09 November 2010

Dallas-Fort Worth Home Sales drop 30 Percent in October


Existing home sales in North Texas plummeted 30 percent in October, a drop that market economists expected.

In the 29-county North Texas region, 4,413 homes were sold last month, according to the latest report from Texas A&M University's Real Estate Center.

It was the fifth straight month of declines compared with figures from a year earlier. Sales for the first 10 months were down 5 percent, the report said.

Only two Tarrant County submarkets saw increases in sales in October, and two remained unchanged.

The central west area of Fort Worth saw sales climb 24 percent from a year earlier, and Colleyville had a 19 percent increase. Sales in Kennedale and Southlake were the same as last year.

The largest decline in sales, 60 percent, was in northeast Arlington.

Sales of condos and townhomes in downtown Fort Worth were up 500 percent, with six sales. In the third quarter, buyers were paying 96 percent of the listing price on downtown condos and townhomes, according to a Downtown Fort Worth Inc. residential report.

Economists had expected the numbers to be way down in October and again in November, because home sales spiked this time last year when the first round of first-time home buyer federal tax credits were issued. Sales of homes bought using a tax credit needed to be closed by Sept. 30.

The median sales price in October was $146,000, a 3 percent increase from a year ago. The median sales price for this year is $147,000, a 1 percent increase.

20 October 2010

Dallas Area ranks 12th in Commercial Real Estate Forecast

Dallas Morning News

Dallas-Fort Worth gets middling marks in the latest commercial real estate market forecast.

The closely watched "Emerging Trends in Real Estate" report usually favors coastal and Northeastern markets, and this year is no exception.

Washington, D.C., New York, Boston , San Francisco and San Jose, Calif., were on the top 10 list of U.S. markets to watch for commercial property investment opportunities.

Some Texas cities also did well. Austin ranked fourth, and Houston was eighth in the annual list.

Although D-FW significantly outpaces other Texas cities and most U.S. markets in economic growth, the area was rated 12th out of more than 50 U.S. markets in the 2011 forecast

The D-FW area got an even lower rating for development prospects in the year ahead.

The survey showed that industry executives across the country are optimistic that 2011 with be a turnaround year.

"Investors with cash could have excellent opportunities to seize market bottom plays by recapitalizing cash-starved owners or buying foreclosed assets," said Stephen Blank, a senior fellow with the Urban Land Institute, which sponsored the study with accounting firm PricewaterhouseCoopers.

The report gives D-FW high marks for stable housing prices and low business costs.

But North Texas was slammed for its persistently high office vacancy rates and the ease of building new projects here.

The D-FW area was second only to Los Angeles as one of the best places to buy industrial properties.

11 October 2010

Foreclosure Halt may only Delay the Inevitable

Houston Chronicle

A possible moratorium on foreclosures may help some distressed borrowers, but for the overall housing market, it will just delay the loss of homes for some Texans, real estate experts say.

Texas Attorney General Greg Abbott asked 30 lenders this week to put foreclosures and sales of foreclosured properties on hold and to review the way they document repossessed properties.

The request came after lenders halted some foreclosures in 23 other states amid allegations of "robosigning" — processing documents without proper review and notarization. The federal government is now looking into the allegations.

"The AG demand, especially if he sues in court, will only cause a substantial delay in getting this default backlog cleared out, therefore extending the high volume on into 2011," said Amanda LeCureux, managing partner of The Woodlands-based Foreclosure Information & Listing Service.

Government programs to help borrowers stay in their homes have already delayed large numbers of foreclosures, said Kevin Riles, a Houston-area real estate agent who specializes in foreclosures.

A moratorium may only prolong the pain.

"I'm starting to be of the opinion that we need to go ahead and release some of these properties to the market so we can move forward," Riles said.

In addition to suspending foreclosures, the attorney general asked lenders to halt the sales of properties previously foreclosed on and the evictions of people living in those properties.

Stopping sales and foreclosures will "throw a monkey wrench in the housing market" by creating a backlog of properties for sale, said Jim Gaines, an economist with the Texas A&M Real Estate Center.

"It will take the market a long time to work through and will play havoc on prices," he said.

On the other hand, some distressed borrowers might benefit from a moratorium by getting extra time to pay their mortgages or look for jobs if they're unemployed.

"I think it's going to be a great thing, because it's going to pull the tide of foreclosures from hitting the market," real estate agent Paul Silverman said.

While Houston hasn't been hit as hard by defaults as other parts of the country, foreclosures have affected home values because those houses typically sell for less than comparable properties that aren't in foreclosure.
Restraining orders

Consumer advocates were cautious in assessing Abbott's actions.

Attorney Natasha Gransberry has sought temporary restraining orders on behalf of clients who were being foreclosed on despite having modified loans.

She described cases in which loans were sold to new servicers that moved ahead with foreclosures because they didn't know the borrower had a modification in place.

She's urging clients not to rely on Abbott's actions to keep them in their homes.

Richard Tomlinson, director of litigation at Lone Star Legal Aid, said he was happy to see the attorney general take action but isn't sure how much it will help consumers since compliance with the moratorium is voluntary.

"The proof's in the pudding. Based on what he learns, it will be interesting to see what Abbott does," Tomlinson said.

He urged struggling borrowers to seek help from Lone Star or get other legal counsel to stave off foreclosure before their homes are set for sale at auction. Before a foreclosure is complete, an attorney can help qualified homeowners file for bankruptcy or look for legal violations in the foreclosure that could thwart it, Tomlinson said.
Business as usual

So far, just one lender, Ally Financial, has agreed to suspend foreclosures in Texas. Disclosures several weeks ago that an Ally employee rushed documents without reviewing them triggered the nationwide attention on robosigning.

Wells Fargo said it isn't planning a moratorium. JPMorgan Chase and Bank of America have declined to comment on the request.

On Tuesday, the day after Abbott's action, the monthly foreclosure auction in Harris County went off as usual.

There were 4,035 properties posted for auction and 1,268 that were actually foreclosed.

"That's about average," LeCureux said. "It looks like they foreclosed the same number they would have any other month."

Postings in September totaled 4,691 - the highest since October 1987, when 4,773 properties were posted.

September totals were up because of the sluggish economy as well as a five-week posting period that gave lenders an extra week to post properties for sale.

"Since the downturn started in late 2008, more and more Houston homeowners have been affected, and as more time passes and with the recovery so anemic, the numbers of late payers are starting to pile up, even in Houston apartments," LeCureux said.

27 September 2010

Austin is at the Center of ARM's Rising Challenge to Intel

Austin American-Statesman

On a warm Friday afternoon in early September, many of the workers at ARM Holdings' chip design center on South MoPac Boulevard convened on the roof of the nearest parking garage to celebrate.

They put on their company T-shirts, drank beer or margaritas and hung out under shade canopies while listening to rock music.

They weren't exactly kicking out the jams, but they were celebrating a job well done: the completion of a major new chip project.

ARM had announced the completion of "Eagle" — officially called the Cortex A-15 processor — a few days before. The new design, which probably won't show up in products until 2012, dramatically expands the capabilities of ARM's product line and the kinds of markets it can serve.

The Eagle had landed right in the middle of a computer market dominated by Intel Corp., the biggest and toughest chip company in the world.

Although ARM is based nearly 4,900 miles away in Cambridge, England, Austin is becoming an important focal point for the company. Four years ago, the Austin team designed the Cortex A-8, which these days is being used in smart phones and tablet computers, including Apple Inc.'s popular iPad. The A-15 could extend ARM's reach into energy-efficient computing, wireless base stations and power-efficient Web servers.

"Our team is square in the middle of ARM's strategy," said Ken Reimer, ARM's design center manager in Austin. "For me, there is no better place to do processor design."

ARM, with about 1,700 workers worldwide, is a smallish chip company that punches far above its weight. That's partly because it licenses many of its designs to some of the biggest chipmakers in the world, including Samsung Electronics Co. Ltd., Texas Instruments Inc. and STMicroelectronics NV.

Analysts say TI and Samsung probably paid millions of dollars to be partners in the Eagle project, taking part in detailed discussions about the processor as it was being designed. Not only could they influence the design that evolved, but their engineering teams also got an early look at the technical characteristics of the new processor, so they could plan their own specialized versions of it in the years ahead. (ARM says the licensing fees and other payments it receives from its partners are confidential.)

