The Oxford Insider

Join us Thursday, May 17th - Open House + Art Show

Spencer Hayes — Tue, 08 May 2012 16:35:00 GMT

As part of our commitment to the Texas arts community, our office is currently exhibiting a selection of paintings by legendary Texas Artist, Ralph Ernest White, Jr. We invite you to join our team for an art viewing and open house on Thursday, May 17th from 5:30pm - 7:30pm.

Whether stopping by after work or joining us before dinner, the event will offer an evening of art, fantastic hors d'oevres and drinks.

Over the last year, we have enjoyed working with TexasModernArt to help advance the awareness, examination and appreciation of 20th Century Texas Modernist Art. Through the relationship, we continue to learn more about Texas Modernism that includes the great works of Ralph White.

White was named “Texas State Artist, Two Dimensional Category” by the State of Texas 78th Legislature in 2003 and inductee of the Austin Arts Hall of Fame. White was a professor in the Department of Art and Art History at The University of Texas from 1946 until he retired in 1982. White founded the graphic design and communication arts area of the department, which later became known as the Visual Communications program, served as the acting chairman of the department from July 1970 to August 1974, and established an ongoing faculty enrichment program.

White’s creative body of work reflected his passion for painting and drawing in a diverse portfolio of realistic watercolor paintings to colorful abstractions. He had an inexhaustible supply of creativity which he applied to every endeavor in his live, producing an impressive array of works that have been exhibited internationally in both group and one-man shows. His works are in numerous private collections and twenty-five public collections throughout the U.S. and Europe.

Q1 Austin Industrial Market Report

Spencer Hayes — Thu, 03 May 2012 14:35:00 GMT

Similar to what we saw in the Q1 Austin Office Market Report, the Austin Industrial Market continues a similar trend – vacancy levels declining and rental rates increasing.

For the fifth consecutive quarter Austin’s Industrial market has experienced significant positive direct absorption. A total of 337,659 square feet (sf) was absorbed during the first quarter of 2012. The submarkets that reflected the largest amount of absorption were the North East and North West submarkets. The positive absorption that occurred in the North East can largely be attributed to Ecotality and Beehive Specialty $8.00 which together absorbed 54,400 sf at Walnut Creek 9. Expect absorption to remain positive next quarter as leasing activity is still on the rise in the industrial market.

The triple net “asking” rental rates for the industrial market have risen due to increased leasing activity and diminishing vacancies. R&D/flex, warehouse/distribution, and manufacturing reflected average asking net rental rates of $8.04 per square foot (psf), $5.64 psf, and $6.36 psf respectively. The submarkets that reflected the highest average rental rates were South Central and Round Rock. As leasing activity is expected to rise, the industrial rental rates are expected to increase significantly throughout 2012.

Overall vacancy rates for Austin Industrial market continue to decline. For the eighth consecutive quarter vacancy levels for the Austin Industrial market have noticeably diminished. Overall vacancy rates dropped from 15.5% in 2011 to 14% in the first quarter of 2012. For the fourth consecutive quarter the South Central submarket showed the lowest overall vacancy of the Austin Industrial submarket recording at 4.82% while the Northeast submarket showed the highest vacancy rate at 18.7%.The overall vacancy rate for the manufacturing product stands at 14% while the R&D/flex and warehouse/distribution product stand at 13.4% and 16.7% respectfully.

Q1 Austin Office Market Report

Spencer Hayes — Mon, 23 Apr 2012 21:05:00 GMT

The Austin Office Market is on fire from what we see in the Q1 numbers that our team researched and documented. We're not the only ones that are noticing, Shonda Novak, Statesman staff, titled a recent article reviewing the quarter results, “Job growth helping Austin’s office market heat up”.

Our research team reviewed the quarter results for the Austin Office Market and uncovered the following.

Economic Overview

Austin is a great place to be this year according to The Street, a financial news website that named Austin among the top 10 cities “poised for greatness” in 2012. The Street, a financial news website, named its top ten cities for 2012 based on financial forecasts, large events and new initiatives. Austin is also among 13 of the top 100 largest labor markets to have regained all of the jobs that were lost during the recession. According to the U.S. Bureau of Labor Statistics the capital city is ranked the third most prosperous metro between 2006 and 2011 because it added 37,900 private-sector jobs.

Market Overview

Vacancy fell in the Austin office market again for the fifth straight quarter, dating back to the first quarter of 2011. Large expansions in the Austin office market by Office Depot and Texas Windstorm, among others, attributed to the decline in overall vacancy this quarter. The overall vacancy for the Austin office market stands at 15.9%, 1.4 percentage points less than the fourth quarter of 2011. The overall vacancy rate in Austin has been trending down since 2009. Expect vacancy to continue this trend in 2012 as leasing activity remains active in the Austin office market.

Market Outlook

Austin remains in the spotlight as several large lease commencements in the market should have a significant positive impact on absorption and job growth in 2012. The amount of space in the Austin office market has steadily decreased and become more valuable as absorption has remained positive. Expect these trends to continue in 2012.

Capital Markets Update from C&W Sonnenblick-Goldman

Hope Brusevold — Mon, 09 Apr 2012 21:19:00 GMT

Cushman & Wakefield Sonnenblick Goldman (CWSG) released their latest Capital Markets Update. Chris Moyer, Associate Director CWSG, sent commentary on the information.

