9/27/21 Dallas Mastermind Group Meeting Copy

Dallas September 2021 Key Take Aways

• Business is picking up in a variety of sectors and economic indicators are all trending up.  (Fischer & Company – Sharon Friedberg, Federal Reserve Bank of Dallas – Laila Assanie)
• The office industry has been really picking up and beating recent estimates, with longer lease deals becoming more common.  Office financing has to be done in the context of how the building has done historically, how they’ve done during Covid and how they’re expected to perform post-Covid.  Class A subleases are in demand. (Fischer & Company – Sharon Friedberg, Cache Realty Capital – Scott Lynn , CoStar Group – Paul Hendershot)
• Construction periods are still tough with supply chain issues causing long delays, even as prices have become more stable.  Inflation continues to be a future concern and a present issue. (Fischer & Company – Sharon Friedberg, Spring Valley Construction – Steve Bruszer, CoStar Group – Paul Hendershot, Marsha Getto-Aikens – HKS)
• The industrial market continues to be red hot and there are new models coming out of Asia that include automation. (Fischer & Company – Sharon Friedberg, Marsha Getto-Aikens – HKS)
• Many companies are evaluating their rules regarding a return to the office.  Some are requiring vaccinations or offering masks and testing as an alternative, while others are mandating vaccinations.  Some of the push for vaccinations is driven by the wishes of the clients. (Cache Realty Capital – Scott Lynn)
• In-person events are becoming more common, with some companies requiring vaccination in order to attend in-person events.  There are some occupations and perhaps some industries that are slower to require employees to come back to the office.  Most companies believe some collaboration is important and are considering hybrid models. (CoStar Group – Paul Hendershot, CoStar Group – Paul Hendershot, Marsha Getto-Aikens – HKS)
• There is a lot of capital in the market, and it’s important to tell the story of what a project or investment can offer pre-Covid, during Covid and post-Covid.  Banks and lenders are out there, but they’re being selective.  Many deals require a creative capital structure and there are opportunities for lenders to participate as partners. (Cache Realty Capital – Scott Lynn)
• Most companies remain very busy, with a backlog of projects into late 2022.  Five words describe the current state of deals: overwhelming, surprised, cautious, selective and blessed. (Spring Valley Construction – Steve Bruszer)
• Retail has been doing better, with many shopping centers getting renovations. (Spring Valley Construction – Steve Bruszer)
• Inflation continues to be a concern and is not likely to be going away.  Lumber costs have come down but are going back up. (Spring Valley Construction – Steve Bruszer, Federal Reserve Bank of Dallas – Laila Assanie )
• The Delta variant has created some concerns but has not had as much impact as the prior waves. (Federal Reserve Bank of Dallas – Laila Assanie )
• Unemployment is finally under 6%, but the labor shortage continues to be an issue.  Many companies are having to compete to keep good workers, offering large bonuses while recruiters remain aggressive. (Federal Reserve Bank of Dallas – Laila Assanie, Marsha Getto-Aikens – HKS, Spring Valley Construction – Steve Bruszer, CoStar Group – Paul Hendershot)
• Healthcare related companies are expanding and there is a need for more buildings to accommodate medical schools and other healthcare-related real estate space. (Marsha Getto-Aikens – HKS)
• Affordable housing is an important issue for all aspects of the real estate industry. (Marsha Getto-Aikens – HKS)
• The Frisco Economic Development Corporation works to assist businesses in the area in any way they can.  They target headquarters and corporate offices, innovation and tech, business of sports, and gaming and media. (Harry Whalen – Frisco Economic Development Corporation)
• Frisco is the best place to buy a house and the #2 safest city in America and a top US city for millennials.  It has a large amount of available land and a large population of potential employees. (Harry Whalen – Frisco Economic Development Corporation)
• Frisco has a number of large developments, including Hall Park, The Star (Dallas Cowboys Headquarters), the Ford Center, Frisco Station, The Gate, JMJ Development, PGA of America, etc.  (Harry Whalen – Frisco Economic Development Corporation)
• Frisco is developing universities to help bring new talent into the area, especially the University of North Texas which has a satellite facility in Frisco and has plans for expansion. (Harry Whalen – Frisco Economic Development Corporation)
• Stan Thomas had a 175-acre site that was meant for development but was not able to get the capital to complete it.  Gamma out of New York acquired it and is looking for a master developer. (Harry Whalen – Frisco Economic Development Corporation)