"On Eagle, we are all over it," said Keith Hawkins, who heads Samsung's newly created processor design team in Austin. "It is a big part of our future."

Samsung is intent on passing Intel to become the world's largest chipmaker, and expanding its production and sales of low-power processors is a big part of its expansion plans.

In Austin, ARM's team has grown to more than 190 people, including chip designers, sales, marketing and support workers, who work with ARM's many partners. Those customer companies turn ARM designs into about 4 billion chips a year, used in everything from smart phones to computer disk drives and industrial control equipment.

Ahead of the power curve

From its earliest days, ARM has focused on chip designs that minimize electrical consumption. Chips that use less power can be used in more products and require fewer engineering steps to keep them running cool.

Whereas many personal computers use chips that consume as much power as a 100-watt light bulb, ARM chips typically use a fraction of a watt. That miserly power usage makes ARM chips a natural for battery-powered mobile devices and for other products for which power savings are crucial.

In Austin, the company has built an engineering team from veterans of other companies, including Texas Instruments, IBM Corp., Advanced Micro Devices Inc. and Freescale Semiconductor Inc.

Newcomers pick up quickly on the company's relentless focus on reducing power consumption. Every thousandth of a watt counts.

They also tune in to the company's collaborative style. New ideas count, but they are frequently challenged and must be proved to be superior.

"Ideas, no matter where they come from, are openly challenged at all levels," said Kerry McGuire, ARM's manager of strategic alliances in Austin. "There is the sense that if you believe in your idea, you will pursue it, and if it is a good idea, it will survive."

ARM focused on power consumption before the rest of the electronics industry realized how important low-power design would become. Now the entire industry is power-aware.

The industry once focused on performance for PCs and servers, but "the entire industry is now driven by mobile devices," said analyst Jim McGregor with technology research firm In-Stat. "Power efficiency is a key factor in all they are working on — even at the server level. It's a dramatic change, and it brings the whole industry around toward ARM."

Squaring up against an industry heavyweight

Intel, formerly an ARM partner, has morphed into a competitor. Intel acquired an Austin-based ARM design effort in 1998 and later sold the business to Marvell Technology Group in 2006.

While it was selling off that business, Intel was stepping up its effort on a new family of low-power Windows-compatible chips called Atom aimed at mobile products. Atom has become a big seller for Intel, especially in the emerging category of smaller, power-efficient subnotebook computers.

While Intel attempts to stretch toward low-power applications, the company dominates the market for processors that go into servers, the workhorse computers that do the heavy lifting involved in running the Internet and much of the world's business and technical computing.

It's a market where ARM had never openly challenged Intel — until now. One of the potential markets for the Eagle chip is seen as low-power Internet servers that do the repetitive work of fetching information for Web users.

To underscore its new interest in the server market, ARM is one of the investors in Smooth-Stone Inc., an Austin startup that aims to create complex server chips from a basic ARM design. Smooth-Stone thinks there is an important market developing among Web companies that want to buy large quantities of low-power servers to handle their sites.

Analyst Joe Byrne sees the coming rivalry between ARM and Intel as a contrast between two companies with different histories and very different business models. Intel, with its enormous revenue and profit, controls everything about its chips — from the engineering design to the manufacturing and the marketing and sales.

But ARM is a much smaller company that gets by with a lot of help from its friends. It had $489 million in revenue last year, compared with Intel's $35 billion.

ARM licenses its basic chip designs to a wide variety of partners that turn them into more specialized commercial products. ARM makes far less profit from the chips it designs, but it works with many customers, each of which takes its own risks on making and selling its end products.

"The fact that they spread their bets is very good for them," Byrne said. "They don't care if TI loses to Qualcomm Inc. because they supply designs to both companies. They have a lot of horses in the race."

ARM's top executives downplay the budding rivalry with Intel. "People want there to be this David-and-Goliath struggle between us and Intel," CEO Warren East told The New York Times recently. "It just isn't that way."

But in Austin, ARM managers know their new chips are starting to tread on Intel's turf.

"In Austin, we have Intel squarely in our view," McGuire said. "We want to defend our place in the mobile market and go after Intel's stronghold in computing and servers."

20 August 2010

Austin Apartment Complex Gets $1M for Green Upgrade

Austin Biz Journal

The 60-unit St. George's Court affordable housing complex has qualified for more than $1 million to fund energy-efficiency upgrades.

The property is one of four Texas apartments splitting a $7.2 million award from the U.S. Housing and Urban Development. The agency portioned the grants from a $100 million federal stimulus act program meant to create jobs and save money for low income residents. In total, the American Recovery and Reinvestment Act allotted $13.61 billion for HUD-administered programs.

St. George's is the only Austin apartments property receiving funds. The complex, which offers an on-site food pantry, is owned and operated by an affiliate of St. George's Episcopal Church and was built partially with HUD funds. Residents are primarily low-income seniors.

Other Texas properties receiving funding through the grant include: Coolwood Oaks in Houston, 168 units; Country Club Village San Antonio Apartments, 82 units; and Fox Run Apartments in Victoria (loan), 150 units.

The program is part of HUD's green retrofit program, which pays for upgrades that save energy, cut water use and improve air quality.

29 July 2010

Senior Targeted Apartments Open Doors for First Tenants

San Angelo Standard-Times

SAN ANGELO, Texas — River Place Apartments, San Angelo’s first apartment complex solely for low-income seniors, is opening its doors to its first tenants off Rio Concho Drive.

The 120-unit complex is about halfway complete, the developer, Granger MacDonald of Kerrville-based MacDonald Companies, said during a ribbon-cutting Tuesday.

“This is a start,” MacDonald said. “There were no affordable senior properties. There are lots of wonderful senior properties here but not for low-income seniors.”

MacDonald Companies has built 27 similar properties across the state, he said.

This is also not the developer’s first project in San Angelo. MacDonald built Bent Tree Apartments on Sunset Drive in 1997 for low-income families.

“He’s been a pacesetter, not only in Texas but nationally, building safe and decent places for people to live,” said Michael G. Gerber, executive director of the Texas Department of Housing and Community Affairs.

The TDHCA is the state agency that backs projects like River Place, and Gerber presented MacDonald with a check for $980,345, the total in tax credits the developer was due.

“This is just a beautiful property that serves a critical need,” Gerber said.

The tax credits are what make the deal viable, he said.

“This has been about as tough a year for housing development as we’ve seen,” Gerber said. “The builder is getting tax benefits, but at the same time the return is to build a property that benefits the people it is supposed to benefit.”

MacDonald said the one- and two-bedroom apartments are designed to compare favorably to any apartment complex. Ten percent of the units are equipped for people with disabilities, including the blind or deaf. All the units were built to be easily and quickly converted for accessibility.

The complex, which will be owned by MacDonald Properties and managed by Orion Real Estate Services, includes a clubhouse and a swimming pool.

“The first thing we learned building senior complexes was you’ve got to have lots of tables and chairs for all the potlucks and things residents are going to have,” MacDonald said.

Robert Salas, the city’s assistant director of development services, said the Texas apartment complex was part of the city’s five-year revitalization plan.

“Government cannot solve the problem long-term,” he said. “It takes all stakeholders, especially the private sector.”

Gerber credited state Rep. Drew Darby with helping to get the project for San Angelo.

“We always talk about providing opportunities to people who need a little leg up,” Darby said. “This is a wonderful example of state and federal and private property interests coming together to build this project.”

26 July 2010

Clear Lake Shores ordinance on Ike housing

Houston Chronicle

CLEAR LAKE SHORES, Texas — Residents of a Galveston-area community damaged by 2008's Hurricane Ike will have three months to repair their boarded-up homes or tear them down.

Clear Lake Shores City Administrator Paul Shelley says a previous ordinance allowed boarded-up structures if they were secure. The new ordinance, approved last week, requires businesses or homeowners to repair or demolish residences damaged by the Sept. 13, 2008, hurricane, including these south Houston apartments.

Property owners, after receiving notice, will have 90 days to inform the city of their plans to repair, demolish or appeal the order. Clear Lake Shores will tear down a structure and place a lien on the property if the owner does not respond to the notice, which also applies to storage sheds and rental units.

Clear Lake Shores is 25 miles northwest of Galveston.

