CapStone BLog

Commercial Real Estate Trends in ATX

By: Richard Ethridge - 4/18/18

April 18 Capstone Blog

Economic Factors:
The commercial and industrial real estate market in the Austin area experienced record demand over the last few years. The boom has triggered massive development and the area remains one of the most competitive business markets in the country.

Austin, Texas continues to attract the attention of many demographics. Not only from other parts of Texas, but from all over the world people are moving to our beloved area. Austin is known for its cool, trendy vibe as well as being a tech savvy region. This diversity is a reason the area has remained largely insulated from the effects of the global financial crisis and why the economic forecast remains confident.

Many economists and investors continue to have Austin commercial properties atop their list due to the growth in the professional and business sectors. In-demand jobs and a highly skilled labor force boost the diversity of the Austin economy.

Office Space:
With all this HQ2 conversation heating up, it seems Amazon isn't the only company considering a move to Austin. A new study based on Bureau of Labor statistics and the Yardi matrix has determined that Austin is one of the top markets for commercial office real estate investors in 2018.

Austin continues to appeal to millennials and their quest for the “live, work, play” locations and the co-working stations creates a larger number of available subleases. Even though some of this availability is caused by relocating or downsizing, it is still a strong desire for the younger members of Austin’s population growth.

The retail sector of Austin continued to grow in 2017 and there is no sign of that growth stopping in 2018. Restaurants, retail and major shopping centers continue to open at a fascinating rate. Of course, this is great for the consumer and Austin’s fun and trendy lifestyle.

As the prices for a single-family home continues to rise and the population does as well, there is a strong demand for multi-family housing in Austin. The result is interesting to investors due to the positive employment outlook and favorable demographic trends. Accordingly, we should expect low vacancy rates to remain the norm.

Market Trends:
If we study the employment numbers, vacancy rates, lease rates, office construction pipeline and a 2.7 percent unemployment rate, Austin ranks among the top cities in the U.S. for job seekers. As a result, the city maintained a low 11-15 percent office vacancy rate throughout 2017.

Austin’s future construction in 2018 is forecasted at 1.8 million square feet, down slightly from the 2.5 million in 2017, it still represents a three percent increase in available inventory, making it a solid place to invest.

As we continue to see developers’ favorite bird, the construction crane, build downtown high-rises and suburban office parks, recent studies noted that smaller co-working spaces are rapidly expanding. This provides companies more flexibility for their employees, which in turn is impacting construction trends.

So, who is using all that space? The overwhelming majority of Austin office space is used by the technology sector, about 34 percent.

According to PWC’s 39th annual Emerging Trends in Real Estate Report, Austin ranked second in the country’s real estate markets, after Seattle. Austin and Dallas both made the Top 10. The report also predicts slower but more sustainable growth for the U.S. real estate market.

Austin, Texas continues to be an active market. Vacancies increased slightly in late 2017 commercial real estate arena, but the long-term outlook for the industrial market is good. Healthy economic conditions, steady business expansion, and popularity make Austin a top market for investors. The city is in high demand for all kinds of commercial spaces: retail, warehouse, office and flex space.

Renting VS Buying & The Value in Each

By: Clari McGougan - 4/11/18

April 11 Capstone Blog The rent versus buy decision was pretty-straight forward until 2007 when the housing bubble that had been slightly growing came to a screeching halt. Many mortgages went under and a foreclosure crisis ensued. Meanwhile, the renters of the world were doing relatively well.

Today there is no clear answer whether to rent or buy. In certain cities and for certain individuals buying a home may make more sense, while for others renting a home may be the better choice. It all depends on one’s circumstances, job stability, love for the area and whether they want to spend the rest of their lives there. There are significant advantages to homeownership, one being the mortgage interest deduction, which is a tax benefit that allows you to deduct mortgage interest payment from your taxable income. The mortgage payment goes towards increasing the stake in one’s equity.

Rental payments in contrast have no such advantages. Rental payment goes entirely to your landlord, and tends to increase over time. The costs of renting can be much higher than buying. Rents can change drastically over a few years, and there’s the ever-looming threat of eviction if a rent increase is more than you can afford. As a homeowner many will not face spikes in their payment (adjustable-rate mortgages are one exception), however most will not have to worry about being tossed out on street if the payment becomes too expensive.

Then there’s the question of maintenance: leaky pipes, painting, cleaning gutters, roof & HVAC and all the costs of owning a home. This can be a personal preference. Many homeowners take pride in working on their homes and by the same token many renters complain of unresponsive landlords who refuse to deal with certain issues.

Answering the question should I rent or buy requires some serious soul-searching. In the end the rent versus buy decision comes down to one’s preferences and plans. If you know exactly how long you want to stay in your home and where you want to live, and you have money saved up, the decision could be as easy as calculating which option will cost you less. If your future is unclear, you may have more to consider

Our team. Our values. Why love drives our company culture.

By: Capstone CEO/President Brad Compere - 4/4/18

April Capstone Blog “A company is stronger if it is bound by love rather than by fear.” – Herb Kelleher, Southwest Airlines

This quote is stamped on the front of the Capstone Compendium – our operational Bible if you will. When we first began contemplating starting a title company, my partners and I agreed on many things. The most important was people and more specifically loving people. Being successful in business and life boils down to one simple concept: love.

We love to spend time together. Once a month we have an off-site team building opportunity. We may have dinner, drinks, go out on the lake or bowling. Whatever we do, we’re doing it together as a team. Once a quarter we take our team building to the community with a group volunteer opportunity with a local non-profit organization.

Love is such an ephemeral word. It brings to mind the romantic love Shakespeare wrote about in his timeless tragedy, Romeo and Juliet. But the concept as we use it is much broader. Love is care, kindness, respect, humility, honesty, integrity, service and community. It is approaching every situation, every decision, every relationship with “How can I help? How can I be of service?”

At Capstone Title we believe that “we” is the key. The key to a successful organization starts internally by taking care of each other. My job as the CEO is to make sure our team feels loved and strengthened by the collective goal to be great and to make a difference in our community. We are good at what we do but are mediocre compared to how great we want to become. Because we are strong internally, our work product reflects that inner greatness and we are able to provide an incredible level of service to our clients.

Success to us means truly caring about people, asking about their families, helping them set and achieve both professional and personal goals and truly listening. It means being kind in every action, thinking that you have a person with cares, concerns, troubles on the other end of every phone call, every email and every interaction. It means treating everyone with respect and using your manners (as each of other mothers taught us). It means being humble…taking personal blame and sharing success with the group. It means telling the truth, owning up to mistakes, no matter how difficult that might be. It means always doing the right thing in any given situation, setting aside pride and ego. It means offering help to anyone and everyone….leading with a servant’s heart. It means giving back to your community, taking the time to help those less fortunate than we are and being grateful for the opportunity to make a difference.

The real estate industry can feel very sterile and transactional. Our amazing team strives daily to make sure that the human piece of each real estate deal is not lost. Put simply, we love.