The Texas Advantage
Texas outperforms national benchmarks on population growth, job creation, and logistics capacity. Over the past five years, population and job growth have exceeded the U.S. average, supporting durable space demand across industrial, office, retail, land, and multifamily. Industrial vacancy typically runs below the national average, retail availability is tighter, multifamily rent growth is stronger in leading metros, and the share of office sublease space is more manageable than in many coastal markets. Cap rates generally price wider than in coastal gateway markets, creating attractive risk-adjusted yields. Operating conditions include no state income tax and a regulatory climate that supports speed to market. A central location with Interstates 35, 10, and 45, Gulf Coast ports, Class I rail, and Tier 1 air cargo hubs expands customer reach and shortens delivery times.
Industrial
Sales Market
Industrial sales activity remains steady, with the strongest demand focused on well-located, functional properties. Small-bay and shallow-bay industrial assets continue to attract owner-users and private investors, while modern logistics facilities command premium pricing. Buyers remain selective, prioritizing functionality, accessibility, and long-term value, with market performance varying by location and asset quality.
Lease Market
Industrial leasing demand remains strongest for small-bay, shallow-bay, and infill properties that offer functionality, accessibility, and operational efficiency. Tenants continue to prioritize move-in-ready space, while landlords with well-maintained properties are achieving stronger occupancy and leasing activity. Market performance varies by location, asset quality, and available inventory.
Our Take
Functionality drives value in today’s industrial market. Properties with strong access, efficient layouts, loading capabilities, and operational flexibility continue to attract the greatest tenant and investor demand. Owners who price appropriately and highlight these advantages are achieving the best results.
Office
Sales Market
Office sales activity remains selective, with demand concentrated on well-located, functional properties. Smaller professional and medical office buildings continue to attract owner-users and private investors, while older commodity office assets often require competitive pricing and repositioning strategies to generate interest. Buyers remain focused on occupancy, functionality, and long-term value, with market performance varying significantly by location, tenant profile, and asset quality.
Lease Market
Office leasing activity remains strongest in well-located Class A and Class A-B properties, as well as efficient suburban office buildings with ample parking and flexible floor plans. Tenants continue to prioritize quality, convenience, and move-in-ready space, while landlords offering spec suites and flexible layouts are experiencing stronger leasing activity. Rental rates remain generally stable, with market performance varying by location, building quality, and available inventory.
Our Take
Convenience, accessibility, and functionality continue to drive office demand. Properties that offer quality locations, flexible layouts, ample parking, and move-in-ready space are attracting the strongest tenant and investor interest. Owners who position and price assets realistically are achieving the best results in today’s market
Retail
Sales Market
Retail sales activity remains strong, driven by neighborhood centers, outparcels, and well-located retail assets. Investors continue to favor properties with stable tenancy, strong visibility, and daily-needs retailers, while pricing remains highly dependent on tenant quality, lease structure, and location. Well-positioned retail properties continue to attract active buyer demand, with market performance varying by asset quality and tenancy.
Lease Market
Retail leasing activity remains strong, particularly for pad sites, neighborhood centers, and service-oriented retail. Tenants continue to prioritize visibility, accessibility, parking, and strong surrounding demographics. Rental rates remain stable in well-performing corridors, while leasing activity and occupancy are strongest for properties with quality co-tenancy and high traffic exposure.
Our Take
Location, visibility, and tenant mix continue to drive retail performance. Properties positioned in high-traffic corridors with strong accessibility and complementary co-tenancy are attracting the greatest tenant and investor demand. Owners who focus on merchandising, occupancy, and realistic pricing are achieving the strongest results.
Multifamily
Sales Market
Multifamily sales activity remains steady, with demand concentrated on well-located properties that offer stable occupancy and rental growth potential. Private investors and 1031 exchange buyers continue to drive transaction activity, while value-add opportunities remain attractive in growing submarkets. Pricing is influenced by location, property condition, operating performance, and long-term rent sustainability.
Our Take
Stable occupancy, sustainable rents, and operational efficiency continue to drive multifamily value. Investors are focused on properties with strong fundamentals, manageable expenses, and clear opportunities to improve performance. Assets located near employment centers, quality schools, and growing neighborhoods remain best positioned for long-term demand.
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Major Developments Shaping Texas
Samsung Semiconductor Plant – Taylor, Texas
A cornerstone of Texas’ advanced manufacturing expansion, Samsung’s $17 billion semiconductor facility in Taylor spans more than 1,000 acres and will produce cutting-edge logic chips for global supply chains. The project includes over 6 million SF of cleanroom, R&D, and support space, with operations expected to begin in 2026. Once complete, it’s projected to create 2,000+ direct jobs and anchor a new regional technology corridor northeast of Austin.