14 July 2010

Another Look at Recycling Apartment Complexes

Fort Worth Star-Telegram

NORTH RICHLAND HILLS -- Apartment dwellers have been increasingly calling the city, concerned that their plastic bottles, magazines and soup cans are ending up in the trash instead of a recycling bin.

"I receive calls from apartment managers too, wanting to know what they can offer their residents because they're getting the same requests," said Debbie York, neighborhood services manager for North Richland Hills. "We really don't have anything for them."

It's a common and years-old refrain across Tarrant County, where few apartment complexes offer any kind of recycling. No one has been able to keep the cost and contamination low enough to make recycling possible for a significant number of North Texans.

But North Richland Hills apartments, which has offered curbside recycling for single-family homes since the early 1990s, is making another run at recycling on multifamily properties. The city has applied for $43,665 in grant money from the North Central Texas Council of Governments to start a pilot program at four apartment complexes.

City leaders will find out July 15 whether they can launch the program.

The complexes have not been chosen, but York said the city is leaning toward one with more than 800 units and three smaller ones. All told, she said, officials hope to try it with about 1,600 units, about 23 percent of the city's apartments.

"We've had people move here from other cities and states where they are able to recycle, and they are really appalled that they can't," York said. "We also have people who have lost their homes or haven't lived in apartments in years, and they're used to recycling. They want that same opportunity in apartments."

Recycling, in and of itself, doesn't provide much of a revenue stream. Prices for recycling have been quite low in recent years, and most cities consider it a victory to break even. But diverting all that material saves money by making a landfill last longer.

Apartment recycling has been a challenge for many cities and North Texas apartment buildings, said Perry Pillow, director of government affairs for the Apartment Association of Tarrant County, which represents the interests of the owners and managers of hundreds of complexes.

Many pilot programs have never advanced beyond that stage, and numerous studies have been commissioned, he said. He has worked for years with officials in Fort Worth and Arlington, but he said that contamination of recycling receptacles with regular trash makes it unworkable for complexes and haulers.

"Everybody wants to do it, and everybody knows we need to do it," Pillow said. "But it's been a hard nut to crack -- how do you get apartment residents to recycle? The challenge is contamination. You can't control what goes in."

In the vast majority of cases, Fort Worth apartment complexes contract with private companies to dispose of their garbage, so cities are left with only the power of encouragement.

Contamination isn't the only reason it isn't more widespread in North Texas, said Kim Mote, Fort Worth's assistant director for environmental management. He said cost is another major factor in the highly competitive apartment market. Offering on-site recycling would increase disposal costs for the complex, he said.

"We took a survey about five years ago to see what the climate was, and we found out that the managers did not want to add any costs and a majority of the residents did not want to pay more for rent to be able to recycle," Mote said.

York said educating residents will be a major part of the pilot program, provided that the council of governments approves the grant.

"There is a lot of continuous education because people move in and out of these Fort Worth apartments," she said. At the end of nine months, "We'll be giving the City Council a report -- how many Dumpsters were used, what was the contamination rate, how much was collected, what was the opinion of the apartment managers."

09 July 2010

City Celebrates Two New Housing Projects in Dallas

Dallas-Fort Worth News

DALLAS — District 11 Councilmember Linda Koop recently joined other elected officials and dignitaries to celebrate completion of the Willow Falls Townhomes, 13890 Brookgreen Drive. The 319 unit development of medium priced homes on 46 acres is a housing leader in the North Dallas High Five Corridor.

“The entire project cost $7.5 million, which was a big reinvestment boost for the community,” said Koop. A fundamental part of the revitalization project was a focus on crime prevention, Koop said, which included formation of a citizen’s patrol to work with law enforcement. As a result, crime has dropped significantly.

Funding was obtained through Community Banc of Arizona and paid for by the homeowners association through an HOA fee increase and no special assefee adjustment with no special assessment.

Each year since in the mid 1980s, residents have organized an appreciation luncheon for police officers and firefighters in their community. The event has grown over the years to include city, county, and state officials as well as local merchants and school principals.

In addition to a more updated and appealing structure, the revitalization has changed resident’s attitudes. Brett Ferguson, a resident who served as financial treasurer and construction chairman, said, “the otherwise busy owners have turned into friendly neighbors where they view the neighborhood not as a place to live but where they do their living.”

Another Dalls apartments project adjacent to Willow Falls is gaining praise too. Built in 1968, the former Woodside Terrace apartment complex has been in poor condition for years. In February, Knightvest Capital acquired the property which is now called Las Terrazas. Over the past several months, a $1.1 million renovation project has been underway at the 230 unit complex and is nearly complete. Renovations include upgraded interior units, a remodeled pool, exterior paint, new playground, exterior lighting, and new security gates.

“The complex has gone from 57% occupancy to over 80% since the renovation and we have experienced a decline in criminal activity,” said KC Kronbach with Knightvest Capital. “Our goal with this project was to take the worst property in the submarket and make it a safe, clean and inviting place for residents to call home.”

“This property was nearly uninhabitable and on the watch list with the City Attorney’s Office,” said Koop. “These revitalization projects will go a long way to bring economic vibrancy back to this area.”

06 July 2010

Notorious Houston Apartment Complex to be Razed

Houston Chronicle

A blighted Houston apartment complex that has been vacant for 20 years is scheduled to be demolished at 9 a.m. today.

"This is one of the worst examples of neglectful ownership that I have seen," Mayor Annise Parker said in a statement today, adding that the owner of the property had failed to improve its condition despite receiving numerous chances. "The property is a neighborhood eyesore and a public safety risk."

The 43-unit complex, located at 7410 Park Place Blvd., was the subject of an extended story in the Houston Chronicle in February that showed the apartment in Houston to be a magnet for crimes involving drugs and prostitution. It is one of thousands of abandoned properties all over Houston that city officials and police have found to be dangerous and in need of demolition.

Since 2005, the city has demolished more than 3,000 such Houston apartments, but nearly three times that remain, despite the hiring in recent years of additional inspectors who can issue citations and begin the process of establishing evidence of abandonment that can be used in court to justify demolition.

More than 800 Houston apartment buildings the city has deemed "unsafe" have been demolished in the past 12 months, a record set largely through the use of "Demolition Day" in May, when 185 structures were torn down in one day with the help of private contractors.

Group Seeks to Stop Oak Cliff Apartments for Homeless

The Dallas News

Opponents of the Dallas Housing Authority's plan to rent apartments to chronically homeless people at an Oak Cliff high-rise have taken their fight to City Hall.

The fact that such tenants at the housing agency's Cliff Manor building on Fort Worth Avenue probably would have battled addictions or mental illness troubles some neighbors. It concerns the Fort Worth Avenue Development Group, which has been leading a turnaround of the corridor.

Specific-use permit

The development group has called on the city to require a City Council-approved specific-use permit for the project, arguing that the property isn't properly zoned for what the housing authority has in mind.

And on Wednesday, Randall White, a founder of the group and neighborhood resident, told the council that Cliff Manor neighbors were shocked to learn about the homeless housing plan.

"Help. Help. Help," he urged the council.

MaryAnn Russ, housing authority president, has said her agency has the necessary zoning and doesn't need the city's permission to proceed. And Wednesday she rejected talk of a city permit.

"The legal opinion we have is it continues the use we've had there all along – low-income rental housing," she said.

Last month, Russ said her agency would target women and older residents in setting aside 100 of the building's 180 units for "vulnerable" people who had been stabilized. Mental health services would be offered, and staffing would be increased, she said, with the possibility of a physical health clinic.

"We are an agency that's supposed to do this sort of work," she said. "The solution to homelessness is housing."

Mike Faenza, president of the Metro Dallas Homeless Alliance, said Wednesday that people now served through The Bridge, the city's homeless center, would be screened and referred by his group to Cliff Manor. They will have "worked hard to be ready for permanent housing and to assimilate into the community" and will have continued support after their arrival, he said.

"Health and human services are part and parcel of permanent supportive housing," he said.

In a letter to City Council member David Neumann, whose district includes Fort Worth Avenue, Scott Griggs, development group president, said the organization is "committed to our social responsibility to aid the longtime homeless with mental illness and addictions."

Yet he wrote that the housing agency needs a use permit from the city to provide medical and "social/psychological services" at Cliff Manor.

And, in his letter, Griggs asked for a decision from the city by Wednesday. City building official, Betty Antebi-Taylor, is considering the request and has given the housing authority until June 16 to respond to questions about its plans for Cliff Manor.

