Top 5 Hottest Markets for Texas Commercial Real Estate in 2021

Investors have long flocked to Texas, where their investment dollars buy more property than in other markets. At CXRE, we are experts in Texas commercial real estate. Our experienced CRE brokerage team can help you identify which markets are the best for your investment portfolio.

Here, we’re looking at the five hottest real estate markets in the Lone Star State based on 2020 performance and 2021 projections.

The Hottest Real Estate Markets in Texas for Commercial Investors (Updated for 2021)

1. Austin

While COVID-19 impacted many real estate markets around the world, Austin remains a booming center of commercial real estate investment activity.

The 2021 report rated Austin the number two city in the nation for commercial real estate investors. 

You read that right: Austin is the second-best city for CRE – not just in Texas, but in the nation. The Lone Star State’s capital beat out big-name metropolises like Nashville, Washington, D.C., and Boston.  A 2020 report found that Austin is one of the fastest-growing large cities in the United States, ranking 6th behind economic powerhouses like Seattle, Atlanta, and Miami.

Austin Texas Why Austin? Besides its fun-loving atmosphere, Austin also boasts plentiful employment opportunities, a booming tech industry, and an affordable cost of living. Plus, it’s a leading innovator of green construction, making it popular among environmentally-aware builders and buyers. As Austin produces some of the most exceptional talent in the nation in its own backyard (the city is home to the University of Texas), many young professionals are putting down roots in the state’s capital.

It’s so popular, in fact, that Tesla and SpaceX CEO Elon Musk recently confirmed he moved to Austin. While his companies remain headquartered in California, Musk’s move to the Lone Star State raises the possibility of massive technological expansion in the area.

In fact, the Wall Street Journal recently reported that the pandemic actually helped Austin’s economy. As more people leave crowded cities in search of wide-open space, affordable living, and work-from-home options, many young professionals land in Austin and the surrounding suburbs. 

Business relocations to Austin in 2020 outpaced every other year on record, creating an estimated 10,000 jobs in the city. Notable industrial leaders are moving to Austin in record numbers, too: Facebook, Whole Foods, Dell, Apple, Home Depot, and GM all have regional headquarters in the city. Google and Amazon are also expanding their operations with major construction projects underway in Texas’s capital. Some are calling Austin the “Silicon Valley of the South” in response to its booming tech activity.

Austin’s economic prosperity, even in light of the pandemic, and wealth of diverse talent make it a red-hot frontrunner for real estate investors in 2021.

Austin’s economic prosperity, even in light of the pandemic, and wealth of diverse talent make it a red-hot frontrunner for real estate investors in 2021.

2. Dallas

The Emerging Trends in Real Estate report ranked the Dallas/Ft. Worth area as the fourth-best commercial real estate market in the nation for 2021. However, for the purposes of this article, we are breaking DFW into two separate markets, with both showing promise for significant expansion. 

Even amid a global pandemic that devastated other markets, Dallas reported the most commercial real estate deals in the nation in 2020. Dallas real estate

Dallas has been a  for close to a decade, and it doesn’t show signs of slowing in the next decade, either. With nearly 1.4 million residents living in the city and a median age of just 33 years, Dallas promises unmatched growth for years to come.

As the cost of living in the nation’s primary markets (Los Angeles, New York, and other coastal cities) wanes, more and more investors flock to the center of the country, where their investment dollars can go further. The Dallas area is at the top of these so-called secondary markets thanks to robust industry growth, population increases, and a relatively low cost of living. In fact, Dallas multifamily properties continued to see 91% occupancy rates throughout 2020, even as the pandemic loomed large. And while office vacancies are on the rise due to the pandemic, reports suggest Dallas is poised to make a comeback in office occupancies in 2021.

Dallas remains a popular destination for investors and builders looking to create environmentally-friendly spaces. In 2008, Dallas passed a green building ordinance requiring new properties to be both energy- and water-efficient.

Dallas continues to be one of the hottest Texas commercial real estate markets, and with good reason. Investors see higher financial returns in their Dallas commercial property for lease than nearly any other market in the Lone Star State.

3. Fort Worth

While some markets saw stale population growth, or even a decline in population, Ft. Worth continued to see new talent move to the city. While the city has faced significant economic impacts because of the pandemic, there is hope for renewed possibilities in 2021. Facebook will grow its Fort Worth data center by some 170k square feet in 2021, the first of what some experts expect to be a wave of data center construction in the city.

Fort Worth Real Estate Dallas and Fort Worth are nearly always lumped into the same category. But the metropolitan area just west of Dallas features its own industry and a distinct opportunity for real estate investors.

Fort Worth is smaller than its neighbor to the east – just 900,000 residents – but it is growing strong. Leading industries in Fort Worth include office management, education, sales, construction, and healthcare.

