Property

Deep In The Heart

Deep In The HeartSay “Dallas” and a few things invariably spring to mind — some good, some bad, all memorable. Near the top of that list are one of television’s most popular night-time soap operas ever, a notorious grassy knoll, one of the greatest — or most irritating—sport franchises in the world and its cheerleaders, perhaps a young woman named Debbie. Regardless of the fact that the city of over six million is a snappy cosmopolitan one dotted with gleaming glass office towers and swanky café districts, The Bid D still finds itself fighting a backwoods good ol’ boy cowboy image. Houston is perceived as urbane and liberal by red state standards. Austin is a hip, young force in American culture. San Antonio has a relaxed southern drawl and historical attitude. Dallas is the prim, proper, fussy one.

In reality the Dallas-Fort Worth-Arlington metroplex is a robust mix of art and commerce, business and leisure, that’s starting to gain traction as an investment location. Dallas boasts an industrial base that includes mining and construction, manufacturing, financial services, education, health services and biotech, IT and energy that underpins an economy that ranks as sixth largest in the United States. Twelve major universities are located in Dallas alone, and it’s headquarters to the likes of Southwest Airlines (the world’s first low cost carrier), American Airlines, local favourite 7-Eleven, AT&T, ExxonMobil, Atmos Energy, Kimberly-Clark, department store chain JCPenney (which last year publicly dismissed a right wing campaign against it for choosing out lesbian Ellen Degeneres to be its spokesperson), Fossil, and of course, chip maker Texas Instruments among scores of others. Dallas employment statistics are stronger than the national average, and the population is set to grow upwards of 40 percent by 2030 — that after a 23 percent jump between 2000 and 2010, well above the state average.

Colliers International’s office market review for the first quarter of 2012 noted steady growth in the business environment over the year before and rising rental rates. As with employment figures, office absorption is a key indicator in any market, and in Dallas, and according to Colliers, “Employment levels made steady climbs, fueled by increases in direct hires, and some shortages developed in skilled workers for IT and accounting fields. Even the construction industry, hard-hit by the slowdown in new homes and commercial development, saw a mild uptick in hiring. Dallas unemployment edged down to 7.1 percent in first quarter 2012 from 7.4 percent at the end of 2011 … Dallas is headed for another year of attracting real estate investors as a stable and appealing market.”

Texas A&M University’s real estate centre reported residential occupancy in Dallas is sitting at around 94 percent — close to 96 percent for apartments built after 2000 in its own market report for Dallas-Fort Worth- Arlington for the same year. Sales prices are still off approximately 7 percent from peaks in 2005-07, but they’re moving up: average prices per square foot in Dallas are up between 8.8 and 12 percent over fourth quarter of 2011. Sales are up too: 26.9 percent from a year ago. Prime neighbourhoods at North Dallas, Preston Hollow, Oak Lawn and the central arts district are seeing strong gains too.

“Dallas has always been the most popular city in Texas for our Hong Kong clients,” explains Patrick ONeill, CEO of Hong Kong-based ONEILL Group. “I never got the connection; I still don’t. But it came up in conversation quite a lot and Texas became a focus because of its tax structure. The glamorous developments fit better in our portfolio so we’ve gone with that.” ONeill then mentions the Dallas reboot and how the city’s arts district Museum Tower features prominently in the show. “It’s the newest project. It’s very much a chic, happening thing in Dallas right now.” The appeal of investing in Texas is easy to understand. The state has no capital gains or rental income taxes, inventory is down 6 percent and the gap between housing starts and household formation is closing. Even though Dallas weathered the 2008 financial storm relatively well, it took a hit, which it’s currently recovering from quite nicely. ONEILL Group focuses on what it calls gateway cities, which begs the question of whether Dallas belongs in such elite company. “True New York and Los Angeles are our most requested cities. But Dallas ranks above San Francisco for us. We use the term ‘gateway city’ as a way to identify cities on the radar for international purchasers.”

Ultimately ONeill chalks up the draw of Dallas to the metroplex’s economic power, Texas’ resilience during the downturn and the city’s social vibe. “It’s got a very international feel, a lot of it influenced by South America … It’s got a good fast pace, a lot of action in the city.” ONeill pauses as he tries to describe the more intangible reasons for Dallas’ emergence as an investment spot — particularly in Hong Kong. “It’s funny when you ask that; it’s hard to say. There’s just something people like about it.” Must be the cheerleaders.