Neumann has said he favors the concept of permanent supportive housing. But the Cliff Manor project should have been discussed with neighbors before its announcement two weeks ago, he said.

'Show of indifference'

At the council hearing Wednesday morning, Neumann lashed out at the proposal.

"I have grave concerns about some of the decisions by the Dallas Housing Authority and the Metro Dallas Homeless Alliance and their show of indifference to the surrounding 12 neighborhoods," he said.

"The neighbors in this area are very concerned about this unilateral action," Neumann said.

Scott Batson, a resident of Stevens Park Village north of the Dallas apartment building, is one of those neighbors.

"The biggest issue for me is that Cliff Manor stands within yards of Stevens Park Elementary and Raul Quintanilla Sr. Middle schools," he wrote in an e-mail. "How can DHA justify housing such an unstable population such as this when we don't even allow registered sex offenders this close to schools?"

Myla Johnson asked in an e-mail: "What happens when an area resident is attacked? The Bridge has a history of violence and crime which could be funneled into the residential family neighborhoods in North Oak Cliff."

Faenza said such concerns are unwarranted. "I am very confident that the people [who are referred to Cliff Manor] will be some of the most positive residents in the neighborhood," he said.

Why? There's no evidence that people living in permanent supportive housing are a neighborhood blight, he said. "We're getting better and better" at placing residents, he said. And with Cliff Manor, "the plan of success is strong."

Faenza said he hopes the move-ins at Cliff Manor begin about July 7. That would give his group and the housing authority time to meet with neighbors, answer their questions and work with them to develop a system for measuring the Dallas apartments effect on its surroundings, he said.

"Words are cheap. We need to develop performance indicators," he said, such as Cliff Manor residents' impact on neighborhood crime and vagrancy.

"It's a business," Faenza said, "and we need to be held accountable."

18 June 2010

Obit: M. Tom Lardner

The Dallas News

Dallas developer turned blighted area into Uptown

M. Tom Lardner had the inspiration for Dallas' Uptown neighborhood more than 30 years ago – when it was just a blighted area north of the central business district.

He was running a Chicago-based real estate investment firm when he first saw the potential of a high-density residential and commercial development here. In 1978, he moved to Dallas.

After nearly a dozen years of advocacy and many land transactions, he began to see his dream take shape with the construction of a 130-unit luxury apartment building, the first of many.

Mr. Lardner, 67, died May 24 of a heart attack while visiting Positano, Italy.

Visitation will be from 6 to 9 p.m. Thursday at Sparkman/Hillcrest Funeral Home in Dallas.

A Mass will be celebrated for Mr. Lardner at 10 a.m. Friday at the Cathedral Shrine of the Virgin of Guadalupe in downtown Dallas.

Mr. Lardner was what a good developer ought to be, said Trammell Crow Jr.

"He had a vision, not just for a profitable, long-term real estate project, but he really knew what he was doing," Mr. Crow said. "He knew full well that it would transform the central business district."

Mr. Lardner purchased much of the land roughly bounded by McKinney Avenue, Pearl Street, Hall Street, Woodall Rodgers Freeway and North Central Expressway. He also worked with city officials to create a tax increment financing district that paid for street and other infrastructure improvements.

The State-Thomas area of Dallas, where the Uptown development started, is now the most densely populated part of the city, officials said.

Mr. Lardner "was a serious, caring man who enjoyed life," Mr. Crow said.

Roger Staubach was a partner with Mr. Lardner in Uptown's first luxury apartment development, the Meridian building, which started in 1990.

"Tom will be missed – he was a great visionary," Mr. Staubach said.

Although Mr. Lardner is best-known for the role he played in Uptown, he remained civic-minded, through efforts that included his support of Texas Business for Clean Air, Mr. Crow said.

"TXU was trying to get permits for 11 coal-fired plants all at one time," Mr. Crow said.

Mr. Lardner was one of the first of about 10 major Dallas business leaders who opposed the fast-tracking of the coal-fired plants, Mr. Crow said. The group was concerned that the electric-generating plants would hurt North Texas' air quality.

"Perhaps more than any other member, he helped us with strategy, with contacts in Austin and with other business people," Mr. Crow said.

Mr. Lardner was born in Port Huron, Mich., and graduated from Barbour Hall Junior Military Academy in Kalamazoo, Mich., and Campion Jesuit High School in Prairie du Chien, Wis.

He attended the University of Detroit, now the University of Detroit Mercy, on a football scholarship. He received a bachelor's degree in business from Michigan State University, which he attended after the University of Detroit ended its football program.

Mr. Lardner later earned a master's degree in education from Michigan State.

He was a football coach and history teacher at St. Gabriel High School in East Lansing, Mich., before beginning his real estate career.

Mr. Lardner founded Lehndorff USA in Chicago and later moved the real estate investment and management company to Dallas, where it grew to have 700 employees while managing more than $3.8 billion of property.

The Meridian was the first test case in Uptown.

"That was to prove there was a market," said his son Colin Lardner, who followed in his father's real estate footsteps. "People were afraid at that time to do any investment, because of what had happened in the '80s."

In addition to his son, Mr. Lardner is survived by his wife, Ann Lardner of Dallas; another son, Eric Lardner of Dallas; and two brothers, Patrick Lardner of Port Huron, Mich., and Jim Lardner of Washington, D.C.

08 June 2010

Relocating to Dallas: High Value Real Estate, High Quality Living

Stock Markets Review

People who decide to relocate to Dallas will be buying a home or renting a home in a major metropolitan area where real estate values have remained stable. Both the cost of living and the unemployment rate are well below the national averages.

** Major Population Center in North Texas **

With a population of 1,240,499 in 2009, Dallas ranks as the ninth largest city in the United States and the third largest in Texas. Although separated from neighboring Fort Worth by 32 miles, the two cities, forming the DFW Metroplex, comprise the 12th largest metro economy in the world with the fourth largest labor force in the United States.

Fort Worth has a population of 600,000 and is the 19th largest city in the nation and one of “America’s Most Livable Communities.” Whereas Fort Worth cherishes its western tradition and “Cow Town” image, Dallas fully embraces its role as a modern, 21st century, urban leader, proudly designated as one of the country’s “Most Ethnically Diverse Communities.”

** Diverse Population, Stable Economy, Strong Real Estate **

Together Dallas and Fort Worth apartments form one of most vibrant and compelling population centers in the United States. The area’s healthy economy is a significant draw for young professionals and families seeking to relocate to Dallas.

The cost of living index in the city is 7.06% lower than the rest of the nation (aided in part by the fact that Texas has no state income tax.) Dallas has grown at a rate of 3.73% since 2000 with a population of 50.4% males to 49.6% females. The median age is 30.5 years.

In May 2010, unemployment in Dallas stands at roughly 8% compared to the national average of around 10%. In recent years tech industries have made strong inroads in the metroplex. The city now has more than 233,000 tech workers, more than Austin and Houston combined, and is home to major companies including Research in Motion (the maker of BlackBerry smartphones), AT&T, Raytheon, and Lockheed Martin.

Real estate values in Dallas have weathered the recession well, remaining relatively stable with fewer of the wild price swings that have plagued other parts of the country. Currently median home prices stand at approximately $115,850, although they vary widely by neighborhoods within the city.

Anyone who is going to relocate to Dallas apartments should work with a knowledgeable real estate professional who can apprise them of all the implications of any location in the immediate city or surrounding suburbs. Dallas is a diverse urban area providing a wide variety of choices for anyone buying or renting a home.

** Education, Health Care, Culture, Access **

The region is especially strong in the terms of education and health care:

– The Dallas Independent School District serves more than 160,000 students.
– Overall, the DFW Metroplex is home to 17 two-year technical/trade colleges.
– There are 7 private colleges and universities, and six public four-year colleges and universities.

19 May 2010

Timing the Housing Market in Houston

The Wall Street Journal / June Fletcher

Q. My husband will retire in December. Our plan is to sell our family home, which we've owned for 19 years and is almost paid off, and move to a retirement community near our daughter in Atlanta. Because it takes a long time to sell homes these days, we figure we should put our house on the market now if we want to have it sold by Christmas. But we read that real estate prices may start improving next year, so we wonder whether it would be better to wait until next spring's selling season. What should we do?

