After moving to Fort Worth 2 years ago I have been paying attention to what businesses are moving here and sort of the reasoning behind it. A lot of the moves have to do with a business-friendly environment in Texas. The atmosphere here is that people want to do business and be in business. Taxes are lower, real estate prices are lower (for now), and the regulatory environment is pro-business. Big companies like Charles Schwab, Toyota, and Tesla are moving to Texas at a rapid rate. It is important to keep up to date with developments because it brings jobs and affects demand for real estate. Below are some notable developments in DFW the last month.
Rising Land Prices
The cost of raw land in DFW has risen dramatically since the pandemic and is rising by the month. Developers are being pushed to secondary and tertiary markets to bring the costs down. Industry experts are saying that there is no end in site to the rising land prices. I was recently looking to purchase a lakefront lot with owner financing and thought the price was too high. The person who bought it ended up paying double what I was quoted for!
Another hurdle in the development process is permitting and long-lead times for materials. This is driving demand and price even higher. I would say most people are aware of the supply chain disruptions by now. Even though the development costs are up, the demand is still there to make it profitable.
Ares Management Corporation
Ares Management Corporation is based in Dallas, and they began construction on Turnpike North Logistics Center including two buildings. The two buildings total 636,000 square feet on a 35.9-acre land parcel. They are warehouse developments expected to arrive in Q4 of 2022. The supply shortages have affected steel, roofing, and other building materials so the delivery may be delayed.
The firm said that the location checks a lot of boxes such as proximity to Dallas, population density, labor pool, good infrastructure, and roadways.
HomeGoods
HomeGoods is about to break ground on a distribution center this month that could add up to 1,000 jobs in Fort Worth. They signed a 20-year build-to-suit lease that will span more than 1 million square-feet and cost an estimated $80.3 million. The warehouse will be on a 100-acre site and be a regional distribution center for HomeGoods and their other brand Homesense.
Stonemont Financial Group
The private real estate investment firm is developing approximately 500,000 square-feet of industrial space in two buildings near DFW Point35 business park on Harmon Road. The CEO said:
Dallas-Fort Worth has clearly emerged as one of the nation’s top industrial markets, and the opening of our new office along with all of the various project milestones we are announcing today signal Stonemont’s intention to make the metroplex a key cog in our overall national network
Source: Dallas Business Journal
They are also working on another project in Fort Worth that is a 213,000 square-foot building on FM Road 156 near Chaplin Drive. Both properties are expected to be delivered by next summer.
North Fort Worth
More than 2 million square-feet of distribution and warehouse space will break ground soon on a new Fort Worth industrial park. The project is along Interstate 35W and is set to being in January 2022. Trammell Crow Co. is the developer and once the project is complete, they will have added more than 5.2 million square feet of industrial space to the Alliance area. DFW is centrally located and an ideal location for distribution.
Conclusion
Rising construction costs and rising land costs will present challenges to developers, but the demand in DFW is strong to say the least. There is a lot of industrial being built here due to its central location and we are starting to see a lot of large companies relocate here. The financial sector is making its way here with the remote work trend being accelerated. High demand bodes well for investors.
