Five Years After the Onset of the Great Recession, Banks Are Ready To Venture Back in to Commercial Real Estate

• For the first time in five years, a majority of banks are finally talking about their ability to grow their loan portfolios.

• Up until the fourth quarter of 2011, non-performing commercial mortgage and construction loans were still increasing notably. And indeed, for many banks, they are still going up, but at moderating rates. So there is still a note of caution from bankers.

• “Because the financial condition of many of our borrowers has suffered over the last several years, we expect to continue to see downgrades within the portfolio into an extended recovery as a play,” said Daryl D. Moore, executive vice president and chief credit officer of Old National Bancorp. “This will be especially true in the commercial real estate portfolio where capital and liquidity continued to be an issue for many of our clients.”

• Some banks are still being aggressive in charging off some loans, particularly construction loans, and are trying to sell off their foreclosed real estate inventory and nonperforming loans as best as they can.

• However, in the Federal Reserve Board’s latest Senior Loan Officer Opinion Survey issued this week, U.S. bank loan officers reported that demand for CRE loans had strengthened, on net, over the past three months. In addition, during the past 12 months, on net, domestic banks reportedly eased maximum CRE loan sizes and many domestic banks trimmed loan rate spreads.

• “Through 2011 obviously we’ve all been very cautious in that sector due to some of the challenges that have been experienced,” said Claude Davis, president and CEO of First Financial Bancorp. “Where we’ve seen our new opportunities are really with those investors who have weathered the storm well, had the liquidity and the cash and the capacity to kind of grow and expand if you will, kind of win assets at a cheaper level. And so we’ve actually seen the quality be very good from our perspective in that book.”

• Banks are still staying away from the high risk areas like residential development.

• Philip Flynn, president and CEO of Associated Banc-Corp., said, “We continue to see opportunities for growth and expansion in CRE lending because of the retrenchment of other competitors and other sources of capital.

• While it is apparent that the growth in commercial real estate lending will be limited and cautious, the timing for an improved lending environment couldn’t be better for some investors who financed at the peak of the market five years ago. As mortgage production ramps up, investors will see banks being more competitive on pricing.

• The bad news is that, initially, it will be the well heeled who stand to benefit first and financing terms are likely to be fairly tight. Banks will also use the opportunity to restructure the makeup of their portfolios – weeding out the less creditworthy.

• At CVB Financial Corp., Christopher D. Myers, its president and CEO, said most of the deals his bank is doing are pricing in the 4.5% to 5.25% range — unless the bank does an interest rate swap. Then typically the bank is pricing CRE loans somewhere around 3% on a variable rate.

• In general, bank executives said they would be targeting the strongest growth in particular assets and markets. Multifamily was most frequently mentioned as a targeted asset category as were some select middle-market industry segments such as, restaurants, health care and energy.

• By market area, Bank of the Ozarks Inc.’s George Gleason, chairman and CEO, said, “I think the largest part of [our] growth is going to come from our Texas offices. The second largest part of that growth I would expect to come from our metro Little Rock, [AR], area offices and the third largest part of growth I would expect to come from our metro Charlotte [NC] office.”

• In the last quarter Bank of the Ozark’s Texas office had accounted for 41.8% of its total loan portfolio.

Houston’s outlook continues to offer more options than the rest of the country in regards to businesses and job seekers alike, say local economic and development experts.

Most parts of the city have seen continued growth throughout 2011, and that momentum is not expected to slow down. The Houston metropolitan statistical area will add about 84,600 jobs this year, up from about 80,000 jobs added in 2011, according to the Greater Houston Partnership.

The Houston Business Journal has identified six Houston submarkets that experts expect to be active in 2012 — Downtown, The Woodlands, East End, Uptown, North and the Energy Corridor. Below is an excerpt about each area. Click on the submarket name for more thorough information.

North Houston
With many large corporations, including ExxonMobil moving or expanding to North Houston, we should expect to see land sales and spec construction increase this year. The corridor is appealing because it offers more available shovel-ready land, nearby residential, a strong labor pool, amenities and transportation. This aerial photo shows the new Exxon Mobil campus site under construction at I-45 North and the Hardy Toll Road. Photo Source: Brian Kennedy, www.birdseyehouston.com.

