One-Time Texas Rangers Owner Lists Dallas Estate for $100 Million

http://www.wsj.com/articles/dallas-estate-of-tom-hicks-is-now-seeking-100-million-1425591851

"Dallas Estate of Tom Hicks Is Now Seeking $100 million"

If you're a high-net-worth individual looking for a spacious, luxurious estate in the Dallas area, you might want to check out what Tom Hicks just put on the market.  Hicks, a former stakeholder in the Texas Rangers franchise, has placed his 25-acre, 27,000 square-foot estate on the market for a paltry $100 million, making it the most expensive residential property in the city.  After initially asking for $135 million in 2013 to attract possible wealthy buyers, Hicks has now provided a (somewhat) more comfortable bargain and has posted the listing publicly on the MLS.

At first, I did a double take when I saw the listing price.  Researching the highest-priced properties in cities like Houston and Fort Worth, I couldn't believe the appraisal of the home.  That was before I began to read more about this unique piece of real estate.

The mansion, located in the wealthy neighborhood of Preston Hollow, is a beautiful property with a bevy of amenities.  This fully-gated, Italian-style home has plenty of features that billionaires adore, including a a 4,800 square-foot recreational complex, wet bar, home movie theater, outdoor pool, and a helicopter pad in case you prefer traveling by air over land.

In addition to the amenities listed above, the home features endless chandeliers, numerous statues, a full 19th century-inspired library and gorgeous landscaping surrounding the home.  Stainless steel, marble, granite and limestone can be found all throughout the interior rooms.  After buying the home in 1997, Tom and Cinda Hicks decided to embark on a 33-month renovation plan to expand and upgrade the property in future hopes to sell it once their six kids grew up.  Allie Beth Allman, the listing agent for the property, said the couple has put more capital into the property than the 8-figure asking price.  The Hicks hope to sell soon and spend more time at their new home in La Jolla in San Diego, California.

This article interested me particularly due to our in-class studies of property appraisals.  It's perplexing to think what method and information was used in valuing the estate.  The cost comparison approach would have most certainly been difficult, considering there are hardly any comparable properties to use in the valuation.  If the couple really had invested more than $100 million in renovations, I wonder what factors (besides low demand from a select target market) caused the market value to be less than the asking price. Assessing the house using the cost approach would suggest the home could be valued at well above the $100 million price.

Also, I am curious about the Hicks' large commitment to high-end finishing and luxurious fixtures in the mansion, and whether or not they will attempt to salvage some of those assets or simply leave them as part of the estate sale. I hope to follow this property closely, as I'm intrigued to see what the final purchase amount will be and which lucky (or not so much) multi-millionaire will end up
occupying the home.

NFL Return to L.A. Imminent as World-Class Stadium Plans Unveiled

http://www.prnewswire.com/news-releases/hollywood-park-land-company-announces-plan-to-build-world-class-sports-complex-in-inglewood-300015442.html

"Hollywood Park Land Company Announces Plan To Build World-Class Sports Complex In Inglewood"

Growing up in Texas, I have been raised to eat, live and breathe football.  In my much younger years, in addition to watching Texas A&M football, I loved watching the Houston Oilers in the Astrodome.  When the team left for Nashville (now the Tennessee Titans), I had no NFL team to root for for almost six years until professional football returned to Houston in the form of my now favorite team, the Houston Texans.

As the years have passed, I have recognized the economic and cultural impact that professional sports teams can have on a city, and how these large metropolitan cities thrive on serving as the home for these franchises.  Because of this, I had always wondered why Los Angeles, the second largest city in the United States, hadn't had a professional football team since 1994 when the Rams (now the St. Louis Rams) played in Anaheim Stadium.  The cities of San Diego, San Francisco and Oakland were home to the Chargers, 49ers and Raiders, respectively, so why would the world-famous city of Los Angeles not be worthy?  Well, after over 20 years of waiting, it looks like the citizens of the city of Angels have their answer.

On January 5, 2015, Hollywood Park Land Company (HPLC) in Inglewood, California released an expanded plan to develop 298 acres by adding a world-class football stadium along with 4 million square feet of retail, office, hotel and residential space.  The project is said to be built by no cost to taxpayers and provide thousands of jobs during and after construction.   HPLC is a joint venture between Stockbridge Capital Group, a real estate investment management firm, and the Kroenke Group, a leader in commercial real estate and development.

