Friday, January 23, 2015
Job Growth: How it Affects the Dallas-Fort Worth Commercial Real Estate Market
By: Greg Langston (Dallas)
Strong job growth has been one of the main drivers of the Dallas commercial real estate market, with analysts expecting this trend to continue in 2015.
The Dallas market experienced broad job growth in 2014. A recent study from the W. P. Carey School of Business at Arizona State University ranks Dallas third among U.S. metropolitan areas in terms of job growth, with notable gains coming from the “‘professional and business services’” industries. The region’s small businesses also had a very strong year, holding the top spot on the Paychex/IHS Small Business Jobs Index from October 2014 to January 2015.
This job growth has been driven by favorable business conditions in the Metroplex, which in turn bolsters business growth. A recent piece by the Dallas Morning News attributes this to Dallas’ growing status as major tech hub, prompting more growing corporations and startups to flock to the city while simultaneously becoming an attractive place to live for potential new residents. Furthermore, this growing job pool primarily draws from well-paying white collar jobs, providing more support for commercial and residential real estate markets alike.
With that being said, the only question that remains is whether Dallas job numbers will continue their upward trajectory in 2015. We’ve already seen early job numbers for small businesses and, although Dallas remains well above the national average, national growth has notably slowed. In terms of larger corporations, however, this will remain to be seen--though, to be fair, the commercial real estate market is showing no signs of slowing at the moment.
The relationship between steady job growth and favorable business conditions has been absolutely crucial to the success of the Dallas commercial real estate market over the past several years. The Dallas market experienced a stellar 2014, with its office market ranking among the most vibrant in the nation. While it remains to be seen whether this robust growth will continue in the year 2015, expect job numbers to provide some potential insight when they are released.
Posted by Greg Langston, AY Dallas at 3:45 PM