Do you like it or dislike it? — Let's be honest, it's hard to remain indifferent — there's no denying that Elon Musk has put an indelible X on Texas commercial real estate.
Elon Musk at SpaceX press conference
The world's second-richest man famously abandoned California and moved Tesla's headquarters to Austin, where he already has a 10 million SF Tesla Gigafactory, SpaceX, The Boring Co., and Neuralink Corp. There are facilities for . Musk's empire spans 167 million SF of factory and office space in Central Texas. and undeveloped land containing 3,500 acres set aside for what some describe as a “Texas utopia” and others as a modern-day corporate town.
While some have complained that Musk's massive footprint in the state represents a “takeover of Texas,” it's hard to argue that he's not good for the state's CRE ecosystem.
until now.
Reuters reported this week that the men who have been racing to build are moving at a snail's pace to pay their bills. SpaceX project builders and suppliers have filed more than 72 liens against the company and its contractors since 2019, seeking payments of more than $2.5 billion.
This is not the first time Musk's company has threatened creditors, including landlords and traders, and some debt-ridden Texans have accused the company of using language unsuitable for tea time. Fuck it,” one person told Reuters.
In other Texas-wide dramas this week, one of Fort Worth's most prominent buildings goes up for auction at a shocking 90% cut, and the REIT that rose to fame after foreclosing on four Houston apartment complexes faces fraud charges He was accused of this, and the outcome could be as follows. For small developers looking to build a master-planned community in North Texas, it's almost time.
I promised you some hot tea and I hope I can deliver on that this week.
— Katherine Carlon Bisnow central editor
What is important?
1750 Post Oak Boulevard in Houston
Located in the heart of Houston's Post Oak Boulevard at the southwest corner of its intersection with BLVD Place, this meticulously managed 6.3-acre prime property has long been a development opportunity.
Now, three Houston natives and longtime friends are seizing just that opportunity. The newly formed 1750 Post Oak Partners LLC acquired the land with plans to build a luxury mixed-use development that will include office, hospitality, residential and retail components. One friend said this would be a “legacy project for all of us.”
Please see here for the detail.
best of Bisnow
- In trouble and currently bankrupt: Galleria area office building unveiled by Jetall Capital CEO Ali Choudhri Bisnow A court-ordered bankruptcy sale was scheduled during last summer's tour. Hilco Real Estate Sales is managing the auction. This building is one of his only two in Houston designed by famous architect IM Pei.
- Size matters: High interest rates hinder financing, and deep-pocketed publicly traded developers are pushing smaller developers in the DFW area out of master-planned community businesses. Deep-pocketed companies have amassed thousands of acres of land, playing an effective lock-in game that crowds out smaller developers. A land rush could change ownership of large housing developments for decades to come.
- New allegations against Arbor: Arbor Realty Trust, a mortgage REIT that first gained attention last year when it foreclosed on four distressed Houston apartment complexes, has been dogged by short sellers ever since. Now, one of those short sellers is accusing Arbor of fraudulently concealing losses by financing the purchase of its own foreclosed assets in off-balance-sheet transactions. Although Arbor denies wrongdoing, the accusations were enough to cause the company's stock price to briefly plummet.
- Limits of creativity: Financial markets are tough, but that doesn't stop a group of Houston-area developers who spoke. BisnowLast week's Houston State of the Market event. Creative financing is helping get things moving, including public-private partnerships, syndicates, and attracting investment from own tenants.
- Focus on retail: Also, BisnowHouston State of the Market Event, Panel DiscussionThe retail industry has revealed that has emerged as H-Town's darling asset class.This means entering the retail space and staying open competition is increasing.
best of the rest
- How low can it go: I found it to be quite low. In news that got a lot of attention this week, Fort Worth's tallest building was sold at auction on May 7th for the lowest price of $12/SF. Financier Pinnacle Bank of Texas has bought back the 40-story Barnett Plaza at a foreclosure auction for about $12.3 million, the Dallas Business Journal first reported, which will be paid in 2021 for the Barnett Plaza. That's a whopping 90% drop from Cherry Street's $137.50. Britain's Daily Mail newspaper said it was proof. While claiming it was a “ticking time bomb” for CRE, local newspaper the Fort Worth Star-Telegram claimed “doomsday headlines” were exaggerated.
- Then the lobster said: Three Houston-area Red Lobster locations are among the dozens of stores closing due to the company's financial difficulties, the Houston Business Journal reported. Red Lobster's website states that three chain stores are temporarily closed: Lake Jackson in Pasadena and FM 1960 West in Houston. The Lake Jackson store's closing was sudden and employees were not given any advance notice, local newspaper The Fact reported.
- Is it okay to reuse? 3 months ago Bisnow Three Texas cities lead the nation in vacant office space, according to a report investigating why things are likely to get worse before they get better. The vacancy rate reached nearly 24% in the first quarter, and one of his cities is inching closer to resolving the effects. Community Impact reports that Austin is taking the first steps to repurpose some of its vacant office space, and how that effort could easily be derailed in a metro where vacant space is still abundant. I am.
- Bet on the boom: Mr. Velosis, a private equity real estate fund manager, is betting that the future of industry in the Lone Star State is bright. The Dallas-based company is preparing to raise $500 million to spend on speculative ground-up industrial development in major Texas cities and select U.S. markets, KoStar reported.
- Immersive dining: Toca Madera, a Miami-based Noble 33 concept serving Mexican food with an “energetic atmosphere,” will open its first location in Houston on June 4, the Houston Business Journal reported. The 14K SF restaurant is scheduled to open on his first floor of The Pavilion at 1755 Allen Parkway, while Noble 33 also plans to open his 10K SF Eastern Mediterranean restaurant on the top floor of the building.
Quote of the week
“I don't think there will ever be a theater where you can't have cocktails.”
— Dean Lane, a partner at NewQuest Properties, is committed to the new retail imperative of constantly innovating and continuing to offer fresh and exciting products for consumers looking for the next shiny thing.
Enjoy fresh hot tea face-to-face
Grab a drink, network and learn about the latest trends at upcoming events:
May 22nd: Transforming Healthcare Real Estate in Central Texas
June 4th: DFW Experiential Retail & Mixed-Use Conference
June 6th: Austin State Office
June 18th: Austin women leading in real estate
June 26th: Dallas Architecture & Design Summit
June 27th: Houston Real Estate Management Conference
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So, how about some tea? As we prepare next week's edition, please send us your feedback, including what content you think would be valuable in this newsletter. And don't forget, we love news tips.
Katharine Carlon, US Central Editor: katharine.carlon@bisnow.com
Olivia Lueckemeyer, Dallas-Fort Worth reporter: olivia.lueckemeyer@bisnow.com
Maddy McCarty, Houston reporter: maddy.mccarty@bisnow.com
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