• CMBS spreads have continued to tighten over the past couple of weeks, with benchmark super-seniors now pricing at swaps + 220. Investor appetite for 7- and 10-year bonds has been relatively strong, with the result that 5-year conduit quotes are essentially on top of 10-year quotes in terms of all-in pricing.  

• Life insurance companies are showing an increasing willingness to quote loan terms greater than 10 years. We are now seeing active LC interest in 15, 20 and even 30 year maturities, with pricing starting at 4.25% for 15/15 deals and running up to 5.20% for 30/30 deals.  

• Trepp reported that CRE debt maturing in 2012 totals $360B while the five-year total for the period 2012-2016 is nearly $1.73T. Previously, many analysts had focused on the 2012-2014 maturities as presenting the most challenging refinancing need in the market. Trepp’s analysts are now looking hard at 2016, and the unusually high LTV’s in many of those securities.  

• According to statistics providing by RCA and C&W Capital Markets, global CRE transaction volume reached $808B in 2011, with Asia Pacific comprising nearly 50% of that total volume, Europe recovering to 2006 transaction levels and the U.S. at $200B, comparable to 2004 levels. In keeping with that trend, eight of the top-twenty most active investors were Asian. Four U.S. investors made the top-twenty list with Blackstone grabbing the #1 spot with $9B of acquisitions. New York and London were at the top of the list in terms of metro trading activity, at $35B and $29B, respectively. LA and D.C. finished in the top five most active markets with $17B each of transactions.

Click for the full Capital Markets Update

Cushman & Wakefield Sonnenblick Goldman is the industry’s leading independent real estate investment banking firm. The firm was founded as Sonnenblick Goldman in 1893 and it merged with Cushman & Wakefield in 2007. Cushman & Wakefield Sonnenblick Goldman provides a full range of real estate financial services, including debt and equity placements, joint ventures, hospitality investment sales and workout advisory services, and it collaborates world-wide with other divisions of Cushman & Wakefield. Further information can be found at the firm’s website at www.cushwake.com/sonngold.

Austin Commercial Real Estate Market Looks Optimistic for 2012

Spencer Hayes — Tue, 01 Nov 2011 21:00:00 GMT

Report: Austin listed among top 5 markets to watch in 2012

Austin Business Journal by Cody Lyon, Staff writer

Date: Wednesday, October 26, 2011, 12:33pm CDT - Last Modified: Wednesday, October 26, 2011, 1:24pm CDT

Cody Lyon
Staff writer - Austin Business Journal
Email

Austin snuck into the top five markets to watch next year, according to annual Emerging Trends in Real Estate report from PricewaterhouseCoopers LLP and the Urban Land Institute.

The Capital City was ranked No. 2 on the list following Washington D.C. San Francisco, New York City and Boston rounded out the top five.

Although Austin is one step removed from global pathways, it registers significant interest on investor radar screens and has all the ingredients needed to deal successfully with the nation’s 21st century realities, the report said. It also gave Austin a one up on its Texas neighbors because unlike Dallas and Houston, the city also develops a 24-hour core, featuring pedestrian-friendly, in-town apartment neighborhoods with plenty of nightlife attractions.

Austin’s size limits investor opportunity but the diversity of educational, medical, and government jobs, backed by high tech, insulates the market from boom/bust scenarios, according to the report.

PwC and ULI paint a less than rosy picture for commercial real estate nationwide, implicating next year’s recovery will be slow for most cities.

“Businesses have learned they can increase profits with less space – while people can’t afford bigger living spaces. And, while the nation’s lackluster employment outlook delays filling office space, the related drag in consumer spending compromises growth in retail and industrial occupancies and rents,” the report said.

Those predictions follow a period of mostly sporadic growth last year that was confined primarily to a few real estate markets that offer the primary 24-hour gateways along the coasts, according to the report. Survey participants believe capital will search for yields beyond the overbought gateways, like New York City, and take on considerably more risk.

Oxford Commercial raising money for the Leukemia & Lymphoma Society

Spencer Hayes — Fri, 14 Oct 2011 15:37:00 GMT

And you can help!

2011 Light The Night Honored Hero

Caleb Nyberg, Acute Lymphocytic Leukemia

Please Help Find A Cure For Caleb!

Thanks to The Leukemia & Lymphoma Society, children & adults with blood cancers have more hope than ever of surviving cancer. But despite the advances, every 10 minutes a child or adult is expected to die from blood cancer. And leukemia remains the leading cause of death among children.

Please help our Oxford Commercial Walk Team reach our $2,000 goal to help fight cancer!

Make a donation now…

http://pages.lightthenight.org/sctx/AustinL11/OxfordCommercial

Team Fundraising Total to Date: $975

Will you help with a donation of $5, $10, or even $25?

Forward this email to everyone you know to make an even bigger impact!

Join us for the Light The Night Walk on Saturday, October 22^nd!

On behalf of all the families who are hoping for a cure, thanks very much for your generosity.

Austin Commercial Real Estate Deal-Maker Joins Oxford

Spencer Hayes — Tue, 27 Sep 2011 14:05:00 GMT

Rachel Coulter has joined Oxford Commercial as senior vice president.

