The Texas Tea: Readying For Takeoff
Aerospace companies are growing and investing in Texas. They need people to do the jobs that are created. It’s not rocket science, right?
I spoke with CRE and aerospace experts about why aviation, defense and aerospace investments are picking up and why Texas is an attractive place for them. The state is winning the investment, but a large talent pipeline is needed for these highly skilled positions, and much of that talent isn't here yet. Companies are trying to gain workers by offering top amenities and workplaces, hosting in-house training programs and partnering with local higher education institutions.
Also in this week’s Tea, Dallas-Fort Worth keeps scoring data center developments while its industrial property owners fight to lower their appraised values. Self-driving 18-wheelers will soon be a reality across Texas, a chemical company is going to give an iconic skyscraper a $61M facelift, and rural communities are reaping the benefits of Tesla’s nearby investments.
It's another busy week in the Lone Star State’s commercial real estate industry, but don’t worry, we’ve got you covered.
— Maddy McCarty, Bisnow Houston Reporter
What's The Big Deal?
DFW continues to be one of the hottest markets for data center development, and it has been hard to keep up with the onslaught of announcements made over the past few weeks. NTT Data filed plans to add another building to its 47-acre campus in Garland the same day Stack Infrastructure announced a six-building project in Lancaster. Last week, news of Compass’ $200M Red Oak expansion dropped within hours of Centersquare saying it would move its HQ to Cypress Waters.
The flurry of activity is symbolic of the relentless need for data storage in North Texas and beyond, which is fueling demand for land and power. The region’s data center experts don’t expect activity to slow down anytime soon, especially as operators contend with power shortages and geopolitical hurdles in other top markets.
The Best Of Bisnow
- Soaring, Flying: There’s not a star that Texas can’t reach, considering its surging investment from aerospace, defense and aviation companies. But there is a finite number of skilled workers locally in those industries. That is why Texas-based companies, educators, economic development professionals and elected officials are stepping up to help the Lone Star State win the upcoming "war on talent."
- Closing The Gap: Prevarian Cos. is building a 72-bed hospital in Dallas that aims to fill an alarming shortage of mental healthcare resources in the region. The 65K SF facility is only the second private acute psychiatric care facility in Dallas and will be one of the few multistory behavioral health facilities near the central business district of a major city.
- Fighting The Man: Industrial owners are in the thick of a contentious protest season after receiving estimated property values that were up 200% in some cases. Tax consultants warn the spikes could have far-reaching consequences for Dallas County, which has been a hotbed for industrial development over the last several years.
- Sweetening The Deal: Taiwanese firm Sysgration is about to begin work on a $20M manufacturing hub in Plano after the city approved a $2.4M development deal for the project earlier this year. Big-ticket incentive packages are becoming more common among municipalities looking to cash in on the rapid expansion of the nation’s advanced manufacturing sector.
- Building The Meaning: Architecture and design professionals gathered at Bisnow’s Houston Architectural Insights and Design Innovation Summit last week to talk about what the next generation is looking for. Gen Z is already heavily in the workforce, and they know what they want, panelists said: human connection and intentionality.
Best Of The Rest
- Swift Reuse: Radom Capital and Triten Real Estate Partners are planning a major redevelopment The Swift Building in the Houston Heights. The historic warehouse complex will be transformed into a 4.5-acre mixed-use project, similar to the adjacent M-K-T development, which was also done by Radom and Triten. Plans include 60K SF of retail, small offices or restaurants, and revamped green space, the Houston Chronicle reported.
- The Tesla Effect: The success of Tesla is multiplying across Central Texas, with several communities reporting heightened economic activity after the company moved its HQ to Austin in 2021. The company has spurred a rising tide of suppliers and competitors moving into the region, lifting the proverbial boat for all parties involved, the Austin Business Journal reported.
- Making A Mark: LyondellBasell is abandoning its namesake tower in Downtown Houston to downsize slightly and move to the Galleria area, but it doesn’t seem to be making many sacrifices in its new office. The chemical company will spend $61M to build out its 318K SF spanning several floors in Williams Tower, the Houston Chronicle reported.
- Hands-Free: Pittsburgh-based Aurora Innovation Inc. plans to put self-driving 18-wheelers on the road in Texas as soon as this year. The driverless semis will initially haul freight on Interstate 45 between Dallas and Houston, but the company hopes to roll out thousands of trucks across the U.S. in the coming years, the Austin American-Statesman reported.
- A Fierce Competitor: Dallas’ diverse industries and strong real estate presence are helping it compete with Austin’s proptech scene, Commercial Observer reported. DFW has gained 17 proptech headquarters and $450M in proptech investment since 2020, and local experts say they’re seeing more groups involved in conversations about fundraising rounds.
Quote Of The Week
“Now I know why your room is only 775 SF. All you need is to shower and sleep because you don’t want to be in your room. You just want to be outside. It’s amazing.”
— Z & Co. President Ziad Kaakouch on why younger generations are OK with living in smaller spaces, as amenities, programming and human connection are more important to them.
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So how's the Tea? As we brew up next week's edition, send us your feedback, including what kind of content you'd find valuable in this newsletter. And don't forget, we love news tips.
Katharine Carlon, Central U.S. Editor: katharine.carlon@bisnow.com
Olivia Lueckemeyer, Dallas-Fort Worth Reporter: olivia.lueckemeyer@bisnow.com
Maddy McCarty, Houston Reporter: maddy.mccarty@bisnow.com
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