Even as Dallas-Fort Worth’s construction pipeline topped $23.4 billion in 2017, North Texas executives say they expect even more projects to get underway this year.
Last year, North Texas general contractors increased the amount of investment in commercial and residential real estate projects by 6 percent in the region, according to Dodge Data & Analytics.
And, this year, projects throughout the United States are expected to climb 3 percent to $765 billion.
“In 2018, there are several positive factors which suggest that the construction expansion has further room to proceed,” said Dodge Data Chief Economist Robert Murray, in a statement.
Real estate executives say they expect to see even more projects get underway this year in North Texas despite labor shortages impacting the construction cycle and cost of development. The region is estimated by the Dallas Builders Association as having a labor shortage of 20,000 workers for commercial and residential projects.
The industry group estimates the labor shortage adds $5,000 to the cost of a new home and homes typically take two months longer to build because there’s a lack of qualified workers in the profession.
“The wages are going up in some areas by 35 percent and that still hasn’t enticed additional workers to come into the industry,” Phil Crone, executive director of the Dallas Builders Association, told the Dallas Business Journal.
“I think we’ll have a good year of construction, but it would be better if we were able to the time it took to build the projects,” Crone added. “There’s plenty of demand, but one of the bottle necks is the labor shortage.”
The inability to build affordable homes has been startling, Crone said, who added Metrostudy’s latest analysis of the market shows home starts below $199,999 represent only 8 percent of the total home starts in North Texas compared with 62 percent a decade ago.
Crone said he expects to see the same construction pipeline of new homes, if not more investment, in 2018.
Meanwhile, the amount of commercial real estate projects in Dallas-Fort Worth is also expected to grow as the region continues to add new jobs.
Mark Penny, a senior vice president at Manhattan Construction Co., said the construction company has a lot of projects in the works and plans to add several new projects in 2018.
Some of the Manhattan Construction’s projects taking shape in North Texas include the National Soccer Hall of Fame Museum at Toyota Stadium in Frisco, the $1.1 billion Globe Life Field ballpark in Arlington, Windrose Tower in Plano’s Legacy West and the historic Dallas County Records Building, among many other developments.
“For the markets we are in, we are seeing a lot of mixed-use developments with apartments with first-floor retail and lifestyle centers,” Penny told the Dallas Business Journal. “We are also still seeing office projects as we build out capacity for people relocating to Dallas.”
Like other general contractors, Penny said Manhattan Construction is being careful not to overbook in the busy market.
“Our number one focus is employee engagement,” he said. “It’s a busy market and we want to make sure our employees want to stay otherwise there’s plenty of opportunities.”
Want to take a look at some of the top real estate projects under construction in North Texas? Check out the attached slideshow of big developments.