Category Archives: Realestate

Downtown by the River

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If you watch much of the show “Buying Alaska,” you will be very familiar with the phrase, “It has a view.” In Alaska, it is all about mountains, glaciers, and sometimes a lake, but in many cities the desired view involves an urban river. According to an article in the Wall Street Journal, “The Latest Housing Hotspot Is Downtown and by the River.” I think that San Antonio already knows this.

“Urban Energy and Natural Beauty”

Ceclie Rohwedder, (WSJ, December 6, 2018) writes about couples in Minneapolis, Washington DC, and Omaha trading in their country homes for homes in remodeled power plants and other industrial buildings in downtown areas along urban rivers, buildings that have been turned into modern condos. What does their new home offer, she asks? “Urban energy and natural beauty” one couple says.

I must agree. Watching a river is like watching a fire, its mesmerizing. But it is interesting and beautiful too with boats, birds, and fishermen. And those old buildings left over after industry has moved on, I have often looked at them, the old brick warehouses and mills that sit along the elevated freeways of our cities, the ones with the fading billboards high up on one corner, and vacant windows. What is the architecture like, I’d wonder? They look so sturdy. They are not going to come down soon, but who is going to use them.

Americans Just want to Live Downtown

Well the city planners, developers, and investors are way ahead of me. They are turning these behemoths into housing with a view, housing near culture and sports arenas, and water. Young professionals and retirees alike, it seems, crave community and walkability along with a touch of nature. And Americans overall (this year anyway) want to live downtown. An urban riverfront close to downtown offers work, culture, and play.

These are the areas that are drawing people to look at the old and want to make something new out of it. It is the buying and the fixing up of the building that is the investment. But investors are doing this all over the country and people are buying.

So, even if you are not up for buying and remodeling the old paper mill down by the river, when you are looking for a house to buy as a fix-n-flip investment, do not forget to scout around in these riverfront areas of your town. There, in the shadows of the big buildings, might be some smaller projects, homes or shops, more to your liking.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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Cold Storage 101 or −101°

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Looking into the future, where should you put your money or your efforts if you are looking for a commercial real estate project that can offer decent returns. Perhaps you should think about one of the things we Americans, and people and animals everywhere, really need, food.  According to Esther Fung, WSJ, the best performing real estate investment trusts this year are in the area of food storage —cold food storage.

Right now, according to Rick Romano, head of PGIM’s global real estate securities, “cold storage is about as defensive an investment strategy as it gets.” American Realty Trust, the only publicly traded cold storage real estate investment trust, has risen 50% since the start of the year.

He also says that only 2% of groceries are bought online, but as people work longer hours and avoid long commutes and extra trips to the grocery store, that number could rise.  If it goes up to 5% or 10%, he suggests, there will be a continued demand for cold storage facilities in densely populated urban areas.

Cost of Building or Remodeling for Cold Storage

Cold storage might be a very good investment for an investor interested in commercial real estate construction or a commercial fix-and-flip project.

I know there are cold storage facilities operating near me, near the train warehouse area, because I have a friend who went to work there and in a cold storage facility, even the office space is a cool 40°.

According to Joshua Everage at A-N-C- cold storage, investment management firm JLL says the “cost of building a new cold storage facility is $150 to $170 per square foot, compared to $50 to $60 dollars a square foot for regular warehouse construction.  Most cold storage facilities are new builds, but you can expand or upgrade existing warehouse space at a cost of $60.00 to $70.00 a square foot. That is about 40% of the cost of building a new facility from the ground up. ”

−Everage also says that when you are looking at costs, consider the usual items, like location, but also the unique requirements of a cold storage facility, the freezing equipment.  Do you need a unit that can flash freeze product like fish, or a chiller? There is a difference in cost.  Also consider the height of the docks, the height of the building itself, exterior and interior wall finishes, and plumbing requirements. For a free cold storage construction guide, visit http://www.anccold.com/blog/cold-storage-construction-cost and download a guide.

For help coming up with a lender or someone willing to tackle the project, call me. I’m based in Austin, but I can meet you where you are at, in Dallas, Houston, or San Antonio.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References:

Everage, J. 2017. Cold Storage Construction Cost Per Square Foot. Blog, at http://www.anccold.com/blog

Fung, E. WSJ, December 2018, Real-Estate Stocks Beating S&P 500 for First Time Since 2015. https://www.wsj.com/articles/real-estate-stocks-beating-s-p-500-for-first-time-since-2015-11545134402

 

What is $358.00?

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Answer: Price per square foot for a luxury home in TX.

It is true that you can put a price tag on anything, well maybe not everything, but you certainly can put one on a luxury home. According to the 2018 Texas Luxury Home Sales Report by the Texas Association of Realtors (TAR), the median price for a Texas luxury home  remains unchanged at $1.35 million.

Houses priced over $1 million dollars are considered “luxury” and 5,123 of them sold across the state of Texas from October 2017 to November 2018, up 11.5% from the previous year. The average price per square foot for a luxury home was $358.00. This is up 2.5% from the first ten months of 2017. A median house in Texas carried an average price tag of $128.00 per square foot.

From January to October 2018 the average time a luxury home spent on the market in Texas was 94 days, a decrease of four days from the same timeframe in 2017. It makes sense that the bigger price would lead to a longer time on the market because there are few buyers who can afford the higher price and it takes longer to get a big loan.

For comparison, here are some statistics courtesy of Realtor.com.

Austin-Round Rock, TX, Median Price $350,000. Days on the Market, 65.

Dallas-Fort Worth – Arlignton, TX Median price $335,000. Days on the Market, 58

Houston-The Woodlands-Sugar Land, TZ – Median Price $350,000. Days on the Market, 65.

Killeen-Temple, TX, Median Price $200,000. Days on the Market, 68

San Antonio-New Braunfels, TX – Median Price $285,000. Days on the Market, 66.

For more on luxury houses, read “Livin’ Large: Texas’ Robust Luxury Home Market,” a Tierra Grande article by Real Estate Center Senior Data Analyst Joshua Roberson. https://www.recenter.tamu.edu/news/newstalk-texas/?Item=21652.Read more at Texas Association of REALTORS

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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