A. Normally I'd suggest that you not try to time the real estate market or let its cycles dictate when you move. But since you don't seem to be under any compelling financial pressure to relocate, I recommend that you wait.

I wouldn't necessarily give this same advice to everyone: Overall, the expiration of tax credits for home purchases, coupled with an expected rise in foreclosures and short sales and higher mortgage interest rates, is likely to keep home prices weak over the coming year. So for most people who want to sell, there isn't much to be gained from holding out for more favorable market conditions.

But given where you live, and where you want to move, procrastination is likely to pay off for you. According to FirstAmerican Core Logic, which forecasts home price trends based on a repeat sales index that tracks prices of the same homes over time, Houston apartment and home values have been rising—they were up 4% in February from a year earlier, and are expected to rise an additional 3% by February 2011. Meanwhile, prices in Atlanta, where you're headed, dropped 2.3% in the year ending in February and are expected to fall an additional 4.5% over the next year.

Moreover, it may not take as long to sell your home as you expect. According to Altos Research and Real IQ, the average time a home takes to sell in Houston has been shrinking: Down 10.9 %, to 122 days, from January to March. If you put your house on the market now and it sold in four months time, and closed a month later, you'd have to find another place to live for at least three months before your husband retires. According to ads on Craigslist, furnished one-bedroom apartments in extended-stay hotels can easily run upwards of $2,000 a month in Houston; add to that the cost of keeping your belongings in storage. Then there's the incalculable cost of living in limbo, a state of anxiety that puts pressure on you to find a new house in a new neighborhood quickly, even if it isn't quite what you wanted.

There just doesn't seem to be any upside to your listing your home now. You'll be better off if you use the time before your husband's retirement for de-cluttering, landscaping and prettying-up your home so that it draws top dollar next spring.

05 May 2010

Fort Worth Fastest-Growing North Texas City in 2009


Bolstered by continued growth in the Alliance Corridor and in-fill housing completions in established areas like the Seventh Street district, Fort Worth was the fastest-growing city in North Texas last year.

But the lingering effects of the recession are still slowing down the regional housing market. The level of new single-family housing units and Fort Worth apartments was the lowest since 1989, according to figures released Thursday by the North Central Texas Council of Governments.

Fort Worth added 15,950 people for a total of 736,200, a sizeable step ahead of second-place Dallas, which added 10,000 people for a total of 1,316,350. Third on the list was Frisco at 6,250.

"The story is we are growing during a recession. It's very positive in this environment," said Tim Barbee, director of research and information services for the council.

For Fort Worth, "the story is the same as last year," when the city added 17,400 people, he said. "The growth has been surprisingly consistent, especially considering the downturn," Barbee said.

But the totals are slim compared with pre-recession numbers. In 2006, Fort Worth added 37,000 residents.

Tarrant County grew by 21,650 last year for a total of 1,829,400, an increase of 1.18 percent. At 2.87 percent, Crowley notched the fastest rate in the county, growing by 350 for a total of 12,550. By comparison, Arlington (370,650) was essentially flat, adding 200 people for a rate of 0.05 percent.

The 16-county North Texas region grew by 89,770 people to 6,729,400. In 2005, it was 6,075,000, up from 5,309,277 in 2000.

Among smaller cities in the region, Prosper in Collin County notched a one-year hike of 31.69 percent, adding 2,250 for a total of 9,350. In 1970, it had 501 residents. Roanoke in Denton County added 550 residents, an 8 percent increase to 7,500.

The council's population estimates are based on building permits, occupancy factors and household size factors.

For the first time in a decade, new single-family housing completions fell below 20,000, said Donna Coggeshall, research manager for the council. The region added 18,840 homes in 2009, compared with 27,300 in 2008. It's the lowest rate since 1989, when the region added 15,250 units, she said.

Despite the slowdown in new home construction, 2009 single-family occupancy rates were similar to 2008's, she said.

Fort Worth added 3,891 new single-family units and 3,452 multifamily completions.

"Compared to Dallas, Fort Worth still has room to grow," Coggeshall noted. "Most of that came in the Alliance Corridor, but there was also in-fill additions in areas like Seventh Street, where condos, town homes and apartments in Fort Worth were completed."

There was a small rebound in the number of new multifamily units (15,200) added to the regional housing stock, she said. In 2008, 13,400 multifamily units were completed.

"Multifamily developments that have been stalled by the economy are now being finished up in response to demand for rentals," she said. "Occupancy rates are up slightly this year."

Considering the economic climate across the country, Barbee said, North Texas is faring well.

"Other areas are flat or declining, and we're still growing. It has slowed down, but it is still happening. Compare that to places like Las Vegas," he said. "A lot of places would be happy to have these numbers."

By his own personal economic barometer, things appear to be looking up, Barbee said.

Two years ago, when the recession bared its teeth, the amount of traffic noticeably slowed on his commute to work at the council's office near Six Flags Over Texas in Arlington.

"In the past few months, it has picked back up," he said.

03 May 2010

Night Construction Speeds Dallas Convention Hotel


DALLAS — As the city winds down every day, one of its highest profile construction projects revs up.

"We're about a third of the way down with the building structure right now," said Michael Hite, general superintendent of the new Dallas convention center hotel.

Three days a week, while the city is asleep, cranes spin, trucks arrive and concrete construction crews go to work on the site just north of the Dallas Convention Center.

It's not at the crack of dawn, but in the middle of the night. The main reason is to pour concrete.

Texas concrete contractors have quietly been adding one new floor every week — often before the city wakes up.

"Logistically, we don't have to deal with rush hour traffic in the morning," Hite explained. "We're able to be not so much of a burden with the City of Dallas, especially on a downtown project where you have concrete trucks staged for literally five, six, seven hours at a time. We're less of an impact to them."

What's most remarkable about the overnight work is how fast special additives help the concrete harden. Twelve hours after it's poured, workers can walk on it.

They've built up to the eighth floor now, which is one-third of the 23-story structure.

The 1,000 room hotel is set to open in about two years. It's estimated to cost $550 million.

28 April 2010

Are Houston Apartment Dwellers Getting the (Water) Shaft?

CultureMap Houston

Calling "halfsies" isn't always such a good deal. For people living in apartments in Houston, it looks like there will be a 50-percent increase in water rates for those who call multi-unit digs home. The hike stands in sharp contrast to the projected slight increase of 12 percent for single-family customers.

According to City Councilman Ed Gonzalez, the jump is the result of a $100 million deficit in the city's water and sewage budget, and renters are going to have to pay. Andy Icken, deputy director of Houston Public Works Department has suggested that research states that single-family homes conserve more water than multi-family units.

"They have a big study that hasn't been released yet," Houston Apartment Association (HAA) executive vice president Jeff Hall told CultureMap. "There's an executive summary from their consulting firm, but that doesn't tell much." Icken did not respond to phone calls inquiring about the research.

HAA feels the increase unfairly punishes apartment renters, many of whom cannot afford to take on a ballooning bill. Hall argues that apartments are cheaper for the city to maintain, and that the cost is lower to provide water and sewage utilities to an apartment complex than to an equal number of single family homes.

This isn't the first proposed infrastructure change under new mayor Annise Parker, who has questioned the financing of  two Metro light rail lines and overseen the weekend closure of neighborhood libraries —  making residents wonder if basic city amenities are going down the drain. Parker has been frank in saying how the city's current budget crisis is going to cause hard cuts and tough times for Houstonians. Rather than try to sugarcoat the projected $140 million budget shortfall with a typical politician's sweet talk, Parker said, "The pressure is going to be immense" in her first state of the city address on April 8.

Hall argues that putting an extra burden on apartment renters is not the way to go to meet shortfalls. When asked if this method has been tried in other cities, Hall responded, "No, we're dealing with a local issue here."

City Council is set to announce a final, revised proposal next week. Until then, foreclosed McMansions are looking more and more practical.

22 April 2010

Downtown Amarillo Looking Up

News West 9

AMARILLO, TEXAS - Things are looking up again for Amarillo's downtown development after hitting a major bump in the road earlier this month.

Until today residential construction projects had a hard time finding funding sources. That's because banks thought it was too risky to invest in new types of projects that hadn't tested before - like high-end  Texas apartments in downtown Amarillo.

But today, seven locals banks announced they will all pitch in to loan out a pool of up to $5.6 million.

