The Residences at Hotel Palomar, a nine-story luxury high-rise condominium, could sell to Dallas-based investor Westdale Capital.

Westdale Capital has taken over the troubled lien after Addison-based Behringer Harvard   Short Term Opportunity Fund I LP defaulted on payments to fulfill the loan agreement on the property.

The investor is in the process of acquiring the property, according to a Dallas Morning News report.

The 18-story office tower at 211 N. Ervay St. has been vacant since 1995, but Turkish developer Mike Sarimsakci and his investors are purchasing the building, hoping to transform the existing space into a 250-room hotel.

The sale is expected to close in 60 to 90 days.

Net leases fell by 270 during first quarter 2012, with most of the declines occurring in the northern suburbs.

Greg Willett of apartment analyst MPF Research believes the slight dip is nothing to worry about.

“I don’t think one quarter of slight resident loss should be viewed as a big deal, especially when demand in first quarter usually is pretty mild anyway,” he said. “The job numbers still look good, and a comeback for the for-sale housing sector actually could drive them higher.”

The North Texas area has added about 40,000 apartment units since the beginning of 2010. An additional 12,000 units are either planned or under construction — more than twice the units a year ago.

Despite the decline, rents and occupancy are both up. North Texas apartments rent for an average $806 a month, the highest ever for the area. Occupancy is at about 93.1 percent, up 1.5 percent from first quarter 2011.

The office market posted a “respectable” 451,464 sf of positive direct net absorption during the first quarter, which comes on the heels of the highest annual gains in four years with over 2.7 million sf absorbed in 2011.

During the first quarter, the Class-B leasing market gained momentum, posting its fifth consecutive quarter of leasing gains with 447,421 sf absorbed, causing occupancy rates to improve by 170 basis points to 79.3 percent within the past year.

The Class-A market recorded 56,417 sf of negative direct absorption during the quarter, largely attributed to vacancies by Verizon Communications (126,750 sf), Highland Capital Management (108,103 sf), Nokia (96,165 sf) and Computer Associates (73,314 sf). As a result, Class-A occupancy rates remained flat at 80.3 percent during the quarter but have improved by 50 basis points within the past 12 months.

Despite the sense of uncertainty for businesses on a national level, PMRG said local tenants are more bullish on making longer-term decisions as they explore the office market, weighing the possibilities of relocation or renewal in order to capitalize on favorable lease terms.

This year, reports PMRG, the local office leasing market is positioned to benefit from several corporate relocations, including Christus Health, Alcon Laboratories and Copart.

By STEVE BROWN

Real Estate Editor

stevebrown@dallasnews.com

Investors who foreclosed on Dallas’ Turtle Creek Village have put the Oak Lawn office and retail project up for sale.
Dallas-based Lone Star Funds took control of Turtle Creek Village in January after buying the distressed $63 million loan on the property and foreclosing.
Lone Star Funds has hired Holliday Fenoglio Fowler LP to sell the almost 9-acre project.

Turtle Creek Village includes 282,000 square feet of office space in two buildings, connected by more than 82,000 square feet of retail.
But a redevelopment plan for the project on Oak Lawn Avenue at Blackburn Street would allow up to 1.48 million square feet of commercial and residential space.
“Given their age and location on the site, the redevelopment will likely entail the demolition of the obsolete retail and office properties,” Holliday Fenoglio Fowler said in its marketing brochure for Turtle Creek Village. “The acquisition of Turtle Creek Village represents one of the premier redevelopment opportunities in the United States.”

For complete article please visit: http://www.dallasnews.com/business/commercial-real-estate/headlines/20120313-turtle-creek-village-complex-up-for-sale.ece?action=reregister

Of course, we’ve heard it all before. But this time the numbers all looked good.

Existing-home sales were up nationwide and in North Texas in January.

Even more important, pending home sales — purchase contracts that have not yet closed — jumped in the Dallas-Fort Worth area and around the country.

So the on-again, off-again home market rebound seemed to be on again at last.

At least that was the case until the Standard & Poor’s/Case-Shiller Home Price Index came out with a thud on Tuesday.

