Business-Minded Legal Solutions

Commercial real estate in Texas: What to watch in 2018

Entrepreneurs are wise to keep close tabs on the real estate market in Texas. A recent report by the National Association for Industrial and Office Parks (NAIOP) Commercial Real Estate Development Association ranks the Lone Star State top in the nation for growth within the commercial real estate market.

What are the numbers? Business in the commercial real estate market in Texas is booming. The sector brought in $59 billion to the state’s economy and supports 380,000 jobs in the Lone Star State.

How can entrepreneurs take advantage of this boom? It is important to move forward with any business deal wisely. Three specific factors to keep an eye on before diving into this particular market at this time include:

  • Interest rates. The Federal Reserve announced plans to raise interest rates three-quarters of a point over a span of three increments during 2018. As a result, interest rates will likely increase.
  • Cost of operations. The NAIOP Commercial Real Estate Development Association projects labor shortages in 2018 that may impact the cost of operations in the commercial real estate market. A number of sectors are experiencing a shortage of workers, including construction.
  • New tax law, unknown impact. There remain a number of uncertainties regarding details for the tax law passed at the end of 2017. These uncertainties may impact consumer spending.

A review of these factors before moving forward with an investment in this market will help to better ensure a successful business deal. These three factors are a portion of the due diligence required prior to moving forward with a real estate project. An attorney experienced in these projects can provide additional guidance, better ensuring your interests are protected.