Bank leaders say this type of idea is a first for Amarillo. The banks will work with the Panhandle Regional Planning Commission to distribute the loans. That organization will begin reviewing applications on Thursday.

Although no official loan applications have come in yet, one banker says there are several interested parties who plan on investing significant amounts of money right here in downtown.

21 April 2010

Failed Apartment Investments Cost Hundreds of Local Professionals Millions

New Orleans Business News

The MBS Companies, founded by Michael B. Smuck of Metairie, did not follow through on its plan to purchase this Houston-area apartment complex, which it planned to rename Yellowstone Ranch. The investors' money was used for other purposes
Kenner residents John and Sharon Kochera had been successfully investing for years in Texas apartment complexes managed by the Metairie-based MBS Companies when one day in August 2007, the quarterly distributions stopped.

They soon learned that MBS had not followed through on its plan to purchase a Houston-area apartment complex to be renamed Yellowstone Ranch -- and had used their money for other purposes.

Two-and-a-half years later, most of the hundreds of thousands of dollars they had invested in Yellowstone and other apartment complexes is gone. The Kocheras are losing faith about how much of their retirement money they'll ever see again.

"It's an absolute sheer theft," said John Kochera, who, like his wife, is a Realtor nearing retirement age. "We've seen one person after another who have been involved in creating Ponzi schemes go to prison, and here it is two-and-a-half years after the fact and nothing's happened."

The Kocheras are among the hundreds of local professionals who are out millions of dollars in the MBS carnage. The roster of investors includes a gaggle of doctors from East Jefferson General Hospital, groups of law partners and even an entire golf group.

MBS filed bankruptcy in fall 2007, and most of the company's assets have been seized by banks or liquidated.

Meanwhile, scores of investors have filed suit over their losses, alleging the company misappropriated funds, neglected its deteriorating apartment complexes and kept multiple sets of books to cheat investors. More than a dozen jilted investors were interviewed for this story, and several also have told their tales to federal authorities.

Many hold out hope that fraud charges against MBS principals -- and possibly other people or institutions that played key roles in the apartment deals -- could bring about restitution.

The U.S. attorney's office in New Orleans and the FBI say they cannot confirm or deny the existence of an investigation. No charges have been filed.

Katrina blamed

At the center of the controversy is Michael B. Smuck, a Metairie man who built an empire of about 20 apartment complexes in Texas and Louisiana in the 1980s. That company, the Equity Group, imploded after the federal Tax Reform Act of 1986.

Undeterred, Smuck founded MBS Realty Investors Ltd. in 1987 and began rebuilding. By the time the privately held firm crashed 20 years later, it had grown into one of the largest landlords in the country, with a $1 billion portfolio of about 60 apartment complexes, mostly in Texas.

Exactly why MBS unraveled is a matter of debate. News reports from that time note that 2007 was the year that FEMA began winding down its Hurricane Katrina rental assistance, and say that Smuck failed to anticipate that the easy rental income at his many Houston-area apartment complexes would dry up, leaving him without tenants and with units in need of repair.

About the same time, complaints to the Texas Apartments Association about collapsed balconies, wet ceilings, no hot water, rats, dead animals and overgrown grass at Smuck properties mounted, according to news reports that have been echoed in lawsuits.

Smuck referred calls to defense attorney Ralph Capitelli, who said Smuck's company got into trouble after Katrina because his insurers failed to pay business-interruption claims.

In a federal lawsuit against Hartford Fire Insurance Co. and other insurers, Smuck claims their failure to pay impeded his ability to acquire new properties, refinance existing properties and collect rents.

Hartford counters that there was "a relatively small amount of wind damage" at Smuck's offices at the Galleria in Metairie.

Many investors question whether storm damage at those offices was just a convenient excuse to explain the lack of business records and why money couldn't be distributed. Bruce Miller, a tax attorney who invested in many of the apartment deals, says the explanation doesn't make sense because rent was being paid at the Texas apartments.

"I started thinking, wait a minute, what's going on here? People are paying rents. Where is the money?" Miller said. "How could Mike say, 'The office was in disarray'?"

Smuck is still working for MBS, where he is advising the bankruptcy trustee about transferring many of the complexes to new management. He still lives in an upscale house on Palm Vista Drive in Metairie.

'Too good to be true'

In 1995, Smuck had partnered with Ed White, a Metairie commercial real estate broker who is active in religious circles and well-known among local business leaders. Until the MBS scandal started eating up his time, White also hosted a local Sunday-night television show called the Freedom Series that delved into issues of faith and free enterprise. White also has a self-published book, Financial Freedom.

Through his firm Ed White & Associates Inc., White began recruiting MBS investors. Many, but not all, of his recruits were wealthy individuals who qualified to be accredited investors as required by the U.S. Securities and Exchange Commission, a designation that is supposed to certify that investors are seasoned enough to participate in high-risk deals and survive financially if they fail.

Investors say most deals had a minimum buy-in of $50,000. They would get handsome quarterly distributions of at least 8 percent and sometimes as high as 15 percent and would cash out when complexes were sold. The investments worked so well that many poured their money back into the next deal and excitedly told friends and family about the opportunity, which often earned them a commission.

Slidell attorney Richard Regan, for example, knew White as a friend and client, and began investing in MBS apartments in the mid-1990s. He reinvested every dime he ever made into the next deal -- so he's now out hundreds of thousands of dollars.

"I know now it was too good to be true. Everything I earned, I put back in and, if I earned more money, I invested that, too," Regan said. "And of course, I got a lot of friends and relatives in it, like a lot of other people. I feel guilty."

Regan reported the scheme to the FBI more than two years ago. Most investors say they didn't know about Smuck's failed venture in the 1980s. But MBS's long successful track record seemed worthy of investment and paid distributions like clockwork. And White's religious convictions, public profile and gregarious nature put people at ease.

One person who did know of Smuck's earlier chapter was Miller. He had a client who got burned with the Equity Group apartments failure back in the 1980s and said the problem wasn't the real estate crash; it was that Smuck moved money from one complex to another to pay debts, when finances should have been kept separate.

Miller said that White knew, too, but White assured him that Smuck had started over and the investments were legitimate. Miller flew see the Houston apartments for himself. The apartments seemed well-managed, the financial statements were good, and White and others putting together the deals were credible.

Miller began investing in the mid-1990s, and he invested and reinvested in 20 apartment deals. He's still waiting for the lion's share of his money. Miller and others question the explanations they've been given and whether the financial statements they saw along the way were real.

White's role

White said he realized all was not well with the apartments when he got a call from an MBS attorney in September 2007 about cash flow problems.

White said he hadn't known anything was wrong with the 28 MBS apartment complexes he was involved with, because when he would visit the properties in Texas, they looked fine from the outside.

White took his concerns to federal law enforcement officials, and because of those inquiries, he said he can't discuss what went wrong with the apartments. "I don't want to do anything to jeopardize the investigation," he said.

White held meetings with investors in fall 2007 to keep them apprised of what he knew, and took actions on their behalf.

Eighteen of the 28 complexes were lost in the bankruptcy, but White was able to save 10.

He sold three apartment complexes to earn money for investors, entered into joint ventures on two others, and pumped his own money into five of them to stave off foreclosure. His company is now managing those properties.

He sued Whitney National Bank on the investors' behalf for allowing Smuck to take the Yellowstone checks and deposit them into another account. The case has been settled.

And while PNC Bank claims in a suit that Smuck improperly transferred to White funds it had a secured interest in, and White improperly transferred them to investors, White has sued PNC Bank. He says he relied on the bank to investigate MBS before making loans, and that the bank didn't do its due diligence.

White has earned a number of grateful fans, who say that he has been their conduit for information and their lifeline in any hope of restitution.

"It was fine for a few years until Smuck ran off with a bunch of money," said New Orleans lawyer Frank Bruno, who had been investing in MBS deals for about eight years before they stopped. "I've got faith in Ed. He's trustworthy."

But others are distrustful that all of their information about the situation has come from White, who was Smuck's partner. They say if White was earning fees and commissions for his work, then he is also liable.

"Personally, I just don't believe that he was on top of his game. I think that things were going so well for so long for these guys, Ed didn't suspect anything was wrong. He didn't visit any of the properties in question to see that they were maintained properly," said Kochera. "I have my doubts."