The Woodlands
The Woodlands continues to be a boon for energy companies drawn by Exxon Mobil’s planned corporate campus near the master-planned community. The demand for office space in the submarket — and the desire to be near Exxon — puts further pressure on the Class A office market. This growth should also positively affect the retail market.

Energy Corridor
Despite the exodus of energy companies flocking to The Woodlands, the Energy Corridor is still appealing to firms of its namesake. Dallas-based Trammell Crow Co’s purchase of 18.8 acres from the Texas General Land Office at the southwest corner of Interstate 10 and Eldridge for future development proves continued interest. Sources told HBJ last year that Trammell Crow anticipates doing a multiphase office campus, with construction starting in 2012. Besides office construction, growth in the multifamily industry in the corridor is focused on lifestyle and creating walkable communities.

Uptown
This link on the HBJ website was not working so we will update it when it become available.

East End
The Houston Dynamo’s opening game and the debut of the new BBVA Compass Stadium will occur on May 12, and with it comes an expected surge of people to the east side of the city. The 22,000-seat, open-air stadium will be a boost to growth and development on the east side of Interstate 59 downtown. Also promising for the area is the “Building a Better Houston” campaign, established between the Dynamo and BBVA Compass, which will focus on revitalizing Houston’s East End, among other initiatives. Rendering of the new Dynamo Stadium. Photo Source.

Downtown
Vacancy rates are expected to drop into the single digits this year due to rapid demand in the heart of the city, sending rental rates soaring. Last year saw the entrance of two new office buildings, Hess Tower and BG Group Place, (about 1.9 million square feet combined) and they sit at . 100 percent occupancy and 70 percent occupancy, respectively. Several new buildings have also designed, but are on hold until tenants can be secured. There are no large retail projects planned to date and any hotel projects are at the beginning stages. The addition of a free bus service on a 2.5 mile loop around downtown also will contribute to changes downtown. The contemporary-designed shuttle will connect workers, hotel guests and residents to the George R. Brown Convention Center, shopping and other amenities in the area. The Greenlink Circular Transit is set to start its first route in May.

1. HOTELS IMPROVE

Performance in the hospitality industry is on the up, according to Smith Travel Research and PKF Hospitality Research. Smith reports that Houston is doing particularly well; our hotels rank second in the US (behind Nashville) for year-over-year gain in room demand.

2. WESTCHASE RISES

With at least two spec office buildings slated to break ground in 2012, Westchase may just be the hottest submarket this year. Westchase District’s Sherry Fox tells us leasing volume in the submarket had topped 1M SF by Q3 ’11, well ahead of 2010 numbers. That put occupancy at 86.7% by the end of Q3, and Sherry says very big blocks are available.

3. FUNDS ARE UNPOPULAR

Ernst & Young American RE sector leader Mike Straneva (we snapped him at an E&Y/Baker Botts event in December to the right of Archstone’s Neil Bown and HFF’s Jody Thornton) says the recession taught people that they need to know who all investors are in a deal. That said, funds that do exist are attracted to RE because of returns.

4. CMBS IMPROVES, BUT IS THAT ENOUGH?

Commercial Mortgage Backed Security values will be on the rise this year: Wells Fargo Securities expects $25B, and Credit Suisse Group AG and UBS AG predict as much as $45B issued in 2012. But Andrews Myers CRE attorney Patrick Hayes has less confidence. Although Patrick has seen a resurgence of CMBS loans, he cautions borrowers that underwriting is tough to the point of being unreasonable. He suggests borrowers avoid that route unless they’re confident their properties can withstand the underwriting process.

5. INVESTORS COME TO CRE

Texas A&M Real Estate Center chief economist Mark Dotzour thinks US stocks and CRE broken deals are the most undervalued assets in the country right now. People are bound to catch on soon, making them the next investment trend.

6. AND TEXAS IN PARTICULAR

Houston and Dallas are among the top CRE hot spots (NY and DC are the others) generating investor interest, says Younan Properties chairman/CEO Zaya Younan. Foreign investors (including the Chinese and Europeans) only want to talk Texas because of its fast-growing, strong fundamentals.

7. DRIVING AUSTIN

A problem everywhere: traffic congestion. For Austin and San Antonio, the problem compounds with 70% of the NAFTA truck traffic making its way up I-35. But, that also means opportunities, too, according to the experts at the Bisnow Future of the I-35 Corridor in Austin yesterday. Only 80 miles apart, the two major metro areas may one day mesh into one greater MSA with a population of about four million. Major universities, international airports, and the NAFTA superhighway are a recipe for growth between the two cities.

