Dallas March 2022 Key Take Aways
John Rhodes with Foresite Group shared that with regards to construction, the “quality is going downhill, and claims are starting to go up”. He also stated:
• They are seeing more and more developers that are reaching out to “older folks in their 70’s and 80’s who are more experienced to come back to work for a short time” so they can help with not only the back log of projects but the quality of the projects.
• Business is very good, but they are still struggling to find employees.
• They are getting into “niche work” such as “CPACE” (Commercial property-assessed clean energy) which is a financing structure in which building owners borrow money for energy efficiency, renewable energy, or other projects and make repayments via an assessment on their property tax bill.
Sharon Freidberg with Fischer Company told the group that they are very busy with office, land and building leases and she’s seeing a lot of rebound. Also:
• She’s still having issues getting her “young team” back in the office. They have lost a couple of employees due to the request to return to the “in-person work environment”.
• Sharon and Kimber agreed that “you cannot train the young professionals unless they are in the office, face to face”. They also agreed you have to be “creative in order to entice them back to the office”.
Kimber Davison with Griffith Davison shared that some law firms have started paying huge bonuses, anywhere from $25-$50,000 to attorneys who commit to come back to office and work at least three days a week in the office.
Scott Lynn & Christi Rogers with Cache Realty Capital shared with the group that they already had one closing transaction completed this year and getting ready for some “marketing moves”. With rates increasing, Scott emphasized to everyone, “If anybody is offering you a fixed price today – TAKE IT”!
• CoStar has picked Red Bird Mall as the Social Impact Deal of the Year” and Scott’s client, Peter Brodsky, will be receiving the award. Peter bought the former Sears Building in the Mall and then signed a long-term lease with UT Southwestern to build a women and children’s healthcare facility in its place.
• They recently completed a Recapitalization project with a “restaurant” client who was considering selling their property, so Scott and Christi reviewed their portfolio and were able to show the client a way to get more money on an after-tax basis by refinancing as opposed to selling the property. Scott realized that to better benefit Cache that instead of charging them a fee to refinance they became a partner in the deal with a long-term equity position. Also that ownership is much bigger over the long term than if they had just charged a fee.
Laila Assanie with the Federal Reserve Bank of Dallas shared a few notes regarding the state of the Economy:
• The Texas Economy was very strong in January and February showing that Texas added 45,000 jobs in the DFW area.
• Growth has been quite widespread, but the strongest sectors are transportation (mostly the trucking and warehouse sectors), business and professional services and financial activities.
• DFW is 2nd behind Austin creator of jobs
• Manufacturing sectors in the state of Texas shows a lot of inflationary pressures in the market in part due to the ongoing war with Russia and Ukraine.
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