That’s been the trouble with most economic indicators lately; they often seem to contradict one another.

Case-Shiller said that home prices in the D-FW area and around the country were still falling at the end of 2011.

Nationally, prices in the Case-Shiller Index are back where they were in 2003.

In the D-FW area, the prices are roughly at 2004 levels. They’ve been down for 18 straight months.

And more than 12 percent of Dallas-area homeowners with a mortgage owe more than their house is worth.

Most of this has to do with foreclosures.

About a third of the homes being sold in the U.S. are previously foreclosed or otherwise distressed — usually properties that change hands in a short sale.

The average discount for these houses is about 20 percent.

Pull the depressed stuff out of the mix, and home prices are starting to inch up.

The differences in prices by neighborhood are also dramatic.

Median home-sales prices in the Park Cities jumped 25 percent in January from a year ago, according to…

For complete article please visit:  http://www.dallasnews.com/business/columnists/steve-brown/20120301-ups-and-downs-in-housing-market-numbers-continue.ece

The number of federal lawsuits filed against debt collectors in the Dallas-based Northern District of Texas has seen a steady increase since 2006 when 13 were filed. By 2009, that figure had risen to 49. They then jumped to 118 in 2010 and 134 last year.

The local figures are a microcosm of how consumers nationally feel about debt collectors.

Complaints about debt collectors ranked second last year among total consumer complaints to the Federal Trade Commission.

Part of the problem is that “with the bad economic times, people are getting more in debt and less able to pay their bills,” said Dallas attorney Frances Smith, who represents corporate creditors and debtors.

But there also have been many cases of unscrupulous debt collectors using unfair or deceptive tactics to try scaring people into settling up.

“I don’t think the abuses are occurring at the creditor level as they are on the third-party debt collection level,” said Smith, a lawyer at Shackelford, Melton & McKinley LLP. “It’s when your debt is sold off to a third person and they’re collecting it.”

The debt collection industry said the FTC report tells only part of the story.

“We take consumer complaints seriously and agree on the significant importance of protecting consumers against businesses that engage in deceptive, unfair or abusive practices,” said Pat Morris, chief executive of ACA International, which represents debt collectors.

“However, the FTC’s report doesn’t explain several relevant underlying factors contributing to the increase in the number of complaints against the third-party debt collection industry,” Morris said.

For one thing, FTC complaints don’t necessarily equate to bad behavior, ACA said.

“While the FTC simply tallies consumer complaints, the agency admittedly does so without investigation into whether the complaint is actually illegal or a violation of the Fair Debt Collection Practices Act,” the group said. “It therefore cannot be assumed that all complaints equate to actual bad behavior.”

Secondly, “The significant increase in volume of delinquent…

For complete article please visit:  http://www.dallasnews.com/business/columnists/pamela-yip/20120304-lawsuits-soar-against-debt-collectors.ece

March 8—”Building Long-lasting Client Relationships,” part of NTCAR’s four-part Sales Success Series. The featured speakers are UCR’s Mickey Ashmore and JLL’s Brad Selner. It runs from 4-7 p.m. at Spectrum Center in Addison.

March 21—”What’s Next: Real Estate in the New Economy,” hosted by the Urban Land Institute. A follow up to ULI’s recent annual Emerging Trends Forecast, it will be held from 7:30 a.m. to noon at the W Hotel in Victory Park. Speakers will discuss how fundamental societal changes could dramatically affect real estate development through the end of the decade. Featured speakers include Fred Balda, Hillwood Communities; Lucy Billingsley, Billingsley Co.; Frank Bliss, Cooper & Stebbins;  Bruce Carlson, CM Architects; Robert Folzenlogen, Hillwood Properties; Jack Fraker, CBRE; A.C. Gonzalez, City of Dallas; Gar Herring, MG Herring Group; Robert Kembel, Huffines Communities; Scott Lowe, 5GStudio; Jack Matthews, Matthews Southwest; Steve Modory, Champion Partners; Terry Montesi, Trademark Property Co.; Charles Myers, MYCON General Contractors;  Ann Saegert, Haynes and Boone LLP; Ken Smith, JC Penney; Jeff Turner, Duke Realty; and David Watson, Direct Development.

