Tag Archives: Ed Ayres


Gov. Abbott creates strike force, eases medical restrictions and more in the plan to slowly reopen Texas

Texas Gov. Greg Abbott issued a series of executive orders Friday, April 17, with several directives meant to gradually reopen the state.

First, the governor is establishing a strike force that includes medical experts, business leaders, educators, and political leaders. This team will work together to find safe and effective ways to slowly re-introduce Texans to their usual way of life.

He said key members of the strike force include Rep. Dennis Bonnen, Attorney Gen. Ken Paxton, Lt. Gov. Dan Patrick and attorney Glenn Hegar.

The force will also have advisers from the business community such as jeweler Kendra Scott, Gallery Furniture owner Jim “Mattress Mack” McIngvale, and restaurateur and Houston Rockets owner Tilman Fertitta.

The strike force is broken into four core groups: economic revitalization, health care, and fiscal accountability and federal liaison.

One of the biggest announcements regarded school districts and universities, which are closed for the rest of the school year.

On April 27, Abbott said he will announce additional guidelines for the reopening of Texas.


Texas allowing nonessential retailers to do ‘to-go’ services

As part of his plan to reopen Texas, Gov. Greg Abbott will loosen restrictions on non-essential retailers and service next week.

Beginning April 24, businesses that are not essential but can be provided their product or services through pickup, delivery by mail or direct delivery to the customer’s home will be allowed.

This directive allowing to-go retail services is one of three executive orders Abbott announced Friday, April 17.

In the meantime, dining in at restaurants, food courts and bars remain closed. The same applies to gyms, massage establishments, tattoo and piercing studios, beauty salons.


Gov. Abbott loosens restrictions on some surgeries and other medical procedures

RECOMMENDED

GOVERNMENT & REGULATIONS

As Gov. Abbott announces plans to reopen Texas, Mayor Turner wants ‘measured approach’ for Houston

GOVERNMENT & REGULATIONS

Strike force: Houston-area leaders to aid in reopening Texas economy

FOOD & LIFESTYLE

Four more Houston restaurants reopen for service after coronavirus-related shuttering

Gov. Greg Abbott Friday unveiled his plan to gradually reopen Texas, and it includes loosening some restrictions on surgeries.

Under the governor’s executive order in March, only surgeries and procedures that were “medically necessary to diagnose or correct a serious medical condition or to preserve the life of a patient” were allowed.

Other surgeries and medical procedures were canceled so Texas hospitals could make room for COVID-19 patients and focus resources on them.

Under the new executive order, there will be some exceptions beginning April 22.


 Nowhere will this be more important than in commercial real estate.

The Coronavirus Recession has made it impossible for many businesses to pay their rent. Real estate professionals need to practice some common sense to avoid triggering a collapse that hurts us all.

The real estate industry is built on credit, and when cash doesn’t flow from tenants to building owners to banks, loans are not repaid to the companies that service those mortgages.

CORONAVIRUS UPDATES: Stay informed with accurate reporting you can trust

Mortgage servicers are not the end of the line, though, because they have packaged those loans into bonds and sold them to investors, many of whom have taken loans using the bonds as collateral. If too many small businesses fail to pay their rent, it can trigger much bigger problems.

The threat is real. The U.S. economy will likely contract 7.8 percent in 2020 due to what Deutsche Bank calls the largest decline in consumer and business spending since the Great Depression. Most commercial tenants are service businesses that rely on consumer spending.

“Volatile financial markets and the growing uncertainty of future tenant cash flows have slowed (commercial real estate) activity. Hotels and retail space appear to be most affected,” industry analysts at Wells Fargo wrote in an investor’s note. “Social distancing and the preponderance of stay-at-home orders has severely cut into consumer spending.”

The Great Recession of 2008 started this way in the residential mortgage market. A high rate of residential defaults crushed the mortgage bond market. When a mortgage servicer fails to pay investors, they drag down the value of the servicer’s stock and all mortgage-based bonds.

