Inspired by “The Texas Triangle: An Emerging Power in the Global Economy,” National Valuation Consultants Inc. set out to apply the key principles of the 2021 book to the commercial real estate sector, focusing on data and trends tied to rent, vacancy and inventory levels for multifamily, industrial, retail and office.
The key takeaways of NVC’s research? Both the projected influx of new residents and an economy that is better-insulated from market forces are expected to continue to catapult the region forward.
The book, published by Texas A&M University Press, drills down on the mega-region comprising the state’s largest cities. NVC, the largest privately held commercial real estate appraisal firm in the country, broadened and applied the study to a 30-mile-wide corridor stretching from Denton, south to Fort Worth on down to Austin and then San Antonio on I-35, before heading east to Houston along I-10 and back north along I-45. The area accounts for each city’s major urban centers, along with dominant submarkets, as well.
Sixty-six percent of the state’s population resides within NVC’s defined area, an expanse accounting for 77% of the state’s total GDP. The 35 counties represented in the Texas Triangle would create the 15th-largest economy in the world, rivaling Mexico or Australia, according to NVC’s research.
While there are some headwinds with the dynamics precipitated by inflation, rising energy prices, interest rates and continued supply chain issues, NVC found that fiscal and monetary policy “looks to remain highly supportive of economic growth” in the Texas Triangle.
NVC’s research, titled “Commercial Real Estate in the Texas Triangle,” was prepared by the team of Chuck Dannis, Jason Stevens, Doug Needham and Cheryl Sevcik. In addition to the Texas Triangle book, NVC also gathered research from Environics Analytics, CoStar, the U.S. Census Bureau and the Texas Office of the State Demographer.
Here are some of the key findings from NVC’s research that examined 2021 market conditions and added further analysis based on projected growth for the Texas Triangle:
NVC further noted that aside from the Texas Triangle’s office market, which is still weighed down by Houston in particular, values in terms of cap rates are up across the board over the last five years.
“This appreciation should be no surprise to any set of market participants that own – are trying to own – prized Texas Triangle commercial real estate,” the firm added.
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