March 21—”North Texas Water Supply Update,” hosted by CREW Dallas, will feature Denise Hickey, PR coordinator for the North Texas Municipal Water District. The event starts at 11:30 a.m. at Park City Club in Dallas.

March 22—”Data Center Roundtable,” hosted by the Society for Marketing Professional Services. A panel of experts will discuss what the future may hold for this specialty realty sector from 7:30-10 a.m. at Cityplace Conference and Event Center.

March 23—”Northern Tier Office Tour and Forum,” hosted by NTCAR, from 11 a.m. to 3 p.m. Attendees will get an up-close look at office properties in the bustling markets of Frisco, Allen, Plano, and Richardson.

March 29—”Developer of the Year and Logistics Trends Update,” presented by NAIOP in the newly remodeled Dallas Country Club. The featured speaker is Tim Feemster, senior vice president and director of global logistics and supply chain consultancy for Grubb & Ellis. Registration and networking from 7-7:30 a.m.; breakfast buffet and program from 7:30-9 a.m.
March 29—”Investor Forum: Why DFW, Why Now?” is the topic of NTCAR’s March membership meeting, starting at 7:30 a.m. at the Frontiers of Flight Museum. Panelists include Jeremy Giles of Prologis, Tom Fishman of Cobalt Capital Partners, Peter Khan of Spear Street Capital, Chris Schmidt of Invesco, and Michael Speer of Brookfield Asset Management. Moderating is Andrew Levy of Holliday Fenoglio Fowler.

Coming up in April, SMU’s Real Estate Society will look at private investment in downtown Dallas, and NTCAR will host its 2012 Hall of Fame dinner.

For complete article please visit:

http://realpoints.dmagazine.com/2012/03/full-schedule-of-cre-events-in-march/

The Eleventh District economy continued to grow at a moderate pace, and outlooks were more positive than in the last report. Manufacturers reported increased activity. Demand for business services was solid, and activity in transportation services rose modestly. Housing and commercial real estate markets continued to improve. Overall building activity remained subdued, with the major exception being robust multifamily construction activity. Contacts said retail sales growth was tepid and automobile sales held steady. Financial services respondents said overall loan demand edged up. Energy activity was strong, and agricultural conditions improved. Employment levels were flat to up slightly. Price and wage pressures were modest.

Prices

Contacts across most industries said prices held steady. The exceptions were some producers of transportation equipment, fabricated metals and food who noted slight increases in selling prices to partially offset higher input costs. Airlines reported higher fares, and shipping firms noted an increase in express package and freight delivery rates.

The price of WTI was near $100 per barrel during the reporting period. Natural gas prices fell from $3 per thousand cubic feet in early January to near $2.50 in mid-February. Gasoline prices rose by about 22 cents per gallon over the past six weeks, and the price of diesel rose by 7 cents. Prices of petrochemicals and plastics increased since the last report.

Labor Market

Employment levels were unchanged at most responding firms but some contacts noted increases. Staffing firms continued to report high levels of demand. Oil services and machinery firms continued hiring at a rapid pace, and slight employment increases came from some auto dealers, airlines, and transportation, food and high-tech manufacturers. Shortages of skilled workers continued to be reported, particularly for the energy industry. Wage pressures remained minimal, although upward pressure for certain positions such as auto mechanics and software engineers was reported. Several firms said annual cost- of-living adjustments took effect at the start of the year.

Manufacturing

Overall demand for construction-related materials improved, and several contacts noted that orders were up from year-ago levels. Mild winter weather, robust multifamily construction and booming oil field activity provided a boost to some producers of lumber, stone, clay and glass. Fabricated metals manufacturers noted a pick-up in growth since the last report, in part due to government projects. Producers of primary metals reported a broad-based increase in orders, and one contact said they were adding a new manufacturing plant. Construction-related outlooks were more positive than in the last report, and several contacts expect a slight rebound in activity this year.