7. OFFICE ABSORPTION INCREASES

Houston’s office leasing market fundamentals improved remarkably last year, according to PMRG VP of research Ariel Guerrero. Office product absorbed 3.2M SF, the most since ’08. Look for a continued shift to a landlord-favorable market as rents rise and quality space options diminish.

8. CLASS-A WILL DO EVEN BETTER

Of the 3.2M SF Houston absorbed last year, 2.4M SF was Class-A.

9. HEALTHCARE’S ABOUT CLASS-B

Marcus & Millichap’s Tanner McGraw tells us investors in the healthcare space are paying more attention to Class-B product. According to Marcus & Millichap’s October report, statewide MOB transaction velocity increased 28% from the same period in 2010. Activity accelerated dramatically for buildings below 5,000 SF, and lower-quality properties were the lion’s share of deals. Tanner is also seeing more health systems building and acquiring off-campus assets through physician practice acquisitions.

10. SPECIALTY GROCERS COME TO MARKET

The retail market in 2011 was dominated by HEB and Walmart, but look for specialty stores to creep into Houston in 2012. Transwestern’s Nick Hernandez says we’ll see Aldi, Trader Joe’s, Sprouts, and others open their first Houston stores this year. And here’s two for the price of one: Nick also says we can expect retail landlords to squeeze more value out of existing centers by adding pad sites in parking lots or tacking on small buildings for additional SF.

11. SELECTED CONSTRUCTION GAINS

Expect modest gains in construction this year, according to Andrews Myers construction attorney Ben Westcott. He expects construction to increase in infrastructure, municipal, education-driven, and multifamily projects. The latter three project types will see a bump from the population spread across our fair city. This is leading to more construction jobs: The Labor Department reports that 9,000 were added in November and 17,000 in December. Plus, construction spending increased over three of the last four months of 2011.

12. INDUSTRIAL STAYS HOT

Many of the spec developments under way will deliver this year, most have significant preleasing. And that means that concessions are burning off. The team predicts they’ll become the exception rather than the rule, a nice change for landlords from the previous three years. The north submarket will be the hottest, possibly running the risk of being overbuilt.

Each number has been summarized. See more on each category HERE.

According to the Tax Foundation, a nonpartisan public policy organization in Washington, D.C., “the most competitive tax systems create the fewest economic distortions by enforcing the most simple, pro-growth tax systems characterized by broad bases and low rates.”

Recently, the U.S. Chamber of Commerce published a report called “Enterprising States 2011” that ranked states in a variety of performance metrics, including their tax and regulatory environments. Those environments were compared in five ways: overall state and local tax burdens, corporate taxes, small-business costs, state government budget gaps, and cost-of-living indices.

With the exception of Texas, States that made the Chamber of Commerce’s top-ten list are not found on the East Coast or the West Coast because desirable coastal states don’t always need incentives to attract business investment and expansion. So states that offer lower taxes and regulations view those attributes not only as advantages but also as necessities in today’s competitive landscape for business expansion and job growth.

The importance of this relates both to corporate entities and to real estate development. Locating in or doing business in a low-tax state can help generate higher profit margins, while operating with fewer regulatory and bureaucratic hurdles can reduce red tape in the real estate development process, whether for environmental reviews or incentive programs.

Here is what they say about #6 Texas:

The Lone Star State is a low-tax state that offers a low cost of living and has an enterprise-friendly climate that’s paying off with high job growth rates. Recent state initiatives include a business tax reform that raises the revenue exemption.

Article excerpt from the Urban Land Institute by Jeffery Spivak

Where is America moving?

As it does every January, Atlas Van Lines reviews data on the origins and destinations of interstate moves during the last 12 months. The 2011 Migration Patterns study results provide a snapshot of relocation patterns, showing an overall increase in the number of moves over last year.

Southwestern and Mid-Atlantic coastal states were popular destinations in 2011. The Midwest continues to lose residents, but Michigan became a balanced state after six consecutive years of steady outbound moves. For the sixth year in a row, Washington, D.C. had the highest percentage of inbound moves, while Ohio came out the clear leader in the highest percentage of outbound moves.

