Texas Real Estate Tour-Day 7 Dallas, TX May 27, 2010

Our last day of our Texas Real Estate Tour started in the City Hall of the City of Dallas. We met with several people departments from the city of Dallas; Parks and Recreation, Sustainable Development, Economic Development, the Urban Development studio , and even the mayor. We also had a chance to visit two projects in the Dallas area; Aloft Hotel in downtown and 1100 acre Craig Ranch in McKinney.
In our meeting with city of Dallas we learned some of their plans for developments in the city. Paul Dyer of the Parks and Recreation department talked about some of the park projects in the area including the 6 acre 106 million dollar park over Woodall Rogers. Our second official from the city of Dallas the Mayor Tom Leppert. He spoke with us about Dallas’s emphasis on downtown development and its plans to utilize the and strengthen the southern region of the city. Some of the incentives offered to developers in Dallas TIF’s and TIRZ. The mayor informed us that Dallas is trying to focus on sustainability and renewable energy. He is positioning Dallas as being a leader in Green development. Theresa O’Donnol from sustainability spoke with us about the city’s efforts to stay sustainable and the city is looking to grow in density and redevelopment. Our last city officials were David Whitley and Carl Zevenkowski and they talked with us about different projects and incentives used to lure investors into the Dallas Market. One particular incentive given is to foreign investors, if they invest a certain amount in American businesses they will be able to get their green card. Our visit to the city of Dallas was great and I really enjoyed meeting the mayor.
Next we went to the Aloft Hotel. This is a hotel project in the downtown area of Dallas across from the new convention center. Aloft brand is a loft style hotel, the special thing about this project is that it was built in a historic building and was given historic tax credits. This was a 42 million dollar project with 193 units and 158,000 sqft. of space. This is very similar to The American Beauty Mill Project just south of downtown Dallas.
Our last stop of the day was Craig Ranch in McKinney. This is an 2200 acre master plan community. David Craig is the developer of this project. He used the concept of new urbanism with project. Craig Ranch is building city inside a city.
Our visit to Craig Ranch was a great way to conclude our Real Estate Tour across Texas.

Day 6 City Centre-May 25

Our last stop in Houston was the City Centre. Brandon Houston the Director of Development for Midway Properties gave us a great overview of the property. This was also great mixed use development off the Sam Houston Freeway over 38 acres. The property boasts over 425,000 sqft. of retail, 450,000sqft. of office space, a hotel with 244 rooms and 525 residential rental units. This property was constructed over an old mall where they kept the garages and tore everything else down and started their construction. The key aspect about this property is how they purchased the property and key thing is to buy right. Midway purchased this property at a very good price which allowed them the flexibility and room to do everything they wanted to do with this property. Some of my take-aways from Brandon Houston are to always be creative and to be open minded.

Texas Real Estate Tour-Day 6 Houston, TX May 25, 2010 Enrty 1

We started off the day with at Brays Crossing off of Gulf Freeway. Brays Crossing was a really interesting project. The project is single room occupancy apartment for low income transitional tenants. The units are fully furnished and lease for $415 and $475 for the two different types of units. The units come with all bills paid except for phone. The property has 149 units and is 50% leased after only being open for 2 months. This project was constructed by New Hope Housing, Inc. who specializes in providing low income housing for the city of Houston. We were met at the property by Joy Horak, the Executive Director, and Nicole Cassier, the Director of Development. They gave us an in depth look of their non-profit and how they help the tenants of their communities. Some of the things the community provides to their tenants are the low income housing, counseling services, and financial assistance. We were told that they have not had to kick someone out of one their communities for nonpayment of rent yet, that shows their commitment to helping their residents. Some of the requirements for tenants to live on their properties are that the person can not make over $22,350 per year and have to pass a light criminal background check. The shortest lease term is 6 months and from their they go month to month with the average stay about 15 months. The goal of the communities is to help the working poor with supportive housing. The properties and projects are have 0 debt and are built with a combination state and city funds. The particular breakdown for Brays Crossing 41% government funding, 29% tax credits, 24% from foundations, 4% from corporations, and 1% from churches and donors. They are apart of the Community Housing Development Organization (CHDO) which is a organization designed to help struggling communities, one of the requirements of CHDO is that 1/3 of the board has to be from the surrounding community. Our second visit of the day was the Canal Street Apartments, also another property low income development of New Hope Housing, Inc. This property has a lot of the same features as Brays Crossing great courtyard, new exterior to help change the identity of the property, and a central entrance to limit access of the property from people who do not need to be there. Overall these were both great properties with a great concept. The total cost for the Bray’s Crossing development was 11.3 million and the total cost of the Canal Street Apartments was 6.1 million.Joy informed us that their next property will be sustainable housing and LEED certified. Joy and Nicole were nice enough to treat us to lunch.The reason why this project really interested me is because low income housing is something I am very interested in. I started my real estate career as a property manager of a low income housing development. I believe that this type of housing is very needed and a key element to growth of a city. The structure in which New Hope develops and manages their properties combined with the support needed to help people get on their feet. This is an area of development that I will definitely continue to explore and support throughout my career in real estate.

