Just the Facts: Dallas Will Replace Chicago as 3rd Largest Metro in U.S.

blog04

Dallas Will Replace Chicago as 3rd Largest Metro in U.S.

Cities, noted René Descartes, should provide “an inventory of the possible,” a transformative experience—and a better life—for those who migrate to them. This was certainly true of seventeenth-century Amsterdam, about which the French philosopher was speaking. And it’s increasingly true of Texas’s fast-growing metropolises—Houston, Dallas–Fort Worth, Austin, and San Antonio. In the last decade, these booming cities have created jobs and attracted new residents—especially young families and immigrants—at rates unmatched by coastal metropolitan areas. Approximately 80 percent of all population growth in the Lone Star State has been in the four large metropolitan areas since 2000. Texas now boasts two of the nation’s five largest metros, the first time any state has enjoyed that distinction. At its current rate of growth, Houston could replace Chicago as the nation’s third-largest city by 2030, and the Dallas–Fort Worth region could surpass Chicagoland as the nation’s third-largest metropolitan area by the 2040s.

 

Texas 4 Metros Lead Nation in Job Creation

Overall, Dallas–Fort Worth and Houston have emerged as the nation’s fastest-expanding big-city economies. Between 2000 and 2015, Dallas–Fort Worth boosted its net job numbers by 22.7 percent, and Houston expanded them by an even better 31.2 percent. Smaller Austin (38.2 percent job-base increase) and once-sleepy San Antonio (31.4 percent) have done just as well. New York, by way of comparison, increased its number of jobs in those years by just 10 percent, Los Angeles by 6.5 percent, and San Francisco by 5.2 percent, while Chicago actually lost net employment. And the Texas jobs are not just low-wage employment. Middle-class positions—those paying between 80 percent and 200 percent of the national median wage—have expanded 39 percent in Austin, 26 percent in Houston, and 21 percent in Dallas since 2001. These percentages far outpace the rate of middle-class job creation in San Francisco (6 percent), New York and Los Angeles (little progress), and Chicago (down 3 percent) over the same period.

 

Texas 4 Metros Lead the Nation in STEM Jobs – Replacing California

Texas’s sprawling metropoles are growing Science, Technology, Engineering, and Math (STEM) jobs more rapidly than the Bay Area—and far faster than New York, Los Angeles, and Chicago. Since 2001, STEM employment in Austin is up 35 percent, while Houston has increased these desirable positions by 22 percent and Dallas by 17 percent. STEM jobs have increased 6 percent in San Jose and 2 percent in New York over this same period. L.A. has seen no STEM growth; Chicago has lost 3 percent of such positions.

 

Dallas Will Soon Replace Chicago as the Business Center of the Mid-U.S.

When Toyota recently moved its headquarters from Los Angeles County to the Dallas area, for example, executives said that the L.A. area’s rising housing prices—roughly three times what they are in Dallas–Fort Worth, adjusted for income—had much to do with it.  Dallas–Fort Worth might be the big metro that benefits most from this movement. The typical corporate expansions in the Dallas area—not just Toyota but also State Farm, Liberty Mutual, and Amazon—have included headquarters and back-office centers in the area’s northern suburbs, creating thousands of jobs. As Southern Methodist University scholars Klaus Desmet and Cullum Clark found in a soon-to-be-published study, jobs are shifting from Chicago and surrounding areas to Dallas–Fort Worth in such numbers that the Texas city is increasingly poised to replace the Windy City as the business center of the mid-U.S.

