Despite the fact that the Obama administration decided to give Iran $1.7 billion in cash, including $400 million in foreign currency for the release of hostages, the rogue nation continues to be the worldwide sponsor of terrorism.

Russia thumbs its nose at the US and basically ignores threats from Obama. And supposedly Putin personally engaged its cyber warfare units to hack the US elections, favoring Trump over Clinton.

Kim Jong Il, the perfect leader of North Korea, is said to have scored a perfect 300 the first time he went bowling and scored eleven holes in one the first time he played golf. Hmm. And now he is testing ballistic missiles capable of reaching California. I guess we had better believe the last one.

According to an article in the Wall Street Journal, Austria is “going long” with a 70-year bond. The bond is paying 1.53%. France is following suit with a 50-year product paying 1.43%.


Trump won the election in what surprised most of the media and almost all of the pollsters. I just do not believe that most of the establishment understands how mad the US citizens are.

Ordinarily I would never show something like this painting on our website but we need to know what is going on in DC. The Democrats have posted this painting in OUR capital showing police officers as pigs killing people. And the Democrats do not understand why they lost the election! I am outraged.

A few quick facts on the Millennials:

  • First, most of the group finds the term Millennial offensive.
  • There are more than 75 million Millennials, more than the Baby Boomers.
  • 32% live with their parents
  • 67% are first time homebuyers!
  • Texas has 6.6 million Millennials, 26% of our population. This represents a huge buyer group.

In an interesting twist to financing, some life companies are now making construction loans in addition to providing long-term fixed-rate financing. The pullback in construction financing by banks, caused by government regulations instituted by the Obama administration and congress over the last several years, has stirred up fresh enthusiasm for life companies to provide construction-to-permanent loans.

The Consumer Sentiment Index has soared since Trump was elected.


Pending sales index dipped slightly in November. Inventory remains unusually low.


The revival of the Permian Basin is going to last for decades. The US Geological Survey says that the shale oil portion of the Basin could yield 20 billion barrels of oil, 16 TCF of gas and 1.6 billion of gas liquids.


PWC (Price Waterhouse Coopers) has taken a look forward and is predicting the following:

  • By 2030, there will be 661 metro areas (worldwide) with populations over 1 million;
  • By 2050, seven in ten people will be living in urban environments;
  • Technology will continue to disrupt everyday life;
  • Because developers will continue to attempt to create a greener planet, those developments that are not sustainable will have much shorter lives;
  • Because of increasing regulations on banks and public lenders, private capital will continue its growth in filling the gap;
  • Expect more public-private partnerships where cities and other government entities partner to get projects developed.

Don’t give up on bricks and mortar yet. Sales at physical stores totaled about $4.2 trillion last year. Online sales totaled only $386 billion of that amount.

Macy’s is closing up to 100 stores this year.

Walmart is slowing growth to a trickle of its past. With only 230 openings this year (2016), 130 for 2017 and only 55 in 2018, the huge retailer is scaling back drastically.

Tractor Supply, a rural lifestyle store with 1,575 stores in 49 states, is in acquisition of Petsense in a $116 million transaction.

Cheddar’s Scratch Kitchen has acquired 44 stores from its largest franchisee, Greer Companies, turning the fast-casual restaurant into a predominately company owed chain.

Regency Centers Corp. and Equity One announced a $5 billion merger agreement that will result in the new entity being branded under the Regency name. The new entity will own approximately 420 centers, mostly grocery-anchored, and about 57 million square feet. Obviously they are very bullish. Regency will become the largest REIT by equity value in the shopping center index.

The restaurant companies suffered from slower sales as we moved up to the election. Once Trump was elected, sales went up significantly and the restaurant stocks followed suit. Casual dining stocks were up 13% and family-dining stocks were up 16% in the fourth quarter. I cannot wait to see what the first quarter sales numbers look like. There is a lot of “unintended celebration” because of the election.

Developers are planning to put more retail on the ground as vacancies recede.


According to Glen Hegar, the Texas Comptroller, over 1,200 people move to Texas every single day.

