Move over Houston, make way for Dallas-Fort Worth — and a host of other up-and-coming secondary markets such as Charlotte, N.C., Seattle, Atlanta, Denver, Nashville, Tenn., and Portland, Ore.
That’s the conclusion of real-estate professionals who were asked about their views on the best markets for property investment and development in 2016.
The survey was conducted by the Urban Land Institute and PcW and released this week at the ULI’s fall meeting in San Francisco.
Houston was the No. 1 pick in last year’s survey on markets to watch in 2015, but it sunk to No. 23 in the latest survey for 2016 expectations, amid worries about the impact of prolonged low oil prices on the energy capital’s local economy.
In its decline, Houston was in distinguished company: Also not making the top-10 list were major gateway cities of New York, Boston and Washington, D.C., which have been losing favor with real-estate professionals in recent years.
Sixth-place Denver, also known as an energy market, “is more diversified (than Houston) and seems to be chugging right through” the low-price oil environment, said Ben Breslau, managing director of Americas Research at commercial real-estate firm JLL (NYSE:JLL), during a ULI conference panel. He noted that 5 million to 6 million square feet of commercial space hit the market this year in Houston as rents trended down.
Another panelist, Kenneth Rosen, chairman of Rosen Consulting Group, said the energy belt has a “digestive issue” and warned investors to avoid Houston.