KW Commercial

By Bill Kitchens
CoStar Analytics

May 12, 2021 | 1:17 P.M.
The Dallas-Fort Worth metroplex led the country in nominal population growth last year, adding 120,000 residents from 2019 to 2020, according to the latest U.S. Census Bureau estimates. Diving deeper, however, the picture is bifurcated between impressive growth in the northern suburbs and stagnation in Dallas County.

Collin and Denton counties remain as two engines for population growth in the metroplex. Last year, the counties welcomed 36,997 and 30,559 new residents, respectively, driven mostly by net migration. Collin and Denton counties ranked number three and four nationally in overall net migration.

Suburbs in these counties, including Plano, Frisco and McKinney, are destinations with their own gravitational pull. Quality of life, more affordable living and well-regarded school districts have been drawing new residents and several corporate relocations have driven job growth in the area. Toyota, J.P. Morgan and Liberty Mutual have all established their headquarters or regional headquarters in Plano.

Dallas County, which added a paltry 285 new residents last year, is an example of a broader trend among urban locales where population growth is either flattening or declining. Last year, Los Angeles County, Cook County, New York County and other large, urban counties bled residents. While builders remain keen on adding more housing in Dallas with a focus on density, infill or renovation projects, it is generally more expensive and time intensive compared to building in Collin or Denton counties.

More recently, Dallas County has faced problems issuing new building permits that have created a bottleneck and giving developers and contractors headaches in the process. Even so, the path to develop and bring new homes and apartments to market is easier to the north, where there are still vast amounts of land.

West of the Trinity River, Tarrant County continues to expand at a healthy clip. Home to Fort Worth and the second most populous county in the metroplex, the area has grown 17% in the past decade. Developers have taken notice and the area led the market in new multifamily deliveries last year.

Looking back, the Dallas-Fort Worth metroplex has added 1.3 million new residents since 2010, leading the country in nominal population growth and ranking among top markets for growth on a percentage basis, at 20%. The metroplex also leads the country in net migration over the same time, welcoming 763,600 new residents to the area.

These population estimates quantify Dallas-Fort Worth's magnetism in both commercial and residential real estate. The region is anchored by a robust, diverse economy that has a strong track record of job growth. In turn, the market routinely ranks among the top spots for demand and construction activity across the industrial, office, retail and multifamily asset types.

What the end of the eviction ban means for landlords and tenants
Mortgage foreclosure litigation attorney Jason Vanslette shares how the moratorium ruling impacts landlords and property owners — and why waiting to evict may be the smart move

Credit: Canva Pro Photos
BY MARIAN MCPHERSON
May 06, 2021
On Wednesday, Judge Dabney L. Friedrich passed down a ruling that’s shaken renters, landlords, investors, and housing advocates.
After a seven-month legal battle between the Alabama Association of Realtors and the United States Department of Health and Human Services, Freidrich vacated the nationwide eviction moratorium, saying the Centers for Disease Control and Prevention overstepped its bounds when it extended the protections to include non-federally-funded rental housing.
“It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic,” her memorandum opinion read. “The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.”
Inman sat down with Florida-based mortgage foreclosure litigation attorney Jason Vanslette to talk about what the ruling means for landlords looking to begin eviction proceedings as the United States Department of Justice is expected to file an appeal soon.

After the ruling, National Low Income Housing Coalition Director Diane Yentel told Inman the ruling will likely only apply to renters in Alabama and Georgia, the states where the plaintiffs are based. Is that true? Just how far-reaching is yesterday’s ruling?
There are federal and state moratoriums attorneys still have to take into account, and that also applies to landlords, property owners, and certainly tenants. Another really important point is the judge specifically denounced any application [of the ruling] applying to the plaintiffs only.
In other words, she felt the moratorium itself was unlawful and unauthorized under the Public Health Service Act, therefore its application should be on a nationwide scale. That’s important because a lot of the issues that we’re having in the court systems is that many tenants are coming in with both defenses from the CDC moratorium and local and state eviction moratoriums.
What’s important is, at least for your readers, to know is that at the very least the federal moratorium as applied should not be inhibiting any type of eviction action on the state level. The problem is, of course depending on what city or state you’re in, you might have some local eviction moratoriums or some other restrictions that this order would not have any effect on.