 

  • From the Magazine, “Urbanism, Texas Style,” September 2016

Just the Facts: DART Expansion

DART Looks To Fast-Track The Cotton Belt Line To 2022

The New Dart Line from Plano thru Addison, Carrollton, Coppell to DFW Airport

 blog02

DART is looking to fast-track the nearly billion-dollar Cotton Belt Line rail project more than ten years from its previous projection date.  A year ago, DART officials said the Plano to DFW Airport train line would have to wait until 2035.  DART now wants to push the project up and have the east-west line operational by 2022.  DART has already secured the funding for half of the project and plans to apply for federal funds to pay for the other half.  While suburban cities like Addison and Plano support the Cotton Belt Line, not everyone in Dallas is on board.  Some business and city leaders are concerned the Cotton Belt Line will impact the plans for a second downtown Dallas trail line. Many now want the second downtown line to be a subway line.  “We don’t believe it needs to be an either/or,” said DART spokesperson Morgan Lyons. “They are totally separate projects. We believe we can actually do two separate projects at one time.”  Decades ago, DART bought the Cotton Belt corridor train tracks. A few years ago, freight trains stopped using the tracks. All along DART officials say they had planned someday to turn the corridor into a passenger line.  That someday is now quickly approaching.  DART is holding a series of public meetings about the Cotton Belt project, including Thursday August 25 at the Addison Conference Centre and Monday, August 29th at Parkhill Junior High School in Dallas.   A proposed change to the DART line is curving the tracks to actually go through Cypress Waters, rather than much of Coppell.   There would be a “Mockingbird Station” type stop in Cypress Waters with retail, restaurants and high density type housing.

CBS News, August 26, 2016-09-05

 

DART Proposes Expansion Downtown Dallas

Dallas Area Rapid Transit wants to expand downtown’s streetcar network and add a second light-rail route called D2 through the central business district.   The projects promise to change how North Texans move around the region — and how the long-fought resurgence of Dallas’ urban core takes shape in coming decades.  But it remains unclear when and whether the agency can deliver the projects in the way that its own board members, elected officials and the public want. And that’s not just because there are warring opinions about how DART should tackle the expansions.   The proposed change would have a second DART line go through the southern portion of downtown near the convention center, city hall and Farmers Market.

Dallas Morning News, August 26, 2016

blog03


Just the Facts: Buyers Gobble Up Homes As Prices Escalate 9.3%

blog01

The new Toyota headquarters in Legacy West, Plano

Buyers Gobble Up Homes As Prices Escalate 9.3%

Home prices in Dallas-Fort Worth are continuing to escalate — rising 9.3 percent year-over-year in May — as buyers continue to gobble up houses.  North Texas is outpacing the rest of the nation by more than three full percentage points, with the national rate sitting at 5.9 percent year-over-year in May, according to CoreLogic Inc. on Tuesday, which has a large hub in Dallas-Fort Worth.  CoreLogic’s Home Price Forecast indicates the trend of increasing home prices will continue into next year, with prices expected to rise 5.3 percent by May 2017.  “It’s amazing it continues to increase that much year-over-year, but the housing market continues to be tight even as there’s more listings in the market,” Ted Wilson, principal at Dallas-based Residential Strategies Inc., told the Dallas Business Journal.  “As quickly as it hits the market; it gets gobbled up,” he added. “Home prices have climbed much higher and much quicker than it ever has in Dallas-Fort Worth, which has raised some eyebrows. But it’s still an affordable market.”  Wilson said he doesn’t see demand, or home prices, slipping anytime soon. Inventories are expected to remain tight with little construction labor to go around in the region, he said.  Nationally, CoreLogic Chief Economist Frank Nothaft said the consistent growth in home prices has been driven by the highest resale activity in 9 years and a still tight housing inventory.  The rising costs are forcing some buyers to bring more cash to the table as lenders are unable to finance the full price of a home.

–          Dallas Business Journal, July 5, 2016

The Toyota Effect: DFW a Beacon for Companies from Japan and Beyond

Two years ago, when Toyota said it was moving its U.S. headquarters from Southern California to Plano, the announcement made national headlines. The automaker was bringing up to 4,000 jobs and investing hundreds of millions of dollars.  With its stature in Japan and beyond, the move validated Dallas-Fort Worth as a business base for international companies. Six months later, officials went to Torrance, Calif., then Toyota’s U.S. home, and held a seminar titled, “Why DFW now?”  About 50 Japanese firms attended and a similar program is planned for this fall in New York.   “They all wanted to know, ‘What does Toyota know?’ ” said Mike Rosa, senior vice president of economic development for the Dallas Regional Chamber.  Toyota has plenty of company here. Kubota Tractor followed a similar path to Grapevine and Trend Micro came a year earlier to Irving. Both are based in Japan and had a U.S. headquarters in California.

