The Texas Tea: Welcome To Your Weekly Rundown Of Lone Star State News
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Good afternoon, and welcome to the inaugural edition of The Texas Tea, your new weekly roundup of the most important commercial real estate news across Texas' largest markets and a few other odds and ends to help you stay in the know.
Every Wednesday afternoon, Bisnow DFW Reporter Olivia Lueckemeyer and Houston Reporter Maddy McCarty will spill the tea from across the Lone Star State. They'll keep it fun and engaging, and they'll keep it brief so you can get up to speed quickly.
In news that will surprise few Texans in CRE, this week’s edition includes fresh evidence that the state’s commercial real estate success has propelled it into the top tier of world economies. Bisnow dove into the NAIOP Research Foundation's annual report, which found that Texas ranks No. 1 for total contributions to state GDP across all four major asset types — office, warehouse, industrial and retail. In total, CRE contributed $185B to Texas’ gross domestic product and supported 1.2 million jobs in 2023.
The state has “the secret sauce,” as CBRE Global Chief Economist Richard Barkham said at a Bisnow event last week.
This week's newsletter also highlights how the state best known for its oil and gas production is exploring new ways to stay at the forefront of a new energy revolution. Gov. Greg Abbott is exploring supplementing the fragile Texas grid with small nuclear reactors, and hydrogen power is already transforming operations at industrial sites in Houston and beyond.
Bisnow is launching this newsier version of its traditional newsletter format in Texas first because it is the state that leads. We want to be there, pulling it all together in digest form, to detail how the world’s ninth-largest economy is making moves and setting the agenda.
So pour yourself a cup of whatever you enjoy and read on. We’re excited to get started and hope you’ll join us on our new adventure.
—Katharine Carlon, Bisnow Central U.S. Editor
What's The Big Deal?
Dallas-based Lincoln Property Co. has been in acquisition mode ever since it received a huge infusion of cash from Connecticut-based Stone Point Capital last year.
Its latest purchase is a 4-acre parcel in Uptown Dallas, where it plans to build Class-A office, luxury apartments, a hotel and residence tower, and 25K SF of food and beverage retail. The project will be happening alongside a series of other high-profile, office-heavy developments underway in Dallas' hottest submarket, which commands the highest asking rates in the Metroplex at more than $63 per SF.
The Best Of Bisnow
- Powering Up: The long wait to get a transformer for a new industrial development has given some Houstonians time to think, “What if we didn’t need one at all?” Thanks to a boost in federal and other funding, some power providers are turning to the most abundant element on earth that can also be used as clean fuel: hydrogen. The fuel source is increasingly making its way into Houston's industrial commercial real estate framework, and experts say its presence will only grow.
- Everything’s Bigger: Texas is among the top 10 largest economies worldwide, in large part due to the state’s booming commercial real estate industry. CRE generated billions of dollars and created millions of jobs last year, according to a new report, putting Texas at the top of the list in CRE contributions to state GDP.
- Joining The Party: Wingstop is among a growing group of Dallas companies ditching their existing office digs in favor of Uptown. The fast-casual restaurant chain, which has been headquartered in Dallas for many years, plans to set up shop at One West Village, where it will occupy nearly half the building.
- A Long Time Coming: Dallas City Council approved a sweeping set of changes to the local development fee structure last week, a move that will double or triple the cost of certain services. Concerned developers said the dramatic increase would likely translate to higher rents for tenants.
- More Of The Same: Houston companies are continuing to flock to high-quality buildings stacked with amenities, according to Savills’ first-quarter office report, which mirrors many that came before it. The data highlighted another continuing trend: Tenants are moving west in an attempt to set up shop closer to their workforces.
Best Of The Rest
- Going Nuclear: As the state — and commercial real estate — reckon with the catastrophic failure of the Texas grid in February 2021, Gov. Greg Abbott is floating one possible solution: small nuclear reactors that could supply on-demand power, complementing the grid and other sources of energy like wind and solar. The Texas Tribune plugs into the progress being made to harness the alternative power source, how the technology works and how the possibility is being received by Texans on both sides of the nuclear energy argument.
- Wheel’s In Motion: A Florida company planning a massive new entertainment complex in Downtown San Antonio has announced the project will be anchored by The Grandisimo, a 200-foot-tall observation wheel. The towering structure is expected to transform the city’s skyline and feature climate-controlled gondolas offering 20-mile views, the San Antonio Business Journal reports.
- Team Building: MLB Commercial Real Estate, the brokerage branch of Houston-based private investment firm Capital Partners, made a slew of hires. The five new staff members all moved over from Avison Young, according to Realty News Report. MLB Capital Partners, known for its redevelopment of the Houston Farmers Market, was founded by Jeff Lindenberger, Fred Baca and Todd Mason.
- Heat Waves: It is no secret that Dallas is hot — literally. But new data reveals that certain areas get significantly hotter than others. A study of urban heat islands found that some of the hottest parts of the city are low-income areas where unfettered industrial development has led to a trend of environmental injustice. Among the neighborhoods with the highest temperatures are the Medical District, West Dallas and Bishop Arts in Oak Cliff, KERA reports.
- The Saga Continues: Houston-based Whitestone REIT, which has been building up its portfolio of upscale retail properties while battling its former CEO in court, has listed its office building for sale, The Real Deal reports. This is the last remaining office property in Whitestone’s portfolio and is the site of its headquarters. Whitestone hasn’t decided whether it will relocate after the sale.
Number Of The Week
2,407%
Dallas’ newly approved round of development fee increases will impact some costs more than others. Excavation services will be the hardest hit, with fees slated to increase from $113 to $2,825 — an increase of 2,407%. Most fees are set to double or triple as the city attempts to fill a $20M budget hole.
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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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