22nd Feb, 2013

Worth While Texas Real Estate Investments

We have heard all about the Texas Hill Country and Fredericksburg real estate markets.  We have heard about the booming apartment rental industry that picked up steam during the housing bust.  Now let us talk about investing in Texas office space.  Office buildings are becoming Texas real estate worth your investment dollars.  Here is why.

Employers that use office space are responsible for a large percentage of job growth.  Right now, rents are just beginning to increase and more investors are looking for good solid Texas investments.  In addition, several of the construction projects that began before the housing bust are back on the table.  Now is a good time to purchase Texas investment property before the competition fully awakens.

Mark G. Dotzour, Daniel Parulian, and Michael Stewart speak of the trends in their article “Rising From the Ashes” in Tierra Grande Magazine, a Journal of the Real Estate Center at Texas A&M University.  “The office market is rising like a phoenix from the ashes of the 2008 price collapse.”

The commercial real estate lending market has eased up.  The vacancy rate is going down, rents are going up, and people are feeling better about the future of the country.  The reasons why office building investment properties have been passed by over during the past several years are slowly disappearing.

Companies are hiring.  Much of the job growth is in the professional and business services sector or PBS employment.  The PBS sector has recovered from nearly all of the losses of the recession.  The financial activities industry is also improving, but at a much slower pace than PBS.

All of the Texas Gateway cities are drawing strong investor interest, according to the Tierra Grande article.

Class-A Office Gross Rental Rates are up.  Texas Hill Country cities such as Austin and San Antonio are seeing gains.  Austin filled 631,000 square feet in the first quarter of 2012 and 314,000 square feet in the second quarter.  San Antonio filled 468,000 square feet in the first quarter and 250,000 square feet in the second quarter.  Asking rents in the central business districts of Austin and San Antonio are higher than they were in 2007.

New construction includes 15 projects in Austin and 26 in San Antonio.  That is after many were put on hold over the past several years including 40 in Austin and 17 in San Antonio.

The stock market is also having an effect.  The real estate investment trusts (REITs) that include office buildings performed strongly in 2012 with prices up 26.6 percent for the largest trusts.  As the Texas economy improves, the average price for office REITS (real estate investment trust securities) is improving.

To find out about Texas Hill Country homes and ranches for sale, please call Dale E. Cook, MBA and owner of SAGE – Premium Texas Real Estate in Fredericksburg at (830) 992-0056.

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