Investors are catering to millennials, who are entering the workforce and moving to large cities, searching for walkable metropolitan housing solutions. Commercial properties for sale in Fort Worth are a smart investment in this ever-expanding Texas city.

4. San Antonio

Nestled between the south and central regions of the Lone Star State, San Antonio remains a superpower in both industry and investments. It’s a hub for the United States military, financial service companies, healthcare providers, and energy/petroleum companies. Combined with a lower-than-average cost of living and high quality of life, San Antonio remains a city to watch in 2021.

Finding commercial properties for sale and listing commercial properties for lease in San Antonio or other markets has never been easier. The dedicated and experienced brokers at CXRE can help guide you through the process. Contact us today to learn more.

San Antonio CRE Before the pandemic, San Antonio was a popular tourist destination. The hotel and tourism industries suffered in 2020, but CRE experts believe it will rebound fully in the next 2-3 years.

In the wake of Coronavirus, San Antonio remains a popular market with commercial real estate investors. San Antonio shows a long history of steady Texas commercial real estate market trends, which is why it’s popular among commercial real estate investors. And even better, properties continue to be more affordable in San Antonio than in many other large CRE markets in the U.S. Investors will get more for their money when they invest in the Alamo City.

Finding commercial properties for sale and listing commercial properties for lease in San Antonio or other markets has never been easier. The dedicated and experienced brokers at CXRE can help guide you through the process. Contact us today to learn more.

5. Houston

In a year of frustrating and concerning commercial real estate news, Houston remains one of the bright spots. Its reputation as a commercial real estate powerhouse remains relatively unchanged moving into 2021.

The comparatively low cost of living compared to the rest of the nation, combined with a steady local economy and job market, has created a mecca for commercial real estate investors. Office buildings, industrial properties, medical facilities, and multifamily or mixed-use properties have proven to be profitable year after year in the Houston area.

In a year of frustrating and concerning commercial real estate news, Houston remains one of the bright spots. Its reputation as a commercial real estate powerhouse remains relatively unchanged moving into 2021.

As host to many large corporations in a variety of industries, the Houston economic outlook is stronger than ever. Once a hub for gas and petroleum production, the city has diversified in recent years and now houses leading companies in oil and gas refining, petrochemical production, medical research and healthcare facilities, technology, national and international imports and exports, agriculture, fishing, and manufacturing.

Expansion continues in Houston, with Amazon building yet another Houston real estate million-square-foot fulfillment facility in the city in 2021 and Lowes following suit, creating hundreds of new jobs. As companies seek new locations to lower costs, companies like Hewlett Packard and others are moving to Houston. That’s great news for the local economy, and for CRE investors looking to get ahead of a potentially lucrative real estate boom.

While the numbers indicate Houston falls behind Austin in projected growth, we think this city should rank at the top of the charts for the hottest real estate markets in America. Houston is our home, and the real estate experts at CXRE have an in-depth knowledge of this commercial real estate market. CXRE helps connect investors with the best possible properties that meet their portfolio needs, and we can even manage those properties, giving investors a stress-free experience.

If you’re interested in discovering profitable CRE properties in Houston, or any of the growing Texas commercial real estate markets, please connect with us. We would love to help you find the ideal property that meets your investment needs.

Other Texas Commercial Real Estate Markets to Watch

These other markets may not be the hottest real estate markets in the state, but they are growing fast. Investors should keep an eye on each of these emerging markets as they promise increasing population and industry growth.

Lubbock

As the 11th largest city in Texas, Lubbock projects a 7% growth rate through 2022, according to the Lubbock Economic Development Alliance. The population’s average age is just 31, setting the stage for a youthful workforce to create grand industrial and economic gains in the coming decade. The city’s primary industries are healthcare and social assistance, education, and retail trade, though it’s also a thriving center for the oil and gas industry.

Killeen

Located 70 miles north of Austin, Killeen is an up-and-coming hub for commercial real estate investors. A 2019 report declared Killeen one of the hottest real estate markets in the U.S. for single and multifamily homes, with prices rising 18% in the last year, thanks to lower interest rates. 

Thanks to its proximity to Ft. Hood Army Base, Killeen enjoys a steady economic forecast, with retail, multifamily homes, and office buildings being the most popular and lucrative real estate investments.

Beaumont

Located near the border of Louisiana, situated just north of the Gulf Coast, Beaumont is growing in popularity with residents, businesses, tourists, and investors.

Real estate trending experts Mashvisor include Beaumont on their list of cities to watch in 2021. Citing high investment return rates, some of the best housing prices in the nation, increasing rental rates, and growing industry and economy, Beaumont is a city to watch for investors.

 

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