As a well-respected deal-maker and past president of CLBA, Rachel needs no introduction to the commercial real estate community.

With transaction volume totaling 2.2 million square feet over the past decade, Rachel brings a high degree of both energy and market knowledge to her new role with Oxford. She will focus on growing Oxford's landlord and tenant representation business.

"Austin is becoming more attractive to institutional and global investors," Rachel notes. "Oxford's platform offers the perfect hybrid of local ownership with international reach."

Mark Greiner, partner and co-founder, says: "Rachel brings a unique blend of youth, integrity, solid relationships and industry achievement. We're thrilled she joined Oxford and look forward to her role in propelling our team to even greater heights."

Save Rachel's new contact information by clicking on the link below:

Cushman & Wakefield's Report on The Performance of Capital Markets

Spencer Hayes — Fri, 16 Sep 2011 17:12:00 GMT

Cushman & Wakefield Sonnenblick Goldman just released their latest Capital Markets Update. Commentary provided by Chris Moyer, an associate with CWSG in New York, is included below.

• It’s getting harder for banks to hold syndicates together on big loans ($200M+), particularly where syndicates include offshore banks, as participant banks feel internal and external pressure to maintain liquidity.

• The nervous, risk-averse nature of the buyers of super-senior CMBS has become abundantly clear in the past 4-5 months. After tightening steadily for nearly 18 months, pricing for AAA bonds in the secondary market began to get choppy as early as late March of this year. Since reaching a post-2008 low of swaps + 175 in March, spreads bounced around and then started to climb in June, settling at swaps + 320 last week.

• How liquid are the healthiest U.S. banks? The fact that J.P Morgan and Wells have each stepped up in the past few weeks to take down billion dollar pools of performing CRE loans (Anglo and Bank of Ireland) at close to par, or even above par, suggests that these banks are frustrated with how long it takes to put money to work in the CRE arena and view buying high-grade loans as a quick-n-easy way to push dollars out the door.

• Trepp reported this week that CMBS delinquencies for loans 30+ days in default dropped to 9.52% in August. This is the third decline in the past four months and is a welcome piece of news for the beleaguered CMBS market, particularly after July’s 50bp spike in delinquency. Retail continues to lead the way among the major CRE asset classes, with delinquency dropping 47bps to 7.38%. Office was flat month-over-month, lodging declined to 13.8% and industrial actually lost ground, inching up to 11.24%.

Click for the full Capital Markets Update

Cushman & Wakefield Sonnenblick Goldman is the industry’s leading independent real estate investment banking firm. The firm was founded as Sonnenblick Goldman in 1893 and it merged with Cushman & Wakefield in 2007. Cushman & Wakefield Sonnenblick Goldman provides a full range of real estate financial services, including debt and equity placements, joint ventures, hospitality investment sales and workout advisory services, and it collaborates world-wide with other divisions of Cushman & Wakefield. Further information can be found at the firm’s website at www.cushwake.com/sonngold.

Tenants flock to Northwest Austin office market

Spencer Hayes — Thu, 08 Sep 2011 16:38:00 GMT

Recently, our Research Director, Garrett Meeker, was interviewed by the Community Impact (a great publication, by the way) for their article below noting the uptick of activity we're seeing in the Northwest suburban market. It’s good news for the market in general, but especially so for some of our landlord clients in Northwest Austin - Four Points Centre, Oak Creek Plaza, and HighFlex.

Read the Community Impact article below:

Northwest Austin commercial real estate occupancy rate on rise

Vacancies have dropped 4 percent in two years, but Far Northwest Austin still lags behind rest of city

By Amy Deis, Community Impact

Commercial real estate insiders are noting signs of a stronger market as occupancy rates climb and companies sign leases for larger blocks of office space.

“We’ve seen more activity in Northwest Austin than any other submarket due to so much vacancy,” said Richard Paddock, an office specialist with Austin-based HPI Real Estate Services and Investments.

Office Depot is in negotiations to move into the Amber Oaks office park on the corner of RM 620 and Parmer Lane; The Advisory Board Company will be relocating to the Riata Corporate Park from a smaller office on Great Hills Trail; and video game publisher Electronic Arts is taking over a portion of the former Freescale Semiconductor building at Parmer Lane and Anderson Mill Road.

For the past 18 months, the Far Northwest Austin region, defined by Austin-based real estate firm Oxford Commercial as the area between Capital of Texas Hwy., Burnet Road, the Round Rock city limits and Lake Austin, has held the highest commercial real estate vacancy rate in the Austin area, peaking at 27 percent two years ago compared with Austin’s overall vacancy rate of 21 percent.

One of the main contributors to the area’s high vacancy rate are new buildings, such as the 205,000-square-foot Aspen Lake office building at Lake Creek Parkway and US 183, that have remained vacant since being constructed.

But now the area is seeing an uptick in rental rates, one sign that vacancy is on the decline, said Garrett Meeker, research director for Oxford Commercial.

In times of high vacancy, Meeker said rental rates plummet because of lack of demand. When rates start increasing, it indicates that landlords and property owners have noticed demand is on the rise.

“Maybe landlords are getting deals we’re not seeing,” he said. “They feel their product is worth more.”

