How Dallas-Fort Worth Punches Above Its Weight in Commercial Real Estate » Dallas Innovates

Whether you’re putting the past two years under a microscope or using a telescope to envision what’s ahead, the Dallas-Fort Worth region has shown a tough resilience during the pandemic. We’ve also been presented with the kinds of opportunities that can mark an inflection point for North Texas.  Through it all, companies continue to seek out Dallas-Fort Worth to relocate or expand their businesses. Investors are choosing to back projects here because they know an investment in DFW is a good one.

In other words, we’re a contender—not only nationally, but on the global stage.

In fact, the region has joined Los Angeles, Chicago, and New York in the upper echelon of the nation’s commercial real estate markets. That didn’t happen overnight. It’s been a determined, steady rise for Dallas-Fort Worth as economic development experts, CRE leaders, and others have worked for decades to raise the region’s profile, attract investment, and create the kinds of environments that will attract corporate headquarters and an ever-growing workforce.

To use a boxing analogy, Bill Sproull says, “There’s no doubt that we’re punching above our class.” 

It ‘staggers the mind’

The number of people and companies moving to North Texas “staggers the mind,” says Sproull, an innovation-led economic development expert in DFW.

Bill Sproull

He believes that Dallas-Fort Worth leads the nation in terms of all the regions that have emerged from the pandemic the quickest and regained the jobs that were lost.

We also lead the nation in the percentage of office workers who have gone back to the office, says Sproull, who most recently served as the leader of Tech Titans and helmed the Richardson Economic Development Partnership for more than 17 years. 

“That doesn’t mean they’re in the office 24/7, 365,” Sproull says. “But think about that in terms of the commercial real estate industry: It’s an in-person industry.” 

The combination of the momentum we have in Dallas-Fort Worth—the companies and people moving here—added to the fact that we lead the nation in the percentage of office workers back to the office “really does allow us to punch above our weight class,” he says.

It’s part of our culture of success: “People believe in the value of work here,” Sproull says. “To me, that’s always spoken volumes about the way that CEOs regard the productivity of people in this market. They’re just hard workers.”

He says CEOs consistently rank Texas high in surveys, saying “I’m choosing North Texas in this market for what they do.” 

Sproull, who moved back to DFW some 25 years ago, remembers one of the Dallas Observer’s “Best of Dallas” stories: “The lead was really funny, and it struck me just having come back to Texas, but the writer said, ‘Dallas is a business town with no natural beauty and a lot of attitude.’”

Yes, says Sproull, “There is an attitude here. We find a way to succeed.”

What makes DFW great

Robert Sturns

Robert Sturns, who leads economic development efforts for the city of Fort Worth, is also impressed by the energy in Dallas-Fort Worth as a whole. 

“Whether we’re punching above our weight, or we’re just hitting our aspirational goal,” he says, “there’s a lot of excitement.” 

“We’ve done a really good job across Dallas-Fort Worth of diversifying industries, looking at life sciences and biotech, and expanding technology efforts.”
ROBERT STURNS

Everyone thought COVID-19 would slow things to a crawl, he says. But “it’s probably busier now than we were before the pandemic.”

Sturns thinks our “historical base has been growing, and we’ve done a really good job across Dallas-Fort Worth of diversifying industries, looking at life sciences and biotech, and expanding technology efforts.”

Sturns and Sproull are among a group of economic development and commercial real estate experts that we invited to share their thoughts about where the region has been, and where it’s headed. They examine the positives and the negatives: What makes DFW great? What challenges must the region overcome as it continues its ascent to greater prosperity and a more prominent place in the nation’s commercial real estate establishment? 

Alan Shor, co-founder and president of The Retail Connection, sums it up: “DFW can take advantage of the current CRE trends and influence them. There’s no stronger market in the industrial, multifamily, retail, or office categories.”

