DFW Economy

[Tivo_Kenevil]

Dallas isn't that desirable, especially when you talk about city living.

Yep.

[tanzoak]

Ah, that's good to know. That is definitely interesting, but I'm not so sure it represents a 'shift', just yet. I think there is demand for both suburb living and city living, but, the thing is, DFW suburbs are HIGHLY desirable, so it's no surprise they are still going strong. Dallas isn't that desirable, especially when you talk about city living.

Also, I'm curious to know if the suburbs were late to the party when it comes to multi-family construction. Is it possible that Dallas had a strong start with multi-family construction, while the suburbs were still building single-family homes, and now things are generally balancing out?

Non-Dallas single-family permitting has actually increased more (+61%) than non-Dallas multifamily permitting (+16%).

Dallas single-family permitting hasn't changed too much (-12%), especially compared to multifamily (-57%).

The 2011-2016 boom was certainly more city-oriented (Dallas >20% of all DFW permitting) than where we're at now (12%) or the 2002-2007 boom (~10-12%).

[Cord1936]

GDP by metropolitan area for 2016 was released this morning by the BEA.

Dallas/Ft. Worth ascended to the 4th largest economy in the nation, supplanting Houston/Woodlands in that spot, and jumping two places from 6th in 2015 to 4th in 2016!

Dallas/Ft. Worth leapt over both Washington D.C. and Houston/Woodlands in a single year ... pretty darn impressive!

DFW's GDP is now $511,606,000 billion - up from $493,048,000 billion in 2015 - increasing by $18,558,000 billion and at a strong +3.8% clip.

Houston/Woodlands dropped to 6th largest economy from 4th due to the oil downturn.

Houston/Woodlands is now $478,618,000 billion - down from $496,708,000 billion in 2015 - contracting by $18,091,000 billion and at a negative 3.6% rate.

Houston/Woodlands was the only major metro to suffer a decline year-over-year in the latest GDP release, falling two places from 4th to 6th in a single year.

GDP release: https://www.bea.gov/newsreleases/regional/gdp_metro/2017/gdp_metro0917.htm

[tamtagon]

inconceivable.jpg

~~The Oil & Gas Cartel

[tamtagon]

DFW's GDP is now $511,606,000 billion - up from $493,048,000 billion in 2015.
GDP release: https://www.bea.gov/newsreleases/regional/gdp_metro/2017/gdp_metro0917.htm

A different perspective:

$850,000,000.00 San Fran-San Jose-Sacto
$800,000,000.00 I-35 corridor, Dallas-Waco-Temple-Austin-San Anton-Laredo
$700,000,000.00 Washington DC-Baltimore

Texas is moving up in the world, totally for sure, but there's a long way to go....

[Tnexster]

That is quite a drop for Houston, I wonder how the floods will impact them? Lots of economic activity in rebuilding but not sure about the longer term prospects.

[Cord1936]

That is quite a drop for Houston, I wonder how the floods will impact them? Lots of economic activity in rebuilding but not sure about the longer term prospects.

It's actually far worse than anyone realizes. Houston/The Woodlands has had negative GDP for three straight years ... with their latest GDP they are lower than they were in 2013.

You have to go back to 2012 as a comparison in order for their current GDP reading to be considered positive growth.

Houston/The Woodlands has at best been treading water this year and Harvey's effects will probably cause a contraction in GDP for them again when this year's numbers are released a year from now.

Unless oil soars to the $100 range again it is going to be a long, hard slug for them to pull out of the hole they've fallen into, if ever. A return to $100 oil is not being predicted by any analysts and really just doesn't appear to be in the cards ever again.

It is now appearing that 2016 is going to be viewed as the watershed year in which DFW pulled ahead of Houston/The Woodlands in a manner so definitive on several key indices and levels ... that we will not look back for a very, very long time ... if ever.

DFW is now the economic king and powerhouse in Texas ... and the rock solid # 4 in the nation ... and we should retain those positions indefinitely into the future (barring some extraordinary geopolitical rupture).

2016 Top 10 Metropolitan Areas by GDP, on Flickr

[Tnexster]

Unemployment keeps dropping

http://apps.dallasnews.com/texas-jobs-r ... 1455145806

[Tnexster]

D-FW's office market is heading into 2018 on a high note

https://www.dallasnews.com/opinion/comm ... -high-note

[Cord1936]

DFW Building Activity Topped $22.2 Billion in 2017
By Steve Brown, Dallas Morning News, 01-25-18

Recap:

* DFW set a new all-time construction volume record at $22.2 billion in 2017
* DFW ranked as number 2 in the nation in 2017 after NYC's $41.1 billion
* DFW 2017 dollar volume is 6% more than 2016, which itself had been the previous record
* DFW commercial building activity totaled $9.6 billion, a 10 percent gain from 2016
* DFW residential building construction hit $12.6 billion, a 2 percent rise from 2016

Article: https://www.dallasnews.com/business/real-estate/2018/01/25/d-fw-building-activity-topped-22-billion-2017

[Cord1936]

This relocation by CBRE Hotels from Houston to Dallas is a prime example of what is occurring on a much broader and larger context. The age old "struggle", if you will, between Houston and Dallas for supremacy has been decided ... Dallas already has and is pulling away from Houston in ever greater ways with each passing day.