In 2005, Stockbridge purchased 238 acres in Hollywood Park for future development and the Kroenke Group purchased an adjacent 60-acre parcel in 2013.  The project, which has been named "City of Champions Revitalization Project", will include the following:

• an 80,000-seat, state of the art football stadium
• a 6,000 seat performance venue
• 890,000 sq. ft. of retail
• 780,000 sq. ft. of office space
• 2,500 new residential units and a 300-room hotel
• 25 acres of public parks, playgrounds, open space and pedestrian and bicycle access

Also, 60 acres of undeveloped land surround the village that is ideal for building a central district that will aim to successfully blend entertainment and residential life in Hollywood Park.  The development is expected to create long-term revenue growth for the city of Inglewood and the Greater Los Angeles area and is slated to be completed in time to host an NFL team for the 2018 season. 

This news was extremely intriguing to me not only because of my deep love for sports and football but also due to my increasing knowledge and curiosity of commercial real estate.  In my opinion, this is one of the best investments I have seen in a long time, and I'm not sure why it took so long for someone to step forward and fund it.  Granted, the development plans and architecture of the village were most likely very complex and the idea couldn't be formulated until the possibility of an NFL team moving to L.A. was at least a strong possibility.  Recently, the St. Louis Rams moved to a year-to-year lease at the Edward Jones Dome in St. Louis, giving them the flexibility to move so things are moving quickly to say the least.

At this point, all signs point towards either the Rams returning to Los Angeles or possibly the Raiders relocating from Oakland, as the city still refuses to build the franchise a new stadium (circa the late 1990's when the Oilers decide to up and leave for Nashville).  With this massive, diverse, football-starving megacity, this development couldn't come at a better time and the people of the Greater Los Angeles area will be flocking to the new "City of Champions" in no time.  It appears that Stockbridge and Kroenke just struck oil out west, and NFL fans alike couldn't be more excited.

Future Downturn Expected for Houston Housing Market

http://www.cnbc.com/id/102424293

"Houston housing awaits spring chill"

Growing up in the Houston area, I have developed a great interest in the city and have become more aware of the growth and development of the area.  A few weeks ago, I came across this article from CNBC.com that examined the housing market in the city and the expected impact from recently low oil prices.

Houston is a strong, energy-focused economy with many large O&G firms establishing their headquarters in the metropolitan area.  That being said, as the energy industry goes, so does the city's economy. As these energy companies thrive, more jobs are created which leads to expansion and growth around the city limits.  As corporations such as Halliburton, Baker Hughes, Weatherford and Conoco Phillips experience corporate layoffs, the desirable and "frothy" real estate market is expected to face an eventual cooling-off period.

However, according to historical analysis, economic standstills such as the energy struggle we see facing Houston today don't effect the real estate market as quickly.  A real estate agent in the Houston area said, "Now that oil prices are down, things haven't completely changed, but let's just say that they have come to more of a stall".  Evidence has shown that the largest drops in year-over-year oil prices haven't had an effect on housing markets until much later. Statistics show home prices don't tend to slide until roughly 18 months to 2 years after the city experiences job losses.

After already experiencing drops in sales of town homes and condominiums, experts believe that a cool-down on the residential side is next.  Rick Sharga, executive vice president of of Auction.com, says it's only a matter of time until the housing market feels the effects.  "Because it hasn't been hit yet doesn't mean it's not going to happen, so I think patience is the buzz word. We're expecting that Houston will cool down significantly on the residential side".

I found this article to be interesting to me as it pertains to my future career plans and my parents' retirement plans.  Upon finishing graduate school and preparing to begin my career, I am very interested in working in either the Dallas or Houston area.  I'm hoping that my knowledge and experience gained in the MRE Program will allow me to make wise decisions in the real estate market.  It will be interesting to see how the market responds once oil prices start to rise again, and whether or not the market will be frothy again by the time I am a potential home buyer.  Buy low, sell high is the idea here.  Ideally, property values will be relatively low when I am looking to buy and will appreciate quickly as the housing market begins to recover and grow at rates seen previous to the oil slides.

As for my parents, they are looking to retire very soon and are considering many different options as they look for their future home.  They've looked at high-rise condominiums in the downtown area, smaller homes in high-population suburbs inside the 610 loop and even multiple acre lots in exurbia Houston.  I think the recent drop in oil, and the subsequent impact on major firms in the city resulting in job losses, will eventually make a difference in their financial decision once they decide they're ready to quit working for good.