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March 2023 | DFW Market Updates

March CFO Corner Dallas Blog

Dallas market heating up as economy and new businesses continue to flourish

Texas is going big in a push to compete more heavily in the life sciences and biotech industry as it continues to attract new businesses and jobs. Read about the state of the Texas economy, more commercial expansions going to North Texas, and what Peppa Pig is doing in DFW.

Texas ranks No.5 for fastest growing economy as it continues to add jobs and attract new businesses

The latest report from SmartDollar showed that Texas ranks third in the nation for the highest GDP growth at 4.03%, while coming in at No.5 as the fastest growing economy.

Davie Nguyen with Dallas Business Journal reported that the Dallas-Fort Worth-Arlington area surpasses the national average for economic output per resident, producing $77,109 of economic output. With a total GDP of $598 billion, the Dallas-Fort-Worth Arlington metro ranked No. 18 out of the 56 largest metros across the country.

In January, Texas added 48,600 nonfarm jobs in January, which is the most since October 2022 according to Mitchell Schnurman with Dallas News. The seasonally adjusted unemployment rate went up to 3.9% but has remained under 4% since March of last year. Though it’s an indication that the tight labor market persists in Texas, which is a challenge for employers looking to add talent, it remains an opportunity for workers looking to improve their prospects.

Adam Perdue, an economist with the Texas Real Estate Research Center at Texas A&M University said, “For the last 11 months, I’ve been expecting Dallas-Fort Worth, Austin and everywhere in Texas to slow down, and I’ve been wrong. The idea that we’re sustaining such high rates of growth is kind of hard to wrap my head around.”

In January, both the leisure and hospitality sector and professional and business services had over 8,000 net hires in Texas; construction and manufacturing each added 5,900 jobs, while oil added 2,500 jobs; Texas’ slowest-growing job category over the past year, the government sector, added 5,700 jobs. Although construction cut 700 jobs in December, it then had a net gain of 5,900 hires in January.

“For the second consecutive month,” said the workforce commission, “every major industry had positive over-the-month employment growth.”

In order to spur continued growth in Fort Worth, the Fort Worth Chamber of Commerce has created a new nonprofit to lead business recruitment and attraction for the city, the Fort Worth Economic Development Partnership. Mitchell Parton with Dallas News reported that the chamber has chosen Robert Allen to lead the new organization as president and chief executive officer. Allen, who is currently President and CEO of the Texas Economic Development Corp. in Austin, will leave the organization and begin his new role in Fort Worth on April 3.

“In my role with TxEDC, I have met with companies from across the country and every corner of the globe and I’ve learned what they are looking for,” Allen said. “I can confidently tell you Fort Worth holds tremendous promise for companies looking to establish or relocate their business.

Rosa Navejar, chair of the Fort Worth Chamber of Commerce, said the chamber will focus on supporting local businesses through business retention and expansion programs, workforce development, government advocacy, infrastructure and transportation efforts, and educational programs. 

“We have made the decision to focus and prioritize the FWC’s efforts where it can have the most positive impact on and for our business community,” Navejar stated. “We looked at various models of how comparable cities drive business attraction and retention compared to Fort Worth.”

More companies choose Dallas market for commercial expansions

Carhartt Inc., a family-owned apparel firm, is setting its sights on a new shipping hub in North Fort Worth near the Texas Motor Speedway. Steve Brown with Dallas News wrote that the company plans to invest more than $80 million in the distribution center which would create up to 500 new jobs averaging more than $55,000 in annual salaries. Carhartt, based in Michigan, began in the 1880s and currently employs more than 5,000 workers across the country. It sells its popular lines of work and outdoor apparel through nearly three dozen company-owned retail stores, other retailers, and online.

One of the world’s largest manufacturers of medical apparel is also choosing North Texas as the site to consolidate seven of its warehouses into one. Tucker Wells with Dallas Business Journal reported that Careismatic Brands is taking over a 1,014,254-SF facility in Dallas to serve as a core part of the company’s global distribution network that will serve Central and Latin America, the U.S., and parts of Canada. The company is based in Los Angeles but has been serving DFW for 15 years and currently employs 450 people in the region.

Sidharth Lakhani, Chief Operating Officer of Careismatic Brands, said, “We’re consolidating our footprint, as well as our leases. But most importantly, we are investing in the latest automation technology and bringing all our brands together under one roof to deliver an industry-leading customer experience.”