High-tech manufacturers said orders edged up moderately since the last report. Demand for semiconductors and other electronic products improved, largely due to a pickup in demand for automobiles, mobile devices and cloud computing. In addition, one respondent noted that retailers of electronic goods had been paring down inventories in the second half of 2011 and that orders picked up as retailers ended the inventory reduction. Most contacts expect a gradual improvement in demand over the next three to six months.

Emergency vehicle, automobile and aviation equipment manufacturers said demand was flat to up since the last report, and expectations are for strong sales growth this year. Food producers noted an uptick in orders from the prior report, largely due to stronger consumer demand. Overall conditions in the paper products sector were mostly unchanged.

Petrochemicals producers reported several large planned and unplanned outages at ethylene and polyethylene production facilities, which led to a sharp increase in prices. Export demand for polyethylene and caustic soda continued to trend up, while domestic PVC demand remained weak due to low levels of housing construction and infrastructure projects. Refiners noted weak demand for petroleum products nationally, although refineries on the Gulf Coast were seeing slightly higher margins than some other parts of the country. Contacts noted Gulf Coast refineries were investing heavily on repairs and maintenance during the current spring turnaround season.

Retail Sales

Retailers said overall sales growth was tepid during the reporting period, largely due to unseasonably warm weather. However, sales of non-seasonal items like menswear and home furnishings remained strong. Eleventh District sales trended roughly in-line with the nation over the reporting period, according to three large retailers. Inventories were at desired levels. Contacts noted that the retail environment had improved, and expectations are for moderate sales growth this year.

Automobile sales held steady from the prior report. The used car market remained tight. Vehicle inventories were somewhat lighter than normal. Expectations are for moderate increases in new car sales this year.

Services

Demand for business services was solid and outlooks were generally more optimistic than in the last report. Staffing firms continued to report high levels of demand, noting more direct hires than temporary placements. Demand for skilled professionals, particularly IT workers was strong, while orders from the banking sector and demand for clerical staff declined. Legal firms reported steady demand, with an uptick in corporate activity and continued strength in intellectual property, energy and real-estate related services. Accounting firms reported strong seasonal demand for tax related services.

Reports from transportation service firms were positive. Air cargo volumes rose, while container shipments were flat during the reporting period. Railroads noted a broad-based increase in shipments, with particularly strong growth in petroleum products, motor vehicles and equipment, nonmetallic minerals, crushed stone, metals and metallic ores. Shipping service firms reported an increase in small parcel shipments from the prior report.

Airlines reported passenger demand improved over the past six weeks. Domestic demand and travel to Latin America were solid, while travel to Mexico and the Pacific was weak. Contacts said business travelers remained price sensitive and were purchasing restricted discount fares. Responding firms expect passenger demand to remain stable over the next three months.

Construction and Real Estate

Housing demand continued to firm since the last report. Sales of existing homes increased moderately and new home sales were flat to slightly up. Some contacts noted that in January, which is usually a slow month, buyer interest and activity was strong due to favorable weather and record low interest rates. In addition, a fast-declining inventory of homes was reported. Respondents expect the positive trend in sales to continue, and outlooks suggest a modest increase in new home construction in 2012. Apartment leasing activity remained strong since the last report, and responding firms said Texas markets were outperforming the U.S. average. Investor interest in sales and development of multifamily complexes continued to increase. The pace of current multifamily construction was said to be catching up with historical norms.

Nonresidential real estate activity continued to pick up, although construction remained at low levels. Contacts said recent reports on leasing for office and industrial space suggest moderate gains, thanks to demand from the energy and high tech sectors. Investment sales activity continued to improve, in part, due to very attractive interest rates. Contacts were optimistic in their outlooks.

Financial Services

Financial firms reported a modest uptick in loan demand. National banks reported strength in middle-market and large corporate lending activity, and several regional banks noted energy-related activity was robust. Outlooks were generally more optimistic than at year-end 2011. Contacts said loan pricing remained moderately aggressive, loan quality continued to improve and problem loans were declining. Respondents noted they were willing to make loans, and borrowers’ financial positions were reportedly better than last year.