According to American City Business Journals, the populations of ten major cities in the US will skyrocket by over 50% over the next 25 years. Four of those cities are in Texas. Austin tops the list with an expected growth of 98.5%; Houston was fifth at 66.7%; San Antonio was sixth at 57.3%; DFW was seventh with an expected growth of 53.5% over 25 years.

What is growing faster than housing prices? According to the Real Estate Center at Texas A & M, personal income per capita in Texas is rising faster than home prices. This is a very good thing and is easily converted to the average person’s standard of living.


According to the Henry S Miller land advisory group, over 360 people are moving into the Metroplex daily. Many are not ready for home ownership and this is driving multifamily development steadily.

Grandscape, the several million square foot mixed-use development at the 1.9 million square foot Nebraska Furniture Mart in the Colony, and actually being developed by Nebraska Furniture Mart under the supervision of Stellar Development, is well underway. Because the project is so large, the developer is not trying to put a measurement on it.


Butler Place, a 41-acre public housing complex that opened in the early 1940s, is one of 52 federally funded low-income housing projects built during the Great Depression. Fort Worth Housing Solutions has received approval from the US Department of Housing and Urban Development to convert the Section 8 project into a HUD Rental Assistance Demonstration Project. We were offered the opportunity to compete as a master developer but decided that there would be too much politics involved and declined.

The first large private development for the Panther Island District, formerly known as Trinity River Vision, was announced. Encore Multi-family, LLC, a Dallas developer is set to break ground on Encore Panther Island, a 233,198 sf, 300 unit multi-family development. Construction is slated to begin this summer.


Parker Products, a baking, dairy and confectionary food products company, has broken ground at Lone Star Business Park, a Wilson & Stonaker development on Loop 820 at Quebec. The company received incentives from the City of Fort Worth to stay in the city. TXDoT announced a $56 million improvement to Jacksboro Highway just south of Azle this quarter. Lake Worth and Azle motorists know the 3-mile stretch of US 199 as a death zone. The roadway will be expanded to three lanes each way.


Hillwood and Howard Hughes have begun construction on a 130-acre mixed-use development located in Alliance at Circle T Ranch on US HY 170. The 2 million square foot development is next to the 500,000 square foot corporate campus for Charles Schwab and will offer office, retail and entertainment. Hillwood also announced a 756,000 square foot distribution center for American Tire
Distributor this quarter. American Tire is one of the largest independent distributors for tires to the replacement market.

Tanger Outlets has broken ground on its 350,000 square foot outlet mall at Interstate 35W and State Highway 114. Major retailers announced at the ground breaking include H&M, The Gap, Tommy Hilfiger, The Children’s Place, Nike, Levi’s, Banana Republic, Express, Guess and Restoration Hardware. They plan on a November 2017 opening, just in time for Black Friday.


The Shops at Clearfork is going to be the upscale retail development of Fort Worth. Anchored by Neiman Marcus, the joint venture development between Edwards Ranch and Simon, will also feature Louis Vuitton, Burberry, Tiffany and Tory Burch. The development is a part of the huge Edwards Ranch mixed-use project that is north of our Summer Creek development. Walton Homes has new product up and for sale. Its phase one, across from the recreation center on McPherson, is substantially finished. The huge phase two on the west side of the Chisholm Trail is putting lots on the ground at a very fast rate. Homebuilders have been selected and have signs on the lots. Expect vertical construction on approximately 1,000 homes to begin soon.


So where are we in our market at the end of 2016? Optimism is very high. Home prices are up over 8% but incomes in the area are rising. Those that want to work can find jobs and are doing so. DFW remains one of the highest ranked areas in the country and as opposed to cities like Austin, we can still do business without a lot of government burdens.

I think we need to adjust our portfolio to only own the highest quality real estate with the greatest opportunity for increases in value. If the pro forma show rises no higher than market appreciation, I think we need to be open to disposition and redeployment of the capital. It is my opinion that we should only own the highest quality assets that will increase in markets that will offer increases above the rate of inflation. We are assessing the entire portfolio at this time. Hopefully the Trump administration will follow through with decreased tax rates that will also help in any disposition.

HAPPY NEW YEAR. Stay safe.

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