- There has been a lot of growth and activity in the Texas commercial real estate market in the last couple of years.
- Last week, some new reports and data came out that showed exactly how dynamic and heated the Texas market is.
- And there is no real reason to think that the hot market will end any time real soon.
If you have been reading this blog lately (and why wouldn’t you?), you have probably noticed that I have written multiple times that you cannot go a day without reading about a new commercial real estate closing in Texas. It sure seems like it is a crazy busy time to be a buyer.
But, of course, you probably did not need me to tell you that. You are out there in the market – you see how hot it is. And while things definitely slowed down at the start of COVID, they have picked back up to very active levels.
Of course, all of this evidence has been purely anecdotal. Its our collective experiences on how things are going. Well last week that changed when I read some summaries of some studies that showed the Texas commercial real estate market really is booming. So that’s what we are going to talk about this week – the huge Texas market.
Last Year was a Great Year for Commercial Real Estate Investment in Texas
It was pretty clear to tell that, at least at first, COVID slowed down real estate sales everywhere – including in Texas. For those first six months, there just were not a lot of deals taking place. But that definitely started to change in late 2020. I mean – deal junkies gotta do deals, right? We cannot just sit on the sidelines forever.
And then 2021 was a great year for commercial real estate in Texas.* And it happened all over Texas. Houston, for example, had a terrific third quarter last year. There were more sales there than any other city in the United States that quarter. This centered around the booming multifamily and warehouse markets. No doubt its yearly totals were near the top nationally also.
We have talked about it a lot in this blog, but of course Austin has been on fire for the last year also. It has set itself up as a leading tech city and continues to attract new businesses. As a result, the demand for office space and housing continues to grow. One report called Austin the second best city in the country for real estate investors in 2021.
And finally, nothing can really compare to the banner year that Dallas saw. For the second year in a row, Dallas was the had more commercial real estate sales than any city in the country. Indeed, almost $13.4 billion traded hands in Dallas in 2021. No other city has seen more multifamily sales ever. Bottom line – Dallas is booming.
Will the Texas Real Estate Market Continue to Boom?
Seeing this growth all over Texas, the obvious question is will we continue to thrive like it has the last few years? I think it will. And I suspect most of you agree. The bottom line is people still want to invest in Texas. And that is unlikely to change in the near future.
Perhaps the biggest driver of that desire is that people keep moving to Texas. Dallas, Houston, and Austin all continue to be near the top of the fastest growing large cities in the country. And the suburbs that surround them often grow even faster.
And its not just people that are moving here. Companies are also. Whether is the business friendly climate, the state’s tax structure, whatever – companies seem to be flocking to the State. Indeed, in 2021 multiple fortune 500 companies moved their headquarters to Texas.
There are, of course, many things that could change that could derail the State’s growth. We are far from perfect. And while I will continue to address those issues in future blog posts, this one is purely optimistic. If you are in commercial real estate, Texas is a great place to be.
*For this entry, I’m looking at commercial real estate in general. Obviously there is a big difference between the performance of industrial versus office versus retail. But that is a big topic for another time.