5 Best Texas Markets for Commercial Real Estate Investments | Riverdale Funding

5 Best Texas Markets for Commercial Real Estate Investments

May 30, 2017

For a first-time commercial real estate investor, it may come as a surprise how much insight can be gained from population and consumer trends. Of course, this is true of any type of investment or market – follow the trends, and you follow the market. However, this is particularly true of commercial real estate. There are several markets throughout the United States that are growing rapidly, and are anticipated to continue their growth trends into the next few years.

One state maintains a position as a shining star of commercial real estate investing: Texas. Even on a national level, there are multiple Texas cities where properties continue to provide attractive returns. It’s always best to consult your investment decisions with your trusted financial advisor and do your research, but should you be considering investing in the Lone Star State, here are five solid Texas commercial real estate markets to start your search.

5 Best Texas Real Estate Markets to Invest in Commercial Real Estate

1. Dallas

Despite the frequent pairing of Dallas with neighboring Fort Worth, we’ve got a feeling the proud Dallasonians would prefer it be listed on its own. (Don’t worry, the real estate market makes a good case for this, too.) Dallas has topped numerous 2016 and 2017 lists of best U.S. markets for real estate investing, and it’s showing no signs of slowing down. With unleveraged returns of 20.7% last year (following 19.5% the year prior), the value of Dallas property is unquestionably on the rise. If you’re searching for properties in Texas, it’s a good place to start.

2. Houston

While Dallas may be the rosiest market in the United States for commercial real estate investing in Texas, Houston is certainly among the largest. As one of the five largest U.S. cities, it’s no wonder the sprawling metropolis makes many national top 10 lists for real estate investing, as well. From a swiftly growing population to the large industrial districts spread across the city, Houston boasts a variety of property types which have been appreciating in value over the past couple years. Should you be looking across several different commercial property types, chances are you’ll find something worth a second look in Houston.

3. Austin

At this point, it feels like every other month Austin makes headlines for the influx of young professionals in technology and other fields swarming into the capital. While this may cause frustration around rush hour, it’s also been driving up property and office rent values substantially for years, providing attractive opportunities for those interested in commercial real estate. Additionally, the city shows no signs of slowing down. If the continued growth of large, international film and music festivals such as SXSW and Austin City Limits Music Festival (ACL) are any indication, ATX will find itself as a top 10 U.S. growth market for many years to come.

4. San Antonio

From Austin, you’re only about an hour and a half away from another strong market – and it’s worth a look. San Antonio isn’t just the home of the Alamo and the famed San Antonio River Walk, it’s also a new home for many job seekers within Texas. Along with the rest of the cities on our list, San Antonio has helped drive the state to the top of various population growth surveys over the past few years. With population booms comes value increases across various property types, making it a worthy place to search for properties if you’re interested in commercial real estate.

5. Fort Worth

Rounding out our list of growing Texas markets, we have the other half of the Dallas-Fort Worth Metroplex. This western-adjacent neighbor to Dallas has earned its spot on the list of top markets for a reason, if largely due to its proximity to the city in our number one spot. While the two cities do operate individually, the population and markets are closely intertwined – growth for Dallas is frequently predictive of growth for Fort Worth, and vice versa. With quickly appreciating values on many commercial property types, it’s clear that you shouldn’t overlook Fort Worth when you’re exploring commercial real estate investing opportunities in Texas.

So which Texas market is the best for commercial real estate investing?

Dallas seems to be the strongest market in terms of returns in the past couple years, but any market on this list has areas of strength. Some cities boast job growth in specific sectors, some are a magnet for young professionals, and some are simply continuing the well-rounded growth they’ve experienced for decades.

Whether you’re interested in flipping a commercial property or taking on the role of a property manager, your investment decisions require diligence and discussion with your financial advisor. Options are out there, and we’re always here to help along the way.