the labor force. The old guys are still working and paying taxes.

The long-term capital expenditure (CAPEX) number is still stuck in a narrow band. Hopefully Trump and Congress will get some serious tax relief passed and we will bring a lot of the manufacturing home to the US.


According to Zillow, the median home value in the US is now almost $200,000.00 and expected to continue up. The median value is $255,200.00. The market continues to be healthy with average days on Zillow at 77 days as of April 30, 2017. What I want to know is where are the people that cannot afford, or qualify, for a $200,000.00 home going to live? Multi-family I guess. According to the US Census Bureau, home ownership peaked at 69.2 percent of households in 2004 and has fallen to 63.5 percent now, a difference of approximately 7 million households, nearly a 50-year low.


Crude Oil just cannot get back to $50.00 per barrel.

And natural gas remains below $3.00 mcf.

Volvo just announced that it is completely doing away with gasoline only automobiles by 2019 at which time all new Volvos will either be electric or hybrids.

French President Emmanuel Macron stated that it is his goal to end the sale of gasoline and diesel vehicles by 2040.


WalMart has acquired Bonobos for about $310 million, all cash. The online men’s clothing retailer also has 35 physical locations. This acquisition comes on the heels of its acquisition of ModCloth, a women’s clothing retailer earlier this year.

Sally Smith, President and Chief Executive Officer of Buffalo Wild Wings for 21 years, tendered her resignation on May 30. Ms. Smith, who brought BWLD through some very challenging years, was not able to beat down the opposition from outside board members that owned significant shares of the company stock. In my opinion this is too bad. Sally Smith was one of the most successful restaurant CEOs on the scene today. Good luck, Sally.

Women’s retailer, Bebe, is closing its remaining 168 stores and going strictly on-line. The closures were expected to be finalized by May. Another one bites the dust.

And Amazon is opening a physical store at Grapevine Mills Mall. So we are not going to be 100% on the Internet.

And the rumor mill was that Amazon was going to open hundreds of grocery stores and compete with WalMart and Kroger. Then the Whole Foods announcement was published. This acquisition will give Amazon 450 physical stores to start with. The other grocery stores have a real reason to be concerned.

Plano based J.C. Penny announced that it is closing two huge distribution centers and 130 – 140 stores. The Lakeland, FL distribution center and the supply chain facility in Buena Park, CA will be closed this quarter and the total store closures, representing 13% – 14% of the company’s current store portfolio was to be completed in the second quarter of 2017.

Marcus Lemonis purchased Gander Mountain in a bankruptcy auction and is rebranding the stores that he is keeping as Gander Outdoors. He bought the leases but not the existing Gander Mountain inventory. Lenonis says he is going to be much more competitive in pricing, especially on firearms.

JAB Holdings is buying Panera Bread for $7.5 billion (yes, with a B) and assuming $340 million in debt. The owner of Popeye’s, Peet’s Coffee and other breakfast restaurants is paying a 20% premium over the all time high closing of the stock for Panera’s 2,000 units that did about $5 billion in sales last year.

McAllister’s Deli opened its 400th store in April. This is one restaurant chain that is doing very well.


Texas Hispanics are behind over half of the state’s growth since 2010. More than 1.4 million of the 2.7 million increase was contributed to new Hispanic residents.

According to Forbes, the top ten cities to invest in real estate in the US included Dallas as number 1 and Fort Worth as number 9. A lot of the weight was given to residential real estate factors.

Texas’ pace of job creation topped the nation again for the year ending in March. According to the Real Estate Center at Texas A&M, the state gained 249,000 nonagricultural jobs, an annual increase of 2.1% as opposed to the nation’s 1.5%. Dallas-Plano-Irving ranked first and Fort Worth-Arlington ranked fifth.


The DFW Metroplex continues to be the leader in office space absorption in Texas. The explosive growth in DFW cannot be over emphasized. Second only to New York City to start 2017 and the highest in 2016, about one half of all new jobs in Texas were in DFW and a huge amount of them along the Dallas North Tollway in far north Dallas. And even with all the new space being put on the market, the Class A office vacancy rates never went above 16% in 2016 according to Ron Hebert with Marcus and Millichap.

Strong leasing activity has also driven the DFW industrial market. According to Allen Gump, Colliers International, total absorption for the first quarter of 2017 was about 5.5 million square feet.

General Motors is investing $1.4 billion in its 4.3 million square foot Arlington Assembly Plant, cementing GM to Arlington.

Builders and various city economic development directors are warning that the everrising home prices in DFW could hurt the Metroplex’ ability to continue to attract new businesses to the area. The median price for new homes in DFW is close to $350,000.00.


Majestic Realty Company, in partnership with Hickman Companies, a local investment group that is very involved in the renovation of the Stockyards with Majestic, is developing a 320-acre master-planned business park south of Interstate 20 on Interstate 35W. The first portion of the park is scheduled to be ready for tenants the second quarter of 2018.

According to Cushman & Wakefield, there is about 1.3 million square feet of new industrial under construction in the north Fort Worth submarket with another 1.9 million square feet underway in Alliance.

S&S Activewear, a Bolingbrook, Il wholesaler of imprintable T shirts and sports uniforms, has leased 493,000 square feet of space at Mercantile Center and creating 300 new jobs.

Republic Property Group has opened “Walsh”, the new name for the Walsh Ranch multi-use development in Interstate 20 west of downtown. The 7,200-acre-development is slated to bring 15,000 homes and 50,000 new jobs to Fort Worth and will continue to open the western corridor.

Transpacific Development Company has acquired the 713,000 distribution located at 3000 Cantrell Sansom Road in north Fort Worth. The building, located near our Northbrook Business Center, is anchored by Campbell Soup.


DFW is still regarded as one of the best markets for commercial real estate in the nation. The higher home prices are disturbing and could slow growth in the near future. But the state and Metroplex are still some of the most business friendly areas anywhere so we probably continue to grow.

The velocity of commercial real estate sales and acquisitions has slowed over the last quarter. Part of that could be attributable to the market taking a break. The Fed raising short term rates doesn’t help and the political turmoil in Washington, DC is a burden on expectations for issues like the failure of Obama Care and tax relief.

The balance of 2017 is probably more flat than an upward trajectory of higher and higher sales and depressed CAP rates.

I continue to look for opportunity but believe all our risk should be covered in one way or the other, especially personal liability.

Have a great summer.


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