Author: Younger Partners

Younger Partners celebrated Halloween in style complete with costumes ranging from rock stars to pirates and our annual chili cook-off.

Younger Partners is honored to be among the 2019 sponsors for CREW Dallas. Here’s Kathy Permenter and fellow CREW leaders at a special CREW Dallas sponsor reception at the new Scott + Reid offices in Addison on Oct. 29.

Congrats to YP’s Kathy Permenter for her selection as a DFW Power Woman. Bisnow writes about Kathy’s path to entrepreneurship. You can also hear her speak at the Bisnow DFW Power Women event on Nov. 12

Of the almost 200,000 square feet of overall office net absorption taking place in the third quarter of 2019, over 90% was directly attributed to co-working companies, including new locations for Common Desk, WeWork, Hana and Spaces, says Younger Partners Research Director Steve Triolet.

While this level of concentration is not expected to carry over into the fourth quarter (American Airlines, Pioneer Natural Resources and Tenet Healthcare all have large pending move-ins), co-working has been a significant portion of overall net absorption over the past two years and is likely to remain a significant factor for the foreseeable future (including pre-leasing of under construction projects like Weir’s Plaza).   

The slides show up-to-date additional information on the major co-working concepts and co-working versus executive suite data.

Younger Partners’ Scot Farber moderated a lively panel of experts debating new development, transportation issues and the lack of affordable housing at Bisnow DFW’s  121 Corridor event Thursday morning. Check out event coverage here.

#YoungerPartners #WhatWeAreMadeOf #MadeOfExperts

Summer is heating up, but Younger Partners cooled down by celebrating #NationalRootBeerFloatDay with the team at Republic Center.#YoungerPartners#WhatWeAreMadeOf#MadeOfCelebrations#Cheers

Younger Partners welcomes CRE veteran Jerry Averyt to the brokerage team. He comes to Younger Partners from Henry S. Miller Brokerage, where he served as senior vice president in the office and industrial division. He worked with clients in both office and industrial areas as well as in investment properties and land sales.

“I’ve known Jerry for years and always admired his skill and work ethic. He’s an extraordinary broker and we anticipate great things as he joins our team,” says Younger Partners’ Moody Younger.

Averyt has negotiated more than 550 lease transactions totaling more than $100 million. His 42 years of experience encompass marketing, planning, real estate finance, and property management.

“It has been a privilege to work for Henry S. Miller for more than 19 years, but this change helps me re-energize my efforts and working with Moody and Kathy Permenter will be a great move for me,” Averyt says. “Kathy has the drive to make the big deals and Moody does a great job with the organization. They complement each other and create a dynamic that achieves success. I’m ready to hit the ground running, serving clients and generating new business,” Averyt says.

Averyt’s 42-year real estate career began in 1977 with Vantage Companies, primarily specializing in the development and leasing of new office properties. After 14 years with Vantage, Averyt worked for CB Commercial and Centre Development Company. He also spent five years at Grubb & Ellis.

Major corporate clients Averyt has been privileged to represent include: BP Capital/T. Boone Pickens, Newmark Homes, Magic Logix, Staubus & Randall, Reed Fire Protection, Cecil Benefits Group, Crawford & Co. Insurance, Elliott Electric, Lubbock National Bank, Tidwell, Swaim, & Associates, SoftLayer, and AOMI.

The Andrews-native has been married to his wife, Terry, for 25 years. He has two older daughters from a previous marriage, Schuyler and Ashley. He and Terry have a son, Wren, who is a grad student at Texas A&M. He also has two grandchildren, 16-year-old grandson, Merrick, and 13-year-old granddaughter, Avery. In his free time, Averyt loves to hunt, fish, play racquetball, ride horses, and travel.

For the past five years, the Younger Partners International Group has been working with Chinese investors both here in the states and from China via an active and successful global investment team that includes Nan Li, Elaine Xu, and long-time broker, Sam Kartalis. 

