Waco Real Estate Market Update March 2016
March 2, 2016 Comments Closed

Waco Real Estate Market Update – March 2016

Posted by:Adam Voight onMarch 2, 2016

Bellmead Chamber of Commerce

Location: Holiday Inn Hotel & Suites Waco Northwest
Date & Time: March 2, 2016 @ 12:00 PM
Presenters: Jon Spelman, Brad Harrell and Melissa Harrell

Hospitality

– Demand is up
– Need for new units (Clarion/Best Western-Old Main razed)
– Developers are considering less visible sites (GPS/internet booking)
– Land prices typically $4.00 – $8.00 Sq.Ft., premium sites up to $13.00
– Pad sites 2 acres or less
Take Away: Increased demand due to Baylor, McLane Stadium, & IH-35

Multi-Family

– Good demand for apartment projects/location specific
– Total projects less than 250 units
– Demand driven by tax credits, blue collar income deals, investors looking for tax breaks
– Investors believe apartments are diversified risk
– Influx of out of town interest & dollars
– Land prices: $2.00 – $2.70 Sq.Ft.
Take Away: Investors see fairly liquid investment commodity with diversified risk – Cap Rates: 4.5% – 6.5%

Office

– Trends towards to executive suites and/or virtual offices
– Good demand for 1,500 Sq.Ft. or less
– Good demand for executive suites
– Large office demand is slow due to internet, technology and recession
– Average Lease Rates: $1.00 – $1.50 per Sq.Ft.
Take Away: Opportunity exists to convert larger office space into smaller, higher rent units

Retail

– Good demand currently exists
– Demand is up due to MSA greater than 250,000 (2014 – 260,430 MSA)
– Major metro areas saturated – secondary markets being considered
– Transition from brick/mortar to online sales & fast shipping
– Influx of out of town interest & dollars
– Rental Rates: $1.50 – $3.00 Sq.Ft.
Take Away: Secondary trade areas over 250,000 are seen by retailers as new untapped markets

Industrial

– High demand for warehouse space
– Currently an extreme shortage
– Waco – Logistics center/capital of Texas
– Class A warehouse space – 34 ft. tilt wall construction
– Low absorption rates on larger spaces
– Rates: $0.25 – 0.45 / Sq.Ft.
Take Away: Opportunity for small spec space or larger space that is divisible

Overall Commercial Take Aways

– Robust Texas Economy
– Waco MSA exceeding 250,000 population count
– Waco’s location along IH-35
– Increased housing demand driving all other sectors
– Increased national exposure
– Considerable out of town/state interest & dollars
– Concerns over McLennan County tax values & rates

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Housing Market Statistics

McLennan County

Current Inventory of single family of less than 1 acre as of 03/01/16: 488 Homes
Homes Sold in 2015: 2,196 Homes
Average Homes Sold per Month: 183 Homes
Months of Inventory: 2.66 Months

Bellmead – 76705

Current Inventory of single family of less than 1 acre as of 03/01/16: 36 Homes
Homes Sold in 2015: 138 Homes
Average Homes Sold per Month: 11.5 Homes
Months of Inventory: 3.13 Months

Take Away: Current Interest Rates of a 30 Year Fixed Rate Conventional Loan,range from High 3% to Low 4%
Note: A Balanced Market is 6 Months of Inventory

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