In choosing the new site, the company commissioned a rigorous site-selection study which showed that Dallas was the “ideal combination of location, labor force availability, and transportation to our customers as well as on the inbound logistics side from the ports,” according to Lakhani.

Spencer Brewer with Dallas Business Journal reported that Fort Worth will be receiving 125,000-SF of mixed-use office space as “The Mullet” is in the planning stages. The development, owned by Goldenrod Companies, will feature about 260 multifamily units and a four-star hotel with nearly 170 rooms. It will also host about 30,000-SF of restaurant and retail space, though design details and programming are not yet finalized.

Brandon Schubert, head of Acquisitions at Goldenrod Companies, said, “We initially referred to it as The Mullet because, until a few weeks ago, we had the museums in the front and three bars in the back of the property. And then it just kind of caught on.” 

The building will rise about nine to ten stories and is expected to be completed by late 2025. Goldenrod Companies is a commercial real estate development and investment firm based in Nebraska with about $4 billion under management.

Dallas pushing hard to compete in life sciences and biotech industry

David Moreno with Dallas Business Journal reported that the Dallas Regional Chamber has launched a new economic development campaign to recruit more life science and biotech companies to DFW. DFW currently ranks 7th in the U.S. for life science and biotech jobs as the DRC is pushing to drive momentum and capitalize on the region’s current position in artificial intelligence, big data, and software development.

The DRC has appointed Kelly Cloud as VP of economic development for life sciences, who will collaborate with community leaders, economic development partners, and the life science environment in order to expand the sectors in North Texas.

Panna Sharma, president and CEO of Dallas-based Lantern Pharma said, “If we’re going to get talent and get people interested, it’ll generate interest from investors. It’ll then generate interest from other like-minded people who want to make a difference in drug discovery or life sciences. This is very exciting for companies like us.”

Pegasus Park, the 23-acre biotech, life sciences and nonprofit hub in Dallas, is gaining a new addition as construction begins this April. David Moreno with Dallas Business Journal reported that the new building, Bridge Labs, will total 135,000-SF at a cost of $32 million and is expected to be finished by July 2024. Pegasus Park was built in 1970 and contains more than 750,000 square feet of space across multiple buildings, including an 18-story office tower.

One of many efforts to grow the biotech and life sciences sectors in North Texas, Dallas-based NexPoint also announced plans to develop a 200-acre life sciences development in Plano that would create more than 4 million square feet of lab, office, and therapeutic production space.

DFW Airport making a comeback post-pandemic and offering unique flying experience

After a steep decline in travel since 2020, Dallas Fort Worth International Airport and Dallas Love Field Airport are making a steady comeback according to Holden Wilen with Dallas Business Journal. DFW Airport reported 73.4 million passengers last year, a year-over-year increase of 17%, while traffic recovered more than 97% compared to 2019, but remained down by more than 2.6 million passengers.

At Love Field, traffic recovered 95% and grew almost 20% compared to 2021, reaching nearly 16 million passengers.

March and April are expected to bring an influx of travelers for spring break season as the trade group Airlines for America predicts about 2.6 million passengers will travel per day during these months, reaching a record 158 million passengers. DFW airport was expected to receive an average of 220,000 passengers per day, or 4.2 million passengers total, between March 2-20. Love Field was predicted to receive about 30,000 passengers per day during the two most common weeks for local schools’ spring break.

Now, DFW Airport will soon be offering a luxury travel experience to celebrities, corporate executives, and other wealthy travelers as the company PS VIP Services has been approved for a 10-year lease agreement to open a private luxury terminal. The airport board of directors waived the airport’s minimum annual guarantee for the first two years of the contract, with PS paying DFW $32 million in rent for the remainder of the contract. 

At 12,200 square feet, the terminal will feature high-end amenities like chef-prepared meals, chauffeur service, and day beds, as well as a signature lounge concept called “The Salon.” PS will offer an all-access membership that includes complimentary valet parking and spa services such as massage, haircut/barber, and manicure. The all-access membership will cost $4,850 annually, $3,450 for up to four people in the private suite, and $695 per person for the lounge.

