Tag Archives: properties

US Office Vacancy Lowest in 10 Years

Post By : admin 23 March 2018 Leave a comment

According to a report produced by Transwestern, office vacancies in the US as a whole are at their lowest in 10 years. That’s pretty amazing when you consider that they also report that 70.7 million square feet (SF) of new construction has been started during that same period. But office demand follows job creation so with unemployment at 4.1%, the lowest since late 2000, this makes sense.

The top 10 markets for net absorption (the net change in the total SF of office space occupied) were lead by Dallas/Fort Worth with over 5 million SF absorbed, followed by San Jose/Silicon Valley with about half that, then Settle, Northern Virginia, Austin, Phoenix, Detroit, Las Vegas, St. Louis and Baltimore.

Notwithstanding the top absorption markets, the top 10 markets for rent growth looked different: Boston at 15%, followed by San Francisco, Charlotte, Orlando, Raleigh/Durham, Oklahoma City, East Bay/Oakland, Phoenix, Los Angeles and Portland. Some of those intuitively make sense because they are land-constrained cities with a huge tech presence. Others were a surprise.

The cities with the most new space under construction are New York with over 16 million SF underway, Dallas/Fort Worth with over 8 million SF coming, Washington, DC at 7.6 million SF, San Francisco at 6 million SF, and Denver at 5 million SF.

The future looks bright for the national office market so long as jobs hold up. If there is a downturn in the economy and companies stop hiring and start laying workers off, things will change.

For the rest of the report, click here.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized

A Ban on Dual Agency Fails…For Now

Post By : admin 16 January 2018 Leave a comment

As you probably know, at REATA, we only represent users – companies that lease or buy office and warehouse space. We won’t take landlord listings for lease because it has the potential to create conflicts of interest.

Furthermore, we don’t think that real estate companies should be allowed to represent both sides of a transaction. That would mean that one agent in BrokerageCo (made up name) shouldn’t be allowed to represent the landlord or seller while another agent in the same BrokerageCo represents the tenant or buyer.

Fortunately, some powerful forces in the industry are starting to agree with us and take action to make this mandatory.

California Assembly Bill 1059 is legislation that was crafted to end “dual agency” (it’s called “intermediary” in Texas). While the specific provision ending this practice was removed from the bill before it made it to committee, the good news is that it was considered at all. It has to be discussed a few times before it actually becomes law.

This all began in 2007 when a Hong Kong businessman sued Coldwell Banker and its agents. He had been represented by a Coldwell Banker agent as had the seller. When a giant discrepancy was found in the size of the property he purchased (long after closing), he filed suit. It went all the way to the California Supreme Court which determined that Coldwell Banker failed in its fiduciary responsibility to him. That was a lightning bolt decision.

The United Kingdom is ahead of the USA on this issue. The Royal Institution of Chartered Surveyors (think of them as the UK version of the National Association of Realtors) in early 2017 created a policy statement with strict conflict-of-interest requirements which specifically bans the practice in the UK.

So the government and industry groups appear to be moving in the right direction. It will likely take several more years, but we’re hopeful that all concerned will do the right thing for clients whether legislation requires it or not.

A more-comprehensive article is available here if you want to learn more.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized

Tax Reform – Another 1986?

Post By : admin 21 November 2017 Leave a comment

Our government is talking about major tax reform. That will make you really nervous if you were in the commercial real estate business in the 1980’s. You will remember how a Republican president signed into law a tax law which killed our industry for 10 years.

Sure, much of the changes in that law were necessary and appropriate. But they changed the rules retroactively and that’s not fair. That meant that anyone who invested expecting a certain tax treatment got something totally different. When new laws are enacted, they should be for the future and not undermine and unravel everything that came before it.

The industry was building far too much in the way of supply given the demand back then. We haven’t seen supply and demand out of whack to that extent since. But talk of tax reform justifiably makes commercial builders and investors jittery so they are keeping a close eye on what’s going on in Washington.

Steve Brown of the Dallas Morning News quoted Ross Perot Jr. in an article recently (full article) saying, “all of us need to watch this tax code for unintended consequences.” We can’t trust the government to truly understand the consequences of the laws and codes they enact. So it’s the unintended consequences that make us most nervous.

With the president being a commercial real estate guy, hopefully he’ll have some clue as to the unintended consequences and won’t sign anything that will put us in recession like in 1986.

Stay tuned though.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas and the surrounding areas and specializes in companies which lease or buy office and warehouse properties.

Categories: Uncategorized