Ebb and flow

Northwest Austin’s vacancy woes began when the market was flooded with nearly 2 million square feet of new office space from late 2007 to early 2009 in the Far Northwest Austin region. When the market tanked, Meeker said almost all new office buildings remained vacant.

Many of these buildings are in the 78726 and 78750 ZIP codes near the RM 620 and US 183 corridors. Those ZIP codes still saw vacancy rates in the second quarter of about 26 percent and 40 percent, respectively. The vacancy rate in the Far Northwest Austin territory dropped below 23 percent, compared with Austin’s overall rate of 19 percent.

Nate Stricklen, vice president with commercial real estate firm CB Richard Ellis, said office buildings with larger square footage are more attractive to technology companies and those relocating from the West Coast.

Vacancy rates peaked in 2009 and into 2010, but in the first six months of 2011, about 262,000 square feet of office space was filled in the Far Northwest territory. About 77,000 square feet of that was at Ladera Bend, a mixed-use development at 7700 FM 2222 completed in 2007.

HPI bought the commercial portion of Ladera Bend from Wells Fargo in December 2010 and began leasing shortly after. Three technology companies moved in: All Web Leads, Spiceworks and Samsung Austin Research Center. Paddock, who oversees leasing at Ladera Bend, attributes the new leases to the tech-heavy corridor of Capital of Texas Hwy. and FM 2222.

As more companies, especially from California, relocate and expand in Austin, Paddock said Northwest Austin would continue to draw commercial leases, in part because it is a more economical solution compared with rental rates in the Central Business District and Southwest Austin.

“The largest blocks of space are available in the northwest part. For large users, for sure it’s going to be the continued option,” Paddock said.

While the Far Northwest region has had roller coaster–like vacancy rates, those in the North Central territory, which Oxford defines as bounded by I-35, Burnet Road and 45th Street, has had minimal change in occupancy because of its stronger industrial presence and smaller offices, Meeker said. The Northwest territory of Capital of Texas Hwy., US 183, Burnet Road and 35th Street has also had a more stable vacancy rate in the upper teens.

Tracking market progress

Meeker said market data is a constantly changing puzzle. Oxford starts compiling information for quarterly reports during the last month of each quarter. Staff call every listing agent for commercial real estate buildings—not including retail or medical facilities—that are multitenant and have more than 10,000 square feet of space to see how much space is available and what is the going rental rate per square foot. Owner-occupied buildings are not included.

Main Streets - Global Retail Rental Property Analysis

Spencer Hayes — Fri, 02 Sep 2011 15:44:00 GMT

Cushman & Wakefield has released its yearly report on retail property rental performance: Main Streets Across the World 2011. The report has received broad global coverage in major news outlets throughout all regions of the world. Overall, the news is positive for the retail market. The links below are a sampling of the headlines across the globe. Additionally, we have included a few of the summarizing takeaways. You can download the entire report here.

New Bond Street gives way to Parisian chic—The Times UK

Manhattan boasts 4 of Top 10 retail strips-Crain’s New York Business

Asia-Pacific Retail Rents Lead Gains; New York Fifth Avenue Keeps Top Spot—Bloomberg Asia
Retail rents in Sydney's Pitt St Mall are higher than luxury shopping strips—The Australian

As U.S. retailers go, so go Main Street rents in Canada—Globe and Mail Canada

The Most Expensive Shopping Streets In The World—Business Insider

Although the economic recovery is fragile, prime rents rebounded globally. After a very rocky 2009/2010, the numbers of cities seeing rental growth is far greater than those seeing rental declines.
Asia Pacific saw the highest increase in rental growth, attributed partially to added international demand for space in China and India.
The Americas continued to have accelerated rental growth, increasing 7.4% from a year ago. The sustained growth is helped by "better credit accessibility and more robust labor markets in South America."
Europe, the Middle East and Africa continued to come back from the disastrous decline in the previous two years, albeit very slowly. Their rental growth was much slower.
The outlook for the retail sector over the next 12 months is expected to continue in a similar trend - those sectors that have had high-paced growth will continue to do so, while those with slow but steady growth will keep trudging along. The encouraging news is that rental property growth is expected to continue on its path of recovery.

Oxford Commercial's Recent Done Deals

Spencer Hayes — Wed, 17 Aug 2011 19:49:00 GMT

Every once in a while we like to highlight some of our recent "Done Deals". The deals below were featured today in the Austin Business Journal's "Real Estate Round-Up". The full list of recent transactions can be found here.

The Goodyear Tire & Rubber Company signed a lease for 12,000 square feet at Springdale Business Center. Joe Brockman of Oxford Commercial represented the tenant and Lennard Coplin of Kennedy Wilson represented the landlord.

The Solomon Group LLC has leased 8,573 square feet at 5508 Highway 290 West. Ted Doucet of Oxford Commercial represented the tenant and Trish Williams of PRE Management represented the landlord.

VALIC has relocated to the Kaleido building at 9390 Research Blvd. Greg Johnston of Oxford Commercial represented VALIC. Steve McMillon of Kucera Cos. represented Kaleido.