Rio Grande LNG – Brownsville, Texas
Rio Grande LNG in Brownsville, developed by NextDecade, is a major Gulf Coast export terminal on the Brownsville Ship Channel. Phase 1 includes three liquefaction trains targeting ~17–18 MTPA, with full buildout envisioned in the mid-20s MTPA. The project reached FID in 2023; Bechtel is the EPC and construction is mobilized while agencies complete a supplemental environmental review following a 2024 court remand. Feedgas will be supplied via the Rio Bravo Pipeline (now owned by Enbridge). NextDecade has withdrawn the on-site CCS concept and is emphasizing lower-carbon LNG sourcing. Once operational, the facility is expected to be among Texas’s largest LNG hubs, supporting thousands of construction jobs and long-term port activity in the Rio Grande Valley.
UT Southwestern Pediatric Campus – Dallas, TX
UT Southwestern and Children’s Health are constructing a $5B pediatric health campus in Dallas’ Southwestern Medical District, directly across from UTSW’s Clements University Hospital at Harry Hines Blvd. and Paul M. Bass Way. The ~4.7M SF build centers on a new hospital with two 12-story towers and one eight-story tower, delivering 552 beds (about a 38% increase) with room to expand. Ground broke on October 1, 2024, with opening targeted in roughly 6–7 years (around 2031). Program highlights include expanded emergency and surgical capacity, a Level I pediatric trauma center, two helipads, and a new fetal care center. The project is supported by significant philanthropy, including a major gift from the Moody Foundation.
Texas Heritage Marketplace – Katy, TX
A ~$400M, 165-acre mixed-use destination by NewQuest at the SE corner of I-10 & Texas Heritage Parkway (Waller County). Plans call for ~750,000 SF of retail/dining anchored by a 148–149k SF Target (targeting 2026 openings), ~300,000 SF of medical office/self-storage, and ~550 apartments delivering in phases through 2028. A five-acre central green organized around a preserved heritage oak is designed as the project’s community hub; site and utility work kicked off with vertical construction following in 2025.
Hillwood Landmark Mixed-Use Development – Denton County, TX
Landmark by Hillwood is a 3,200-acre master-planned community at I-35W & Robson Ranch Rd. planned for ~6,000 single-family homes, 3,000+ multifamily units, and ~5M SF of commercial/mixed-use space, plus ~1,100 acres of parks, trails, and open space. Early site and lot work began in 2024/2025, with initial commercial anchored by a planned H-E-B at the northwest corner of I-35W and Robson Ranch. Positioned as a southern gateway to the AllianceTexas corridor, the project extends Hillwood’s long-range Denton County footprint and is designed as a live-work-play district integrated with significant natural amenities.
Sachs on the Seawall -Galveston, TX
Sachs on the Seawall is a $540 million mixed-use coastal development planned along Galveston’s Seawall Boulevard near 45th Street. Developed by the Sachs Company, the project will feature a 216-room luxury hotel, two condominium towers, two apartment towers, and several restaurants and retail spaces with walkable public areas. The design includes about four acres of landscaped green space overlooking the Gulf, enhancing both public access and the city’s tourism appeal. Construction is expected to begin in late 2025, with phased completion through 2029. Once finished, it will stand as one of Galveston’s largest private investments, bringing significant hospitality, residential, and retail opportunities to the area.
Tesla Gigafactory Texas -Travis County
The Tesla Gigafactory in Travis County, also known as Giga Texas, is one of Tesla’s largest and most advanced production facilities worldwide. Spanning over 10 million square feet on a 2,500-acre site along the Colorado River near Austin, the factory serves as the central hub for manufacturing the Model Y, Cybertruck, and upcoming Tesla Semi. The project represents more than $5 billion in investment and employs tens of thousands of workers, with continued expansion underway. Current additions include a battery cathode facility, logistics park, and advanced testing center aimed at improving efficiency and in-house battery production. Beyond its scale, the Gigafactory has fueled economic growth throughout Central Texas, transforming the Austin–Bastrop corridor into a growing hub for clean energy and high-tech manufacturing.
Castle Hills – Lewisville, Texas
Castle Hills is transforming from a suburban neighborhood into a self-contained urban district, designed to let residents live, work, and play within one community.
Its mix of modern office spaces, multifamily housing, and entertainment venues positions it as a major suburban employment and lifestyle hub in the North Dallas corridor, rivaling areas like Legacy West and Cypress Waters.
The community’s success has also driven significant land value appreciation and continues to attract both corporate tenants and high-income residents, making it one of the most dynamic suburban developments in North Texas.
Disclaimer
The information provided on this Market Insights page is for general informational purposes only. While KARE Investment Sales & Leasing strives to present accurate and up-to-date market data, all information is subject to change without notice and may include content from third-party sources deemed reliable but not guaranteed.
KARE Investment Sales & Leasing makes no representations or warranties regarding the completeness or accuracy of the information presented. Readers should conduct their own due diligence and consult qualified professionals before making any investment, purchase, or leasing decisions.
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