Elon Musk Needs A DFW Real Estate Play. He Just Doesn’t Know It Yet
SpaceX and Tesla head Elon Musk is making headlines again in Texas with his hyperloops-focused tunneling company The Boring Co., which is reportedly building commercial space near Austin, not far from Musk, where a Tesla gigafactory is already under construction .
The real estate move contributes to Musk’s growing presence in the Lone Star State, which already includes SpaceX locations in McGregor and South Texas and a Tesla gigafactory in the Austin area.
While Austin looks like the winner in Musk’s recent Texas commercial property search, the Dallas-Fort Worth CRE could still benefit from the tech guru’s growing presence in the state.
Unsplash / SpaceX
Fort Worth Mayor Betsy Price is suspending feelers to get Musk’s attention, and it appears that Musk has been critical of DFW. In a recent interview about his move to Austin, the tech CEO said DFW was on his shortlist, according to Evan Stair, senior vice president of data and analytics at ESRP.
Musk ultimately chose Austin because that’s where his top talent wanted to live, added Stair. But that doesn’t mean that Musk doesn’t know or ignore the logistics and talent pool that is available in DFW a few hours away.
According to Stair, DFW outperforms Austin in terms of technical talent and logistics infrastructure. The North Texas region has 49,985 software engineers, according to ESRP data, compared to 22,101 in Austin. DFW also has twice as many mechanical engineers – 6,192 versus 2,190 in Austin. The talent distribution between the two cities is similar when it comes to electrical engineers.
Musk’s top people might want Austin as their home base, but according to Stair, DFW could ultimately be considered the best logistics, transportation and talent hub nearby.
“They want to be in an environment they like and have that creative buzz, and Dallas could benefit from the fact that you actually need to have infrastructure and all of the other utilities, and we have a good part of that,” Stair said . “If you look at the airport infrastructure, Austin doesn’t have it. So I’d imagine a lot of the product and raw materials will likely be transported through and stored in Dallas.”
This could lead to additional development as companies serving Musk-related companies look for strategically located real estate, shipping, and inventory across Texas.
Fort Worth Alliance Airport is a DFW amenity that could draw Elon Musk and others to North Texas.
“Suppliers may also have the opportunity to move here. This has an indirect effect on companies that supply the various companies,” Paul Hendershot, director of market analytics at CoStar Group, told Bisnow.
Obvious landing sites for suppliers to auto, avionics, and AI companies like SpaceX, The Boring Co., and Tesla are located across DFW. The Metroplex has a larger international airport than Austin and more cargo-handling capacity compared to central Texas, Hendershot said.
North Texas is also home to the AllianceTexas Mobility Innovation Zone, a Hillwood creation that incorporates AllianceTexas’ infrastructure to serve high-tech companies testing everything from lifting vehicles to autonomous trucks. According to Hendershot, Musk could even visit AllianceTexas and other DFW industrial centers for its own future expansions in the state.
The Frisco Station is an example of DFW’s technology-driven industrial base. Developed by Hillwood, The Rudman Partnership and VanTrust Real Estate, the 242-acre mixed-use development is already the test site for Uber Air’s aircraft. The rise in industrial prices in Frisco shows what high-tech innovations like Uber’s flying taxi concept are for industry prices.
In the first quarter of 2017, industrial prices in Frisco were around $ 75 per SF. Three years later, after Frisco Station and its innovation center came into play, industrial prices in Frisco are as high as $ 108 per SF, Hendershot said.
This growth in the western portion of the Metroplex and AllianceTexas could attract Musk himself, companies tangentially related to Musk, or other innovators of similar caliber to follow him to Texas.
“If you look at a place like Alliance, Bell Helicopter is already well represented and the airport provides connectivity for the transportation of valuable parts and goods,” said Hendershot. “I think I would say that the opportunity for him to build a facility, additional manufacturing facility, or something in connection with one of his many companies in the Dallas-Fort Worth area is definitely eligible.”
The reality that Tesla and The Boring Co. are taking root near Interstate 35 in Austin is a boon for the CRE to encourage South Dallas developers like Terrence Maiden, CEO of Russell Glen, of the opportunities for dreaming of their rural communities.
“In the past few years, South Dallas has seen impressive regional industrial growth,” Maiden told Bisnow. “With south Dallas to Austin along Interstate 35, hopefully the region can continue to be successful in attracting more companies that could support Tesla.”
Even without the new lease from The Boring Co in the Austin area, Tesla developers dreamed of how they could combine South Dallas with the technology boom in Austin, according to Maiden.
“Tesla coming to Austin should eventually create several thousand job opportunities in both central Texas and possibly Dallas,” he added. “Given the number of technical schools and colleges in south Dallas, the area would have a large number of young, talented people to Tesla recruiting for. Also, I’m sure there will be many regional companies in the area doing business Tesla compete. “”