Energy

Energy-related service firms reported very strong demand over the past six weeks, despite a small dip in the rig count due to low natural gas prices. A few gas-directed drilling firms have announced drilling cuts, but respondents expect oil-directed activity to offset the losses. Oil service firms expect strong orders, high investment activity and good overall prospects in 2012.

Agriculture

Recent rainfall eased drought conditions in several areas, particularly in the northeastern parts of the District. The rain helped refill stock tanks and benefitted pasture conditions. Farmers were a little more optimistic about spring planting. Demand for agricultural products remained strong. Contacts said cattle prices climbed to record levels, largely due to tight supplies. High commodity prices have helped agricultural producers’ margins, but elevated input costs have erased some of those gains.

For complete article please visit:

http://www.bloomberg.com/news/2012-02-29/u-s-federal-reserve-beige-book-dallas-district-text-.html

 

By STEVE BROWN

Two investors have teamed up to buy downtown Dallas’ first major mixed-use development, the Plaza of the Americas.

M-M Properties and Dallas-based Invesco Real Estate bought the Pearl Street complex Thursday.

The sale, estimated to total close to $100 million, is the largest such transaction in downtown this year.

The purchase includes two 25-story office towers, a 13-story retail atrium and a 12-story parking garage located just a block from downtown’s Arts District.

“This is another great step forward for downtown in that the purchaser brings fresh blood, a new attitude and investment capital to enhance the asset,” said John Crawford, CEO of the economic development group Downtown Dallas Inc.

“Moreover, this is another indication of how downtown is being perceived as an investment opportunity and the success of downtown revitalization efforts,” Crawford said.

M-M Properties, which owns office buildings in Houston, joined with one of Invesco’s institutional clients to acquire the buildings. Equity Office had owned the properties since 2004.

“We believe Dallas’ central business district is turning the corner with the recent additions to the Arts District and the soon-to-be-completed Woodall Rodgers Deck Park,” said Ken Moczulski, CEO of M-M Properties.

Built in 1980, the 1.2 million-square-foot Plaza of the Americas includes a Marriott Hotel, which was not included in Thursday’s transaction.

The retail atrium, with its central ice skating rink, is one of the most popular restaurant and retail centers in downtown Dallas.

Peloton Commercial Real Estate was hired as the leasing agent for the properties.

For complete article please visit:

http://www.dallasnews.com/business/commercial-real-estate/headlines/20111222-plaza-of-the-americas-sold-to-two-investors.ece

Some weeks there are two or even three deals.

While apartments are the current favorite flavor of real estate developers and investors, don’t expect the kind of overbuilding that usually results.

That’s because tight financing is still holding developers back.

“It will definitely keep the supply managed,” said Dallas apartment analyst Ron Witten. “The banks are eager to do construction loans, but they are pretty selective to do them with companies they are comfortable with and just great deals.

“We are not going to be immediately back to the races.”

Apartment starts rose about 70 percent in North Texas in 2011. But that was coming off a very low base.

Most analysts predict that 2012 will see another increase in starts, depending on how quickly builders tie up construction sites, get zoning and arrange funding.

Witten predicts that Dallas-area apartment starts will total about 9,500 units this year. That will still make Dallas one of the top apartment-building markets in the country.

Along with financing issues, developers could face more difficulty attracting equity…

For complete article please visit:

http://www.dallasnews.com/business/columnists/steve-brown/20120223-apartment-boom-will-be-held-in-check.ece

Dallas Business Journal by Candace Carlisle, Staff Writer

Date: Thursday, February 23, 2012, 1:16pm CST

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David Merker and Carmaleta Whiteley

Candace Carlisle

Staff Writer - Dallas Business Journal

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In a statement, Santa Ana, CA-based Grubb & Ellis said it believes the acquisition by the investment firm headed by Cantor Fitzgerald CEO Howard Lutnick “will bring the much-needed scale and resources the company had been seeking through its strategic process” and will position Grubb & Ellis to “become part of a well-capitalized global platform.”