This summer, the International Group was honored to receive the Golden Eagle Award for commercial real estate in Houston from the Golden Eagle Real Estate Alliance (AGEEA). The AGEEA members are primarily entrepreneurs from the U.S., China, Korea and Singapore from a variety of real estate-related industries that include finance, development and technology. The organization provides both a platform and network for Asian-American and especially Chinese-American investors to connect with U.S. commercial real estate experts and resources.

The Golden Eagle Awards ceremony was attended by around 1,000 investors and professionals and featured Houston Mayor Sylvester Turner, Congressman Al Green and AGEEA leaders including the very influential Southwest Realty Group Chairman Kenneth Li and IBMG Group Chairman and CEO Jacky Li. Both are business leaders and have played a large role within the China General Chamber of Commerce and the Asian Real Estate Association of America.  Younger Partners and its International Group were recognized and honored for service excellence in commercial real estate.

The awards recognized local and international real estate professionals and developers with the added goal of attracting additional real estate resources from China and other overseas markets to the Texas real estate market. We were incredibly flattered to get this recognition for our International Group as the Golden Eagle Top Brokerage and Property Management Company. Nan and Elaine were honored as Golden Eagle Top Agents and Sam was presented the Golden Eagle Real Estate Outstanding Service Award. “It was very humbling as Nan, Elaine and I have focused our time and energy on growing this platform for Younger Partners,” Sam says.

The Dallas CBD has seen a surge of projects that should help continue to transform it from a traditional office center to a live-work-play district with an abundance of amenities to draw people back into the urban core. One of these prominent, community-driven projects is the development of Pacific Plaza. This project has been in the works since 2006 when the land was acquired for $9.1 million with bond funds. This community park project will be entirely funded by the non-profit Parks for Downtown Dallas and will showcase both green spaces for activities as well as park amenities for guests. 

We are excited to see this project unfold as Younger Partners has a prime leasing property overlooking the Pacific Plaza development. Our office space leasing, Republic Center, will have a front-row seat to this community development and is a highly desired location for leasing tenants. The new development is also near Fountain Place, a property that we sublease. 

Visit the full article here to learn more about the Pacific Plaza development: https://parksfordowntowndallas.org/pacific-plaza/

By Younger Partners Director of Research Steve Triolet

On a regular basis, I get asked why is the market building so much office product in the Dallas/Fort Worth market?  Our total vacancy rate typically runs twice or more the national average and yet our construction pipeline is greater than almost every other major office market in the country, on any given year, for the past 40 years.  If you look at the inventory of available space and where it is concentrated, you quickly see that DFW doesn’t have so much of an overbuilding problem as it does of a demolition problem.  Simply put, unlike most large office markets (which typically have substantially higher land prices) we don’t tear down old inventory, we just expand northward and build more new product.

The chart below is a breakdown of the approximately 30 million square feet of existing big blocks of space available by age categories.  The newest properties (built in five years or less) make up only 3% of the large blocks of space currently available, while the 80s vintage properties make up almost half (47%).

One-Quarter Of All U.S. Office Construction In The Past Decade Was In Texas

July 8, 2019 Kerri Panchuk, Bisnow Dallas-Fort Worth

Texas metropolitan areas have been leading the nation in office construction and have no reason to pump the brakes on future construction projects since demand only continues to grow, a new report from CoStar says. 