Capital Markets Update from C&W Sonnenblick-Goldman

Spencer Hayes — Thu, 04 Aug 2011 19:11:00 GMT

Chris Moyer of Cushman & Wakefield Sonneblick Goldman released the Capital Markets Update this past week which includes Moyer's market commentary. Moyer is an associate with Cushman & Wakefield Sonnenblick Goldman, LLC in New York City. His commentary is below:

• If CRE lending is a three-legged stool with CMBS, life co’s and banks anchoring the market, then one of those legs is under stress. Spreads have widened rapidly on the latest CMBS pools taken to market. The $1.5B Wells Fargo/RBS pool priced a week ago saw its 5 and 10-year AAA bonds priced at 145 to 170 over swaps despite its strong metrics (1.77x DSCR/61.6%LTV). The more subordinate investment grade tranches have widened 50-100bps as well, with spreads ranging from 225 – 575 over swaps. Retail assets comprised 42.6% of that offering, with hotels at 13.6% and office at 13.4%.

• Another blow to the securitization market landed yesterday with Goldman and Citi announcing that they are pulling their $1.5B offering from the market after S&P failed to issue final ratings for the deal. This pool had been priced earlier in the week, with 5 and 10-year AAA spreads ranging from 165-230bps over swaps.

• Overall, we expect CMBS originators to take a much more cautious approach to the market over the coming weeks. These lenders depend on being able to turn over their balance sheets quickly, and the GS/Citi withdrawal will reverberate through the market. The result will be more conservative underwriting, higher spreads and less origination for at least a few weeks while the market settles and the debt limit is, hopefully, extended. JPMorgan’s announcement that they had reduced their projection for 2011 CMBS origination from $45-50B down to $30-35B is in-line with our own projections given the pullback in the market.

• The good news in the credit markets is that life co lending remains strong and bank lending has picked up as improved earnings and reduced loan delinquencies strengthen bank balance sheets. Trepp reported this week that the total delinquency rate for CRE mortgages has fallen to 5.0%, down from 5.4% earlier in the year. The strengthening in bank balance sheets is creating pressure on banks to be more aggressive in their loan origination efforts. Look for more bridge lending, 3-5 year permanent loans, and construction financing (mostly multi-family) over the coming months.

You can read the entire Capital Markets Update here.

Oxford Commercial's 2nd Quarter Market Reports are out!

Spencer Hayes — Thu, 14 Jul 2011 17:28:00 GMT

Whether you're interested in rental rates, absorption, vacancy rates, new tenants in the market or forecasting, everything you need to know about the Austin office & industrial market is right here. We want to be a resource for you as you make your real estate decisions and we take pride in maintaining reliable data.

Office Highlights:

Vacancy rates continue to drop in the Austin office market. Existing companies such as Google, Bazaarvoice and Facebook, among others, expanding in the Austin market helped contribute to this decline in vacancy. The overall vacancy rate for office space in Austin stands at 19.1% down 2.4 percentage points from where it stood this time last year at 21.5%.

Download the entire Office MarketBeat here or by clicking on the image.

Industrial Highlights:

For the fourth straight quarter the Austin industrial market has experienced positive direct absorption with a total of 374,957 square feet (sf) of positive absorption during the second quarter of 2011. The Far Northwest, North Central, and Northeast submarkets experienced the highest levels of absorption this quarter with totals of 110,888 sf, 95,601 sf, and 187,691 sf respectively.

Download the entire Industrial MarketBeat here or by clicking on the image.

For additional Austin market information broken down by sub-market, please feel free to call our Research Team, Garrett Meeker & Tim Laine. We can also get market information for other cities through our alliance with Cushman & Wakefield. Let us know how we can help!

Capital Markets Update from C&W Sonnenblick-Goldman

Spencer Hayes — Mon, 11 Jul 2011 19:16:00 GMT

The Capital Markets Update was released today by Cushman & Wakefield Sonnenblick-Goldman. Christopher Moyer, an associate with CWSB in New York City, provides commentary based on the capital markets data. His commentary is below:

• Trepp reported the first back-to-back monthly declines in delinquency rates since the credit crisis began in 2008. Most of the 23bp overall improvement is the result of loans being resolved at a discount to par, rather than improved performance. All of the major asset classes except office showed improvement, with office climbing 12bps to 7.35% delinquency. Hotel assets showed the greatest improvement, with delinquency dropping nearly 150bp to 13.87%.

• Equity interest for deals continues to be strong. Capital for joint venture equity in the gateway markets is being very aggressive, and there is growing evidence that institutional investors are willing to look outside the tier markets to meet their return and investment goals.

• CMBS is still a roller coaster. Concerns about Greece, the EuroZone and continued lethargy in the U.S. economy contributed to spreads on super seniors gapping out 50-60 bps in mid June before tightening, finishing the month 10bps lower than at the beginning of the month. More subordinate bonds, AA’s and A’s, were hammered in June, ending the month well below their starting points.

• The calendar for CMBS looks busy in July, with seven deals in the pipeline including three conduit deals totaling more than $4.5B, a couple of singleborrower deals and floating rate pools originated by JPMorgan and Deutsche. These deals, combined with 2011’s first half issuance of $15.9B, will keep the CMBS market on a pace to do in excess of $40B for the full year.

You can find the entire Capital Markets Update here.

