DFW sizzles as country’s 2nd hottest commercial real estate market

The eyes of Texas – and the entire commercial real estate world – seem to be on Austin and Dallas-Fort Worth.

In a new survey by commercial real estate services company CBRE, commercial real estate investors rank Austin first and DFW second among US metropolitan areas for investment prospects in 2021. Austin has ousted Los Angeles from its former first place. DFW comes in second place, Los Angeles in third place.

Dallas-Fort Worth ranked second in 2019 and 2020, while LA ranked first in those two years. Austin was ranked 3rd in the 2020 CBRE survey and 11th in the 2019 version.

“The Sun Belt markets in Austin, Dallas, Phoenix and Atlanta were among the top performing metropolises in which the fewest jobs were lost in 2020,” according to the survey results from CBRE.

For the first time in the history of the CBRE survey, large investors (those who manage assets in excess of $ 50 billion) preferred smaller markets like Austin and Dallas-Fort Worth over mega-markets like New York City and San Francisco.

According to CBRE, markets like Dallas-Fort Worth and Austin will “see intense competition for high quality assets from all types of investors.”

At the same time, commercial real estate services company JLL names the cities of Dallas-Fort Worth and Austin as “rising stars” for investments in the US. Also in this category are Denver; Charlotte, North Carolina; Miami; Nashville; and Raleigh, North Carolina. JLL cites population and employment growth, lower cost of living and shorter commute times than places like New York City and San Francisco as reasons for its optimistic outlook for “rising stars.”

Mike McDonald, vice chairman of commercial real estate services company Cushman & Wakefield, recently told the New York Times that Austin was “the hottest market in the country right now.”

“Millennials are moving to the sun belt and companies are following millennials. Investors follow the company, ”McDonald told The Times.

It’s no surprise Dallas-Fort Worth ranks second on the CBRE poll, says Ari Rastegar, founder and CEO of Austin-based Rastegar Property Co., which has homes, offices and industrial properties in US markets like Dallas and Austin owns.

“While Austin has become one of the fastest growing tech hubs in the world, Dallas has long been the financial center of the state and the Sun Belt region and has benefited from the vast … educational facilities located throughout the subway,” says Rastegar.