Anthony Tridico, a physician with several hundred thousand dollars in the MBS apartments, wants answers.

"We all feel betrayed. We're angry. We're bitter. It was a Ponzi-type scheme and, supposedly, he knew nothing about it," Tridico said. "Why has two to three years gone by? This is ridiculous. We've been given a story. The only information it seems we can get is through Ed White, and Ed White was Mr. Smuck's partner."

Similarly, Robert Schimek, an 84-year-old ophthalmologist with about $250,000 in the MBS deals, said the explanations don't add up.

"According to Ed White, Mike Smuck started all this underhanded, fraudulent activity, taking money off the table and into his pocket. He said he was completely unaware of it. If you're a co-general partner, you're responsible," said Schimek. "He was collecting money and asking us to make contributions. We were really counting on him to make sure they were good investments."

White says there's no way he could have known what was going on because, while he saw financial statements on individual apartment complexes, he couldn't see how it all fit together under the MBS umbrella.

Moreover, he was the biggest local investor, so it wouldn't have been in his interest to let things slide. He even invested in the last deal, Yellowstone.

"I lost millions of dollars on this thing. I am not that stupid," White said. "Let me assure you, if I knew what was going on, I wouldn't have invested. It was well-concealed."

White says he has been assisting federal investigators and is not a target of any inquiries. He has hired defense attorney Donald "Chick" Foret, but Foret said that's only because of his familiarity with the federal investigation process.

"He is absolutely not a target. Ed White is a victim along with the other victims," Foret said. "Ed did hire me to help he and other investors because he knows that I'm familiar with the federal system. The purpose is to maximize restitution for all the investors."

In the meantime, for investors like Gary Auer, founder of the Kenner concrete and construction company F&G Services Inc., the consequences are real.

Auer got hit with a double whammy. Not only did he invest $75,000 with MBS in his first real estate deal with Yellowstone, but his wife's son-in-law worked in Antigua for R. Allen Stanford, the Texas financier who has been charged with operating an international Ponzi scheme, so he invested about $500,000 there.

"I'm still working now. I had planned on retiring last January," said Auer, who is trying to look in the bright side. "You've got a tax write-off. It's theft."

10 April 2010

Dallas-Fort Worth Home Sales, Prices Rise

Ft. Worth Star-Telegram

After three months of declines, homes sales in North Texas were up 11 percent in March, according to the Texas A&M Real Estate Center.

Moreover, the median home price rose 6 percent, the largest increase in several months, the figures show.

Locally, Kennedale and central area Fort Worth apartments saw big sales increases of 100 percent and 107 percent, respectively. Those cities were followed closely by Euless, Hurst and Trophy Club/Westlake, all with sales increases of more than 50 percent.

Texas A&M compiles numbers from a 24-county North Texas region for its report.

In March, 6,036 homes were sold in the region. Sales last increased in November, when they jumped 31 percent on the strength of a surge of people returning to the market to take advantage of low interest rates as well as the first-time homebuyer tax credit. Sales numbers then fell in December, January and February.

The median sales price in March was $144,900, a 6 percent increase from a year ago. Median sales prices had only been increasing about 1 percent for the past few months.

Year-to-date, 13,466 homes have sold in the region, a 1 percent increase from the same period a year ago.

April sales numbers are also expected to be high as the second round of the tax credit expires at month’s end.

08 April 2010

Ross Perot Jr. Selected to Real Estate Hall of Fame

The Dallas News

Dallas businessman Ross Perot Jr. and real estate investor James Sowell are getting top honors from the North Texas commercial property industry.

Perot and Sowell next month will be inducted into the North Texas Commercial Real Estate Hall of Fame.

The award is sponsored by the North Texas Commercial Association of Realtors and Real Estate Professionals and will be presented on May 13 in Dallas.

Perot’s Hillwood companies have developed landmark North Texas real estate projects including the Alliance apartments in Fort Worth and Dallas’ Victory Park development.

Sowell’s investment firm, Sowell and Co., has built residential communities such as Dallas apartments and in other Texas markets.

The new hall of fame members will join a group that includes the likes of Trammell Crow, Henry S. Miller Jr. and Roger Staubach. More than 70 past and present real estate players have been honored with this industry accolade.

Along with the awards to Perot and Sowell, a lifetime achievement award will be given to Dallas brothers Jerry and John Bradley, who’ve worked as commercial real estate agents here since 1970. 

01 April 2010

Raytheon Shopping for Big Texas Office Space

The Dallas News

A high-profile office tenant is shopping for a big block of space in Dallas' northern suburbs.

International defense and high-tech conglomerate Raytheon Corp. is looking for potential locations for consolidating its Dallas-area offices, real estate brokers say.

The deal would encompass several hundred thousand square feet of space and would be one of the largest in the Dallas area in the last year.

Raytheon already looked at moving into part of the former headquarters of Electronic Data Systems, which is now a unit of Hewlett-Packard. But a transaction to take over a large portion of the EDS headquarters building in the Legacy business park fell through, real estate agents familiar with the deal said.

Raytheon is now considering office locations in the Telecom Corridor, including Nortel's buildings along U.S. Highway 75 near Campbell Road.

Officials with Massachusetts-based Raytheon wouldn't confirm that the company is hunting for office space. But they didn't rule it out.

"We stay abreast of opportunities in the market," Raytheon spokesman Keith Little said. "We don't discuss specific properties that we may be considering."

Real estate brokers say the EDS headquarters and Nortel buildings are logical choices for a company that needs a big office in Dallas' northern suburbs.

Both companies have reduced the amount of space they use in the Dallas area in recent years, and Nortel is in bankruptcy.

"Yes, we have been talking to companies about the Richardson space," said Nortel spokesperson Jamie Moody. "And, just like we're selling off all our businesses, we are also selling our assets, including real estate, so that we can recover the greatest value in the interest of our creditors."

Despite a real estate downturn that has left acres of North Texas' office space sitting empty, there are few prime vacant offices as big as Raytheon would need.

"For spaces 200,000 and up, your options are fairly limited," said Greg Biggs of Cushman & Wakefield of Texas. "We are working on a transaction in North Dallas that's fairly sizable, and the amount of existing space available is fairly limited in big blocks."

Raytheon has operations in several Dallas-area locations, including on U.S. Highway 75 north of LBJ Freeway, farther north in McKinney and on Lemmon Avenue in Dallas.

Unlike in previous economic downturns, the area isn't awash in vacant Dallas apartments or office space. That's why some companies – including Pizza Hut – have recently chosen to build.

"We don't have all the see-through [empty] buildings we had here in the early 1990s," said Greg Langston, managing principal in CresaPartners' Dallas office. "One thing we didn't do is overbuild this time."

31 March 2010

Austin is Highest Rental Market in TX

Austin Business Journal

Austin is the most expensive city in Texas for paying rent and buying a home, according to a study released this week by Washington D.C.-based Center for Housing Policy.
The study “Paycheck to Paycheck" compares and ranks costs in more than 200 metro areas in the United States and ultimately concludes homeownership is still unaffordable for many workers despite low interest rates and steep drops in home prices.

Austin ranks as the 65th most expensive U.S. rental market and the 73rd most expensive homeownership market of all metro areas studied. The center studied data provided by the National Association of Home Builders, the National Association of Realtors and the U.S. Department of Housing and Urban Development.

Austin’s median home price is $176,000, unchanged from 2008, the study found. However, Austin’s ranking rose to No. 73 for 2009 compared with No. 84 in 2008.

The markets with the highest median home prices were in California: with San Francisco and San Jose leading the way, followed by Honolulu in third place, and then back to California in Santa Ana and Santa Cruz in fourth and fifth place respectively.

The typical rent for a two-bedroom home rose in 89 percent of the markets studied, with Austin’s price hitting $954 in 2009 from $912 in 2008, although Austin did fall in rankings down to 65 from 59. Once again, San Francisco was the most expensive city at $1,760.

Despite some perceptions it’s a renter’s market in the U.S., the study found that in the vast majority of metropolitan's fair market rents have held steady or increased, even occasionally surpassing monthly mortgage payments for a median-priced home.

The study also found that some occupations are more prone to being priced out of renting. Specifically, retail salespeople continue to be priced out of renting a two-bedroom apartment in every market studied. Janitors fare almost the same, being able to afford a two-bedroom apartment in only one of the 210 rental markets studied. Licensed practical nurses are unable to rent a two-bedroom apartment in 55, police officers in 12, and elementary school teachers in 11, of the markets studied.