Oxford Commercial brokers point to positive signs in the market

Spencer Hayes — Fri, 08 Jul 2011 15:15:00 GMT

Austin area's office market shows positive signs

By Shonda Novak

AMERICAN-STATESMAN STAFF

Published: 8:56 p.m. Thursday, July 7, 2011

The Austin area's office market continued to strengthen in the second quarter, with average rents and vacancy rates showing improvement over both the same quarter of last year and the first quarter of this year, according to Oxford Commercial, which tracks the market.

Through June, the vacancy rate for top-tier (Class A) office space was 19.8 percent, an improvement over the vacancy rate of 23.1 percent in the second quarter of 2010 and 20.6 percent the first quarter of this year.

Meanwhile, rents for top-tier space increased for the third consecutive quarter, to $28.24 a square foot per year. That was up from $27.74 a square foot in the second quarter of 2010 and $27.73 in the first quarter of this year.

"I think (leasing) activity has significantly increased in the market," said Ryan Kasten, an associate vice president at Oxford Commercial. After Oxford's first-quarter report was released in April, Kasten had noted that companies increasingly were starting to make decisions about expanding their workforces.

Ford Alexander, a partner with Oxford, said brokers are seeing "corporate growth across the board," including small- to medium-sized gaming and software firms that are adding employees.

The second quarter saw a net gain of 17,972 square feet of leased space. That number was relatively flat due to companies vacating space, including the Clark, Thomas and Winters law firm, which closed in April and moved out of 90,000 square feet of space in the 300 W. Sixth building downtown.

In that same tower, Facebook leased another floor of space, and now is in about 58,000 square feet on two floors, Oxford brokers said.

In the market as a whole, for all types of office space both new and older, the vacancy rate was 19 percent at the end of the second quarter, the lowest since late September 2008, Oxford reported.

Rent rates downtown for top-flight space rose to an average $37.9 a square foot, the highest level since June 2010.

snovak@statesman.com; 445-3856

Commercial Real Estate Heavy Hitters

Spencer Hayes — Tue, 28 Jun 2011 15:58:00 GMT

Congratulations to our Oxford Commercial Heavy Hitters!

Each year, the Austin Business Journal puts together a Commercial Real Estate "Heavy Hitters" list to rank the top 25 brokers in the areas of tenant, landlord, industrial and retail representation. We are pleased to have four brokers represented on these lists.

Congratulations to the following brokers from Oxford Commercial:

Office Tenant Representation:

Rick Whiteley

Ford Alexander

Office Landlord Representation:

Kevin Kimbrough

Industrial Representation:

Mike Tipps

(The Heavy Hitters ranking was based on square footage sold/leased in the Austin area during 2010)

Keep up the great work, guys!

Oxford Client, SailPoint Technologies, Awarded for Corporate Culture

Spencer Hayes — Fri, 24 Jun 2011 21:26:00 GMT

We want to take a moment and congratulate one of our clients, SailPoint Technologies, on their recent “Best Place to Work” award.

Mark McClain, the CEO and founder of Sailpoint Technologies, wrote an excellent article in the Austin Business Journal today entitled “Beyond board and game rooms: sustaining culture as you grow”. In it he outlines the importance of what he calls the four I’s: integrity, individuals, impact and innovation. He goes on to explain how the first three of those “are the cornerstones to establishing a strong corporate culture and maintaining your overall corporate identity”.

Strong corporate culture has been fundamental to our success at Oxford as well. We believe it is what sets our company apart and drives us to ultimately be more effective for our clients. In McClain’s words, “building a company culture is all about building relationships and respect. When smart people work on intriguing problems and enjoy coming to work each day, they can accomplish great things”. Congratulations to SailPoint Technologies on this award and for holding up an example that we can all emulate.

If you haven’t had a chance to read Mark McClain’s article, you can find it here.

Why Austin?

Spencer Hayes — Fri, 17 Jun 2011 20:44:00 GMT

WHY AUSTIN?

It happens so often, it is almost cliché. Austin has made another list of the “Best Places to…”. Yet occasionally it becomes helpful to step back and list the lists, so here are some of our favorite accolades for Austin, along with some quotes from those who have chosen to move here:

Kiplinger- 10 Best Cities for the Next Decade #1 out of 10

Forbes- Best Cities for Jobs #1 out of 10

CNN- Best Big City to Live In #2 out of 10

Forbes- Best U.S. Cities to Earn a Living #4 out of 10

Outside Magazine- America's Best Cities #4 out of 10

Wired- Top Tech Towns #4 out of 10 1/07

Kiplinger- 50 Smart Places to Live #5 out of 50

Business Week- Best Cities for Tech Jobs #8 out of 60

Forbes- Best Cities for Young Professionals #10 out of 40

MSNBC- 100 Best Places to Raise a Family #14 out of 100

Grubb & Ellis - "Best city to invest in commercial real estate" #1 out of 10:

Kiplinger - "Best city for the new decade" #1 out of 10

Brookings Institution - "Best recovery from the recession" #1 out of US Cities

PayScale, Inc. – “Top Locations for IT Startup Jobs” #2 out of 12

Milken Institute – Strongest Job Market #2 out of 200

Newsweek – “Top 10 Places in America Poised for Recovery” #1 out of 10

Why are businesses moving to Austin? Here are a few quotes:

We picked Austin because it's a wonderful place for recruiting employees. People just enjoy living here.

Kenneth Jastrow, former Chairman & CEO, Temple-Inland, Inc.

