June 2019
Annual Update
Wow, this year is flying by. Activity is still brisk, but leveling off.
As a company, Wicker & Associates currently has almost 15 deals under contract and in the title company. Best of all the activity is coming from all “food groups”. In other words, we have a few industrial tracts under contract, a few office sites, multi-family sites, single family tracts, and investor sites under contract. The only “food group” in the land arena that is not seeing much activity is large power center or mall type retail properties. Almost every property that we have under contract is for immediate use. Very little speculation activity, almost all properties are interior locations with construction planned by a speculative developer or an end user. This is tremendously exciting. We are simply hoping that Washington and international politics remain stable and allow us to work.
Residential home prices have peaked and leveled off with home builders looking for starter home priced land. In the last few years we have constructed 35,000 new homes per year. There are currently 210,000 lots planned. Definitely out of balance.
Multi-family, as reported earlier has peaked. Supply and demand have taken over. There are simply not as many well-located multi-family tracts available for development. Well-located garden apartment zoned tracts are almost non-existent. Thus; the number of land transactions for multi-family development has been reduced. However, we are seeing a few “AAA” locations going for much higher numbers than we thought possible just 12 months ago. We do expect multi-family developments to diminish and level off.
The office development segment of the market has also diminished and leveled off.
Industrial land continues to be active. The North DFW submarket is the most sought after-area with little or no supply of land. Otherwise Great Southwest submarket and the I-20 corridor are attracting the new built to suits and speculative projects. The Alliance area and South Fort Worth are also very active. Industrial land prices remain fairly stable in “A” locations at approximately $2.50-$3.00 per square foot.
As mentioned before, retail sites and “not ready for development” tracts are the slowest segments of the market. With new residential subdivisions coming on line, neighborhood service retail developments are sure to follow. This includes corner convenience stores, pharmacies and small strip centers. We still feel major power centers are many months away.
There is no shortage of money on the sidelines looking for investment opportunities. Investors are looking, and wish they could find more. However; what the investors are willing to pay differs greatly from current asking prices. We have two basic schools of thought; the investors want to buy at a discount and the peripheral land owners want to sell at a user price. Thus, creating a pricing gap with very few transactions. We expect some give and take on both sides over the next year or two and transactions will become more frequent.
We continue to work hard on all of our listings and the “Bull market” that we have experienced has allowed us to sell many of our listings!!! We are actively pursuing new listings, with sellers that want to take advantage of the strong market that remains. Please keep us in mind for other opportunities. We are available to consult at your convenience. Feel free to call for more details regarding your specific property anytime.
Sincerely,
-The Wicker Team-