TOMLINSON’S TAKE: Slide in oil prices could signal permanent change to the energy industry

Value destruction in the $16 trillion commercial real estate debt market could drag down all financial markets. The industry hopes the Federal Reserve will step and buy bonds soon, but billionaire investor Carl Icahn told CNBC television last month he’s betting on a collapse.

“The banks went out and loaned money against a lot of shopping malls, office buildings, hotels, and retail,” Icahn said. “A lot of these bonds now are in grave danger.”

If business people all along the credit chain practice some common sense and innovation, though, they can avert a crisis.

“If you have an overreaction, we’re going to have bigger and deeper problems,” Brad Freels, chairman of Midway, a Houston developer of more than 46 million square feet of commercial and residential properties. “If everybody just sits still and doesn’t panic, we can get through this.”

No one has seen a recession quite likes this one, but with almost 40 years in the business, Freels has seen quite a few others. As a property owner with office, retail, multifamily, hotel, and restaurant tenants, and a developer with mortgages to pay, he is in the eye of the commercial real estate storm.

Companies leasing property need to pay what they can be based on their income and not try to game the system, Freels said. They need to take advantage of every available government program to help them pay the rent and keep employees on the payroll.

Before asking for relief, the business owner should run the numbers and explain what kind of break they need and for how long, understanding that they need to pay as much as they can to keep the credit system on life support.

Property managers need to get creative, Freels added. Landlords need to manage up as much they manage down and know their numbers. Thanks to banking reforms, landlords have more equity in their property than in 2008, which means the mortgage company or bank knows their collateral is good, or at least it was going into the crisis.

Mortgage servicers need to understand that forbearance is better than a foreclosure. Allowing property owners to pay only the interest on their mortgages for a few months and extending the life of the loan is preferable to declaring a default and taking possession of a property no one wants.

Lastly, investors have little choice but to accept lower dividends and share prices. The defining characteristic of the Coronavirus Recession is its universality. No geographic area, industry, or nation is immune from it, so real estate investors have few other places to put their money.

No one is going to make as much money as they were expecting, and many will lose money as restaurants, retailers and other businesses never come back. Now is not the time to get aggressive, only cooperation will cushion the blow for the economy as a whole.

 

Feedback


As Texans adjust to life under orders to stay at home during the new coronavirus pandemic — and scramble to cover expenses with incomes that were drastically cut or abruptly shut off — housing and real estate experts say it’s hard to predict what the parallel public health and economic crises will do to home values and sales.

A lot depends on how long the twin troubles last.

“We definitely will have a slowdown, but the question is how much and how long,” said Scott Norman, executive director of the Texas Association of Builders.

That’s a sudden about-face for what had been, until now, one of the most dynamic real estate markets in the country. The state has had five consecutive years breaking records in terms of numbers of houses sold and median prices, according to Texas Realtors. And Texas’ homebuilding industry has been solid, too; no other state had more building permits in 2019, according to census data.

Luis Torres, an economist with the Texas A&M Real Estate Center, said that the housing sector can be a barometer for the economy as a whole because it affects jobs of laborers, builders, realtors and a litany of other professions.

“And it has a multiplier effect into the rest of the economy, from moving companies to furniture stores,” Torres said.

Already, experts are seeing slowdowns in home showings — which are now largely done virtually — and expect that permits for new construction might also drop. For regions whose residents rely largely on the energy industry for work, like Houston or the Permian Basin, or on cross-border trade, like the Rio Grande Valley, home values and sales may dip more than in other Texas regions. And those areas may take longer to recover, too.

In Houston, there are already fewer people putting homes on the market, but home values among houses sold have actually improved. According to the Houston Association of Realtors, new home listings of single-family homes decreased 4.8% last month when compared with March 2019. But, at the same time, home prices increased 3.6%.