“Following a thorough and rigorous process and the evaluation of all available options, we determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients,” said Thomas P. D’Arcy, president and chief executive officer of Grubb & Ellis. “We believe the transaction will be seamless for our clients and we expect no disruption to the company’s operations.

“Furthermore, we believe our professionals and clients will benefit greatly by being part of the BGC organization, which, with its recent acquisition of Newmark Knight Frank, will bring together two strong brands to create a powerhouse in the commercial real estate space. BGC’s purchase of the company’s senior debt and its willingness to provide incremental financing to ensure the smooth execution of the sale process demonstrate its commitment to the success of the Grubb & Ellis business.”

To execute the bankruptcy sale, BGC said it has acquired the outstanding secured debt of Grubb & Ellis and has committed to provide debtor-in-possession financing to fund Grubb & Ellis operations during the sale and bankruptcy process.Grubb & Ellis has filed motions requesting that the bankruptcy court approve sale procedures and set a hearing date to approve the sale.

Lutnick, chairman and CEO of BGC, said the deal reflects the “deep and unwavering commitment” of BGC to build a premier position in real estate services.

“We agreed to acquire Grubb & Ellis because we believeNewmark Knight Frank’s and Grubb & Ellis’ broad knowledge and extensive brokerage expertise, combined with BGC’s powerful proprietary technology and our strong financial backing, will enable Grubb & Ellis to thrive and grow as part of the BGC family of companies.”

Barry M. Gosin, CEO of Newmark Knight Frank, pointed to the “tremendous” synergies between NKF’s's consultative approach to clients and Grubb’s transactional and management services capabilities. James D. Kuhn, NKF president, added that Newmark Knight Frank’s business model has been “dramatically strengthened” upon becoming part of BGC and believes Grubb & Ellis’s brokers, employees and clients would find the same opportunities to grow.

The announcement comes a week after longtime Grubb & Ellis Co. director C. Michael Kojaian resigned from the company’s board of directors, in part to “avoid actual or apparent conflicts of interest” in connection with his affiliated companies.

Negotiations with several prominent companies in recent months, including BGC Partners, C-III Capital Partners and Colony Capital, had failed to yield an agreement that would infuse enough cash into the company to continue operations.

Most of the reports about the development have been bad of late.

Just last week, lenders foreclosed on one of its biggest buildings.

So truly, it is about time for Victory to catch a break.

For more than a decade the ambitious project has gone from boom to bust, from controversy to celebration.

One thing hasn’t changed along the way — the 75-acre development’s strategic location on the northwest corner of downtown Dallas.

That’s why there will soon be construction cranes rising again over Victory Park.

But what’s going to be built won’t be more of the same.

Instead of expensive condos that have gone begging or more high-priced retail space, Victory’s developers are going to add a new office tower and midrise apartments.

Demand for this new space will boost Victory’s population — something that must happen if the project is going to be what was once envisioned.

Victory has a storied past.

The project started out with a political battle over building the American Airlines Center sports arena and the surrounding mixed-use complex. Voters finally approved the project after a virulent public campaign.

Actually, that part of the project turned out even better than planned. The city of Dallas paid off 17 years ahead of schedule the $140 million in bonds used to build the arena and infrastructure.

After the arena was under way, it still took a while to get the rest of the project going.

The New York firm originally hired to build Victory pulled out of the deal in 2003 after almost four years of planning.

Victory’s owners — developer Hillwood and companies affiliated with the arena’s sports teams — then went back to the drawing board to come up with a new scheme.

What they picked was set by the tone of the times.

The high-end condos and shops that went up at Victory did OK until the recession hit and the economic downturn let all the air out of the deal. It wasn’t long before Victory’s storefronts were going dark.

Last week lenders foreclosed on the 28-story, mostly unsold House condo tower.

The German bank that now owns the luxury high-rise has marked it down from almost $80 million in debt to about $32.5 million.

In 2009, German investors who had invested more than $185 million took control of the buildings and some of the land at Victory.

Since then, the office buildings and apartments at Victory have filled up.

