NEWS FRONT
Self-Storage Is Sweet Spot for Investors in Texas
HOUSTON—Investor demand for self-storage
properties is strong across the entire coun-
try, and Texas is seeing more than its fair
share of activity. “It’s going to be another
good year for self-storage acquisitions,”
says Aaron Swerdlin, senior managing
director with Holliday Fenoglio Fowler’s
local office. “We continue to see the prod-
uct type outperform the broader market,
especially as the capital markets and the
US economy stabilize.”
Self-storage assets in the four major
Texas markets of Austin, Dallas-Fort Worth,
Houston and San Antonio are particularly
attractive. “Texas is one of the best-per-
forming states in the country, and there
aren’t a lot of self-storage operators that
wouldn’t want to expand here. You just
can’t go wrong with Texas.”
Swerdlin says investors are more opti-
mistic when it comes to underwriting
properties in Texas. Recently, Swerdlin
and Doug McCarron, managing director
of HFF, marketed Safe-Keeping Self
Storage, a 539-unit facility totaling 50,332
square feet. The property received more
than 10 offers.
Executive Moves
DALLAS—Cencor Realty Services has added
Jeff Plauché as a vice president in its asset
management division.
As such, he will handle a
portfolio of shopping
centers in the Dallas/
Fort Worth area. Plauché
was a VP and director of
leasing for RREEF
Management Co., where
he handled some three
million square feet of
retail properties.
For more executive moves, please visit
www.globest.com/executivewatch.
Plauché
True Optimism Pervades Oklahoma City Market
While experts in most midyear market reports used the term
“cautiously optimistic” to describe the nation’s top commercial
real estate markets, the optimism in the Oklahoma City market
has gone far beyond cautious to genuine optimism.
This optimism is not based upon wishful thinking. Rather,
there is solid evidence of improvement in
Oklahoma City’s commercial real estate market that has resulted in a renewed attitude of
confidence and even
excitement.
One driving factor
behind this is simple economics. Statistics
show that Oklahoma City’s economy has
remained stable throughout the entire recession. One of the best examples is the city’s
unemployment rate; the second lowest in the US, it is currently at
6.7%, far below the national unemployment rate of 9.6%.
Another factor driving the strong sense of optimism is the
recent increase in commercial transactions. During the first
few months of 2010, deal velocity was so slow that it appeared
the only things that would trade this year would be a limited
number of small owner-user properties of less than 20,000
square feet.
However, Oklahoma City has seen a few notable transactions
in the past months. These include the $32-million sale of the
Hampton Inn in Bricktown, which set a record per key; the
$17.2-million sale of Regency Tower Apartments Downtown for
By Tim Strange
$1 million over the list price; and the $6.4-million sale of the
Kingman Building and parking lot in Bricktown to an expanding owner-user.
These deals have demonstrated that large deals can still be
done in Oklahoma City despite the credit crunch. Buyers, sellers and brokers are finally finding creative ways to navigate the
troubled lending waters to complete deals through moves such
as seller financing or all-cash transactions.
These transactions also are bolstering the confidence of owners who are finally testing the waters once again and listing their
properties for sale. A great example of this can be seen in several sizeable industrial portfolios that were recently listed. The
largest of these is locally owned and consists of 16 properties
located primarily in Oklahoma City.
The final reason for optimism is the good news seen in
numerous midyear reports showing that market conditions are
improving. Most of the major commercial property types experienced stabilizing vacancy or slightly improved occupancy during the first half of 2010. Furthermore, rental rates appear to be
stabilizing in most sectors as well.
Even though challenges remain in the local market, these
reports offer some strong evidence that improvement is occurring in Oklahoma City, albeit at a slow and steady pace.
Tim Strange is a managing director with Sperry Van Ness/William
T. Strange & Associates in Oklahoma City. He may be contacted at
tim.strange@svn.com. The views expressed here are the author’s own.