“The Texas miracle still has lots of steam,” CoStar Group Director of Market Analytics Paul Hendershot said. “We continue to be on top of the list in terms of best places to do business. We also have a highly skilled labor force and favorable tax conditions. I would say it is a combination of things that are driving the Texas economy.” Texas’ top three office markets — Houston, Dallas-Fort Worth and Austin — housed roughly 104M SF of the 430M SF of new U.S. office space that came online during the last decade, CoStar data shows. In totality, Dallas-Fort Worth, Austin and Houston accounted for 24% of the nation’s new office construction pipeline during the 10-year span running from 2009 onward.  DFW in particular is keeping that pace up: Roughly 7M SF of office space is under construction in Dallas-Fort Worth, with 4.7M SF scheduled to deliver in the second half of 2019, Younger Partners Co-Managing Partner Moody Younger said.  Corporate relocations from other states, alongside intermarket moves from older to newer properties, have kept the office construction pipeline robust in Texas.  In the past 10 years, DFW alone welcomed corporate heavyweights such as Liberty Mutual’s 1.1M SF campus, Blue Cross and Blue Shield of Texas’ 1M SF campus and the JPMorgan Chase and Toyota North America headquarters.  That heavy allocation of build-to-suits and large corporate relocations has meant new supply is absorbed quickly. Of the 7.1M SF underway in DFW, 69% already has a user lined up, Younger said.

“On a regular basis, I get asked why we are building so much office product in the Dallas/Fort Worth market,” Younger said. “Our total vacancy rate typically runs twice or more the national average and yet our construction pipeline is greater than almost every other major office market in the country, any given year, for the past 40 years.” He explained this dichotomy by looking at the actual amount of new space available when compared to 1980s or 1990s office products.  “If you look at the inventory of available space and where it is concentrated, you quickly see that DFW doesn’t have so much of an overbuilding problem as it does of a demolition problem,” Younger said. “Unlike most large office markets (which typically have substantially higher land prices) we don’t tear down old inventory, we just expand northward and build more new product.”

While the DFW market appears to be drowning in office supply, data from Younger Partners shows that there are limited new-build big blocks of office space available that are 50K SF or larger. Many of the larger available office spaces are 1980s products — those represent a whopping 47% of the big office blocks available in DFW. Office product that is five years old or less represents only 3% of the local DFW market. “Given this low availability of new construction, developers have little incentive to pull back,” Younger said. “In fact, most seem to have a sense of urgency to capture the existing demand for new space. Almost every office developer currently has a project underway or has announced plans for additional projects to begin construction within the next year.”  The underlying fundamentals support this rush, and analysts expect construction to continue apace in Texas, and particularly DFW.  “DFW is projected to continue trending positively in employment growth, and office jobs are forecasted to hover around a 1.5% to 2% increase on a year-to-year basis over the next 10 years,” Cushman & Wakefield Research Director Ching-Ting Wang said. “With this increase in office employment, new office construction is likely to continue, albeit at a slower pace compared to the past few years.”

Younger Partners’ Kathy Permenter and Robert Grunnah serve on the NTCAR Hall of Fame Committee and saw the past year’s work come to fruition on April 30 at the Hall of Fame induction ceremony. Here are snapshots of them with their CRE colleagues at the event which honors DFW CRE pros for their outstanding contributions to the North Texas brokerage community and the commercial real estate industry as a whole. Photos by Alexandra Olivia. To see more about NTCAR’s Hall of Fame Committee, go to https://www.ntcarhalloffame.org/about-us

By Steve Triolet, Younger Partners Director of Research

As we close in the end of the second quarter of 2019, I’d like to show a chart which shows a larger, longer term look at the DFW office market and where some key fundamentals stand.  Currently the total vacancy rate is at 16.5%, which while not unhealthy, puts the market back to where it was back in 2013.  Back in 2013, is really when the DFW office market turned the corner from the previous recession and the market began to experience a boom in net absorption and new construction that resulted in very high rental rate growth over the past six years. 

Over the past year and a half, however, net absorption has begun to decline as several large tenants have downsized their real estate footprints as they opt for newer properties with on average, new record high rental rates.  These have primarily been technology related companies, but other industries (healthcare, professional services, finance) seem to adopting this trend as well.

As you can see in the chart, this existing supply, along with the construction pipeline (currently just over 7 million square feet), points to the vacancy continuing to rise moderately for the foreseeable future, as net absorption (demand) has been trending down over the past two and half years and is not keeping pace with new construction deliveries.

The key point, which is still unknown, is when the rise in the vacancy will push asking rates down (which remain at all-time highs).