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ULI Real Estate 2017 Outlook: Austin No. 1; Dallas No. 2 and Houston at No. 40

DALLAS – Austin ranks No. 1 and Dallas No. 2 in a national ranking of the nation’s top cities for real estate investment opportunities next year, according to Emerging Trends in Real Estate 2017 outlook report by PwC US and the Urban Land Institute.

The Emerging Trends report said Austin “boasts attractive, niche neighborhoods and a vibrant, diverse economy.”

“Despite Austin’s growing popularity, it remains a comparatively small market in terms of investment opportunities. While Austin is unlikely to attract a meaningful amount of off-shore capital, it tops many domestic investors’ wish lists,” the report said. “This makes the market very competitive.”

San Antonio ranked No. 32 and Houston ranked a No. 40.

ULI, which unveiled the report at its annual conference in Dallas last week, created (with PwC) the Emerging Trends rankings based on interviews and surveys from more than 1,800 leading real estate experts, including investors, fund managers, developers, lenders, brokers, advisers and consultants.

Foreign investors and institutions that focused only on coastal property in years past are doing deals in Dallas, says Michael Hardage, a managing director of investment services in Transwestern’s Dallas office. “We have capital looking at the city that has never looked at Dallas before,” Hardage says.

Austin ranks high on the “hip” factor, making it a cool city that appeals to Millennials. That hip image will continue as Generation Z – the next demographic cohort behind the Millennials – comes of age. “They will continue to want to go to the Austins of the world or the Portlands of the world,” says Matt Khourie, chief executive officer of Trammell Crow Co.

Khourie, formerly a leader in the Houston real estate community, was one of the commentators presenting the report last week in a massive ballroom at the ULI Fall Meeting at the convention center in Dallas.

The ULI report said: “The 2017 outlook for Houston is muted.” The report said Houston is in a “period of uncertainty” as the market waits on the recovery of the energy market.

In 2014, the ULI Emerging Trends reported ranked Houston No. 1, but that was before oil prices took a sharp drop, touching off layoffs and widespread vacancy in the office market.

In San Antonio, institutional investors are now looking for opportunities in “this very affordable market.” San Antonio is “gaining experience in multiple product types that have generated a considerable amount of buzz.”

San Antonio’s opportunities can be found in shared office work locations in the CBD, urban residential, historic developments, and top-tier distribution. Some suburban employers are moving at least some of their employees downtown.

Nov. 2, 2016 Realty News Report Copyright 2016

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