Basketball & Buildings
August 12, 2014 — Not only did the San Antonio Spurs win the 2014 NBA Championship, but Texas is hitting 3-pointers when it comes to economic growth.
The real estate industry is no exception, with our Texas clients reporting tremendous demand in all sectors. Developers ranging from global institutions to local entrepreneurs are participating in a building boom where speculative projects are fully leased before construction is complete.
In addition to the anecdotal evidence we’ve been collecting, here are some facts on the Texas boom, many of which were reported in a recent article in Urban Land, the magazine of the Urban Land Institute (ULI):
Population: Big cities and small towns throughout Texas are outpacing most other areas of the country in terms of population growth. Houston's headcount increased more than any other U.S. city between 2012 and 2013, with an addition of 137,692 people, while Austin won the top spot on Forbes' annual list of America’s Fastest Growing Cities for the past three years with a population growth rate of 3% in 2013. The 2013 addition of over 100,000 people to the Dallas-Fort Worth population made that metro area the fourth largest in the nation. Small cities in Texas are also growing rapidly, with Odessa and Midland in West Texas enjoying the second and third largest percentage of population growth of all cities in the U.S. with under 200,000 people.
Employment: Population growth typically follows employment opportunities and this holds true for Texas. 1.2 million jobs were added in Texas over the past four years, bringing its unemployment rate in April to 5.2% as compared to the national rate of 6.3%. Job creation has not been limited to the energy sector, where it’s been especially strong. There have been significant gains in construction, insurance, finance, technology and service sector jobs as well.
Housing: If you’ve got people and jobs, housing can’t be far behind. Houston led the nation with 28,339 housing starts in 2013, followed by Dallas in second place. Austin and San Antonio were not far behind, also placing in the top ten.
Office Construction: Houston, with a vacancy rate hovering around 1% for Class A office space, has 30 office buildings under construction in addition to ExxonMobil's three million square foot corporate campus project. Once again, not far behind is Dallas, where State Farm is building a 1.5 million square foot office campus in the suburb of Richardson.
Infrastructure: The explosive growth in people, jobs, and housing means that Texas infrastructure will also have to grow. We are happy to report that Texas also takes the lead when it comes to renewable energy transmission. 3,600 miles of high-power transmission lines were recently completed, with the capacity to connect up to 18,000 megawatts of wind power generated in the windy west Texas Panhandle to the high-density areas of Houston, Dallas-Fort Worth, and Austin.
Go Texas go!