DALLAS/FORT WORTH—If you build it, they will come. This was the sentiment among Dallas/Fort Worth's commercial real estate community during RealShare Dallas/Fort Worth's conference, held here at the Hilton Dallas/Plano Granite Park in Plano, TX.
Job growth, corporate relocation and plenty of supply—with absorption right on its heels—were the subjects of the day. According to panelists, the hotspots of activity are almost too numerous to name. The abundance of development include north of Dallas and Fort Worth, Dallas' strong downtown and uptown areas, the West End district, and the communities of McKinney and Denton to name a few.
“Continued job creation and population growth in DFW has resulted in an overall increase in development of all product types across the region,” said Tony Creme, SVP at Hillwood Properties. “Our development track record and local expertise has allowed us to partner with other land and building owners to create a mix of the most exciting and unique offerings in DFW.”
Hillwood Properties, developer of the master-planned industrial park AllianceTexas, is evolving in DFW. To meet the demands of the current market, the company will now include office, retail, medical and multifamily facilities. “Alliance Town Center is our new, 900-acre, fully integrated, mixed-use community designed to serve all the residents who have moved to North Fort Worth recently to live near the jobs which have been created in this area,” Creme explained.
David Cohen, managing director at Ready Capital Structured Finance, a publicly traded REIT based out of New York, stated, “We have found the market here to be different than other parts of the country in that it is bifurcated with both growth in the downtown area from the live, work, play plus the creative office spaces, and the extremely vibrant uptown market with a focus on the millennials gravitating to that area.” Ready Capital has recently financed the redevelopment of a historic building—211 N. Ervay in the downtown district—into a creative office space.
“The number of cranes and sheer scale of activity is amazing,” said Bill Brown, CIO at Granite Properties. And most remarkably, he explained, is that much of the development has been preleased—in the 90% range. He attributes this mainly to corporate relocations.
Not to be ignored, the Dallas/Fort Worth International Airport is a highlight among the robust activity in the region. “We are very bullish on the DFW airport” Cohen said, “and it will remain a focus for us due to the fact it's one of the best and busiest airports in the country [touting warehouses, factories, three hotels, office space and a golf course].”
Negating the possibility that DFW is on the verge of being overbuilt, Vic Clark, Hunt Mortgage Group's Managing Director, noted, “The job growth in the DFW market will continue to lead the state and remain a bright spot for the nation.”
Multifamily hits a high note
With the theme continuing, multifamily panelists explained that job expansion—resulting from corporate relocations and the expanding DFW established and entrepreneurial businesses—is driving multifamily development. In addition, there is a higher quality of multifamily activity in the downtown, uptown and urban areas, attracting both millennials and empty nesters.
“DFW continues to be a hot bed for multifamily development,” said Stuart Wernick, managing director at Walker & Dunlop. “We have always attracted major employers due to our pro-businesses attitude. This results in a larger job pool and, therefore, a need for housing.”
Rick Graf, President and CEO of Pinnacle, said multifamily has evolved in an extremely dramatic fashion over the past decades. “Multifamily in Dallas was previously thought of as one of the less interesting sectors,” he said. “But this has changed over the past 10 years because of institutionalization,” explaining how institutional capital that was traditionally not in the multifamily space has now made its way into the sector in a big way. This has ramped up the quality of development and amenities.
One issue in particular that was touched upon by most speakers was the slowing of rent growth. “This has definitely slowed on higher-end assets in certain pockets as the new units are being leased up,” Hunt Mortgage Group's Clark said. “As the markets settle over the next 12 months, rent should continue to be relatively flat but could certainly pick up as more owners become renters.”
Somewhat surprising, the mid- to high-rise properties that are demanding higher rents are creating a new tenant base that is now competing with home ownership. “We are now establishing a distinction between the end user or renters of need and those of choice in Dallas,” Walker & Dunlop's Wernick said.
DALLAS/FORT WORTH—If you build it, they will come. This was the sentiment among Dallas/Fort Worth's commercial real estate community during RealShare Dallas/Fort Worth's conference, held here at the Hilton Dallas/Plano Granite Park in Plano, TX.
Job growth, corporate relocation and plenty of supply—with absorption right on its heels—were the subjects of the day. According to panelists, the hotspots of activity are almost too numerous to name. The abundance of development include north of Dallas and Fort Worth, Dallas' strong downtown and uptown areas, the West End district, and the communities of McKinney and Denton to name a few.
“Continued job creation and population growth in DFW has resulted in an overall increase in development of all product types across the region,” said Tony Creme, SVP at Hillwood Properties. “Our development track record and local expertise has allowed us to partner with other land and building owners to create a mix of the most exciting and unique offerings in DFW.”
Hillwood Properties, developer of the master-planned industrial park AllianceTexas, is evolving in DFW. To meet the demands of the current market, the company will now include office, retail, medical and multifamily facilities. “Alliance Town Center is our new, 900-acre, fully integrated, mixed-use community designed to serve all the residents who have moved to North Fort Worth recently to live near the jobs which have been created in this area,” Creme explained.
David Cohen, managing director at Ready Capital Structured Finance, a publicly traded REIT based out of
“The number of cranes and sheer scale of activity is amazing,” said Bill Brown, CIO at Granite Properties. And most remarkably, he explained, is that much of the development has been preleased—in the 90% range. He attributes this mainly to corporate relocations.
Not to be ignored, the Dallas/Fort Worth International Airport is a highlight among the robust activity in the region. “We are very bullish on the DFW airport” Cohen said, “and it will remain a focus for us due to the fact it's one of the best and busiest airports in the country [touting warehouses, factories, three hotels, office space and a golf course].”
Negating the possibility that DFW is on the verge of being overbuilt, Vic Clark, Hunt Mortgage Group's Managing Director, noted, “The job growth in the DFW market will continue to lead the state and remain a bright spot for the nation.”
Multifamily hits a high note
With the theme continuing, multifamily panelists explained that job expansion—resulting from corporate relocations and the expanding DFW established and entrepreneurial businesses—is driving multifamily development. In addition, there is a higher quality of multifamily activity in the downtown, uptown and urban areas, attracting both millennials and empty nesters.
“DFW continues to be a hot bed for multifamily development,” said Stuart Wernick, managing director at Walker & Dunlop. “We have always attracted major employers due to our pro-businesses attitude. This results in a larger job pool and, therefore, a need for housing.”
Rick Graf, President and CEO of Pinnacle, said multifamily has evolved in an extremely dramatic fashion over the past decades. “Multifamily in Dallas was previously thought of as one of the less interesting sectors,” he said. “But this has changed over the past 10 years because of institutionalization,” explaining how institutional capital that was traditionally not in the multifamily space has now made its way into the sector in a big way. This has ramped up the quality of development and amenities.
One issue in particular that was touched upon by most speakers was the slowing of rent growth. “This has definitely slowed on higher-end assets in certain pockets as the new units are being leased up,” Hunt Mortgage Group's Clark said. “As the markets settle over the next 12 months, rent should continue to be relatively flat but could certainly pick up as more owners become renters.”
Somewhat surprising, the mid- to high-rise properties that are demanding higher rents are creating a new tenant base that is now competing with home ownership. “We are now establishing a distinction between the end user or renters of need and those of choice in Dallas,” Walker & Dunlop's Wernick said.
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