The Dallas region is now 4th largest GDP in the nation (Houston falls from 4th to 6th), Dallas region has 22 Fortune 500's (Houston falls from 26 to 20), Dallas is literally number one in the nation in just about every major financial and economic metric (with Houston in many instances literally falling off the map).

Houston's role is number two in Texas and consequently the entire South, still quite important of course, but now must accept it has an ever more apparent supporting role to Dallas as the number one throughout the South and number 4 nationally.

The positions and roles of the two respective cities and regions have flipped. About the only major category that Houston now tops Dallas on is in its greater city population ...

CBRE Hotels Says, 'Adios, Houston' And 'Hola, Dallas'
CBRE Hotels South-Central To Pack Its Bags And Head North
by Jeremiah Jensen, Dallas BisNow, January 31, 2018

CBRE is moving its hospitality consulting and advisory services for the South-Central U.S. region from Houston to Dallas.

“Dallas is the quintessential location for focusing our services throughout the South-Central U.S. In addition to DFW’s centralized location, transportation hub and growing tourism, Dallas is home to many hotel franchises, representatives, management companies, developers and investors, as well as an essential financial market for our industry. This restructuring will enable us to expand our advisory services to ultimately better serve a broader range of our hotel clients,” CBRE Hotels Director, Consulting, Jeff Binford said in a statement.

The reason Dallas is the quintessential location is simple. Dallas is the busiest, biggest hotel market in Texas.

According to Marcus & Millichap research, Texas has the largest construction pipeline in the nation and out of all the Texas markets, Dallas has the largest pipeline of hotel rooms by far.

The data from the second half of 2017 puts Dallas at roughly 8,000 rooms in the pipeline and second place Houston has about 6,000 rooms in its pipeline. The report indicates this may hurt occupancy for a while, but it also says demand remains strong as occupancy in Texas trends in the mid 70% range, well above the national average of around 65%.

CBRE Hotels will work out of 2100 McKinney Ave., a 352K SF, Class-A property in Uptown.

Article: https://www.bisnow.com/dallas-ft-worth/news/hotel/cbre-hotels-says-saynara-houston-and-konnichiwa-dallas-84341?rt=53851&utm_source=MorningBrief&utm_medium=email&utm_campaign=20180201_dallas-ft-worth_morningbrief&be=dallasdecodence%40aol.com

[tamtagon]

Glad to see references to the economic reach of Dallas expanded to South Central rather than Southwest. The reference may seem like a subtle change, but the reality is huge -- it's not just Texas, Oklahoma, New Mexico and part of Lousiana... it's Texas, Oklahoma, New Mexico, Lousiana, Arkansas, Kansas parts of Mississippi, Colorado.... growing!

Houston has lived through swings like this for decades. Exxon has been reported to expect tripled Permian Basin oil/gas production over the next five years, and Mexico is primed to finally turn back into a major oil/gas producing country -- both of these growth markets will be channeled through Houston.

I really want the renewable energy companies to move HQs to North Texas, Fort Worth being the ideal downtown setting for them.

[Tucy]

NM

[Cord1936]

I receive a weekly newsletter from Allie Beth Allman Real Estate that nearly always has very interesting and topical statistics for the area. The following three are from last weeks March 9th newsletter:

DFW: DFW is the state’s biggest hotel market, reports Source Strategies, raking in slightly over $3 billion in revenue in 2017. Austin posted the highest overall occupancy rate of 75% (DFW 70%). The hotel with the most revenue per-available-room per-night was Dallas’ Ritz-Carlton. The 1,511-room Gaylord Texan Resort and Convention Center took in the most overall revenue of nearly $89.1 million. Other Dallas hotels in the top five were the Hilton Anatole and the Omni Dallas.

DFW: Despite increasing mortgage rates and home prices, North Texas home sales rose 10% in February over last year, reports the Dallas Morning News. Real estate agents sold 7,188 preowned single-family homes last month, the highest February sales total ever for the area, according to NTREIS data. For the first two months of 2018, agents sold 7% more homes than the same period in 2017. The biggest increase so far is for homes priced from $200,000-$250,000. More than 17,500 homes were listed for sale entering March, up 6% from last year, but still woefully low.