The more than 600,000 square feet of existing office space in Victory is 95 percent leased. And the two current apartment buildings — Vista and Cirque — are 98 percent occupied.

No wonder Victory’s owner has decided to go with more offices and apartments.

But most important in this week’s construction announcements at Victory is the proof that the German owners are going to stick with the deal for a while. It would have been easy for them to just liquidate Victory for cents on the dollar and turn their backs on the whole project.

“We are committed to making Victory Park become the icon for Dallas it was supposed to be,” said Lance Fair, vice president of Victory Park and chief operating officer of Estein & Associates, the company that represents the German owners. “We are long-term investors, and that’s our approach with Victory.”

The $225 million development will include an office tower, 60,000 sf of retail and restaurant space, and 50 luxury residential units. It will be at Cedar Springs Rd. and Olive St.

The firm’s owner, Cesar Pelli has designed some of the world’s modern landmarks, including Petronas Towers in Malaysia.

Year to date, commercial contracts through October totaled $3 billion, down 2 percent compared with a year ago. Residential contracts totaled $4.4 billion for the first ten months, up 10 percent.

Statewide numbers for the year show commercial contracts down 13 percent at $11.5 billion and residential contracts remaining flat at $14.6 billion.

The area includes Collin, Dallas, Delta, Denton, Ellis, Hunt, Johnson, Kaufman, Parker, Rockwall, Tarrant and Wise Counties.

Homeprices in the U.S. increased for the fourth consecutive month, inching up 0.8 percent on a month-over-month basis. On a year-over-year basis, however, national home prices, including distressed sales, declined by 5.2 percent in July 2011 compared to July 2010. In June 2011, prices declined by 6.0 percent* compared to June 2010. Excluding distressed sales, year-over-year prices declined by 0.6 percent in July 2011 compared to July 2010 and by 1.9* percent in June 2011 compared to June 2010. Distressed sales include short sales and real estate owned (REO) transactions.

Highlights as of July 2011

• Including distressed sales, the five states with the highest appreciation were: West Virginia (+14.0 percent), New York (+3.3 percent), Wyoming (+3.2 percent), Mississippi (+2.4 percent), and the District of Columbia (+2.3 percent).
• Including distressed sales, the five states with the greatest depreciation were: Nevada (-12.2 percent), Arizona (-11.9 percent), Illinois (-10.0 percent) 
• Excluding distressed sales, the five states with the highest appreciation were: West Virginia (+16.8 percent), South Carolina (+5.5 percent), New York (+4.1 percent), Wyoming (+3.8 percent), and North Dakota (+3.6 percent)

  .

“While July’s numbers remained relatively positive, particularly for non-distressed sales which have been stable, seasonal influences are expected to fade in late summer. At that point the month-over-month growth will most likely turn negative,” said Mark Fleming, chief economist with CoreLogic. “The slowdown in economic growth and increased uncertainty caused by the recent stock market volatility will continue to exert downward pressure on prices.”

By STEVE BROWN

Real Estate Editor

stevebrown@dallasnews.com

Published 08 August 2011 10:57 AM

An Irving hotel firm is transforming a vacant downtown Dallas office building into an all-suite hotel.

The former United Fidelity Life Insurance Building at 1025 Elm St. has been vacant for more than a decade.

Earlier this year, Lowen Hospitality Management bought the property out of foreclosure. It has begun work to convert it to a Homewood Suites by Hilton Hotel.

The first phase is to gut the old building and ready it for redevelopment, Lowen officer Sanjay Naik said Monday.

“It will definitely take the rest of this year to clean it out,” Naik said. “We don’t have an opening date scheduled yet.”

Built in 1918, the 10-story high-rise originally housed the offices of the Texas & Pacific Railroad.

In 1920, United Fidelity bought the Texas & Pacific Building located between Elm Street and Pacific Avenue and moved its office into the lower floors of the high-rise. Most of the building remained occupied by the railroad into the 1950s.

The insurance company in 1959 decided to modernize the classical-style high-rise with a glass and metal exterior.

That’s when an adjoining five-story parking garage was constructed facing Griffin Street.

