Other massive projects underway
include the 20-story PwC Tower being
developed by Trammell Crow at Park
District in Uptown with 500,000 square
feet, and Frisco’s Wade Park/buildings II
and III, with 400,000 square feet each.
Many of the larger projects are being
constructed at the metro periphery, such
as the 1.089 million-square-foot 35 Eagle
Building A in Alliance, as infill sites are
becoming increasingly rare, says CBRE.
And historically concentrated in Far North
Dallas, large build-to-suit projects are
beginning to appear elsewhere in the market: Pioneer Natural Resources broke
ground on its 1. 1 million-square-foot campus at Hidden Ridge in Las Colinas and
Signet Jewelers moved into its
225,000-square-foot building in Cypress
Waters. Meanwhile, American Airlines
with 1. 8 million square feet, Charles
Schwab with 500,000 square feet and
Mercedes Benz Financial with 200,000
square feet recently broke ground on the
Fort Worth side of the market.
Marketwide, build-to-suit projects
accounted for 50% of all industrial development as of Q4 2017, the highest build-to-suit to spec construction ratio yet this
cycle. Additionally, an influx of new residents and jobs into DFW, increased adoption of automation and e-commerce/last-mile logistics have resulted in larger
super-regional distribution centers.
Despite all of this demand and growth,
Texas’ top-tier office markets—as with
many markets across the country—
were off to a slow start this year in
terms of investment, wrapping up
what may be one of the worst quarters
of the past five years. The Texas office
market had a total of 22 sales since
the beginning of the year, totaling
$504 million in sales volume and sig-
naling a 63% year-over-year decline,
according to CommercialCafe.
The 5. 6 million square feet of
inventory in fewer than 30 office
transactions was the lowest quarterly
total in five years. But, DFW was the
most active in quarterly deals closed
with 11 sales for $87 million.
Not to be outdone is Houston,
which has created a million jobs in 10
years as one of the nation’s largest
manufacturing metros. Its industrial
market remains one of the healthiest
in the country, fueled by strong population growth and port activity.
“Everything we have going on here economically with the ports, transportation,
the medical centers and the oil-gas sector,
and the fact that it’s a great distribution
center for goods and services going East or
West make us a very desirable city to live
and invest in,” says Tucker Knight, senior
managing director, Berkadia.
With an economy largely focused on
products that support oil extraction and
refining, distribution and warehousing
have picked up the slack as the shale oil
production pace has slowed. And, more
than a year has passed since the widening
of the Panama Canal, resulting in container traffic soaring by 11% last year.
Industrial construction has been very
balanced, with demand heading toward
High RevPAR growth is fueling
investor demand for hotels in
Tempe, Scottsdale and Downtown
Phoenix, where Apple Hospitality
REIT Inc. paid $44 million for this
recently completed 210-room
Hampton Inn & Suites by Hilton.