Texas Real Estate Tour-Day 5 Houston, TX May 24, 2010

Our first day in Houston started off with a visit to the City of Houston Land Development Office. We met with several of the city of Houston’s City Planners, Richmond Coward, Bryan Crimmins, and Ryan Albright. The group spoke with us about several different subjects that concern the City of Houston, zoning, sprawl, and incentives given for development.
Houston’s mission statement “is to ensure Houston stays vibrant and sustainable city. One of the key elements that the city of Houston uses to achieve this mission by not having zoning restrictions throughout the city of Houston. This lack zoning has contributed to Houston being the 4th largest city in the U.S. We were explained that just because the city lacks zoning does not mean you can place any structure anywhere, there are land and deed restrictions that prevent pick up in the place of several zoning issues. The job of the planners in Houston is to create flexibility and community without creating sprawl. Some of the downtown goals of the city to promote densification, however downtown Houston has a problem with parking. The city offers incentives for Green developers. One lesson that should be taken from meeting with the city of Houston are assume the worst with every property, make sure to do your due diligence, and deed restrictions.
Our second meeting was with Steven Stelzer from the Green Building Resource Center. The center promotes Green building among builders and developers. This is a great resource.
Our third stop on our trip to Houston was the West Ave. Gables project off of Kirby and Westheimer. Ben Peacecock and Josh Landry were our guides through the property. This was a great mixed use development that with 200,000 sqft. of retail space, 5 floors of residences, and storage. The goal of the company and the community is to build a premium neighborhood. We were told by the builder that if they could do it over they would not build so much storage space. This project is an example of an Established Premium Neighborhood (EPN). Most of the residents looking to move into this community are looking to move into a trendy apartment with every amenity you will need. One of the biggest issue with project and it falls in line with the city Houston not having zoning is that there was another mixed-use development built right next door. This is one of the downfalls of not having zoning requirements, you never know what will built right next door.
Our final stop on Monday was to the Core on Washington Avenue in Houston. We met with the developer project Michael Morgan. This was also a very nice multi-family project in west Houston. This project is 326 units whose target market are late 20’s to early 30’s singles. Some of the challenges that he faced with this project were that it was a brown field site on a railroad track. Mr. Morgan spoke with our class about his experience as a developer and some of his different projects. The key to a good development project is to buy it right and price it right. When budgeting your project be very conservative with the downside and the upside will take care of itself. Overall we had a great first day in Houston.

May 20th Day 4-San Antonio

Texas Real Estate Tour-Day 4
For Day 4 we had a fun filled day planned of real estate. The projects we visited were the Friedrich Lofts, Alamo Architects, met with Marty Wender, and met with the San Antonio River Authority about some things going on the second half of the River Walk.
Our first stop on Thursday was the Friedrich Lofts where we met with Patrick Sheer the real estate broker for the project. The Friedrich Lofts is a project that started about 10 years ago and like most projects that started in within the last decade lost funding during the economic downturn. The Friedrich Project is on the eastside of San Antonio built off of the old Friedrich Refrigeration building. This project is meant to be a new development into one of the cities more troubled urban areas. The property is currently for sale for 8 million, since the start of the project the only thing they have done is place couple of nicely finished out offices in the project. There are no lofts or any other retail in the project, so far.. The city has started some revitalization of the surrounding area with TIF’s. The project has a great location, but some of the challenges I see are in the building itself. There will have to be a lot of major reconstruction to make the property conducive for condos and for retail spaces. I can see this project becoming very expensive.
Our second stop was the Alamo Architects building. This was a great design in how to reconstruct and reuse building materials for LEED certification. This project was LEED Silver. One thing that stood out about this project was that they used a lot of the reused old materials and parts from the warehouse that was acquired before they constructed their building.
For lunch we met with Marty Wender who is a large scale land developer in San Antonio area. He is responsible for such projects as Crown Ridge, Western Hills, bringing a highway through west San Antonio, getting Sea World on the west of San Antonio, bring Microsoft and several other companies to San Antonio. He told us the three things that lead to the expansion to Northwest San Antonio were the Medical Center, USAA, and UTSA. Marty spoke to us about his projects, but we learned much more from him. What I learned is needed to survive in real estate are experience, sell, politics, and vision.
Our last visit of the day was to San Antonio River Authority project of the extension of the Riverwalk. This was a perfect example of a joint project between different entities city, county, and private money coming together to what is now a great addition to the San Antonio Riverwalk. This had many aspects and really showed off the beauty of San Antonio. The good thing about this project is the fact that it sprawled more development around river which adds to the appeal of the area and San Antonio. One goal of development should be increase development around the initial project. This has happened with the case of the river project. We had a great day in San Antonio seeing some great projects. We learned that San Antonio is a city that is still growing and I believe it can be a hot spot for development for years to come.