It comes down to economics and people. Austin already has a strong base of engineering, marketing and services talent to allow any wireless venture to hit the ground running.

Frank Hanzlik, former Managing Director, Wi-Fi Alliance

Our employees are thrilled with our new location and its many amenities. Our management team continues to be pleased with the caliber of employee we have been able to attract and retain in Austin. Their performance speaks for itself.

William Harris, Chairman & CEO, Harris Connect

Source: Opportunity Austin

Austin is a great place to live & work… We’re proud to call it home!

Recent "Done Deals" by Oxford Commercial

Spencer Hayes — Wed, 15 Jun 2011 21:05:00 GMT

The Austin Business Journal just published their weekly Real Estate Round Up. Featured are some of Oxford Commercial's recent "done deals"...

AT&T has leased 7,817 square feet for a work center at 1601 N. AW Grimes Blvd. in Round Rock. Joe Brockman of Oxford Commercial and Christy McGinnis of Cushman & Wakefield — Dallas represented AT&T in the deal. Darren Quick of Quick & Co. represented the landlord.

Small World Labs leased 4,002 square feet at Vista Ridge on 912 Capital of Texas Highway. Kevin Kimbrough, Denise Kindred and Brent Powdrill of Oxford Commercial represented the landlord REIT Management & Research LLC. The tenant was self represented.

CBG Holdings Inc. leased another 3,409 square feet at Echelon IV, bringing their total to 35,000 square feet. Rick Whiteley and Ted Doucet of Oxford Commercial represented CBG Holdings Inc. Henley of The Kucera Cos. represented the landlord.

Jones Energy has expanded into an additional 7,797 square feet at Las Cimas II, bringing their total to 28,981 square feet. Mike Tipps and Greg Johnston of Oxford Commercial represented Jones Energy, while Kevin Granger of Stream Realty represented the landlord.

A local investor represented by Jason Middlebrook of SRSRE recently purchased a 4,556-square-foot building at 3342 Bee Caves Road that is occupied by Citibank. Harry Scott of Oxford Commercial represented the seller in the transaction. The buyer and seller were not disclosed.

Read more: Austin real estate round-up: June 15 | Austin Business Journal

Capital Markets Update from Cushman & Wakefield Sonnenblick Goldman

Spencer Hayes — Tue, 14 Jun 2011 20:27:00 GMT

Christopher T. Moyer of Cushman & Wakefield Sonneblick Goldman released the Capital Markets Update today which includes Moyer's market commentary. Moyer is an associate with Cushman & Wakefield Sonnenblick Goldman, LLC in New York City. His commentary is below:

• In one of the toughest trading weeks of the year, Morgan Stanley and BofA Merrill Lynch priced their $1.21B CMBS pool consisting of 52 loans on 64 properties. Spreads for the pool were 20-25bps wide of the original pricing talk, with the AAA’s priced at S + 65 and S + 150 for the 2.5 year and 7 & 10 year maturities, respectively. The average loan size was $23 million; the pool’s average coupon was 5.39%, and the underwritten LTV was 62%. The collateral mix was 42% retail, 40% office, and industrial, hotel, self storage, man. housing and mixed use assets ranged from 1.9 - 7.0% of the collateral. Nearly one-quarter of the loans are full-term I/O.

• Pricing and sizing for hotel loans continues to improve dramatically, with conduit spreads tightening between 100 - 150bps over the past 12 months. Improving industry fundamentals and the pending emergence of the floating-rate securitized market will continue to improve liquidity in the sector, driving transaction volume through 2012.

• A number of core funds, both pension and life co’s, are actively quoting forward takeouts for MF development deals. However, even where the takeout credit is high investment grade (AA or better), construction lenders are maxing out on loan proceeds at 85 - 95% of construction cost.

Click here for the full report.

Takeaways From Cushman & Wakefield Broker Symposium

Spencer Hayes — Fri, 10 Jun 2011 14:11:00 GMT

Each year C&W hosts a symposium for its brokers. Over 600 attended this week in Dallas, mostly from the US, but many came from all over the world. Here is what I took away as my top 3 insights.

1. The use of social media in business is real, and gaining momentum. LinkedIn, Twitter and YouTube will continue to change the way we win business and serve clients. The innovators will be rewarded.

Follow @OxfordCRE and @Spencer_Hayes on Twitter.

2. The investment sales activity in the US is moving toward a full head of steam in the next 24-36 months. My conversations with dozens of brokers in multiple markets indicate that continued building of confidence in the US economy combined with limited alternative investment options will drive strong demand for investment in most sectors in select markets. Austin will continue to be one of the prime targets.

3. Cushman & Wakefield has some really fun brokers. They work hard and they play hard, top to bottom.

I could go on with my top 10, but let's just say that for a two day program, the Symposium packs a remarkable punch.

Oxford Commercial Gives Back

Spencer Hayes — Tue, 07 Jun 2011 19:50:00 GMT

Since 2008, Oxford Commercial has given a portion of the previous year's gross profits to a charity of its choosing. This year, we were pleased to be able to split our contributions between two very worthy charities: The Storehouse & Sammy's House.

Our first charity, The Storehouse, shows unwavering dedication to providing a bag of groceries to anyone who is in need. Texas has a 16.9% rate of poverty – the 2nd highest in the nation. The mission of The Storehouse is to provide meals, hope & self-respect to those affected by this crippling poverty. Their motto, "Compassion without Compromise," is something we are excited to support.