Other migration trends:

Northern States
With the exception of New Hampshire, which went from an inbound to a balanced state, and Massachusetts, Connecticut and West Virginia, which transformed from balanced to outbound states, the Northern States saw relatively few changes in moving patterns from 2010 to 2011.

Southern States
The Southeast remains balanced with the exception of Louisiana, which switched from a balanced state to an outbound one in 2011. Southwest states Texas and New Mexico continue to be inbound states, as well as Mid-Atlantic states Virginia and North Carolina. After becoming a newly inbound state in 2010, Kentucky is now balanced.

Midwestern States
Again seeing the majority of its states with more outbound than inbound moves, the Midwest region only has three balanced states – Iowa, South Dakota and Michigan. Despite uncertain economic conditions, Michigan became a balanced state following a six-year streak as an outbound state. Wisconsin, Nebraska and Kansas finished 2011 as outbound states – all of which were previously classified as balanced states for seven, nine and 10 years in a row, respectively.

Western States
The annual study shows that the majority of the Western states remain balanced with only two states changing status. Utah is now an outbound state and Wyoming is now balanced.

How is a state classified?

Each state/province has a threshold value, which is the total number of shipments multiplied by 0.55 (for example, in a state with 100 moves, at least 55 of them would have to be outgoing to classify the state as outbound). A state/province is considered:

Outbound when outbound shipments exceed the threshold.

Inbound when inbound shipments exceed the threshold.

All other states are classified as balanced. Shipments noted for Canada are cross-border-to the United States or from the United States (not inter-provincial.)

Source

How will new laws affect you? Several changes to state laws that affect real estate professionals, property owners, and tenants go into effect Jan. 1, 2012. Here’s what you need to know.

Do you remember what happened during the 82nd Texas Legislature earlier this year? If you’re like most people, you can barely remember what you ate for breakfast today let alone what state legislators did in May. The Texas Legislature changed and added many laws, but some specific to real estate don’t take effect until Jan. 1, 2012. Here’s a summary of the changes to come and what they mean for you, property owners, tenants, and real estate transactions.

Changes for you and your transactions

You’ll need more experience to qualify for a broker’s license
The Texas Real Estate Commission will soon require more time spent as a salesperson to qualify for a broker’s license and will require you to submit evidence that you’ve performed a certain amount of brokerage activity during that time.

As of Jan. 1, 2012, you’ll need to have been licensed as a salesperson in at least four of the previous five years. You’ll also need to show, using TREC’s new point system, that you’ve participated as a salesperson in “enough” real estate transactions during that time.

How much is enough? TREC has devised a points system that awards you for various real estate tasks. For example, re
presenting a buyer or seller in a transaction that closed is worth 300 points, and an executed lease is worth 50 points. To qualify for a broker’s license, you’ll need at least 3,600 points, with some points earned in each of those four years.

Part of your broker-license application will include a sheet showing the points you’ve accumulated. If you’re part of a sales team, you may only claim points for brokerage activity for which your name is on a document (e.g., a sales contract or a property-management agreement). Initially, you won’t have to provide proof of your experience; you and your broker will sign the sheet. However, TREC will have the option to require supporting documentation.

Education requirements for a broker’s license remain the same.

Buyers can get an HOA resale certificate
Beginning January 1, a homebuyer purchasing a property in a subdivision will have the ability to request a resale certificate directly from a homeowners association. The HOA may require the buyer to show he has a valid contract for the property and may require payment before beginning work on the resale certificate. The association is prohibited from processing the payment until the resale certificate is prepared and may not charge a fee at all if the certificate is not provided in a timely manner.

Buyer’s representatives should be aware that for contracts entered into on or after January 1, buyers will be required to pay the fee for the resale certificate unless the buyer and seller have negotiated otherwise in the sales contract. Currently, the TREC addendum provides options for delivery of the resale certificate and states the seller will pay for it. That addendum is likely to change early in 2012 to reflect the change in law.

The law still allows sellers, seller’s agents, and title and insurance companies to order updates to already issued resale certificates. But under the new law, a resale certificate is only good for 60 days. For any resale certificate older than that, a new one will have to be issued.

Tweaks to owner’s and lender’s title policies
Title policies could always exclude coverage of the ownership of minerals, but as of Jan. 1, 2012, title companies are no longer required to provide a 2% credit on the cost of the owner’s policy for this exclusion.