In 2012,  Dallas-Fort Worth had 112 Japanese firms with regional HQs or operations. By April, the number was 164, with 20 additions since last summer.  “That’s why we’re seeing more flights between here and Japan,” said John Stich, honorary consul-general of Japan in Dallas.  Stich, who tracks the number of Japanese companies here, said air travel connections were a crucial factor in North Texas’ appeal. DFW International Airport has 34 nonstops a week to Narita Airport, outside of Tokyo. Only three airports in the U.S. mainland have more — in Los Angeles, New York and Chicago.

American Airlines has applied for a new daytime route from DFW to Haneda. That’s Tokyo’s close-in airport and a favorite for many business travelers.  In filings with the U.S. Transportation Department, American and DFW touted the size of this market and airline hub, and the many connections. They also highlighted the growth in Japanese businesses, which generate demand for service to DFW and connecting flights to Latin America.  DFW connects more passengers between Japan and Mexico than any other U.S. gateway, according to the filings. And the Haneda-DFW route would offer one-stop service to nine Mexican cities where over 100 Japanese companies have subsidiaries.  “DFW is the only gateway capable of attracting the huge traffic between Latin America and Tokyo,” American said its application.

In 2012, DFW had 19 weekly flights to Asia; today, it has 52, airport officials said. Passenger traffic to Asia more than doubled in three years. In 2015, it grew 36 percent, over three times faster than total international traffic at DFW.  Love Field also has become a major asset in selling the region, Rosa said, because it adds so much competition on domestic travel. Corporate visitors often look out from the chamber’s high-rise office in downtown Dallas and see flights taking off from Love and DFW.  They’re impressed by how close the airports are, he said. And that underscores the strength of North Texas for companies that travel regularly.Japanese firms have come to Dallas for over 30 years. Initially, the focus was on telecom, semiconductors and electronics. More recently, Rosa said, there’s been growing interest from Japanese banks, retailers and homebuilders.

In 2014, North Texas had almost 10,000 people of Japanese descent; that’s well below the number from India, Vietnam, China, Korea and the Philippines. But Japan ranked No. 2 for international companies in the area, after the United Kingdom and ahead of Canada, according to the chamber.  Since 2003, at least 175 Japanese projects have led to $19 billion in investment statewide. And that’s without the bullet train proposed for Dallas to Houston. If that multibillion-dollar project gets built, it would have Japanese technology and investment.

Executives in Japan often contact Takahashi to discuss potential locations in the U.S. In addition to the usual talking points — the cost of living, low regulations and airline connections — he touts the region’s spending on highways and buildings. That impresses most outsiders. He also brags about the talent in North Texas, where he’s hired key positions in finance, operations and information technology.  “That’s huge,” Takahashi said. “Regardless of the industry sector, you know there’s a good talent pool for corporate leaders.”  He likes to cite another sign of growth: ramen noodle restaurants.  “When I moved here, there were almost none,” Takahashi said. “Now there are many, and that’s something Japanese businessmen really value.”

