April 10, 2018
If commercial real estate (CRE) is the measure, the city of Dallas is in an economic boom. In 2017, Texas led the nation in states where CRE contributed to the overall economy. Over $24 billion of direct construction dollars were spent in the Lone Star State, and building was responsible for $59 billion in contributions to the Texas economy, according to the National Association of Industrial and Office Properties (NAIOP). In addition, the business-friendly economy of Dallas may inspire tech giant Amazon to choose the city as its second headquarters.
The city of Dallas is in an economic boom if commercial real estate (CRE) is the measure.
Texas led the U.S. in commercial real estate development during 2017.
CRE: Texas Is #1
In 2017, Texas led the nation in states where CRE contributed to the overall economy. Over $24 billion of direct construction dollars were spent in the Lone Star State, and building was responsible for $59 billion in contributions to the overall Texas economy, according to the National Association of Industrial and Office Properties (NAIOP).
The building sector is responsible for nearly 380,000 Texas jobs.
In the warehouse and retail segments of CRE, Texas stands at the #2 slot, behind California.
The CRE sector is a robust one nationwide, with 7.6 million jobs and an economic contribution that topped $935 billion last year.
Good economic times generally mean good times for construction, and the current economic boom bears that out. In 2017, ground was broken on over 524 million square feet of commercial space, including retail, office, industrial, and warehouse space.
The total direct expenditure for construction nationwide last year was the highest recorded in 10 years, at more than $1.2 trillion.
Amazon wants a “stable and business-friendly” environment.
Is Dallas Going to Be Amazon’s Second Home?
And a booming Dallas may attract Big Retail too. The Dallas Morning News speculates that Dallas's business-friendly climate may make it the winner of Amazon’s much anticipated second headquarters. The e-retail giant is currently looking at a number of cities to place its HQ2, as the development is called.
Plans are for the second headquarters to be the equal of the first, which is located in Seattle.
But as the Dallas Morning News observes, Amazon specified that it wanted a “stable and business-friendly” environment. Seattle may be stable, but its recent moves are not business friendly. A mandated minimum wage of $15 is considered by many restaurant owners too high, and the city has also required business owners to give employees paid sick leave.
In short, Seattle and Washington state tend to regulate - and businesses don’t like regulation. In Texas, deregulation is king.
Seattle-based business leaders are terming Amazon’s search a “wake-up call,” even though there is no sign that the company plans to leave Seattle.
Amazon wants a place happy to have businesses. While Amazon has never directly criticized Seattle, some city leaders in Seattle seem to regard successful business owners as potential wreckers of the common good. The view of business is negative, not positive.
Austin is another Texas city in the running for Amazon’s second headquarters.
In both Dallas and Austin, the cost of living and traffic are likely to be less than in Seattle, which has witnessed tremendous growth in the past several decades.
Moreover, if you have made money in business in Washington state, your heirs will suffer comparatively, as the state's estate taxes can reach 20%. Texas no longer collects estate taxes.
Great Opportunities for Banks: How a Seasoned Loan Sale Advisor Can Help
Fast-growing and economically robust areas present great opportunities for banks. For local Texas lenders, we can assist them in diversification by purchasing more national portfolios. For banks and credit unions located elsewhere, seasoned loan sale advisors like Garnet can help them diversify into the economically strong Texas region.
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