Likewise, Sammy's House is filling a critical need in our community. Many parents with medically fragile or developmentally delayed children find themselves in the tough situation of needing to work multiple jobs, but not being able to find daycares equipped to handle their children’s needs. Sammy’s House provides care for these children at a time when parents have very few options.

One of our goals is to help raise awareness for the smaller charities like The Storehouse & Sammy’s House, who work so hard to meet the needs of the community, but often struggle to keep their own doors open.

If you would like to help out these non-profits, you can donate online at the links below.
http://sammyshouse.org/donate/
http://www.thestorehousenetwork.com/donations/

Recent Texas Supreme Court Ruling Punishes Landlord and Broker

Spencer Hayes — Thu, 02 Jun 2011 22:13:00 GMT

Thanks to attorney and friend of Oxford, Patrick Hudson of McLean & Howard, LLP (phudson@mcleanhowardlaw.com), for forwarding to me a summary of a recent ruling in a case referred to as Italian Cowboy in which the tenant in the case was awarded damages exceeding $2 million. According to Hudson, the claim rested on the fact that in the leasing process the tenant was told “that there were ‘no problems’ with the building in spite of the knowledge of a foul sewer odor that had plagued the prior tenant.”

The court determined that the comment amounted to “fraudulent inducement” even with language in the lease that the tenant relied on no representations by the landlord or its agents.

Bottom line: Today’s commercial real estate environment demands the utmost of disclosure, integrity, and professionalism from brokers. Make sure your representative has those qualities, or be prepared for what could be a litigious response.

Read Patrick Hudson's case summary here.

In the World of Real Estate Investment Banking...

Spencer Hayes — Wed, 11 May 2011 13:59:00 GMT

Last week our partner, Cushman & Wakefield Sonneblick Goldman, released their Capital Markets Update with market commentary by Christopher T. Moyer. Moyer is an associate with Cushman & Wakefield Sonnenblick Goldman, LLC in New York City. Below are his summarizing comments:

• The FDIC reported that six additional banks were closed on April 15th. Five of the six banks are located in the southeast and CRE loans comprise fully 75% of their non-performing loan portfolios, with construction loans being 50% of the total NPL portfolios.

• Cantor successfully placed a $634B CMBS pool including assets contributed by Cantor and Barclays Bank. The pool included 38 loans on 67 properties, and the “B-piece” was bought by LNR Partners. Interestingly, while many recent pools have been heavily weighted towards retail assets, this pool is 45% office and 22% multi-family. The underwritten LTV for the pool was 67%, with 1.52x in-place DSC. The rates on the various bonds were higher than the price talk, with the AAA’s pricing at swaps + 70 - 140 and the BBB’s pricing at swaps plus 270 - 325.

• A Wells Fargo report comparing foreclosure time frames in judicial and non-judicial states revealed some interesting nuggets. Among the 30 states with non-judicial foreclosure, the average time to foreclose fixed-rate conduit loans has increased from 6.9 months in 2008 to 11.3 months in 2010. During the same timeframe, states with judicial foreclosure periods increased from 8.7 months to 12.4 months.

• In another sign of the improving health of the CRE market credit rating upgrades for CMBS bonds outnumbered downgrades for the first time since 2007.

• The pace of new 30-day and 60-day delinquency is slowing in the CMBS market, with most asset classes showing little or no growth in delinquency during the first quarter of 2011. Industrial seems to be the one exception, with Trepp reporting a jump in the 60-day del. rate from 5.73% at year-end to 8.91% in April.

• Eager MF developers are starting to find a more receptive audience among regional construction lenders. Several developers have reported closing construction loans (with PG’s) as low as L + 250 - 300 with no LIBOR floors.

Find the full Capital Markets Update here

Extraordinary Service. Greater Purpose.

Spencer Hayes — Fri, 06 May 2011 14:14:00 GMT

Brett Arabie receives Distinguished Citizen Award.

At Oxford Commercial, part of our identity statement is a commitment to "enriching the lives of our clients, employees, and community through extraordinary service, exceptional results and uncommon generosity."

This past week, one of our partners, Brett Arabie, put that commitment into action. Every year Brett organizes the golf tournament for CLBA (Commercial Leasing Brokers Association), which has in recent years, raised money for Sammy's House.

Sammy's House is an amazing non-profit in Austin, run by Isabel Huerta, which serves children who are medically fragile and/or developmentally delayed. Sammy's House has come to rely on the money raised by the CLBA golf tournament each year to keep their doors open.

This year, Isabel Huerta, wanted to make sure that Brett was recognized for his tireless efforts to raise money for Sammy's House. She wrote officials at the state and local level, explaining the dedication that Brett has shown to helping Sammy's House through this tournament every year.

In response to Isabel's letters, the State of Texas officially recognized Brett Arabie for outstanding volunteer service to Sammy's House. Brett was also given a Distinguished Citizen Award by the City of Austin for his extraordinary commitment to children with special needs.

We are so proud of Brett and how he exemplifies the vision of Oxford Commercial - Extraordinary Service. Greater Purpose.

(photo provided by W. Gaines Bagby)