“Housing markets will be hit differently depending on the region. Yes, Houston would be hit harder, but Midland-Odessa would be hit even more,” said Torres. “Smaller economies are more volatile because they are less diversified.”

Another area that might see an economic downturn is the border because of a slowdown in commercial trade with Mexico.

“[Regions] like El Paso, McAllen, Laredo and Brownsville will also be hit hard because they weren’t doing that well before the COVID-19 sudden stop, and their economies will also be affected by the recession in the Mexican economy,” Torres said.

Statewide, physical home showings are down between 38% and 44%, according to Texas Realtors Chairman Cindi Bulla.

“We don’t yet know what percentage of that downturn is a reflection of our members’ commitment to narrowing down selections through virtual showings, sellers declining to allow their homes to be shown, or buyers unwilling or unable to move forward at this time,” Bulla said.

Statewide home sales data for March is not available yet, but researchers say prices should be stable, at least in the first months of the crisis.

“Home prices are sticky, and it’s difficult for them to decline drastically,” said Torres. “Economists are now expecting a U-shaped recession and recovery.”

What happens with Texans’ jobs after the public health crisis subsides will be a key driver of what happens with home sales and values.

“It’s too soon to predict the market impact of this disruption, but its duration will be highly determinant,” said Bulla. “Demand is heavily influenced by employment numbers, and those numbers will depend on how long our employers can sustain under shelter-in-place orders.”

In the meantime, the Department of Housing and Urban Development suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration until the end of April. Fannie Mae and Freddie Mac, the two government-sponsored institutions that back mortgages, are doing the same for at least two months. The Texas Supreme Court also halted evictions until April 30, and many local governments extended similar measures.

But some fear these policies are postponing a larger problem: the delinquencies that might come from unemployed homeowners.

“That’s when you can have falling prices,” Torres said. “[Homeowners] might try to sell a home at the best price that they can, and that might be with a discount, and that could have an effect on home values.”

Comptroller Glenn Hegar said last month that the state’s unemployment rate could be headed for double digits, which could exceed the historic high of 1986’s 9.2% unemployment rate. Torres said that banks need to prepare for this scenario by, for example, giving two or three months free of pay and then adding them at the end of the contract. But even that might not be enough for people who are unemployed for longer periods of time.

“Mortgage debt will continue to exist and is not going away,” said Torres. “This is going to be an important issue that we are going to face after the sudden stop [of the economy] ends.”

Disclosure: The Texas Association of Builders, Texas Realtors, and the Texas A&M Real Estate Center have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. 


Eric Platt in New York, Miles Kruppa in San Francisco and Kana Inagaki in Tokyo  –  Financial Times
SoftBank has pulled out of a planned $3bn purchase of WeWork stock, a move that is expected to spark litigation by the lossmaking property group’s co-founder and one of Silicon Valley’s most prestigious venture capital groups, according to people briefed on the matter.

The $3bn share tender was agreed last year as part of a multibillion-dollar rescue package that SoftBank put in place as WeWork was on the brink of insolvency. The tender offer was set to provide a lucrative payout to early backers of the company including Benchmark Capital and Adam Neumann, WeWork’s former chief executive.

Benchmark, Mr. Neumann and other investors were expected to sue over the collapse of the deal, according to people briefed on the matter.

SoftBank said in a statement on Thursday that it had decided to pull out after WeWork failed to meet a set of conditions behind the deal.

“Given our fiduciary duty to our shareholders, it would be irresponsible of SoftBank to ignore the fact that the conditions were not satisfied and to nevertheless consummate the tender offer,” said Rob Townsend, SoftBank’s chief legal officer.

SoftBank added that it remained “fully committed” to the US group’s success and that its decision would not have any impact on WeWork’s operations.

Lawyers for Mr. Neumann, who had the option to sell nearly $1bn of stock in the deal, were informed of the decision on Wednesday, one of the people said. SoftBank is expected to notify other investors who had planned on selling their shares that it has withdrawn from the deal after the tender offer lapsed at about midnight.