You have to look at your local areas, on a state and city level. Is there an eviction moratorium ongoing? Obviously, the CDC can try to make a nationwide moratorium, but they can’t override a state’s moratorium at this time.
That makes sense. How can landlords and property owners research their local and state eviction laws and figure out what eviction moratoriums or other restrictions are in place?
With the federal decision and the order suggesting [the CDC moratorium] is unlawful and that the application should be nationwide, that is invariably going to be appealed by the Department of Justice. So [the moratorium] may be stricken currently, but you could be midway through the eviction action, and sure enough, [the DOJ overturns the order] and then you’re stuck in the same situation as you were before.
That being said, on a state and local level, you can look at your governor’s orders. Under their inherent executive powers, they can make Safety Executive Orders, such as moratoriums for evictions and foreclosures. Also, every county and city has the ability to take public safety and welfare into account and make their own rules and regulations.
So you have to look at city-level, county-level and state-level administrative orders and executive orders to see if there’s anything that would prevent you from moving forward with an eviction. Look at the restrictions and how to comply with them. They could allow full-out evictions, or they could allow eviction notices or perhaps a delay of 30 days instead of a full-on moratorium.
It just depends. Seeking an experienced division, landlord, and tenant attorney would probably be the best place to start.
Can you explain a little more about the various eviction options? When people think of evictions, they often go straight to the image of a sheriff removing a tenant from a property.
Again, every state is different. At least in Florida, there’s usually time requirements landlords and property owners must follow. If it’s a lease eviction for default on the payment, that’s a three-day notice. Now, if it’s a default on the lease for something else, like too many occupants, that extends the notice deadline from three days to maybe to 14.
So once the notice requirements are done, you post a notice that they’re going to be evicted, then you have to file an action in the local county courthouse, after which everybody gets served. That could take typically about five days. At that point, if nobody responds to the complaint itself, you can file a motion for judicial default and writ of possession.
At that point, the clerk will send the writ to the local Sheriff’s Department [and] the department will contact the plaintiff and coordinate and schedule the eviction process. So, in Florida at least, an eviction typically takes between 30 and 45 days, assuming there are no state, local or federal moratoriums in place that would make judges uncomfortable moving forward.
But I should say, though, that there are several different types of evictions. So, residential evictions for tenants is one thing, but squatters are another issue. At that point, you would not do an eviction, you would file an unlawful detainer, which is a completely different cause of action. So if you have a squatter, which is someone you don’t have a lease contract with, that should be a much more quick process.
So depending on whether it’s residential, whether it’s commercial, and whether or not it’s actually a tenant with a lease makes a big difference with what type of action you want and whether or not the moratoriums apply to your eviction.
That makes sense. So, going back to the DOJ. I know you don’t have a crystal ball and can’t predict exactly what will happen. But, what’s your best guess about when the DOJ will file the appeal? How would that appeal complicate the process for landlords and property owners who want to begin eviction proceedings?

No orders are filed until obviously, you exhaust all your appellate remedies, and as a landlord and as an attorney giving advice to landlords, we have to take into consideration that the DOJ is likely going to immediately appeal. That process can take anywhere between 30 to 60 days to be heard. If the rehearing is denied and the Supreme Court decides to take the issue itself and review it, that could take even up to a year or more.
In that time period, the CDC or the DOJ might seek an injunction to maintain the status quo until [Judge Friedrich’s] ruling is heard. Or the alternative could say that, you know, until [Judge Friedrich’s] ruling is found to unlawful, we won’t hold injunction on the moratorium and allow for evictions to proceed.
The ironic part is, by the time it gets to the Supreme Court, we might already be out of the pandemic, which is the whole basis of the moratorium and of itself.
So I understand it’s extremely frustrating for landlords and it’s certainly frustrating for attorneys. But the federal relief landlords recently obtained should be enough for them to feel comfortable and not risk breaking any federal regulations.
So it seems that landlords and property owners are in legal limbo right now. For those who aren’t beholden to city or state eviction moratoriums, how can they weigh the risks of starting eviction proceedings before this all shakes out in court?
The wait-and-see approach is always something that you can do. Unfortunately for landlords, time is money. I think if you were to file your action now, I think you’d have every legal right to do so, at least based on [Judge Friedrich’s] federal ruling, assuming that it’s applied on a nationwide level.
Then, you just have to understand the risk financially, that halfway through your eviction case, there might be a hold on it. It’s really a business decision the landlord has to make as to whether or not you know, the immediacy of the eviction is something they need.
Regarding relief, there have been several stimulus packages and relief bills passed over the past year to help renters and landlords. What relief do landlords have available to them and how can they access it?
Under the CARES Act and the latest stimulus package, there are millions, if not billions of dollars of relief for both renters and those with tenancy issues. That comes in the form of mainly local and county-specific allocation of those funds, assuming that their local governments are creating the programs and the applications to access those funds. Whether or not that’s actually happening on a county-level or on a local level remains to be seen.
Landlords and property owners really seem to be the forgotten ones throughout the moratorium, and that’s both on the foreclosure side and the eviction side. You know, I’ve seen a lot of reports on the demand for housing and the increase in real estate prices. Some are saying is derived from a lumber shortage and other factors, when in reality, ongoing foreclosure and eviction moratoriums have a big part to play.
As far as the relief for the tenants and the homeowners, it’s all there, but for the landlords and owners, it’s a harder road to access state and local help.