Gone to North Texas

While Japanese companies have put down roots in the Dallas area for over 30 years, the pace has accelerated sharply since Toyota’s announcement in 2014.  Here are some marquee Japanese firms with regional headquarters or operations here:

* Canon USA

* Fujitsu America

* Hitachi America

* Kubota Tractor

* Kyocera America

* Mitsubishi

* Mitsui

* Murata

* NEC Corp. of America

* Nippon Express

* Nissan

* Orix USA

* Panasonic

* Sony

* Sumitomo

* TDK

* Toyo Cotton

* Toyota

* Trend Micro

* Uniden America

SOURCE: American Airlines filing with U.S. Transportation Department

–          Dallas Morning News, July 5, 2016


Just the Facts: Big Corporate Moves To DFW

The economy is booming in North Texas, with a number of corporations bringing thousands of employees to the D-FW area in the near future. Here’s a look at some of the big corporate moves in the works from Real Estate editor Steve Brown. (Dallas Morning News, March 11, 2016)

 

Richardson:

State Farm Insurance is nearing completion on a 2 million-square-foot, four-building regional office campus at Plano Road and the Bush Turnpike in Richardson. About 8,000 State Farm workers will be housed in the towers, which are part of the $1.5 billion CityLine development.

Plano:

JPMorgan Chase is moving 6,000 workers to a new office campus in the Legacy West development near the southwest corner of the Dallas North Tollway and State Highway 121. The project is expected to total more than 1 million square feet in six buildings and could cost more than $300 million.

                                          

Plano:

Toyota Motor Co.’s new North American headquarters complex is under construction in Plano’s Legacy West development at State Highway 121 and Legacy Drive. The $350 million office project, with more than 2 million square feet of space in seven buildings, will open in 2017 and will house more than 4,000 workers.

Plano:

Liberty Mutual Insurance plans a 1 million-square-foot, two-tower regional operations center on Headquarters Drive at the Dallas North Tollway in West Plano. The $325 million project, part of the $2 billion Legacy West development, will have room for more than 4,000 workers when it opens in 2017.

Las Colinas:

McKesson announced Thursday that it is buying the former NEC Corp. of America office complex on State Highway 114 in Las Colinas. The two office buildings contain more than a half-million square feet of office space. McKesson will add 975 new jobs and move 900 workers already in the Dallas-Fort Worth area to the new offices.

Richardson:

Raytheon is building a 500,000-square-foot, three-building office campus as part of the 186-acre CityLine development on the Bush Turnpike in Richardson. About 1,700 workers will move into the new campus.

Cypress Waters:

CoreLogic is building a $68 million, 327,000-square-foot office campus in the Cypress Waters business park just north of LBJ Freeway near Belt Line Road. CoreLogic plans to move more than 1,300 workers from Westlake and Richardson when the new building opens in 2017.

Cypress Waters:

7-Eleven is moving to a 325,000-square-foot headquarters complex in the Cypress Waters development off LBJ Freeway in Irving. 7-Eleven starts relocating more than 1,200 workers from downtown this year.

Plano:

FedEx Office just opened a 265,000-square-foot corporate campus at Legacy and Headquarters drives, south of State Highway 121 in West Plano. 1,200 employeesworkers will work be located in the worldwide headquarters complex.


Just the Facts: Dallas Continuing to Grow

Dallas-Area Home Price Still Racing Up

9.8% Increase in January; Economists Predicted 3-4% Increase for DFW

blog3

Dallas-area home prices rose by almost 9.8 percent in January, continuing to grow faster than nationwide rates.   The analysts had predicted the DFW area would slow to a 3% to 4% increase in 2016, but are now revising – there is simply too many jobs coming to North Texas.  Analysts expect that North Texas’ near double-digit home price gains will continue as long as employment growth in the area remains strong.  CoreLogic said Tuesday that U.S. home prices were 6.9 percent higher in January than they were at the start of 2015.  “Heading into the spring buying season, home prices continue to rise across much of the country,” said Anand Nallathambi, president and CEO of CoreLogic. “With rates staying low for now and continued solid job and income growth, the spring buying season is shaping up to be a good one.”  CoreLogic is forecasting that nationwide home prices will rise by 5.5 percent in the year ahead.

–          Dallas Morning News, March 1, 2016 (excerpt of article)

blog4

Castle Hills Developer Has Bought Singer Ranch; Negotiating with Clem Ranch.

