No Overbuilding Expected in Big D. Here's Why.
Construction projects are thriving across North Texas, but there are always those nagging doubts for lenders who fear overbuilding. But, Greystone managing director Jef Elm believes there’s a healthy balance of pre-leasing and caution being exercised in this boom. These are a few of the topics we’re excited to explore at Bisnow’s Dallas Capital Markets event on Aug. 25 at the Dallas Marriott City Center (7:30am start).
On a macro level, of the four major Texas metros, North Texas may be the best positioned because of its diverse economy, Jef (one of our event speakers) tells us. Dallas-Fort Worth has benefited from massive corporate relocations from a multitude of diverse industries, including Toyota, State Farm and Liberty Mutual. There’s always the concern of overdevelopment, Jef says. For the most part, Dallas has developable land in all directions of the city with little to no natural barriers; for example, 25 years ago the town of Frisco was a small town in the country north of Plano. Now, it’s no longer just a traffic stop on your way to Lake Texoma, but it’s one of the top suburban development markets in the US. And, with the Tollway’s planned 18-mile expansion north of Frisco, Celina and Gunter could be next in line for a Frisco-like development boom.
There are always potential roadblocks to slow down commercial real estate booms, including a prolonged period of low oil prices and rising interest rates. This fall may see the Fed raise interest rates; but Jef thinks it has a 50/50 chance of happening. Even if it does, he doesn’t think it will affect the DFW market too much. The overall national economy is not really strong, while the Southwest region is dominating. The Fed may raise rates a little this fall, but if so, it will likely be a one-time raise. He doesn’t see them doing it quarterly until the entire nation’s economy is back on track. Beyond capital markets, Jef was recently navigating the Buffalo River in Arkansas on a Boy Scout canoeing trip with his son.
Come hear Jef talk about the Dallas capital markets on Aug. 25 or catch him at Bisnow’s Multifamily Surge event in Austin, focused on multifamily on Aug. 27. You can register for the Dallas event here, and you can register for the Austin event here.