The brown glass building for many years housed operations of First National Bank of Dallas and its successor companies.

Dallas architecture, engineering and design firm Aguirre Roden Inc. is handling the work on the renovation project.

“We are in the design phase of the renovation as well as performing some demolition work,” executive vice president Gary Roden said.

The Elm Street project is the third new hotel development under way downtown.

Construction will be completed later this year on the Omni Dallas convention hotel on Young Street. South of the convention center on Lamar Street, development has begun on a 76-room Nylo Hotel.

By STEVE BROWN

Real Estate Editor

stevebrown@dallasnews.com

Published 04 August 2011 10:25 PM

During the first half of 2011, almost a half-billion dollars in Dallas-Fort Worth area commercial properties were sold by lenders on the courthouse steps.

The total sounds big, but the dollar volume and number of commercial property foreclosures in the area are down from the same period last year. And the expected flood of commercial real estate sales by lenders just hasn’t materialized.

“What we are seeing is just phenomenal compared to what it could have been,” said George Roddy, whose Foreclosure Listing Service tracks North Texas property foreclosure postings and sales. “We heard predictions of how much commercial property would be foreclosed on, and it hasn’t gotten there yet.”

In the first six months of the year, just over 300 commercial properties — including offices, retail buildings, apartments, warehouses and development land — were sold at auction by lenders, Roddy’s data shows. That’s about a 7 percent decline from the same period last year.

The dollar volume of the foreclosures is down even more — about 30 percent less than in 2010.

In number and dollar amount, the current downturn’s commercial foreclosures are nothing like what North Texas saw in the late 1980s and early 1990s real estate crash.

“We were running in Dallas County 300 to 400 sales a month back then,” Roddy said. “Compared to that, the last few years have been anemic.”

Not that North Texas hasn’t had plenty of commercial foreclosures so far in 2011.

The largest included an LBJ Freeway office complex — the Fenton Center in Farmers Branch — and theCrowne Plaza hotel in Addison.

Lenders also foreclosed on parts of a new shopping center on State Highway 121, the Lewisville Town Crossing. And big development sites in Irving and Frisco went into lender control.

Lost land

Development land accounted for the biggest share of commercial property foreclosures so far this year in the D-FW area. More than 100 tracts with more than $178 million in debt went into foreclosure.

Office buildings, with almost $85 million in debt, and apartments, with more than $80 million in mortgages, were also sold at foreclosure, according to Foreclosure Listing Service’s data.

So far, some lenders have been reluctant to take over failed commercial real estate deals.

That’s given the market time to sort out some of its problems, said Stuart Wernick, senior vice president of Grandbridge Real Estate Capital.

“A lot of the lenders have been able to work out the problems with their borrowers,” Wernick said. “They are being patient and working with their clients, who have acted honorably.

“There is also some new capital out there that has shown up to save the day,” he said. “Interest rates have remained low, and that’s helped, too.”

Train wrecks

Still, hundreds of North Texas commercial properties face debt issues in the year ahead, analysts say.

And billions in local property loans will come due over the next few years and must be refinanced.

“There are train wrecks waiting to happen, still working their way through the system,” said Tom Fink, managing director of Trepp LLC, a New York commercial mortgage information firm.

Trepp estimates that of the more than $19 billion in outstanding commercial mortgages in the D-FW area that have been sold as securities, about 11 percent are delinquent.

“You should see some time over the next 24 months another $1.3 billion hit the courthouse steps,” Fink said.

He estimates only about a third of the problem deals have been foreclosed on so far.

“The process has gone a lot slower than anyone ever thought it would,” he said.

Top foreclosures

Some of the most expensive of the commercial properties sold at foreclosure auction in the first half of 2011 and their original loan values:

Fenton Center office complex, Farmers Branch: $62 million

Crowne Plaza Hotel, Addison: $30 million

Parts of Lewisville Towne Crossing shopping center: $20 million

Frisco Main Street and tollway mixed-use land: $19.8 million

Irving land, 109 acres, State Highway 114 and Belt Line Road: $14.3 million

SOURCE: Foreclosure Listing Service