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- From Policy to Property: Understanding Fed Policy, Treasury Markets, and Their Effects on Commercial Real Estate
Where Are We Now? At the time of publishing this article, it has been 60 days since the Fed reduced the effective rate by 50 basis points from 5.33% to 4.83%. At the same time, we've seen interest rates for commercial property loans INCREASE... some by as much as 75 basis points from their September lows. Why is that? Treasury Yields and Commercial Interest Rates "The Treasury Market is the basis for almost all capital deployment." -Ray Dalio Historically, it is the Treasury Market, specifically the 10-Year Treasury, that sets the bar for commercial interest rates, not the Fed Funds Rate. Understanding this relationship provides insight into how lenders and investors factor risk for commercial assets. Factors Influencing Treasury Markets Treasury yields are on the rise due to several key factors. Increased government borrowing has led to a surge in the supply of Treasury bonds, pushing yields higher. Additionally, concerns over persistent inflation and uncertainty about future Fed policy have driven investors to demand higher yields as compensation for increased risk. These dynamics are contributing to upward pressure on Treasury rates. The Lag Period There's a common misconception that reducing the fed funds rate IMMEDIATELY translates to lower commercial interest rates. That is not the case. In fact, historically there has been a lag period, usually no more than 6 months, between the reduction in rates from the Fed and Treasury yields. Where Are We Going? It seems as if the Fed's restrictive monetary policy has accomplished it's goal of tamping down inflation AND there is ample reason to assume that erring on the side of caution is of utmost importance to the Fed's monetary policy. The last thing the Fed wants to do is spark a second wave of inflation by easing off too quickly. Our group believes that with some additional rate cuts, and a clearer political landscape, we could see Treasury Yields decline in the first half of 2025. Time will tell. In the Meantime... Talk to us. If you think there is value in having a market expert evaluate your situation - reach out for a complimentary consultation.
- The Shift Toward Neighborhood-Based Medical Care: A Growing Trend in Healthcare Delivery
The medical landscape is evolving, and healthcare delivery is no exception. Over the last decade, a significant shift has emerged—moving away from traditional hospital campuses toward neighborhood-based medical care. This trend is reshaping the healthcare industry, with medical office buildings (MOBs) becoming critical in providing accessible, patient-centered care. For the first time in history we are seeing an inversion between total revenue spent in an outpatient setting compared to an inpatient setting. Historically, healthcare providers operated from centralized hospital campuses, requiring patients to travel longer distances for specialized services. However, today’s healthcare environment is all about convenience, accessibility, and patient experience. According to a 2022 report from CBRE, outpatient visits are growing faster than inpatient stays, with outpatient services projected to grow 16% by 2025. Neighborhood-based medical offices bring services closer to communities, allowing patients to receive care without the inconvenience of navigating large hospital complexes. This shift offers numerous benefits for both patients and providers. Patients appreciate the convenience of shorter travel times and easier parking, while healthcare providers gain greater flexibility in where they practice. For physicians who own and occupy their own medical offices, this trend presents a prime opportunity to serve local communities while building equity in their real estate. Furthermore, private investors have taken notice of this growing trend. In 2021 alone, investment in medical office buildings reached $16 billion—a clear signal that demand is rising for these assets. As Texas continues to expand rapidly, the need for localized, convenient healthcare options grows alongside it. Middle-market medical office buildings—ranging from $1 million to $20 million—are becoming highly desirable assets for both physician-owners and investors alike. Whether you’re a physician looking to relocate or expand, or an investor seeking a stable, recession-resistant asset, now is the time to capitalize on the movement toward neighborhood-based healthcare delivery. The future of healthcare is closer to home than ever before, and it’s a shift that is here to stay.
- FOR SALE - Victory Medical Center
4303 Victory Drive, Austin, TX 78704 Price: $9,250,000 Size: 18,183 SF 4303 Victory Dr, Austin, TX 78704 is a rare and highly sought-after medical center investment opportunity for commercial real estate buyers. This property is currently for sale with a list price of $9,250,000 and boasts a cap rate of 7.01%. Victory Medical Center has a total area of 18,183 square feet and was renovated in 2018. Over $1,000,000 in capital improvements were put towards this renovation, including upgrades to the building's HVAC system, plumbing, and electrical systems, new flooring, fixtures, a fresh coat of paint, and new landscaping. One of the main selling points of Victory Medical Center is its location. The property is situated in the highly desirable 78704 zip code and offers tremendous visibility to highway 290, which sees over 100,000 vehicles per day. This site is surrounded by a trove of dining, shopping, and essential amenities, making it a prime location for a medical practice. Additionally, the property is only one mile from St. David's South Austin location, a 368-bed full-service hospital, and within 15 minutes from over six other major hospitals. Furthermore, Victory Medical Center is located less than half a mile from South Austin's biggest redevelopment projects in recent history, Brodie Oaks. This 37-acre shopping center is undergoing a massive transformation and will feature a mix of retail, office, and residential space, making it a vibrant hub of activity in the area. Investing in this property offers a rare opportunity to take advantage of a single tenant investment with a sale-leaseback option. The tenant, Victory Medical Center, is a full-service medical practice with many dedicated providers and has been operating since 1996. With over 25 years of operating history, this makes them a stable and reliable tenant providing a reliable income stream and long-term investment potential for buyers. Overall, 4303 Victory Dr, Austin, TX 78704 is a rare investment opportunity in one of the most desirable areas of Austin. With its prime location, strong tenant, recent renovations, and proximity to major redevelopment projects, this property is definitely worth considering for potential buyers. Don't miss out on the chance to invest in this stable and attractive commercial property. Contact: Connor Watson - 512-643-8079 Ryan McCullough - 512-580-6224
- FOR SALE - Emergency Room/Ambulatory Surgery Center in Round Rock, TX
1700 Round Rock Avenue, Round Rock, TX 78681 Price: $5,700,000 ($624.00/SF) Size: 9,129 SF This rare and exceptional building opportunity is located less than a mile from St. David's Round Rock Medical Center, a highly reputable medical facility in the Austin MSA. The building's ambulance accessible rear loading ramp and its location on Round Rock Avenue with easy access to I-35 and Mopac Expressway makes it an ideal location for a medical facility. Additionally, the property comes with fully designed building plans for an ambulatory surgery center conversion, providing added value and convenience to the potential buyer. With its prime location, accessibility, and included building plans, this building presents an excellent opportunity for medical practitioners looking to establish a new emergency room or ambulatory surgery center in the Austin area. Contact: Sean Anderson - 512-647-1541 Ryan McCullough - 512-580-6224 mjinvestmentgroup@partnersrealestate.com
- Partners arranges the sale of 3010 Bee Caves Rd. in Austin
Austin TX, October 7, 2021 – Partners recently arranged the sale of 3010 Bee Caves Rd., a 5,460-sq.-ft. medical office building in Austin, Texas. Partners’ Tyler Jaynes represented the seller, Lonestar Apothecary, LLC, in the transaction. The buyer is an out-of-state private investor.