How DFW Punches Above Its Weight in Commercial Real Estate

Read on for what leaders in the region had to say about our Dallas-Fort Worth ‘X factors’ as a whole and across sectors:

Bill Burton
Hillwood

People underestimate the size and diversity of the North Texas economy. The GDP for North Texas is approximately $615 billion, and the GDP for the State of Texas is around $1.7 trillion. If we treated North Texas as a state, it would be the ninth-largest economy in the United States. As a country, North Texas would be the 24th largest economy in the world.

Finance, insurance, healthcare, technology, manufacturing, and energy are all major industries in the region. Combine the strength and diversity of North Texas with a favorable tax policy, affordable housing, significant investment in infrastructure, a highly skilled workforce and a government that helps business grow, and you begin to understand why DFW is a popular place for people to move and companies to flourish.

Brad Gibson

Brad Gibson
HALL Group

Here are three top factors:

  1. Geographical location. The Dallas region is centrally located and has an ease of accessibility for domestic and international travel.
  2. Talent. The talent pool in the Dallas region is among the best in the country, with multiple universities locally and a draw for graduates who return to the area after attending other prestigious universities.
  3. Taxes. The environment is friendly to corporations, resulting in savings specifically around taxes and ease of doing business.

Frisco Jason Ford

Jason Ford

Jason Ford
Frisco EDC

DFW’s central location and lower costs (lower than coastal cities) makes it very attractive as companies realign their footprints. Mobile talent is also flocking to North Texas because lifestyles improve as money goes further here.

From a local perspective, Frisco is a city that takes a common-sense approach to public planning, business continuity, public health, and safety.  We have long advocated for heavy green space in mixed-use developments. Today, that’s a very-high demand amenity for residents, companies, and employees seeking healthy workspaces and engaging outdoor environments.


Kim Buttram

Kim Buttram
Mesquite EDC

Here are five top factors:

  1. Location.  We’re lucky to be in the center of the continental U.S.
  2. Accessible.  Land availability and competitive cost of doing business; access to workforce talent on all sides and of all skill levels.
  3. Workforce.  Companies go where the people are.  Our population explosion naturally attracts the need for additional products and services, plus companies want to be where the talent is.
  4. Supply chain.  Close proximity to suppliers, services, and related industry.
  5. Business-friendly environment.  Freedom to do business without over-regulating policies.

Keri Samford

Keri Samford
The Colony EDC

When it comes to the factors companies evaluate for expansion or relocation, the Dallas region continues to rank high in all areas, including having a central location in the U.S. for
distribution and market access, a diverse and well-educated workforce, a pro-business environment with low taxes, and a high quality of life with excellent communities.

Steve Williamson
Transwestern

Land parcels in DFW are now commanding the highest sale prices on record.

New development for all product types, but especially for industrial and residential projects, literally exploded in the last half of 2021. The unprecedented levels of new development throughout the region will continue to drive increases in land prices in 2022. All product types for land are in great demand, but particularly land that’s already zoned for industrial, multifamily, and townhomes.

Beth Bowman

Beth Bowman
Irving EDC

Our region is rich in offering a variety of communities that can serve the many needs of companies looking to expand or find a new place to call home. We can serve a multitude of needs—from industrial to e-commerce—and we also offer an attractive location for employees searching for affordability and job opportunities, which are abundant because of our continued growth.

Alan Shor, President, The Retail Connection

Alan Shor
The Retail Connection 

DFW has been—and will continue to be—one of the fastest-growing MSAs in the country, with announcements almost monthly about businesses relocating or opening major regional offices here. The region is predicted to add more than 1.7 million residents in the next seven to eight years, making it the third-largest metropolitan area in the U.S. A great example of DFW’s population growth is the 380 corridor—literally, thousands of homes are planned north of 380. Coupled with the explosive growth in the communities of North McKinney, Prosper, Celina, and Little Elm—and the transformative PGA HQ Development—the 380 corridor is one of the hottest submarkets in the country.