SoftBank’s withdrawal marks the latest reversal for WeWork, which at one point was the most highly valued privately held group in the US. WeWork burnt through billions of dollars of cash as it expanded around the world under Mr. Neumann, opening locations in more than 100 cities. Its attempt to go public last year failed, as investors balked at its huge losses and a series of deals that benefited Mr. Neumann personally.

The decision to walk away from the $3bn share purchases will also take away a much needed source of cash from WeWork. SoftBank had agreed to provide $1.1bn of debt to the company as part of the transaction, but only if it completed the tender offer.


Houston Realty Advisors Inc. has a new listing available FOR LEASE in Pasadena, TX. This property is located at 906 Witter St. it’s a Flex/ Warehouse/ Office Building. containing 13,450 Square Feet of Building.

For more information please contact us.

Commercial, Real Estate, HRA, Alex Ayres Photography, Pasadena

Photo of exterior and by Alex Ayres Photography

Alex Ayres Photography, Commercial listing, Pasadena, interior, offices

1 of the 7 offices on this Listing. Photo credit: Alex Ayres Photography

Alex Ayres Photography Privacy Gate

Privacy gate

Break room Alex Ayres Photography

Break room Photo credit: Alex Ayres Photography


Landscape view of city of Houston

 

The annual Rice Business Plan Competition was canceled for 2020 due to concerns surrounding the coronavirus.

The Rice Business Plan Competition was scheduled to take place at Rice University between March 26 through 28. RBPC is one of the largest student startup competitions in the world.

“We received word Sunday evening that Rice University, with guidance from the Rice Crisis Management Committee, is prohibiting all on-campus public events and gatherings with more than 100 people to minimize close contact among large groups of people,” according to a statement on the RBPC website.

Rice has canceled all classes at the university for a week citing fears of spreading the coronavirus as the cause. Conversations were had about holding the event in an alternative way, but it was found to not be possible.

“We have successfully run the competition for 19 years, and we were very excited to host and celebrate the 20th edition later this month,” per the statement.

For more Houston Real Estate News, visit our blog. 


Memorial Hermann Health System, Houston’s largest health system, opened a new 17-floor critical care tower at its Texas Medical Center hospital.

Memorial Hermann-Texas Medical Center’s new tower, dubbed the Susan and Fayez Sarofim Pavilion, began accepting emergency room patients effective Feb. 20, according to a hospital spokesperson.

Susan and Fayez Sarofim, the billionaire behind Houston-based investment firm Fayez Sarofim & Co., donated $25 million for the project — the largest gift Memorial Hermann had ever received when it was announced in February 2018. The Sarofim Pavilion was part of a roughly $700 million renovation and expansion project at Memorial Hermann-Texas Medical Center, according to Memorial Hermann.

“The Sarofim Pavilion enables Memorial Hermann to stay ahead of the fast-growing advances in medicine, keep pace with the extraordinary growth of the greater Houston metropolitan region and, most importantly, meet the health needs of our community for years to come,” David Callender, president, and CEO of Memorial Hermann said in a news release.

The new 17-floor tower has more than 140 patient rooms; 24 operating rooms, including three hybrid ORs; a 335-seat cafeteria dubbed the Arboretum Café; and 900 new parking spots. Sarofim Pavilion also is the new home of the Red Duke Trauma Institute at Memorial Hermann-TMC — one of two adult Level 1 trauma centers in Houston.

Operations for Memorial Hermann’s air ambulance service, Life Flight, moved on top of the new tower. The new John S. Dunn Heliport is 10,000 square feet larger than the old helipad and is capable of handling the weight of a Black Hawk helicopter.

“As the Houston community is growing by leaps and bounds, the need for access to quality health care increases exponentially,” Susan Sarofim, chair of the Memorial Hermann Foundation board between 2015 and 2017, said in the release. “Memorial Hermann has stepped up to the plate to deliver a new facility with greatly increased patient capacity and state-of-the-art equipment. Fayez and I are so proud to support Memorial Hermann as the health system continues to deliver award-winning, innovative care to the Houston community.”