Will Be Larger Than Valley Ranch

About 3,400 houses have been completed in the Castle Hills community.    Another 1,500 lots are in development.  Now Chris bright has announced the purchase of the Singer Ranch (Old Denton Rd, just south of Windhaven) and negotiations underway for the Clem Ranch (Josey at Parker Rd)

Bright Realty just acquired the next door Singer Ranch, a more than 100-acre property on Old Denton Road.  The former horse boarding and riding facility is surrounded to the east on three sides by Castle Hills.  Bright Realty CEO Chris Bright said the purchase will give Castle Hills land for more than 300 additional homebuilding sites.  “We moved fast to buy it,” Bright said. “We knew the way things are working right now in single-family home development that it would sell fast.  Bright Realty is already working with the City of Carrollton to plan and zone the property – much of which is located in a floodplain and is wooded creek area.

Bright said he’s working with the Clem family, which owns about 140 acres north of Castle Hills to expand the project further.   “That family has owned that property since 1860,” he said. “We are doing a joint venture with them that will give us another 400 to 500 lots north of Parker Road.”

More than 12,000 people now live in Castle Hills.  In addition to the custom home communities, Bright Realty is building shopping apartments and an office park to complement the residential neighborhoods.

–          Dallas Morning News, March 2, 2016 (excerpts)

 

 No Dallas Bubble Most Housing Analysts Say in New Poll

North Texas were up 11 percent on 2015.  With a year of double-digit home price gains, concerns about housing costs in North Texas are growing.   Most housing experts polled for the study by Zillow said Dallas has no significant risk of a housing bubble in the next five years.  The rest said Dallas is either already in a bubble or will be in the next few years.    That is a better forecast than almost any other major city.    “It is very clear that nationally we are not seeing a return of the conditions that caused the last national bubble,” Gudell said. “Tighter lending restrictions today mean we aren’t seeing buyers get loans they realistically can’t pay back, like we did in years past.  “It’s significant that some experts are starting to worry about bubble conditions, but in my opinion, there’s no real danger of a severe crash like the one we all remember from the last decade.”  But continued employment gains and population increases will keep housing demands strong in Dallas.  Some 20 of the analysts saw no risk for Dallas in for more than five years.

–          Dallas Morning News, December 9, 2016 (excerpts)


Just the Facts: DFW Still Short of Homes

Report: DFW Still Short of Homes Despite Record Construction

Dallas-Fort Worth was still short over 40,000 home listings by the end of 2015, even as the number of single-family homes under construction set a regional record, according to one housing research firm.  By the end of 2015, there were 14,180 single-family homes under construction, which represents a 7.2-month supply, but it wasn’t enough to counteract the North Texas’ home shortage, said Ted Wilson, principal at Dallas-based Residential Strategies, which tracks and analyzes Dallas-Fort Worth’s housing market.   “Shortages of construction labor continue to provide challenges for homebuilders,” Wilson said. “Unfortunately, there appears to be no near-term alleviation for this challenge.”  The record rains in spring 2015 also set back the number of completed homes. For 2015, builders started 27,672 new homes, which was an increase 6.6 percent year-over-year, according to Residential Strategies’ data.   By year=end 2015, builders closed $23,565 single-family homes, which increased 7.9 percent year-over-year.  

 

Builders’ estimated the number of closings were 15 percent to 20 percent below their business plan because of construction delays tied to weather and a tight labor supply, Wilson said. And, so far, there’s no end in sight, he said.  “Shortages of construction labor continue to provide challenges for homebuilders,” Wilson said.  Wilson said North Texas’ homebuilding industry outlook appears “quite bright” for the next few years as companies continue to relocate employees to the region.   “This steady influx of workers should help sustain housing demand,” he said.