Also on January 1, title companies are no longer required to insure a loss from damage to property resulting from the use of the surface of the land to extract minerals. Prior to that date, if title companies excluded minerals from coverage, they were required, upon request, to insure against such damage. This insurance was provided through an endorsement to the policy, which cost $50. The endorsement is still available for the lender’s policy and the owner’s policy, but there will be no charge for the endorsement to the lender’s policy. For an endorsement to the owner’s policy, the charge remains $50.

Disclosure requirements for private transfer fees.
Most future private transfer fees on real property were prohibited on Sept. 1, 2011. However, as of Jan. 1, 2012, a real estate sales contract for a property with existing private transfer fees must disclose those fees.

Changes for property owners and tenants

HOAs face new rules for foreclosures, finances, and more
Homeowners associations, as of Jan. 1, 2012, have new guidelines for maintaining association documents, providing access to association records, and conducting open meetings. Also, unless waived in writing by a property owner, a homeowners association will be required to use an “expedited foreclosure” process, which includes obtaining a court order, before foreclosing against a property owner. Property owners can now add or remove an HOA’s foreclosure power by a two-thirds vote of association members. Additionally, HOAs are prohibited under the new laws from foreclosing a debt consisting solely of fees charged for obtaining copies of HOA records.

The new law dictates the order by which a homeowners association must apply owners’ payments: delinquent assessments, current assessments, attorneys’ fees, and fines—affecting their ability to foreclose. Also, the notice that must be given to a property owner by an HOA before it can take certain actions against the owner, including foreclosure proceedings, must now inform the owner that he may have special rights or relief if the owner is on active military duty.

Paperless property-tax bills.
Starting January 1, local tax offices can offer an electronic tax bill. Interested property owners should check with their tax office to see if they can begin receiving their bill via e-mail.

Appealing property appraisals without going to court
Also January 1, property owners in Collin, Denton, Fort Bend, and Montgomery counties whose properties are worth more than $1 million can appeal their property appraisals through the State Office of Administrative Hearings rather than taking that appeal to district court. Property owners in Bexar, Cameron, El Paso, Harris, Tarrant, and Travis counties were given that option two years ago.

Tenants can appeal eviction regardless of ability to pay court costs
Effective January 1, a tenant unable to pay the costs of appealing a judgment in a residential eviction suit may still appeal by filing a pauper’s affidavit. The tenant will still be required to pay rent, which goes into the registry of the court, and must make a rent deposit into the registry within five days of filing the pauper’s affidavit. Without this deposit, a landlord can request a writ of possession in his favor, which the court will immediately issue.

Lori Levy is legislative and regulatory counsel for the Texas Association. Reprinted from Texas REALTOR® magazine.

The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio.

See more here.

• Disaster Relief And Disaster Training (DRADT) specializes in responding to disasters immediately and share the needs of survivors via social media; allowing you to join the relief efforts. Visit www.texasfirerelief.com for information on how to help.
• Houston-based Friends for Life brought in its mobile shelter to help treat injured Bastrop animals until their owners can be found. Make a donation to them here.
• Pearland High School is collecting items to provide relief to our Texas neighbors displaced by the devastating wildfires. The community is invited to join in this effort to help these families by donating the items listed belYou may bring your contribution to the Sheryl Searcy Ninth Grade Center Choir Room (room 1500), between 7:00 a.m.-3:00p.m. on school days.If you prefer, you may make a monetary contribution to benefit theTexas Wildfire Relief Fund. Please make your check payable to PHS, and notateTexas Wildfire on the memo line. The drive ends on Friday, September 23, 2011.
• Buy this shirt and 100% of profits will benefit the AmericanRed Cross with their efforts in Texas.
• Friends of Texas Wildlife supports the rehabilitation of native Texas wildlife and the promotion of co-existence of wildlife and humans through education. Go here to find out how to support their efforts through donations or volunteering.
• The Houston-area Red Cross has opened 3 shelters around Houston to assist over 130 people.  For updates, to volunteer or to help by giving a financial donation, click here.
• This new site has been set up to keep the public updated on information on the wildfires.

