by Steven A. Lieberman & Alan P. Shor. The theme of
our newsletter last year was “Accelerating”, highlighting that our economy was
improving at a healthy pace, with our capital markets, housing and consumer
confidence all on a solid and steady upswing. The emphasis was how fortunate we
are to be based in Texas, which continues to lead the way in job creation,
favorable cost of living, and overall business health.
later, we have accelerated from a period of stabilization and recovery to the
front end of a dynamic cycle. Existing vacancies are quickly dwindling, as all
of Texas’ major markets are showing occupancy rates nearing all-time highs.
DFW’s retail market is almost at 90% occupancy, its highest rate since 2007,
and we expect that occupancy will continue to further improve over the next two
years. At year-end 2012, Houston’s occupancy rate hit 89.5%, Austin was at 94%,
and San Antonio was at 90.2%. The result is the incubation of new retail
development. We are expecting new construction to more than double last year’s
levels, with TRC’s Connected Development Services collaborations leading the
way with over three million square feet of new development in the Texas,
Arkansas and Oklahoma markets.
Why such a
dynamic picture when only two short years ago we were struggling to come out of
a deep recession? For those of us who do business in Texas, the answer is
simple. Jobs. Last year Texas added more residents to its ranks than any other
state in the country, accounting for nearly 19% of the new population growth in
the U.S., where we have only 8% of the country’s population. We have replaced
100% of the jobs lost during the recession, adding almost 300,000 jobs in 2012
alone, with an annual growth rate of 2.6% compared to 1.4% overall for the
country. As such, our recovery compares very strongly to the overall economic
recovery nationwide. Unemployment is currently at 7.5% compared to 6.3% in
Texas. Dallas, Houston, Austin and San Antonio continue to rank among the top
markets in the U.S. in new job growth and housing is rebounding in lock
to TRC, we are in a dynamic phase as well. This past year, we opened in Austin,
our fourth office in Texas, which has grown to eleven strong, extending the
depth of our very talented leasing, property management and investment teams.
Companywide, we currently have 85 teammates, with additions made across all our
business lines over the last year, including adds in brokerage, finance,
property management and investment, reflecting our broad growth as a company.
We also enjoyed the successful IPO’s of two more of TRC | Connected Capital’s
portfolio companies and brokerage was up over 20%, as we represented our
clients for right at $1 billion in consideration. Our tenant-driven investment collaborations
led to over 600,000 square feet of acquisitions, taking TRC | Connected
Acquisitions over 1.25 million square feet in the last 18 months, enabling TRC
to continue to deliver extraordinary results and growth opportunities for our
base also continues to grow, with our representation of over 240 retail and
restaurant chains and over 25 million square feet of property listings in 287
centers, an increase of 13% over last year, as TRC continues to be engaged to
lead our clients expansion programs from coast to coast and now cross border
into Mexico and Canada. So, clearly more action ahead with retail store
openings at a five-year high with almost 80,000 new stores planned to open over
the next two years, up 11% from last year.
was an active year in the redevelopment arena. Our 391,000 square foot Village
on the Parkway project in North Dallas is taking shape, with Whole Foods
opening in July of this year and AMC Theatre under construction. We are also
actively redeveloping our recent acquisition of Willowbrook Plaza in Houston,
led by the conversion of a 92,000 square foot former furniture store into the
retail trio of Bed Bath & Beyond, Buy Buy Baby and Cost Plus World Market.
Our most recent acquisition of a vacant Target in San Antonio will turn empty
space into a strong multi-tenant center. Finally, our record recapitalization
of Arlington Highlands shopping center at the end of last year was one of the
largest retail transactions in the country.
point on what will be a very dynamic period for TRC is our development
collaborations. These tenant-driven developments are in six different markets
across Texas and Arkansas, totaling over three million square feet of new
2012 was a
very strong year across the board; one that reflected strong returns in the
investments we have made in all aspects of our business. We are excited about
2013 as we continue to actively invest in both the real estate and operating
company fronts. We are well on our way to becoming one of the top retail
brokerage, advisory and investment firms in the country. Our team, clients and
partners are the invaluable cornerstones in which our successes continue to be
built.We thank you all, and as always,
we look forward to staying connected and to all of our opportunities ahead.