Many investors look to Texas for their next commercial real estate investment project. Texas is home to some of the hottest markets in the country; combined with the appealing quality of an excellent risk-reward profile that real estate ventures possess, investors are running to the opportunity to build and buy in Texas.
Take a look at the five hottest real estate markets in the Lone Star State for 2022 based on performance and projections.
The Hottest Real Estate Markets in Texas for Commercial Investors in 2022
1. Austin
Over the past few years, Austin has remained a booming commercial real estate investment activity center.
The 2021 report rated Austin the number two city in the nation for commercial real estate investors.
Yes, you read that correctly! Austin is the second-best city for CRE – not just in Texas, but in the nation. The Lone Star State’s capital beat out big-name metropolises like Nashville, Washington, D.C., and Boston. A 2022 report found that Austin is one of the fastest-growing large cities in the United States, ranking number 10.
So, why are investors choosing Austin? The city is the home of the new booming tech industry. With its affordable cost of living paired with plentiful employment opportunities, the city of Austin is attracting many young professionals who are putting down roots in the state’s capital.
Plus, it’s a leading innovator of green construction, making it popular among environmentally-aware builders and buyers. It’s so popular that huge names like Tesla and SpaceX CEO Elon Musk moved to Austin while his companies remain headquartered in California.
Business relocations to Austin in 2020 outpaced every other year on record, creating an estimated 10,000 jobs in the city. Notable industrial leaders are moving to Austin in record numbers: Facebook, Whole Foods, Dell, Apple, Home Depot, Google, Amazon, and General Motors all have regional headquarters in the city.
Some call Austin the “Silicon Valley of the South” in response to its booming tech activity.
Austin’s economic prosperity, even in light of the pandemic, and wealth of diverse talent make it a red-hot frontrunner for real estate investors in 2021.
2. Dallas
The Crowdstreet report ranked the Dallas/Ft. Worth area as the eighth-best commercial real estate market in the nation for 2022.
For the last decade, Dallas has been a top growing city, and it doesn’t show signs of slowing down either. With nearly 1.4 million residents living in the city and a median age of just 33 years, Dallas promises unmatched growth for years to come.
So, why are investors choosing Dallas? As the cost of living in the nation’s primary markets increases, more and more investors flock to the center of the country, where their investment dollars can go further. The Dallas area is at the top of these so-called secondary markets thanks to robust industry growth, population increases, and a relatively low cost of living compared to the other markets. In fact, Dallas multifamily properties continue to see expansion with a 95.6% occupancy rate in the first quarter of 2022.
Also, in 2008, Dallas passed a green building ordinance requiring new properties to be both energy- and water-efficient. Dallas remains a popular destination for investors and builders looking to create environmentally-friendly spaces.
Investors see higher financial returns in their Dallas commercial property for lease than nearly any other market in the Lone Star State.
3. Fort Worth
Dallas and Fort Worth are almost always lumped into the same category. However, the metropolitan area just west of Dallas features its industry and a distinct opportunity for real estate investors.
The attraction to the Fort Worth area over Dallas is rising, due to the greater affordability of properties. Since 2010, the city has seen a 22 percent growth rate making it the 13 largest city in the United States.
Fort Worth is the leader in some of the top industries: office management, education, sales, construction, and healthcare. In 2021, Facebook expanded its Fort Worth Data Center by some 170k square feet. This expansion was the first of what some experts expect to be a wave of data center construction in the city.
Investors are catering to millennials, who are entering the workforce and moving to large cities, searching for walkable metropolitan housing solutions. Commercial properties for sale in Fort Worth are a wise investment in this ever-expanding Texas city.
4. San Antonio
Nestled between the south and central regions of the Lone Star State, San Antonio remains a superpower in both industry and investments.
Finding commercial properties for sale and listing commercial properties for lease in San Antonio or other markets has never been easier. The dedicated and experienced brokers at CXRE can help guide you through the process. Contact us today to learn more.
San Antonio is not only known for being a top tourist destination in the United States, but it is also a hub for the United States military,
financial service companies, healthcare providers, and energy/petroleum companies. Also, the city is known for its lower-than-average cost of living and high quality of life. These combined make San Antonio a city to watch in 2022.
San Antonio shows a long history of steady Texas commercial real estate market trends, which is why it’s popular among commercial real estate investors. Even more, properties continue to be more affordable in San Antonio than in many other large CRE markets in the U.S. Investors will get more for their money when they invest in Alamo City.
5. Houston
Houston’s reputation as a commercial real estate powerhouse remains relatively unchanged moving into 2022 – actually it may have increased in status.
With a comparatively low cost of living compared to the rest of the nation, combined with a steady local economy and job market, Houston has created a mecca for commercial real estate investors. Office buildings, industrial properties, medical facilities, and multifamily or mixed-use properties have proven to be profitable year after year in the Houston area.
In a year of frustrating and concerning commercial real estate news, Houston remains one of the bright spots. Its reputation as a commercial real estate powerhouse remains relatively unchanged moving into 2021.
As host to many large corporations in a variety of industries, the Houston economic outlook is stronger than ever. Once only a hub for
gas and petroleum production, the city has diversified in recent years and now houses leading companies in petrochemical production, medical research and healthcare facilities, technology, national and international imports and exports, agriculture, fishing, and manufacturing.
Expansion continues in Houston, with Amazon building yet another million-square-foot fulfillment facility, with other large corporations like Lowes and Hewlett Packard following suit. These developments create hundreds of new jobs, bringing in a multitude of new residents.
These expansions and developments are great news for the local economy, and for CRE investors looking to get ahead of a potentially lucrative real estate boom. While the numbers indicate Houston falls behind Austin in projected growth, Houston remains ranked at the top of the charts for the hottest real estate markets in America.
Other Texas Commercial Real Estate Markets to Watch
It is important to note that Texas is home to some of the top fastest-growing cities in America. Commercial Real Estate investors should keep an eye on each of these emerging markets as they promise increasing population and industry growth will be key in their future investments.
Frisco, TX
Thirty minutes north of Dallas lies Frisco, Texas, a city known for family activities – sporting events, areas for biking and hiking, and lots of dining, nightlife options, and more.
Over the last ten years, Frisco has shown a 71% growth making it the fastest growing city in the United States in 2021. The city’s massive growth is a direct result of businesses in nearby cities bringing commuters to town due to the lower cost of living. Some of the major cities surrounding Frisco are home to big-name brands like IBM, Oracle, and AmTrust Financial Services.
New Braunfels, TX
Midway between San Antonio and Austin sits New Braunfels. The city features a historic downtown district and is home to the nationally-acclaimed Schlitterbahn water park – the largest water park in the world. Residents have access to enjoy scenic local parks, bike trails, and a stunning natural bridge cavern.
Over the last ten years, the city has grown 57%, with more and more people calling the city home.
Fulshear, TX
Over the last ten years, the population in Fulshear has more than doubled, growing from a relatively unknown area to a large suburb.
One of the driving factors behind Fulshear’s impressive growth is the installation of multiple master-planned communities. Large swaths of available land and more affordable housing opportunities quickly attract residents from multiple states, especially those looking to expand their families.
As a Texas-based commercial real estate firm, CXRE, LLC is an expert in helping our partners discover profitable CRE properties in any of the growing Texas commercial real estate markets. Connect with one of our experts today to see how we can help in your search for the ideal property that meets your investment needs.
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