–          Dallas Business Journal, January 8, 2016

 

North Texas Home Sales Surged in December to Set Record for 2015

North Texas home sales jumped 21 percent in December as homebuyers scrambled to get purchases closed before the end of the year.  December’s surge in sales was enough to push 2015 home purchases to a record 96,156 preowned homes, according to data from the Real Estate Center at Texas A&M University.  Almost $25 billion in houses were sold last year.  “We knew the market was very strong,” Russell Berry, president of the MetroTex Association of Realtors, said in a statement. “We astounded to see sales volume at nearly $25 billion for the year.”  Home sales in the area in 2015 were almost 15 percent greater than in 2006, the peak local housing year before the recession.  Real estate agents sold 8,543 preowned in December – the highest sales volume in three months. December usually sees declines in home purchases because of the holidays.  Median home sales prices in the final month of 2015 were $210,000 – 9 percent ahead of December 2014, according to data supply by the North Texas Real Estate Information System.

–          Dallas Morning News, January 8, 2016

 

January Pendings Are Up 28 Percent

Early indications show another strong month for home sales in January.  The number of pending home purchases – under contract but not yet completes – was 28 percent higher than a year ago.  The early start for 2016 no doubt ease fears of a housing sector cool down caused by the huge declines in oil prices and cutbacks in Texas’ energy industry.  Worries about rising interest rates may have helped fuel the dramatic rise in December home sales.  “The uptick in Federal Reserve rates pulled people off the sidelines,” said Ted Wilson, a housing analyst with Dallas’ Residential Strategies Inc. “They think it’s time to buy.”

–          Dallas Morning News, January 8, 2016


Just the Facts: Companies are Heading to Texas

blog 3

California Lost 9,000 Business HQs and Expansions, Mostly to Texas

A 7-year study says roughly 9,000 California companies moved their headquarters or diverted projects to out-of-state locations in the last seven years, and Dallas-Fort Worth has been a prime beneficiary of the Golden State’s “hostile” business environment.   That’s the conclusion of study by Joseph Vranich, a site selection consultant and president of Irvine, California-based Spectrum Location Solutions.  Of the 9,000 businesses that he estimates disinvested in California, some relocated completely while others kept their headquarters in California but targeted out-of-state locations for expansions, Vranich found. The report did not count instances of companies opening a new out-of-state facility to tap a growing market, an act unrelated to California’s business environment.

Dallas Business Journal, November 11, 2015

 

Companies Save 20% to 35% Annually Leaving California, Coming to Texas

Companies continue to leave California because of rising costs and concern’s over the state’s “hostile” business environment, according to the study by Joseph Vranich.  It’s typical for companies leaving California to experience operating cost savings of 20 up to 35 percent, Vranich said.   He said in an email to the Dallas Business Journal that he considers the results of the seven-year, 378-page study “astonishing.”  “I even wonder if some kind of ‘business migration history’ has been made,” Vranich wrote in his note.

Dallas Business Journal, November 11, 2015

 

When States Compete for Headquarters, Texas Usually Wins.

Nowadays, the corporate equivalent of the spirit embodied in those letters has taken root as companies from California to New Jersey move their headquarters or other substantial business functions to Texas in general and Dallas-Fort Worth specifically.  The modern-day migrants have names like Toyota, Liberty Mutual, Facebook and Farmer Brothers. They set up shop in corporate campuses in the suburbs and downtown Dallas skyscrapers. And more often than not, they’re lured not by the inexpensive acreage that enticed the early settlers, but by a strong business climate, affordable housing, proximity to an airport that can get you anywhere in the world, and by multimillion-dollar incentive packages dangled by cities and the state.  Corporate relocations have profound and long-lasting effects on communities in terms of jobs, housing, development and philanthropy. They’re game changers. They shape the identity of cities, defining how they grow and how they’re perceived by the outside world.  Where would Dallas be without AT&T, Fort Worth without American Airlines, Plano without J.C. Penney or Irving without Exxon Mobil? All moved here from somewhere else and made North Texas the corporate quilt it is today.  The Dallas-Fort Worth metro area has more than 10,000 company headquarters, the largest concentration in the United States.

Dallas Business Journal, July 24, 2015