UPDATED

• Tuesday night, El Real Tex-Mex will present “Pray for Rain” a four-course interactive dinner to benefit the wildfire victims. Chef/owner Bryan Caswell and Underbelly’s Chris Shepherd will team up for create a “Texas-style” menu, and Hay Merchant’s Kevin Floyd will contribute margaritas and drink pairings. Windsor Village United Methodist Church pastor Kirbyjon Caldwell will also be present to open the evening with a prayer. The dinner tariff is $85 per person, including beer and margaritas, and the dinner begins at 7 p.m. with cocktails served for half an hour beforehand. Reservations are required, and all proceeds from the dinner will go to Society of Samaritan, a local Magnolia organization that Caswell and Shepherd came into contact with while bringing foodstuffs to Waller and Montgomery counties on Friday.
• To help local farmers affected by the Texas wildfires, Urban Harvest has set up a Wildfire Farm Relief Fund (WFRF). The public can make donations to the WFRF fund and to buy their products, which will all help support the farmers’ day-to-day lives. Checks should be written to Urban Harvest and 100 percent of these donations will go directly to the farmers. Checks, cash or credit card donations are tax deductible and can be made at any of the Urban Harvest Farmers Markets, or mail checks c/o Urban Harvest, 2311 Canal, Suite 200, Houston TX 77003.

Issues of Our Time
by Mark Dotzour

Do you feel confused about what is happening in our country? Do you find it hard to make investment decisions? Well, you are not alone. Many in this country are struggling to make sense of what is going on. It doesn’t matter if you are a CEO or a retired widow, it’s hard to anticipate where we are headed. This uncertainty is causing investors and business owners to postpone decisions. It’s leading to a very slow, prolonged recovery.

Previous Federal Reserve officials have referred to times like this with statements like: “There seems to be a lack of transparency in the markets.” When you translate this into Main Street English, this means, “We have no earthly idea of what is going to happen next.”

From my perspective, from talking to businessmen and -women all over this country almost every week for the past 14 years, here are the key “Issues of Our Time” that are causing concern.

Are we headed for inflation or deflation?

This question is very perplexing because the markets are giving off strong and conflicting signals. Many know that banks have enormous excess reserves that could be deployed to make loans. This could lead to inflation. Gold at $1,600 seems to confirm this viewpoint. But the 10-year treasury bond rate has fallen to 2.9 percent. People buy bonds when they think inflation is going to be low or they might actually experience deflation. Who is right, the gold buyers or the bond buyers?

Are we going to continue the very modest recovery from the recent recession, or are we going to slide back into another recession?

Corporate profits are up and the private sector has been hiring. Government layoffs have offset most of the private sector gains. Companies have about $2 trillion in cash on their balance sheets. When will they deploy it? What are they waiting for? How can we staunch the drain of American wealth to China? Will we outsource all of our IT jobs to India? Where will U.S. companies find engineers this year?

Will the federal government begin the struggle to return to a balanced budget?
Gold buyers are betting they won’t. Bond buyers are betting they will. Who’s right? Clearly the current trends in government spending cannot continue. But there are a lot of people in America who rely on the federal government for their jobs and/or their incomes. If everyone doesn’t share in the sacrifice, then nobody will want to share in the sacrifice.

When will the residential real estate market rebound?

People still want to live in homes. Mortgage rates are ridiculously low, creating an incredible buying opportunity. What’s holding them back? Some are worried about losing their job. Others are worried that home prices could fall further. How long will it take the large banks in our country to foreclose on the delinquent loans? As long as this “shadow inventory” overhangs the market, buyers will be nervous. The sooner we foreclose on these properties, the quicker the housing market starts to recover.

How far will the rebound in commercial real estate go?

Trophy properties in gateway cities have rebounded almost to the highs of the market peak in 2007. But properties in smaller cities and Class B and C properties are having a hard time getting bids. For some properties you can get 70 percent financing at low rates, while other properties are denied. Billions of investor dollars are prowling the country looking for deals.

Why do investors like to put money to work in Texas real estate?

As I travel around the country, I’ve met lots of private equity firms and high-net-worth individuals that may live in New York, Boston or Laguna Beach and want to own Texas real estate. The long-term outlook for Texas is strong, with population and job growth on the horizon. Houses will need to be built. Shopping centers and offices will come with the houses. Construction jobs will play a role in the future recovery as Texas leads the country out of recession.

In coming posts, I will answer these questions and other pressing Issues of Our Time in more detail.