Space, urban sophistication, live music, and cultural diversity—there’s something for everyone deep in the heart of Texas.

Texas First is an ongoing series detailing the explosive growth of Texas’ economic landscape.

A quick summary of the major Texas markets and their key economy drivers:

Austin: Austin is a major tech hub and is home to many startups and growing companies. The office market is very strong in Austin, and there is also a growing demand for industrial space.

Dallas-Fort Worth: The Dallas-Fort Worth metroplex is the second-largest in Texas and is home to a diverse economy. The office market is strong in both Dallas and Fort Worth, and there is also a growing demand for industrial and retail space.

Houston: Houston is the largest city in Texas and home to the energy industry. The office market is on the mend as energy prices have increased, and there is also a growing demand for industrial largely due to the port and manufacturing.

San Antonio: San Antonio is a major tourist destination and is home to a number of military bases. The office market is strong in San Antonio, and there is also a growing demand for retail and multifamily space.

HOUSTON: FULL OF ENERGY AND EXPLORATION

Houston, home to NASA’s Johnson Space Center, is an international hub for space exploration. The city’s museums, like the Houston Museum of Natural Science and the Museum of Fine Arts, attract tourists interested in science, history, and art.

Energy: Houston is known as the “Energy Capital of the World” and is home to the headquarters of many major oil and gas companies, as well as a large number of energy-related businesses. The energy industry accounts for about 16% of Houston’s GDP.
Healthcare: Houston is also a major healthcare hub, with the Texas Medical Center being the largest medical complex in the world. The healthcare industry accounts for about 13% of Houston’s GDP.Aerospace: Houston is home to a number of major aerospace companies, including NASA’s Johnson Space Center. The aerospace industry accounts for about 8% of Houston’s GDP.
Manufacturing: Houston is also a major manufacturing hub, with a variety of industries represented, including petrochemicals, plastics, and transportation equipment. The manufacturing industry accounts for about 12% of Houston’s GDP.
Logistics: Houston is a major transportation hub, with the Port of Houston being the second-busiest port in the United States. The logistics industry accounts for about 10% of Houston’s GDP.

AUSTIN: THE LIVE MUSIC CAPITAL

Austin, renowned as the “Live Music Capital of the World,” attracts tourists and music enthusiasts from all corners. The city’s vibrant music scene, arts, and culture communities make it a hub for creative exploration.

Technology: Austin is known as the “Silicon Hills” and is home to a large number of technology companies, including Dell, Samsung, and Indeed. The technology industry accounts for about 25% of Austin’s GDP.
Government: Austin is the capital of Texas and is home to a number of state government agencies. The government sector accounts for about 15% of Austin’s GDP.
Education: Austin is home to the University of Texas at Austin, which is one of the largest universities in the United States. The education sector accounts for about 12% of Austin’s GDP.
Healthcare: Austin is a major healthcare hub, with a number of hospitals and medical centers. The healthcare industry accounts for about 10% of Austin’s GDP.
Biotech: Austin is also a major biotech hub, with a number of companies developing new drugs and therapies. The biotech industry accounts for about 5% of Austin’s GDP.

DALLAS-FORT WORTH: URBAN SOPHISTICATION

The Dallas-Fort Worth metroplex is a bustling urban center with a diverse range of attractions, including world-class museums, sports venues, and shopping districts. It is also the headquarters of headquarters locations. There are 35 Fortune 500 companies headquartered in the Dallas-Fort Worth metroplex.

Technology: Dallas-Fort Worth is a major technology hub, with a number of Fortune 500 companies headquartered in the area, including AT&T, Texas Instruments, and ExxonMobil. The technology industry accounts for about 15% of the DFW GDP.
Financial services: Dallas-Fort Worth is also a major financial services hub, with a range of banks, insurance companies, and investment firms located in the area. The financial services industry accounts for about 12% of the DFW GDP.
Healthcare: Dallas-Fort Worth is a major healthcare hub, with many hospitals and medical centers. The healthcare industry accounts for about 11% of the DFW GDP.
Logistics: Dallas-Fort Worth is a major transportation hub, with the Dallas/Fort Worth International Airport being the fourth-busiest airport in the world. The logistics industry accounts for about 10% of the DFW GDP.
Defense: Dallas-Fort Worth is home to several defense contractors, including Lockheed Martin and Raytheon.

SAN ANTONIO: A CULTURAL GEM

San Antonio, with its rich history and cultural heritage, stands out as a major tourist destination in Texas. The city’s iconic attractions, such as The Alamo, the River Walk, and historic missions, draw millions of visitors each year.

Healthcare: San Antonio is home to a number of hospitals and medical centers, including the University of Texas Health Science Center at San Antonio and the San Antonio Military Medical Center. The
healthcare industry accounts for about 20% of San Antonio’s GDP.
Technology: San Antonio is also a growing technology hub, with a number of companies developing software, cybersecurity, and medical devices. The technology industry accounts for about 10% of San Antonio’s GDP.
Aerospace: San Antonio is home to numerous aerospace companies, including Boeing and Lockheed Martin. The aerospace industry accounts for about 7% of San Antonio’s GDP.
Tourism: San Antonio is a popular tourist destination, with a number of historical landmarks and attractions, including the Alamo and the San Antonio River Walk. The tourism industry accounts for about 10% of San Antonio’s GDP.
Manufacturing: San Antonio is also a major manufacturing hub, with a variety of industries represented, including food processing, metalworking, and transportation equipment. The manufacturing industry accounts for about 12% of San Antonio’s GDP.

TEXAS BY THE NUMBERS, KEY INDUSTRIES AND COMPANIES THAT SHAPE THE DIVERSE TEXAS ECONOMY:

These are the prominent investors in the Texas commercial real estate market. Beyond these large companies, there are various other active buyers, including local real estate developers, private equity firms, and family offices, each with their unique investment strategies. The diversity of property types being acquired in Texas reflects the dynamic nature of the commercial real estate market, driven by the state’s robust economy and growing population.

Investment volumes are down significantly over the past year, mainly due to higher debt costs, still Texas remains one of the most desirable locations for commercial real estate investors because of its economic advantages. For the first six months of 2023, $181.77 billion of commercial real estate sales occurred, a sharp drop from the $424.51 billion in transactions a year prior, according to MSCI Real Assets data.

Commercial properties currently under contract give some indication of investor appetite and where the market is headed over the shorter term. Currently, office properties outpace industrial properties

The numbers can also be evaluated by the number of deals currently under contract, which shows, though while generally smaller in size (by square feet), Industrial/Flex outpaces Retail and Office as far as investor preference at the moment.

Texas has emerged as a preferred destination for foreign commercial real estate investment. Some recent examples of foreign players in the major Texas markets include:

These foreign investors have been actively participating in the Texas commercial real estate market, adding to the diversity and vitality of the industry in the state.

Interested in investing in Texas?

If you’re an accredited investor, you can sign up and invest in Texas-based opportunities directly through our online investment platform, Partners Finance—the capital-raising division of Partners Real Estate.*

*Securities offered through Partners Finance, member FINRA / SIPC. Investing in private placements is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Some of the risks of investing in real estate include changing laws, including environmental laws; floods, fires, and other acts of God, some of which may not be insurable; changes in national or local economic conditions; changes in government policies, including changes in interest rates established by the Federal Reserve; and international crises.

Steve Triolet
Senior Vice President of Research and Market Forecasting
[email protected]
tel 214 223 4008