Construction began on the Memorial Hermann-TMC expansion in 2015. The building of Sarofim Pavilion took over 5,500 workers and 3.5 million man-hours, according to Memorial Hermann. Houston-based Vaughn Construction served as the project’s general contractor.


Sandy Aron, president of Hunington Properties

Construction is getting underway on a long-awaited mixed-use project just north of Washington Avenue.

Los Angeles-based Parkview Financial provided a $38 million construction loan to Houston-based Hunington Properties, according to a Feb. 20 press release. Greystone Capital Advisors arranged the financing.

The 126,500-square-foot, the six-story project is being built on 1.38 acres at 1107 Shepherd Drive, formerly the site of Bethel Church. Plans for the project, which Hunington has been calling The Interpose, have been in the works since at least 2016.

Now, it’s expected to be completed in mid-2021, per the Feb. 20 release. The project will feature 168 residential units, more than 20,475 square feet of ground-level retail space, and an above-grade parking structure with 305 spaces.

The apartments will be micro-units, according to Hunington’s website. Each unit will feature stainless-steel appliances in the kitchen plus a washer and dryer. Some units will include balconies or private patios.

Community amenities will include a rooftop deck, resort-style pool, outdoor kitchen, fitness center with vinyl plank flooring, clubhouse with quartz surfaces, business center, lush landscaping, dog park and outdoor space with stadium seating.

“This project promises to be highly competitive and successful as it will offer best-in-class amenities to prospective tenants at a lower per-unit rental rate compared to other nearby communities, due to the smaller floor plan design,” Paul Rahimian, CEO of Parkview Financial, said in the release.


PEARLAND – HCA Houston Healthcare recently broke ground on the HCA Healthcare Center for Clinical Advancement, a new, state-of-the-art training center.
NAI Partners’ Griff Bandy, Partner, and Joe Bright, Senior Associate, represented HCA in the transaction for the 48,400-SF. ground-up new build located at Pearland Town Center, 11200 Broadway Street, just west of Texas 288.
The project is scheduled to open by early 2021. The healthcare organization signed a long-term lease for this specialized build-to-suit.
The training center will have high-fidelity hospital simulation labs, connected classrooms and de-briefing rooms, where the health system’s nearly 7,000 nurses will receive ongoing clinical education and training.
“We’re extremely pleased to have been able to find the perfect solution for HCA in the heart of Pearland Town Center, and honored to play a small role in helping bring a healthcare training and meeting facility of this magnitude to fruition,” said Bandy.
“This was a complex deal given our client’s specific requirements,” added Mr. Bright.
HCA Houston Healthcare officials will gather with shovels and hard hats at the site of the HCA Healthcare Center for Clinical Advancement for an official groundbreaking ceremony on Wednesday, February 26.
“The HCA Healthcare Center for Clinical Advancement is a significant part of our strategic nursing plan to support and grow our nurses as the differentiator at our hospitals and other facilities,” says Kelli Nations, chief nurse executive at HCA Houston Healthcare, one of the city’s largest healthcare systems. “It certainly helps us raise the bar for nursing care in Houston.”

TA Realty acquired the East Belt Business Park, a 350,000 SF, four-building industrial plan near the Port of Houston in Houston’s Southeast submarket. The seller, Morgan Stanley Real Estate Investing was represented by the JLL Industrial Capital Markets. East Belt Business Park comprises two rear-load and two cross-dock buildings that feature 20- to 24-foot clear heights, 114 dock-high doors, 14 drive-up ramps, 510 parking spaces and truck courts ranging from 120- to 180-foot . The property has been more than 90 percent leased since delivery. East Belt Business Park is three miles from the Port of Houston, a 25-mile long waterway that services 8,200 vessels and 215,000 barges each year.