- Partners Investment Sales team arranges sale of 901 E 15th St. in Austin
Austin, TX, August 2, 2021 – Partners recently arranged the sale of a 5,684-sq.-ft mixed-use property for Fernando and Rebecca Loya at 901 E 15th St. in Austin, Texas. Partners’ Ryan McCullough and Tyler Jaynes represented the seller in the transaction.
- Partners Austin strengthens its Investment Sales Division with highly-regarded team from Nevada
Austin, TX, October 2, 2020 – Partners has substantially strengthened its Texas Investment Sales division, recruiting one of the best-regarded up-and-coming Investment Sales teams in the country: Ryan McCullough, Tyler Jaynes, and Connor Watson, previously of NAI Las Vegas. “Our focus on building on our company’s strengths—both from a business-line and company-culture perspective—has resulted in the continued evolution of our firm as a place where growth-minded individuals want to plant their flag and build their business for the long haul,” said Travis Rodgers, Executive Vice President. “This approach has been hugely successful in helping us attract and retain the very best talent in the business—underscored by the fact that elite professionals like Ryan, Tyler and Connor chose Partners as the ideal place to collaborate with the industry’s top professionals to meet our shared goals.” Mr. McCullough and Mr. Jaynes join the company as Senior Vice Presidents, specializing in the acquisition and disposition of office and industrial properties. Mr. McCullough started his commercial real estate career in 2016 and specializes in professional and medical office properties. His client-first focus and tenacious work ethic helped him close over 40 transactions worth nearly $130 million within his first few years. Mr. Jaynes closed more than $75 million in transactions in his first two years of business, quickly establishing himself as a market leader for private client office sales. Rounding the team out is Mr. Watson, Senior Associate, who closed nearly $10 million in acquisitions and dispositions within his first year; and Client Services Coordinator Jackie Mendoza, who previously spent time at CBRE in Houston. These new hires come on the heels of Partners announcing the recent hire of a new leader for its Investment Sales Division: Executive Vice President Scott Lunine, who joined the firm from Marcus & Millichap last month, and grew that firm’s South Florida region’s team from 29 to 80 agents, doubling sales revenue in just three years. “My goal is to build the top Investment Sales team in the state of Texas in five years, and adding Ryan, Tyler, and Connor is a huge needle-mover right out of the gate,” said Mr. Lunine. “Their professionalism and accomplishments align perfectly with our company culture and platform, and I’m excited to welcome them to the team and work together to deliver exceptional results for our Investment Sales clients.” For additional information, please contact Larry Koestler, Senior Vice President of Marketing & Communications, at 713.629.0500. About Partners Houston | Austin | Dallas | San Antonio WHO WE ARE Partners is a diversified commercial real estate firm that offers a full spectrum of services and investments. WHAT WE DO We partner with people to create value, protect assets, and preserve wealth through real estate services, development, and capital investment. WHERE WE’RE GOING As a diversified brokerage, investment, development, and commercial real estate services firm, we are realizing a new standard of expertise where all those who create value benefit from the ownership and success of the firm.
- Partners arranges sale of 14425 Falcon Head Blvd in Austin
Austin TX, September 27, 2021 – Partners recently arranged the sale of 14425 Falcon Head Blvd, an 8,000-sq.-ft. ambulatory surgery center in Austin, Texas. The property is brand new construction and includes 5 class ‘C’ operating rooms. This sale broke a record high for price per square foot and a record low for CAP rate in the submarket of Lakeway. Partners’ Tyler Jaynes and Ryan McCullough, SIOR represented the seller, Izarus, LLC, in the sale of 14425 Falcon Head. Falconhead Surgery Center is a community-focused, high-tech, boutique-style ambulatory surgery center that strives to stand out in regards to patient care, positive outcome, personal attention, and exemplary experience.
- Partners arranges record-setting sale of 230 Deer Ridge Dr in Round Rock
Austin, TX, December 29, 2021 – Partners—the commercial real estate services business of Partners Real Estate Company—recently arranged the sale of a 12,747-sq.-ft. Micro-Hospital at 230 Deer Ridge Dr in Round Rock, Texas. This single-tenant net-leased asset is leased to Family Hospital Systems and set a record high price per foot for Austin. Partners’ Tyler Jaynes and Ryan McCullough represented the seller in the transaction at 230 Deer Ridge.