Bill Sproull

Nationally, there’s a “buy America” resurgence, particularly in the semiconductor industry.  In North Texas, you can look at Texas Instruments’ plans for its new fab plants in Sherman and its continued expansion in Richardson. They can’t wait to get the equipment in there and start producing. Next door to them is Qorvo, which is expanding. That kind of advanced manufacturing plays very well here in the Dallas area.

Watch the “buy America” trend: I think a lot of that will be tied into the United States-Mexico-Canada agreement (USMCA). It opens a door to more opportunity.

Chris Gomes

Chris Gomes
Marcus & Millichap

North Texas, especially the DFW MSA, is a highly sought-after market for hospitality investors. I’ve seen a huge influx of out-of-state investors moving into North Texas and a growing number of first-time buyers getting into the hotel industry. Low corporate travel is going to continue to be a challenge for certain corporate-driven markets. On the contrary, non-urban core hotels, especially interstate and some secondary-tertiary markets here actually performed better in 2021 than pre-pandemic comparisons and are expected to continue the same trend in 2022, thus presenting some opportunities for investors.

Danny Baker

Danny Baker
CBRE

Dallas-Fort Worth has become the epicenter of growth in North America. We’re in the middle of a population boom that has led to the region outperforming other markets in terms of job creation and growth, as well as the demand for all types of CRE.

In terms of the multifamily boom we’re seeing now: population growth and migration trends, business-friendly environment, relative affordability compared to coastal markets, and sustained levels of rent growth are forecasted.

Sandra Engelland contributed to this report.

A version of this story first appeared in the print edition of DALLAS® Commercial Real Estate 2022, published by Dallas Next for TREC and the Dallas Regional Chamber. Read more in the digital edition of the magazine below, and request the next print edition here.

 

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The real estate magazine is part of the DALLAS® media platform that includes the DALLAS® Relocation and Newcomer Guide and the DALLAS® Economic Development Guide. Published by Dallas Next for the Dallas Regional Chamber, together they tell the world about the future of live, work, learn, and play in North Texas.

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R E A D   N E X T

  • Dallas-Fort Worth has joined Los Angeles, Chicago, and New York City among the nation’s top real estate markets. That rise strikes at the very heart of the region’s viability, charm, and ability to adapt. It’s a tale of “coopetition,” good weather, available land, and a steady flow of inbound Type A personalities.

  • Here’s what Lee Wagner had to say about Dallas-Fort Worth’s CRE market. The partner of corporate relocation services talks trends, opportunities, and pandemic-proof sectors.

  • In just 15 years, Dallas will be the third-largest city in the country—”that’s our destiny,” writes developer Mike Ablon. “The only question is—through aspiration, strategy, and dedication to following through—how great a city we can become for all of us.” “Our to-do lists could be written from many perspectives,” he says.

  • The Techstar team briefed the Fort Worth City Council on the new accelerator program Tuesday. [Courtesy photo]

    Trey Bowles, a longtime startup champion in DFW, will helm Fort Worth’s Techstars physical therapy-focused accelerator.  “It’s a big win for the region,” Bowles says. “Customers and capital are the things that help startups grow.”  Techstars Physical Health Fort Worth is the first accelerator for Techstars in North Texas—and the “first true accelerator in Fort Worth,” says HSC’s Cameron Cushman, a key player in attracting the program.

  • Renderings from left: Frisco Station, Cypress Waters, CityLine

    Robert Folzenlogen, Lucy Billingsley, and Michael Alost tell us what it takes to build a future-proof place for people and companies. Their mixed-use developments—Frisco Station, Cypress Waters, and CityLIne—each started with a bold vision. A great location and North Texas’ “transactional efficiency” didn’t hurt. 

  • DALLAS Commercial Real Estate magazine 2022

    In this inaugural edition of DALLAS Commercial Real Estate, our cover feature reveals how Dallas-Fort Worth became a top-tier real estate market. DFW punches above its weight across sectors—and as a whole. Real estate and economic development experts share their perspectives on our rise to elite status—and what’s ahead.