Not over yet! CoStar makes another play to buy CoreLogic for $7B
In a letter to CoreLogic shareholders, CoStar Group CEO Andy Florance outlines a 'superior' proposal to trump private equity bidders

CoStar/Casey Templeton
BY PATRICK KEARNS
February 16, 2021
Just two weeks ago it appeared CoStar Group was out of the running to buy real estate data and analytics giant CoreLogic, the latter of which appeared to be sold to two private equity firms for a sum of $6 billion.

Andy Florance | Photo credit: CoStar
CoStar Group CEO Andy Florance revived his company’s efforts to acquire the firm Tuesday in a letter to CoreLogic shareholders in which he outlined CoStar Group’s new nearly $7 billion offer to buy CoreLogic, a total which amounts to a price of $95.76 per share.
“Given our substantial engagement since early December, we were stunned to read about the acquisition of CoreLogic by Stone Point Capital and Insight Partners on February 4, 2021,” Florance wrote. “Their cash bid of $80 per share was materially less than our last all-stock offer, which had a headline value of $86.30 per share.”
“The decision to accept the lower $80 per share bid from a sponsor instead indicates a failure to appropriately value the synergies of our proposal as a strategic bidder.”
Inman Connect
CoreLogic’s stock closed the day Monday trading at $81.99, above the price that Stone Point Capital and Insight Partners agreed to pay to acquire CoreLogic.
The transaction is still pending shareholder approval and the firms originally estimated it would close in the second quarter of 2021.
“The fact that CoreLogic stock continues to trade well above the pending transaction price is a clear indication that the shareholders agree with us,” Florance wrote. “Accordingly, we propose moving forward with an acquisition of CoreLogic that will provide value directly to CoreLogic’s stockholders that is substantially superior to the value they would receive in the pending transaction.”
Florance said he believes CoStar’s competing proposal offers “superior value” to CoreLogic’s stockholders and that there’s a “strong strategic rationale” for the combination of the two firms.
CoreLogic offers a variety of multiple listing services and real estate data products, including the popular digital MLS platform Matrix.
CoStar in recent months has moved deeper into the residential real estate space in recent months, first with the acquisition of Homesnap and recently with the acquisition of houses.com. Florance, in an appearance at Inman Connect last month, outlined the company’s plans to build a residential search site.
CoStar already has a massive footprint in both the commercial real estate and rental space, with auction.com and apartments.com among the company’s biggest properties.

Who does Zillow fear? Not who you think
A 33-year-old commercial real estate data company is scratching at the door of online residential real estate and could be on the scene by next year

BY BRAD INMAN | Staff Writer
November 02, 2020

Is Zillow afraid of Keller Williams, Compass, Realogy, or Realtor.com? Nope.
How about Opendoor? Of course, both companies are pioneering the budding iBuying movement.

But Zillow faces a bigger threat.

And the company is not even in the residential for-sale business, yet. CoStar, a 33-year old commercial real estate data company, is knocking on the door of online residential real estate and could be on the scene by next year.

It was reported last week that CoStar is in talks to acquire CoreLogic.
Data giant CoreLogic has 600,000 real estate agents as clients and 17 of the 20 largest MLS organizations, which could put it in the home listing business overnight. The company also has a lead in the mortgage-related data business.

Such a merger worries Zillow because CoStar is a good executor. Look at its rental property, Apartments.com, which has already outpaced Zillow Rentals on revenue and the size of its inventory.

Plus, like Zillow, CoStar is imbued with founder zeal and has a strong management team. The company is led by Andrew Florance, who like Zillow founder Rich Barton, is a Wall Street darling. Both are charming but sometimes ruthless.

Founded in 1987 by Florance, then fresh out of Princeton University, the company has grown to include commercial database CoStar and many online marketplaces, including Apartments.com, LoopNet, Lands of America and BizBuySell. Twenty million unique visitors come through this collection of sites each month.

The company has a market cap of $32 billion (Zillow’s is $20 billion) and an 82 percent gross margin, compared to Zillow’s 45 percent. Plus, CoStar is sitting on a $6 billion cash reserve and it’s profitable.
In its earnings report last week, Florance talked about the residential listings business, specifically mentioning similar businesses in the U.K. and Australia where agents pay to post their listings online. That is Co-Star’s business model with commercial listings.

No doubt, Co-Star is on the prowl to sew up the missing parts of its real estate portfolio.

“One common theme for us has been to use acquisitions to enter a new, closely related real estate segment,” Florance said. “We acquired a national retail bureau to jump-start our retail entry. We acquired Apartments.com to enter the apartment sector. We acquired STR to enter hospitality. We acquired Lands of America to enter the real land space.”

Residential sales seems like a missing piece in his real estate puzzle.
I have heard that Florance wants to take on Zillow, and at one time even had ambitions to acquire the online portal. But that was before the Zillow market cap more than tripled in the last year.
CoreLogic’s market cap is $6 billion.

Earlier this year, CoStar acquired real estate auction platform Ten-X in a $190 million deal. That may be how the company enters residential sales.

Whatever its journey, CoStar is on the move. Don’t be surprised if some day in the future you wake up and find yourself buying ads from them for your home listings.

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