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Industry Updates

JANUARY 2012

Austin Ends 2011 With 17.8 Percent Vacancy Rate

(RECON, 01/10/2012) – New leases and expansions generated 465,975 sq. feet of positive net absorption in fourth quarter 2011, according NAI REOC Austin's survey of more than 37.2 million sq. feet of Austin industrial space.

The gain pushed the year-end total above 1.1 million sq. feet, which NAI REOC Austin Vice President Mark Milstead said was “a feat not accomplished in the local market since 2007.”

The citywide vacancy rate finished the year at 17.8 percent, compared with 19 percent last quarter and 20.3 percent a year ago.

Asking rental rates showed no significant change over the quarter.

Gross leasing activity within the city’s 24.3 million sq. feet of warehouse facilities generated 363,735 sq. feet of positive net absorption between October and December.

Activity within the service center/flex/R&D properties, consisting of nearly 13 million sq. feet, slowed in the fourth quarter compared with earlier in the year but still generated 102,240 sq. feet of positive net absorption. Activity in the last three months of the year raised the year-end total to 842,325 sq. feet of net gain.

Texas' Foreign Relations

(RECON, 01/06/2012) – Three Texas cities are among the top U.S. cities favored by foreign real estate investors, according to a survey released January 3 by the Association of Foreign Investors in Real Estate.

Houston held onto last year’s ranking at seventh place. Austin moved into the eighth spot from eleventh place last year. Dallas ranked thirteenth, after not placing on the list since 1995.

The top five cities for foreign investment in 2012 are New York, Washington, D.C., San Francisco, Boston and Los Angeles.

60 percent of survey respondents said they plan to increase their U.S. investments this year, down from 72 percent last year.

59 percent said the U.S. offers the most stable and secure real estate investments worldwide--the highest level of respondents’ confidence in the U.S. since 2006.

Multifamily complexes remain the most popular investment property type for foreign buyers, according to the survey. Apartments are followed in popularity by industrial, office, retail and hotel properties.

Austin Off-Campus Housing Project Sold

(RECON, 01/06/2012) – Cardinal Group Investments LLC has purchased the 184-unit University Towers in Austin.

Located at 801 West 24th St., the off-campus student housing project consists of three residential towers; a six-story, 575-space parking garage; and 35,840 sq. feet of ground-floor retail space.

Holliday Fenoglio Fowler arranged $25 million in financing for the purchase.

Texas' Private Sector Job Growth Outpaces Nation's

(RECON, 01/03/2012) – Texas gained 227,800 nonfarm jobs from November 2010 to November 2011 according to the Center’s latest Monthly Review of the Texas Economy. That represents an annual growth rate of 2.2 percent compared with 1.2 percent for the United States.

The state’s nongovernment sector grew at an even faster rate, adding 292,700 jobs (3.4 percent) compared with 1.7 percent for the nation’s private sector.

Texas’ seasonally adjusted unemployment rate fell to 8.1 percent in November 2011 from 8.3 percent the year before. The nation’s rate decreased from 9.8 to 8.6 percent.

All Texas industries except the information industry and the state’s government sector had more jobs than the same time a year ago. The state’s mining and logging industry ranked first in job creation, followed by the professional and business services industry and the leisure and hospitality industry.

Abilene, Wichita Falls, Killeen-Temple-Fort Hood and College Station-Bryan were the only metro areas that had fewer jobs in November 2011 than in November 2010. Victoria ranked first in job creation followed by Corpus Christi, McAllen-Edinburg-Mission, Lubbock and Laredo.

The state’s actual unemployment rate in November 2011 was 7.5 percent. Midland had the lowest unemployment rate followed by Amarillo, Odessa, Lubbock and San Angelo.

Texas Dominates Best-Performing Cities Index

(RECON, 12/16/2012) – Milken Institute just released its "Best-Performing Cities" index for 2011, and Texas is everywhere you look.

Nine Texas MSAs landed in the top 25 on the institute's list of 200 largest metros, and four of those ranked in the top five, including number one San Antonio.

Others on the list were El Paso (2), Austin–Round Rock (4), Killeen-Temple-Fort Hood (5), Houston-Sugar Land-Baytown (16), McAllen-Edinburg-Mission (18), Dallas-Plano-Irving (20), Fort Worth-Arlington (24) and Lubbock (25).

The state's smaller metros didn't do too shabby either, with five among the top 25: College Station-Bryan (4), Longview (9), Waco (12), Tyler (20) and Midland (22).

While it's good news for Texas to do so well on an index that is based largely on employment growth, Real Estate Center Research Economist Dr. Jim Gaines said the state looked good mainly because other states didn't.

“Our growth rate and advancement isn't all that wonderful,” Gaines told the San Antonio Express-News. “We've managed to stay flat or have very small positives. But because everybody has so many negatives, we look so much better.”

Texas accounted for one in every five jobs created in the country between June 2010 and June 2011, reported the Express-News. Houston and Dallas alone were responsible for one in every ten new jobs in the country.