Thanks to Steve Brown for most of the following news. Follow @SteveBrownDMN on twitter.
Happy Easter! Hope you and yours is enjoying good food and family time today, whether you’re celebrating Easter or Passover.
The big real estate news in Dallas – Fort Worth this week is the big uptick in office construction and the weather’s delaying of new home construction.
Steve Brown of The Dallas Morning News reported that office construction in Dallas – Fort Worth has increased 50% versus a year ago. More than 8.8 million square feet of office space is now being built in the Dallas-Fort Worth area with much concentrated in West Plano, Frisco and Uptown. With a 17% vacancy rate that continues to decline, economic growth seems to indicate that office developers are not overbuilding. Corporate relocations to north Texas are expected to continue, and almost 60% of the new space being built has already been leased to tenants.
Our unusually cold and wet first quarter weather had an adverse effect on new home construction. Home starts in D-FW were 22% below year ago levels, even though Dallas has the state’s tightest supply of homes for sale. Dallas-Fort Worth homebuilders started just 5,740 houses during the first three months of 2015, making it the slowest quarter in more than a year. Ted Wilson of Residential Strategies, and Dr. Jim Gaines of the Texas ATM Real Estate Center expect a big rebound in the 2nd quarter if the weather cooperates. Completed new homes for sale in Dallas – Fort Worth totaled 3,100 homes at the end of March, or about 1.7 months of supply. When including preowned homes, the overall Dallas home market has only a 2 month supply. As a result, new home prices are up 5% versus a year ago. With our depressed levels of new home construction since 2008 and pending corporate relocations, the housing supply versus demand imbalance is expected to continue.
Speaking of corporate relocation, Liberty Mutual is expected to lease 160,000 feet of office space at 3905 North Dallas Parkway while their new offices are built. Although, they’ve been coy about their relocation plans, Liberty Mutual is expected to relocate to the west side of the Dallas North Tollway at Headquarters Drive. Two high-rise office buildings that could accommodate more than 4,000 workers are reportedly in the works.
A new high-rise apartment tower may be coming on the west side of North Central Expressway, just south of Knox Street. Nashville-based Southern Land Co. is seeking zoning to build a 19-story apartment tower on a site currently zoned for office. Southern Land Co. has built the Tucker Hill residential community in McKinney and the 279-unit Junction 15 apartments in downtown Plano. It’s also building the Lofts at Watters Creek apartments on North Central Expressway in Allen.
Atlanta-based apartment developer Davis Development will build 300 townhouse style apartments at Windsong Ranch in Prosper. It has purchased 26 acres at the entrance to The Windsong Ranch community near the northeast corner of Hwy 380 and Gee Rd. Windsong Ranch developer Terre Verde Group sold the apartment building site, which is next door to where a Kroger-anchored shopping center is planned.
Dallas – Fort Worth is the hottest apartment development market in the country with 34,000 units in some stage of development. More than 18,000 new apartments have been absorbed, or leased in D-FW in the last 12 months, ahead of runner-up Houston with 15,ooo apartments. With population in North Texas growing by more than 100,000 people last year, residential rental demand is expected to continue.
A new mixed-use development is on tap for the University of Texas at Dallas campus. The project is expected to house 6oo students and include retail in 4-story buildings near the intersection of Synergy Park Boulevard and Floyd Road. Balfour Beatty Campus Solutions LLC and Wynne/Jackson Inc. are building the project on 13 acres, next door to a planned commuter train station.
Japan’s largest home builder, Sekisui House, has acquired the 1,200-acre Canyon Falls development in Flower Mound from owner Wheelock Street Capital. Located on Cross Timbers Drive east of Interstate 35W and started in 2013, Canyon Falls is planned for about 1,750 single-family homes, apartments, shopping and commercial space. New homes are selling for $300,000 to more than $500,000. Homes in Canyon Falls began selling last summer and include Ashton Woods Homes, Coventry Homes, Highland Homes, K. Hovnanian Homes, Toll Brothers, Drees Custom Homes and Ryland Homes.
A 3-story, 50,000-square-foot medical office building will provide a variety of medical services to the new CityLine mixed use development occupied by Raytheon and State Farm. Children’s Health and Texas Health Resources will provide medical care and will occupy the building, located at the southwest corner of Plano Road and Bush Turnpike. Austin Commercial was the builder on the medical office project. The entire CityLine development is expected to tally $1.5 billion when complete.
Case-Shiller reported that Dallas had the 3rd highest annual price gains in January, just behind Denver and Miami. Dallas home prices in the Case-Shiller index are now 13 percent ahead of where they were at the peak of the housing market before the recession.
That’s the top news for this week. Let’s look forward to another great week in Dallas real estate. If we can answer any of your real estate questions, we would love to help. Call our office at 214-827-1200 or reach me directly at 214-690-9682.
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