“We must develop the common sense, cost-effective policy solutions at the state and local levels that will help ensure long-term affordability for homes and Austin apartments,” said Center for Housing Policy Chair John K. McIlwain, senior resident fellow and the J. Ronald Terwilliger chair for housing at the Urban Land Institute.

“Otherwise, our workforce will face longer commutes and higher transportation costs, leading to increased traffic congestion and adverse environmental impacts."

29 March 2010

Gables Residential Sells Dallas Apartments to California Investor

Dallas News

A California real estate investor has made its first push into the North Texas apartment market.

CIM Group's purchase includes two properties in the popular West Village neighborhood in Dallas' Uptown district: the 103-unit 3636 McKinney apartments and the 75-unit West Village apartments, at 3839 McKinney Ave. CIM also purchased the 334-unit Knoxbridge apartments, near the corner of Knox and Travis streets.

The investor, which specializes in urban-style real estate projects, bought the rental units from Gables Residential, which owns or manages more than two dozen apartment communities in the Dallas-Fort Worth apartments area.

The West Village properties were built in 2005 and are on top of retail space. Terms of the transaction were not disclosed, but the units are valued for taxes at almost $22 million.

The Knoxbridge, constructed in 1993 and 1995 at 4649 Cole, is listed on the tax rolls at more than $27 million.

As part of the deal, CIM also bought a Gables project in Houston apartments.

Gables will continue to manage all the Texas properties, which total 820 units.

Gables senior vice president Doug Chesnut said the developer decided to sell the properties because it was "overweighted" with Dallas-area apartments and had more in the works.

"We took the opportunity to move assets," Chesnut said.

CIM said in a statement that the apartments it bought are all in "districts positioned for economic expansion."

The investor also owns a mixed-use development called Penn Field in Austin.

CIM is a real estate fund manager that makes both private equity and debt investments in urban communities across North America. It has offices in Los Angeles, Oakland, Calif., and Bethesda, Md.

The Gables Dallas apartments sale is the second recent transaction involving high-end North Texas rental properties.

In December, Nebraska-based Slosburg Cos. purchased the five-story Delante Las Colinas apartments.

25 March 2010

Forecasters Improving at Tornado Prognostication

Fort Worth Star-Telegram

For all their fury, thunderstorms are fragile things, dependent on a delicate balance of wind, water and heat.

Too much wind at a certain altitude can scatter storm clouds before they form. A storm's own rain can smother the columns of rising air that give the storm its strength.

Even rarer are storms that spin off a tornado. And it's rarer still for a tornado to hit a populated area and kill people.

It's happened only once in Fort Worth -- a decade ago. The storm killed two people, ripped houses from their foundations and pummeled several downtown high-rises.

The chance to spot a tornado -- and sound the warning early enough to save lives -- has spawned a corps of volunteer storm chasers who work with the National Weather Service every spring. And they're getting better at what they do.

Advances in radar and computer mapping have helped forecasters get a better idea of how severe storms work. For instance, forecasters originally thought that the storm that struck Fort Worth on March 28, 2000, was going to hit close to North Loop 820. They quickly adjusted their warning, Fox said. But today, the weather service would have a more accurate picture of the storm before it spawned a tornado.

Still, the weather service relied on a corps of more than 3,000 volunteer storm spotters.

"Even with all those technological advances, the electronic tools still don't show us all that's going on with a storm," said Gary Woodall, chief of the weather service's Phoenix bureau.

The idea of using volunteers started in Dallas-Fort Worth, the biggest metropolitan area in Tornado Alley, which stretches from Texas to Iowa, said Martin Lisius, chairman of the Texas Severe Storm Association and a storm tracker since 1987. During a typical storm, 20 to 40 volunteers take to the streets, communicating with ham radios. They provide crucial on-the-ground information to the weather service.

"You don't see them; they're sort of like unsung heroes, but they're out there," Lisius said.

About 450 storm spotters, Red Cross volunteers, students and other enthusiasts attended a storm association conference Saturday in Colleyville.

Most of the conference dealt with technical issues: wind shear, cold pools, rear flank downdrafts.

What most worries the spotters is the theoretical big one -- a severe tornado hitting a populated area.

Three years ago, an F-5 tornado, the top category on the Fujita scale, struck Greensburg, Kan., laying waste to 99.8 square miles. Eleven people were killed and more than 60 injured. By comparison, the 2000 Fort Worth twister had a footprint of 0.5 square mile.

But Greensburg is a small town. If the same storm struck, say, the Arlington entertainment district on a busy night, it could be devastating. Scott Rae, a planner with the North Central Texas Council of Governments, overlaid a map of the Metroplex on maps of the Greensburg storm to estimate that such a storm would affect 265,000 people in 111,000 Fort Worth apartments and houses.

Lisius projects that if it hit on a Friday night in April -- with crowds arriving for Good Friday church services and a Texas Rangers game -- hundreds or thousands of people could die. The roads would be too jammed for people to escape, and things would only get worse if drivers tried to take shelter under freeway overpasses, which is common during storms.

"A lot of them are not going to be able to get out of the path of the storm," Lisius said.

The upside is that the warning system is getting better. In 1986, 30 to 40 percent of the weather service's tornado warnings had no lead time, said Mark Fox, the warning coordination meteorologist at the service's Fort Worth office. By 2009, 80 percent of the warnings had lead time -- usually 10 to 12 minutes.

"Our average last year was about 12 minutes," he said.

Fox says the lead time could eventually reach 30 minutes. At that point, he said, the problem would become one of education: "Making sure people know what to do and making sure they believe the warning when they hear it."

24 March 2010

Census Undercount Could Cost Texas Money, Political Clout

Fort Worth Star-Telegram

Think of it as the equivalent of tabulating Texas and forgetting Arlington.

An estimated 373,567 people in Texas were uncounted in the 2000 Census, second only to the 522,796 that were missed in California.

The undercount cost Texas about $1 billion in lost federal funds, according to a PriceWaterhouseCooper report on the census. Fort Worth, where the undercount was pegged at 24,661, lost $62.3 million in federal funds, the report said.

As the U.S. Census begins mailing its national questionnaire this week, it pays to be counted because power and money are at stake, says Gabriel Sanchez, regional census director for Texas, Louisiana and Mississippi.

The once-a-decade head count determines congressional reapportionment, and State Demographer Karl Eschbach believes that Texas, which has been the big gainer in U.S. population in recent years, will be the overall winner in added political clout. He predicts that Texas will add four seats in the U.S. House.

A new report illustrates the fiscal power of the count.

In 2008, $447 billion in federal funds were distributed based on the 2000 Census and later updates, according to the Brookings Institute, a nonprofit that examines U.S. public policy.

A Brookings study shows that 80 percent of the money tied to the census goes to state governments, many of which, like Texas, are struggling with budget shortfalls, said Andrew Reamer, who wrote the report.

In Texas, Reamer said, nearly $1,000 in Medicaid funds will be returned to the state for every person counted. "The key point here is that census participation means more money locally," he said.

Hard to count

Multiple factors make Fort Worth and Texas tough to tally, Sanchez said.

"Obviously, you have a lot of Hispanics and a lot of recently arrived immigrants. There has also been a lot of growth, and those people aren't as tied to the community as a family that has been here 25 years. You also have a lot of young children," who, historically, have been missed more often than people in any other age group, Sanchez said. "People forget about the baby."

The state also has 80 percent of the U.S.-Mexico border, which presents a different set of problems, he said.

"You have a lot of interaction back and forth across the border. And how those border communities feel about the federal government and how they interact with it -- they have to be approached in a different way," Sanchez said. "There are also large number of immigrants from Mexico that aren't as integrated as one would hope, and that leads to language barriers and cultural barriers."Another factor is Hurricanes Katrina, Rita and Ike, which destroyed vast tracts of housing in Texas and Louisiana, Sanchez said.

"We send forms to housing units and Fort Worth apartments, and if they've been destroyed we have problems. You might have one address with three trailers parked in the back," he said. "So we're hand-delivering questionnaires in the areas that have been hit by hurricanes."

Not to be discounted is the "true Texas independent spirit, which makes it a great place to live but a hard place to try to get a form back from everybody," Sanchez said.