DFW: DFW had more home sales in 2017 than any Texas metro area, according to a new TAR report, accounting for about a third of all home sales in the state. More than 102,000 preowned single-family homes were sold in the DFW area, up 3% from 2016. Builders sold around 32,000 new homes. Statewide, 336,502 homes were sold, up 4% for the year. The report noted that almost a third of homes sold were between $200,000-$300,000. Almost a quarter of buyers were between 45-54 years of age. Economists say the housing recovery that started in North Texas almost eight years ago still has momentum.

[Cord1936]

Colliers: Dallas and Houston Were National Leaders in Medical Deals in 2017
from RealtyNewsReport.com, 03-19-18
...
In 2017, Atlanta was No. 1 in medical-related real estate deals with $1.1 billion in sales.

Los Angeles, with $973 million in sales, ranked second.

Dallas, with $893 million in sales was third. Houston ranked fourth with $495 million.
...
Article: http://realtynewsreport.com/2018/03/19/colliers-dallas-and-houston-were-national-leaders-in-medical-deals-in-2017/

[Cord1936]

More Hyperscale Demand On The Way For Dallas Data Center Market
March 22, 2018, by Jeremiah Jensen, Bisnow Dallas

More hyperscale users are on their way to the Dallas-Fort Worth data center market in 2018 and 2019 (10 MW to 30 MW of extra demand estimated), according to CBRE's Data Center Solutions team. Excellent fundamentals, room to build, prime geography and low costs of electricity/development put DFW on shortlists for developers and investors everywhere.

“We hear about this all the time, [when] a client is on a search for data center space, and they don’t know exactly where they want to be, they don’t have to be in Northern Virginia for instance, Dallas is 95% of the time on that list,” CBRE Senior Vice President of Data Center Solutions Brant Bernet said.

Historically, DFW has been primarily an enterprise market (80% enterprise and 20% cloud as a colocation market), and the lion’s share of DFW’s excellent absorption numbers comes from enterprise users, which typically are smaller than hyperscale players. That makes its placement among the nation's data center markets an impressive feat — DFW has the third most absorption in the nation behind Northern Virginia and Silicon Valley whose absorption numbers get boosts from hyperscale users, according to CBRE’s data center team.

DFW is getting its own significant hyperscale players in the market, such as Facebook, that do not register in the data because they are privately held. Facebook’s Fort Worth data center has almost 100 megawatt of load in play already and is supposed to double. DFW’s total inventory, not including users like Facebook that own their space, is 252 MW, the second-largest in the nation, and 40 MW was in the pipeline at the end of 2017[/b], according to CBRE research.

“I think the same fundamentals that brought Facebook here will attract companies like AWS and Microsoft (aka hyperscale users) when the timing is right,” CBRE Associate, Data Center Solutions, Haynes Strader said. “Every co-location provider is positioning themselves to be able to accommodate a large cloud provider when the time is right.”

“Our prediction is that 2018, and certainly 2019, we’ll see more of those types of clients, the real hyperscale guys, find their way to Dallas,” Bernet said.
...
Article: https://www.bisnow.com/dallas-ft-worth/ ... %40aol.com

[Cord1936]

Very interesting post from this week's weekly newsletter from Allie Beth Allman Real Estate (week ending 03-30-18):

DFW: With major corporate relocation in northern suburbs, support companies are settling in the urban core, especially the large millennial workforces. Uptown and Downtown are leasing both office and living space at a record pace. Deep Ellum and Farmers Market are popular residential areas, as are East Dallas and Knox Henderson. Apartment prices went up about 7% last year, responding to demand for amenities.

[Cord1936]

The Dallas area remains absolutely RED HOT!

Any worries or concerns about a pull back or slowdown are completely unfounded as the data for the first two months of 2018 indicate yet another record year of construction volume in both the commercial and residential sectors is unfolding before our eyes ... this on top of already two record years in a row (2016 & 2017)!!!

Surge in construction pushes D-FW building up 6 percent this year
Dallas Morning News, Steve Brown, Real Estate Editor, 03-29-18

A surge in February construction helped push Dallas-Fort Worth building this year ahead of 2017 levels.

New commercial building activity rose by 75 percent last month compared with February 2017, according to a new report Dodge Data & Analytics.

Residential construction starts were up 5 percent year over year.

Through the first two months of 2018, Dodge Data has recorded $3.5 billion in new residential and commercial construction in North Texas. That's 6 percent more than in the first two months of 2017.

D-FW set a new construction record with more than $22 billion in projects last year.

Only New York City had more construction activity, according to Dodge.

Article: https://www.dallasnews.com/business/rea ... rcent-year

[lakewoodhobo]

6 Projects That Transformed Dallas Into A Global Powerhouse Over The Last 10 Years
https://www.bisnow.com/dallas-ft-worth/ ... years-8745

Not sure where to put this, but this dumb listicle gives way too much credit to individual projects like the Farmers Market and the Joule (we're a global city because of them, really?) and completely ignores things like lifting the Wright Amendment and DART service to DFW.

[Tivo_Kenevil]

Haha. Good laugh this article.