Austin, Texas, now offers the most attractive real estate investment and development opportunities of any major U.S. market, according to a survey of industry authorities.
Another Texas market, Dallas/Fort Worth, took second place in the Emerging Trends in Real Estate 2017 survey from PwC and the Urban Land Institute (ULI) released Oct. 26. Portland, Oregon ranked third in the survey of more than 1,800 real estate experts.
Austin, which ranked second in last year’s survey, becomes the third consecutive Texas market to lead the survey, following Dallas/Fort Worth in 2016 and Houston in 2015.
“Viewed as a fluke when it hit the study’s top 10 list five years ago, Austin’s rise to the top of the list signals the durability of the city’s long-term appeal to investors,” said Mitch Roschelle, PwC partner and real estate research leader. “Austin, along with many of this year’s top 10 cities, boasts attractive, niche neighborhoods and a vibrant, diverse economy,” he added.
“Magnet for Millennials”
Scott Fordham, president and CEO of TIER REIT (NYSEMKT: TIER), a Dallas-based office REIT, said the reasons that Austin and Dallas are two of the company’s seven target growth markets are “self-evident.”
As of the end of September, year-over-year class-A office rent growth was 7.7 percent in Austin and 5.4 percent in Dallas/Fort Worth, while office development in both markets has remained generally in check, he said. Austin has 1.7 million square feet of office development under construction, about 75 percent of which is pre-leased, while Dallas/Fort Worth has 10.4 million square feet under construction, with about 66 percent pre-leased, according to TIER.
Steadfast Apartment REIT, a public, non-listed REIT that acquires and manages mid-tier apartments, has also been a long-time advocate of Austin.
“Austin grows by about 150 people per day. It is truly a magnet for millennials. The reason is easy - great lifestyle and higher paying jobs,” said Ella Shaw Neyland, president of Steadfast.
Rounding out the PwC/ULI top 10 list of markets were:
- Seattle in fourth place;
- Los Angeles in fifth place;
- Nashville, Tennessee, in sixth place;
- Raleigh/Durham, North Carolina, in seventh place;
- California’s Orange County in eighth place;
- Charlotte, North Carolina, in ninth place; and
- San Francisco in 10th place.