A wide variety of commercial real estate is available in Texas. The main areas that currently see a high rate of growth are Houston, Dallas and Plano. Houston was ranked in the top 10 metro areas in 2013 and continues to lead as one of the healthiest economies in the U.S. in July 2014. Five metro areas in Texas are slated to have at least 3.5% growth in 2014.
Houston Area Growth
The majority of job gains in Houston are expected to be in the energy sector. The city will also make the top 10 list for STEM occupations (jobs needing degrees in science, technology engineering and math.) Companies currently have 10,278 positions listed. Engineering and Operations jobs are expected to relocate to Houston during the coming years.
The Greater Houston Partnership leads economic development efforts, assisting companies considering relocating, expanding or investing in the greater Houston area. It oversees GHP's investment programs, international trade and investment plans. The Partnership is also involved in Houston 2.0 which is a $40 million fundraising campaign to support the Partnership.
In the Dallas Area
Dalcan Investments is one of the Dallas companies that focus on international relationships with corporations that primarily acquire office buildings and properties in various sectors. Three million square feet were recently purchased, managed for a few years and then sold off. A number of acres of land was developed including The Wilderness (a waterfront development) and gated communities in the Houston/Dallas corridor. The company has currently been acquiring industrial, office, data and other properties for similar lease and sales.
A Dubai-based investment group recently began a new 700 million project for mixed-use buildings off the Dallas North Toll way .A luxury development is planned on its 41-acres. Plans include 2.3 million square feet of space. There will be high-rise condominiums, Class A office space, a 5 star hotel, destinational tourist space and fine dining restaurants.
Prospects for Plano
The Plano area is experiencing similar decreases in space for rent or lease and increases in the price per square foot within existing structures. Property leases for industrial properties range from $4.50-$5.25 to $9.00-$14.40 per square foot depending on the location.
Types of Properties
Large, single-story structures primarily used for distribution centers and warehousing business inventory range from 50,000 to hundreds of thousands of square feet in one building. Many have up to 60-foot ceilings which accommodate large storage and racking systems. A small amount of office space is often included along with loading docks, truck doors and parking areas for several semi-trailers. Rail cars serve some of these buildings.
Industrial buildings specializing in refrigeration and cold storage offer large capacity freezer space. They provide distribution centers for food products requiring refrigeration.
Telecom/data hosting centers are usually located near major communications lines accessing large redundant power supplies. They are capable of powering extensive amounts of telecom switching equipment and computer servers. The floor slabs are capable of supporting the weight of this equipment as well as backup generators and HVAC units. Raised flooring can handle extensive cabling and cooling systems. Their many uses include Cyber Centers, Switching Centers, Telecom Centers and Web Hosting Facilities.
Heavy industrial buildings provide manufacturing facilities. They are designed to produce goods and materials using specialized equipment. They house three-phase high capacity electric power. Some industrial properties include heavy duct work and pressurized water and air lines, high capacity ventilation and exhaust systems, buss ducts, floor drains, cranes and storage tanks.
Flex Buildings cover a wide range of uses often combining more than one within each structure. These include retail sales showrooms, office space, research and development. Their ceilings are usually below 18" high and contain more office space than larger structures.
Find available office space in Houston, Dallas, Plano and other Texas cities.
Specialized Biotech flex-buildings can contain a variety of laboratory spaces where chemicals, biological matter, and drugs or other materials are tested and analyzed. These biotech buildings must have extensive plumbing for water distribution, direct ventilation ducts and specialized piped utilities. Accurate humidity and temperature controls, heavy power lines and dust control are sometimes required.
Basic showroom buildings combine retail display areas with on-site storage and distribution space. Ordinarily 50% of the square footage is dedicated to sales.
Future Commercial Growth
Rising demand for commercial real estate and employment growth in a market of limited development set the stage for a drop in vacancy rates throughout much of Texas. Expectations are that rates are expected to fall as low as 5% by late 2014.Rental rates have been in a decline since the recession. Rates should take a positive turn, peaking about 6% by year's end. Continued growth depends on wage and job growth.
Retail sales have returned to pre-recession numbers and increased by 6% the last half of the year. The increase in leasing volume also picked up. CoStar projected more than 53 million square feet of retail space would be leased in the first quarter of 2015. As existing buildings get leased, overall rents are improving at different rates according to the market and product type.