Ken Buchanan, Executive Vice President of revenue management and customer experience, said, “DFW Airport is excited about this newest opportunity to transform travel for our customers as PS brings its unique services to our airport. DFW welcomes PS and the opportunity to elevate the customer experience with this unique new option for travelers. They can have a more personalized experience to and from their flights at DFW.”

Walmart expanding into healthcare and building in DFW

 Walmart entered the healthcare space as it launched the Walmart Health division in Atlanta in 2019. Now, the Arkansas-based retail giant plans to open up 28 more clinics across the country by 2024, with 10 of those in Dallas-Fort Worth. Angela Gonzales with Dallas Business Journal reported that the clinics will be around 6,000 square feet and located in or near Walmart Supercenters as well as near existing pharmacies where possible.

Each multimillion dollar clinic will have physicians and dentists on site as well as nurse practitioners and other health workers. Some of the services offered will include primary care, urgent care, behavioral health counseling, dental, lab and X-rays. Dr. David Carmouche, Senior Vice President of Walmart’s Omnichannel Care Offerings, said that the clinics are planned to be contracted with major health insurance carriers, including commercial, Medicare, and Medicaid health plans.

Camouche stated, “These are not small investments. These are substantial, very modern, very well-equipped health care facilities. They are very nice and very modern health care centers that just happen to be in very convenient, very popular well-known locations.”

He explained that if patients don’t have their own primary care physician, the Walmart Health doctors can serve as one, offering care for those with chronic conditions, such as diabetes, hypertension, and asthma.

“Under one roof, we’d love to deliver as many health care-related services as we can,” said Camouche.

Portillo’s raking in the cash after successful launch in Texas

Since opening its first Texas location in The Colony on January 18, Portillo’s has been seeing massive success at an average of $48,000 in revenue a day. The Chicago-based fast-casual restaurant, known for its hot dogs and Italian beef, has plans to build two more locations in North Texas, one in Allen and the other in Arlington.

CEO Michael Osanloo said Texas “can be either hit or miss for restaurant companies”, but after popular public demand to bring a Portillo’s to North Texas, the region is showing great promise for expansion. 

In regards to the blitz of success in the new location, Osanloo said, “This means it’s been matching the volumes of restaurants in Chicago that have been open for decades. Specifically, The Colony has averaged $48,000 in sales per day since the grand opening. Now, that annualizes to $17 million per year; and that’s a crazy number, so please don’t model that. It’s definitely coming down. But we feel really good that this restaurant will significantly exceed our underwriting expectations and sets us up for further success in Texas as we continue to expand.”

Hollywood and Peppa Pig are coming to North Texas

Mansfield Super Studios, a film studio development created as a mini Hollywood, will be breaking ground in Mansfield this year. Adriana De Alba with Dallas Business Journal wrote that the project will sit on 72 acres with a starting cost of $70 million. It will feature “clusters” with sound stages and mill spaces, hotels, restaurants, coffee shops, and retail space. Additionally, the studio is expected to create 2,000 jobs and attract big business.

Filmmaker and Super Studios CEO Angel Garcia, who directed the film From Prada to Nada, is overseeing the studio development and said, “This is a filmmaker’s studio designed by filmmakers for filmmakers.” Gracia selected Mansfield as the location due to its access to the airport and proximity to both downtowns. The studio is designed to be capable of producing big-budget films and shows, as the film industry has poured nearly $600 million dollars into Fort Worth’s economy since 2015.

Coming in 2024, North Richland Hills is the chosen location for a new Peppa Pig Theme Park. Owned by Merlin Entertainments, the company behind the Legoland Discovery Center and Sea Life Aquarium in Grapevine, the new park will be the second Peppa Pig Theme Park in the country, with the first one located in Florida. According to Mitchell Parton with Dallas News, the new park will be centered around the pre-school market, featuring multiple rides, interactive attractions, themed playscapes, and shows based on locations from the Peppa Pig brand.

“North Richland Hills is known for its family-friendly amenities and activities and we could not be more thrilled to add Peppa Pig Theme Park to the mix. This will be a great addition to our community,” said North Richland Hills Mayor Oscar Trevino. “Conveniently located next door to NRH2O Family Water Park, Peppa Pig Theme Park will bring more energy to an area already known as a destination for family fun.”

Though another new kid-friendly theme park being planned by Universal Studios in Frisco is receiving local opposition, the Peppa Pig Theme Park in Mansfield is receiving positive feedback according to Trevino. 

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