May 19th Day 3- San Antonio

Texas Real Estate Tour Day 3-Back Home
Day 3 of our Real Estate Tour started with a trip to the City of San Antonio to meet with city officials to learn more the procedures needed to start projects in the City of San Antonio. Our goal in this visit was to find out some of the current projects going on the city, some of the challenges in building in San Antonio, incentives given, and future growth.
The first three people we met with were Dave McGowen with Center City development, and Jesus Garza and Richard Milk with the Planning & Development Services. They spoke with us about several subjects including the push for the city of San Antonio encourage development and growth towards downtown and the inner-city. Unfortunately, for San Antonio with other major cities schools have hindered the growth because the lack of quality education which has led to the sprawl of homes and development moving the outer limits of the cities. San Antonio has started to follow suit with other major cities and started incentivizing developers to move downtown through TIF’s, tax abatements, and land leases.
The next people we met with was the city architect, Betty Feldman, and Laurence Doxsey from the Office of Environmental Affairs. We spoke with Betty in regards to where she expects development to happen in the city and where she expects it to go. Mr. Doxsey talked with us in regards to some of the things that the city is doing to ensure developers are keeping the environment in mind with their projects. The Property Accessed Clean Energy (PACE)program has implemented. Our last meeting with the city was with the Sylvia Cortez and Ray Herrera who spoke with us in regards to some of the rules and regulations involved in the city inspection process of residential and commercial properties. Overall it was great visit to the city offices.
After lunch we visited a project off of 287 and 35 which was described as what happens when a developer doesn’t know what he is doing. The original plan of the project was a mixed use development with office space, parking , and residential housing right off the Riverwalk. The project started in 2002 and has been just sitting there since 2005. The project currently is about ¼ of the way done and is looking to start construction back up in the next 3 weeks. The new developer is Ed Cross who happened to be the developer of the Vistana, which happened to be our last stop of the day.
The Vistana, developer Ed Cross, is also the first residential mixed use development in downtown San Antonio. The Vistana encompasses parking, residential apartments, and retail space. Ed Cross started it 2007 and opened it 2009 and now is 96% leased on the residential side. Some of the challenges during development was making sure the building was built and structured to realize all the goals of the development. From this project I learned that San Antonio is ready for downtown development.
We met with Ed Cross for drinks at 5 and he spoke in regards to how he got into development and what young people need to do to get into the business. He also spoke with us about some of his new projects and challenges with his current projects. Overall the meeting with Ed Cross and capped off a great day of Real Estate.

Texas Real Estate Tour-Day 2 Austin, TX May 18, 2010 Enrty 1

Day 2 Ronald McDonald House is LEED Platinum development. Kent Burris gave us a tour of the project. The Ronald McDonald House provides access and lodging for families who have children in the hospital for $10 a night. Built in 2003, it is the first LEED Platinum building in Austin and was the 3rd in Texas. All water fixtures throughout the building are water efficient, which reduced the water usage by 30%. The building was built specifically to help it reach its long term goal of sustainability. The Ronald McDonald House gets its cold water through a very efficient system from Austin Energy plant. It was built over a portion the old airport and has a LEED rating. The building has no asphalt and light colors to reduce electric cost. Materials are recycled, built for 11 mil, receives funds through fundraising. This is the most energy efficient place I have ever been in. From the building material to the solar powered water faucets, great building and deserving of its certification.
Mueller Central is a 700 acre development over the old Austin Airport. It is a PUD development with great flexibility for use changes of land. The property has 140 acres of parks and looks to restore the original Austin ecosystem. The community development plan was 15 years, 4900 homes including multifamily in the community with about 25% affordable housing. This is redevelopment of land of a brown site.
After lunch, we met with Judy Fort and Sherri Gohart Barron from the Texas Department of Agriculture. They discussed economic development in rural areas in Texas. They informed us of some the rules and incentives given to rural businesses in order to keep businesses gong. Sherri Barron spoke with us in regards to the GO Texan Certified Community Program. Our 2nd stop after lunch was with John Rasatta from the Seaholm Power Plant. The Seaholm Power plant is an interesting redevelopment and reuse of an old electrical powerplant. It has been on hold for the last couple years. The project has an 180 million dollar budget and after it starts it should take about 2 1/2 years to complete. I think the concept is great. I’m just not sure of the efficiency as far as revenue stream and proper use of the area. The concept of the Seaholm Project is to turn the old electric power plant into a mall, green garden, and condos. This property is one of a kind, because unlike many other projects this received city money.
Our last stop in Austin was the Hillcrest Galleria in Bee Cave. Lance Morris the Broker responsible for leasing the retail portion of the development gave us a rundown of the challenges and the future of the property. The significance of this project was that it was built for 160 million and sold for 75 million after foreclosure. At this point about 70% of the retail space is leased, however the owner has had to give several concessions. The problem with leasing some the space in this building was because the crash of the retail market and the community surrounding the property is not large enough to support such massive mall in the area, yet. The office space leasing in the Hillcrest Galleria has went from 3% to 55% in 7 months. With the new leases developing in the project, there does seem to be light at the end of the tunnel.