Dallas sizzles as country’s 2nd hottest commercial real estate market for 2021
The eyes of Texas — and the entire world of commercial real estate — appear to be upon Austin and Dallas.
In a new survey from commercial real estate services company CBRE, commercial real estate investors rank Austin first and Dallas second among U.S. metro areas for investment prospects in 2021. Austin knocked Los Angeles off its previous first-place perch. Dallas-Fort Worth comes in at No. 2, with Los Angeles holding down the No. 3 spot.
Dallas-Fort Worth ranked second in 2019 and 2020, while LA ranked first in those two years. Austin appeared at No. 3 in CBRE’s 2020 survey and No. 11 in the 2019 version.
“The Sun Belt markets of Austin, Dallas, Phoenix, and Atlanta were among the top-performing metros where the least number of jobs were lost in 2020,” CBRE says in its survey findings.
For the first time in the history of the CBRE survey, big-time investors (those that manage assets of more than $50 billion) preferred smaller markets like Austin and Dallas-Fort Worth over mega-markets like New York City and San Francisco.
CBRE says markets such as Dallas-Fort Worth and Austin “will see intense competition for good-quality assets from all types of investors.”
At the same time, commercial real estate services company JLL names Dallas and Austin “rising star” cities for investment in the U.S. Also in that category are Denver; Charlotte, North Carolina; Miami; Nashville; and Raleigh, North Carolina. JLL cites population growth and job growth, as well as a lower cost of living and shorter commute times than places like New York City and San Francisco, as reasons for its bullish outlook regarding “rising star” locales.
Mike McDonald, vice chairman at commercial real estate services company Cushman & Wakefield, recently told The New York Times that Austin is “the hottest market in the country right now.”
“Millennials are moving to the Sun Belt, and companies are following the millennials. Investors are following the companies,” McDonald told The Times.
It’s no surprise that Dallas-Fort Worth ranks second in the CBRE survey, says Ari Rastegar, founder and CEO of Austin-based Rastegar Property Co., which owns apartment, office, and industrial properties in U.S. markets such as Dallas and Austin.
“While Austin has become one of the fastest-growing tech hubs globally, Dallas has long been the financial center of the state and Sun Belt region, benefiting from the tremendous … educational institutions that are located throughout the metro,” Rastegar says.