Dallas February 2022 Key Take Aways!

Kimber Davison with Griffith Davison shared the following:

• REAL Professionals Network is considering starting a group in Austin, so she encouraged everyone to share the news with any colleagues in Central Texas to get some feedback on the idea
• She also shared that Griffith Davison now has offices open in Fort Worth and Austin.?

Scott Lynn with Cache Realty Capital is concerned about what is taking place in Ukraine and shares the following:

• Up until the middle of last week, the financing markets were very liquid with a lot of investors with plenty of capital.?However, he feels that with the current situation in Ukraine, no matter the outcome, it will most likely make capital more expensive.??

Robert Gunby with RTG Capital shared the following:

• RTG has purchased an operating company that operates 25+ tractor trailer parking lots across the United States.?They are in the process of trying to grow the company with leasing locations, buying locations, etc. and are “sort of forming a real estate company right now”.?With the current high demand across the country to park trailers once the tractors deliver them, they felt that it was the right time to and a good opportunity to “try something new”.?The company has 150+ customers so they are looking to purchase 10-30 acres locations.??

Whitney Teague with Spring Valley Construction shared that they currently have 16 active projects, including three with HEB Grocery Store.?Two are from the “ground up” and the third is the expansion of a current location.?She also shared:

• Overall construction material costs are up 15-20%, which is nothing new, but they are hopeful that the price of lumber will decrease by the Summer.?

Blake Lugash with Realty Capital Partners “RCP” shared with the group that there is “no shortage of capital on either the debt and equity side, which is both a blessing and curse for us”.?RCP is actively looking for developers who need equity capital to complete their projects.?They have a “great track record for our investors” and will continue to search for more opportunities.

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Phil Crone with the Dallas Builders Association shared the following:

• Lumber costs and materials are up 30% on the residential side.
• Wages have gone up 8% because of the shortage.
• The lumber shortage has increased $18,000/home for every home being built in the Dallas area.
• These are the worst shortages Dallas has seen since World War II.?
• Encouraged that there is a New Construction Management Course?“up and running and ready to launch” at Collin College so he is very pleased with that positive news.?

JJ Williams with BUILT National shared that BUILT has 4 Chapters in Texas, Oklahoma, Austin and the Carolinas.?

• JJ has another company that focuses on the challenge of the lack of school trades in design and engineering, so they have international resources to provide production work for the architects.?A lot of his resources are from Poland so with what is currently happening in the Global climate, that may increase their available resources because of the ? million people fleeing Ukraine.
• Poland – may increase their available resources.?

Crystal Shin with EisnerAmper shared that she mainly focuses on the real estate in the Korean market and other Asian countries.

• Many Korean investors are putting money into Real Estate Investment Trusts or “REITS” so the properties that are currently of interest are distribution and data centers globally.?

Bob Thomas with Bancorp South shared the following:

• Banking industry is gearing up for the rising interest rates.

Christine Stoneking with Emerald Ridge Concepts shared that she’s noticing that the focus has shifted in the marketing, but they have not gone back to do the strategy work needed to make the marketing effective.

? Laila Assanie with the Federal Reserve Bank of Dallas said that the Dallas Fed recently hosted a conference, so she shared the following notes with the group but also told everyone to go to the Dallas Fed website at www.dallasfed.org for more information from the Conference:

• The operational challenges that the builders are facing won’t be resolved for at least 12-18 months from now, which means it will most likely be sometime in 2023.
• There is a current moderation in the home market, whereas home prices will not be double digits in 2022 as they were in 2021.
• Inflation is expected to take longer with rent inflation expected to slow into the Consumer Price Index “CPI”, meaning we will likely see inflation being elevated in 2022.?