It’s no secret the market fluctuates in the commercial real estate industry. Right now, and since the pandemic, the industry has faced several hurdles due to rising interest rates, return to work, and other outside influences. The federal interest rate hikes have been a primary concern across the board for investors and owners of real estate. When one service line is struggling, the industry often sees another skyrocket, but the record rise in interest rates has impacted all sectors. However, the beauty of being in North Texas is that it’s always open to opportunities to capitalize on, and we have a market that should bounce back quicker than many others across the country.
Currently, in the industrial sector, North Texas has 67 million square feet of product under construction, which remains active. We are absorbing industrial properties at a healthy pace, akin to pre-COVID levels, which is a positive sign. This rebalancing in the market has stabilized rental rates and land prices. We also see positive signs in the office sector with return-to-work amping up. At Colliers, we’ve seen this take off with office leasing, especially with smaller users and Class B office space.
Additionally, Texas being such a pro-business state is a significant advantage, attracting companies and investors to the region. The population growth and business relocations also feed into the booming multifamily market in North Texas. The sector has ample opportunity to take advantage of because of the influx of people moving into the area. With our flat and developable land in all directions, the growth continues in the city’s core and suburbs.
One crucial thing when the market forecasts a downturn is to remain optimistic and remind clients and peers there are still deals out there. They may look different than previous years, but they are out there. It takes being scrappy, and that’s when professionals in this industry start to show their strengths. True talent and grit come to light in uncertainty, which is precisely why those professionals are the experts continuing to grow their portfolios and maintain healthy relationships with clients. Those are the types of experts who keep clients calm and excited about their investments when they close deals.
Clients also appreciate being surrounded by credible, up-to-date research highlighting market statistics, trends, and forecasts. It puts the client at ease, knowing their representation is in tune with current times and looking ahead at the bigger picture. The easier you can simplify things, the better. At the end of the day, reassuring investors about the potential North Texas will always maintain is critical.
Texas is resilient, and North Texas is one of the driving forces behind the state’s success. It’s easy to get discouraged during economic uncertainty in this industry. Although, it can also be exhilarating times if you play your cards right. That’s why thoroughly educating clients and keeping them optimistic is vital. Texas is unique; it tends to remain strong no matter what the economy throws our way.
Daniel Taylor is Executive Managing Director at Colliers | Texas Region
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