Dallas-Fort Worth, along with other areas of the southwestern U.S., is being targeted by real estate investors intent on investing in the region’s strong growth and strong real estate assets.
“Everyone has become optimistic as we continue to recover in the industry and there’s been favorable financing,” Greg Williams, national leader of KPMG LLP’s real estate practice, which is based in Dallas, told the Dallas Business Journal. “The southwest U.S., in particular Dallas and North Texas, has seen stronger job growth, which drives real estate fundamentals. When people are looking at opportunities, the Southwest is the No. 1 region for job growth.”
Employers added 195,000 jobs in June in the U.S., which was a better-than-expected job growth for the month. Dallas-Fort Worth employment was up 104,900 jobs in April year-over-year, according to the Bureau of Labor Statistics.
There’s a historically large amount of capital on the sidelines looking to find investment properties, which has driven prices up to prerecessionary levels, Williams told me.
About 58 percent of U.S. company decision makers plan to expand their businesses geographically, according to KPMG’s 2013 Real Estate Industry Outlook Survey. That expansion, coupled with acquisitions and improving real estate fundamentals, is expected to drive revenue growth during the next three years, according to the survey results.
Where do people want to spend money? Multifamily, or apartment properties, are still the most-desired property type by real estate investors, according to the survey.
Even though there’s plenty of capital on the sidelines, few investors or REITs are able to acquire reasonably priced real estate, Williams told me. The market recovery is expected to continue in the next 12 to 18 months, he said.
What happens next? Williams told me there are still a few cautionary areas of the economy, such as rising labor costs, and regulatory and political uncertainty. Despite uncertainty, Dallas is poised for investment, he said.
“It’s one of the stronger markets in the southwest U.S. and has really benefited from job growth,” he told me.