By Ryan Salchert – Staff Writer, Dallas Business Journal
Jun 1, 2020
Many developers have said that despite COVID-19, they continue to be bullish on North Texas’ commercial real estate market, including Southern California-based Majestic Realty Co.
What’s more, the company’s Senior Vice President Kyle Valley says the way Texas has begun to reopen its economy has shined additional positive light on the state, and outside companies are taking notice.
Of Majestic Realty’s 12 million square feet of real estate in Texas, about 9 million square feet is located in Dallas-Fort Worth. The company primarily develops industrial property but is also currently involved in the redevelopment of Mule Alley at the Fort Worth Stockyards. It’s largest local project will be a 320-acre industrial park in south Fort Worth, where a new tenant was recently announced.
In a recent interview with the Business Journal, Valley expanded on his bullishness about North Texas and Fort Worth while also sharing additional thoughts about the local economy reopening.
What have the last two months been like for your company?
To say the last two months have been interesting would be an understatement. We’ve been keeping tabs across all our markets and have been trying to group tenants together that are seeing difficulties or are expanding like crazy. Industrial has been the bright shining light over these last few months. Retailers are using it to enhance their e-commerce presence.
Some markets have been virtually unaffected. Others have experienced minor devastation because some groups have had both suppliers and buyers shutdown. How are they supposed to stay in business? No one has a good playbook for this. Some of the most interesting conversations I’ve had have been with produce companies. They’ve had to deal with crop-related viruses before and a few have felt like things have been business as usual.
What submarket does your company really like locally and how are you all feeling now that the economy has begun to reopen?
In south Fort Worth, we’re still bullish in the long run. Nothing short term can impact the positive momentum we had prior to this. If anything, Texas has been at the forefront of reopening which has shined a bright light on the state. Look at Elon Musk. He’s representative of how so many businesses feel. I came from California. A lot of those tenants aren’t doing well and are looking for new places to do business. It’s all representative of longer-term trend. DFW is still poised to pick up a lot of that. This region is a bastion of freedom and business friendliness and both are working in our favor.
Besides your project in south Fort Worth, what else is Majestic working on locally?
We’re delivering two buildings in Lewisville totaling 300,000 square feet and are capping off the park up there. We also have a few more undisclosed sites under contract, we’re in the planning phases of a large project west of Fort Worth and we have an additional 200 acres available in south Fort Worth.
How has leasing and general activity been lately?
On the leasing side, the smallest deal we had pending was actually the only deal to be put on hold or stalled. We’ve received more RFPs in the past two months than we had prior to this. In general, it’s been interesting to see how many people in the investment community are seeing the light with industrial now. These are people who were more office or multifamily-centric before. It’s not been a secret for us. It’s been interesting to see how capital flow has become so eager and how developers are trying to pivot towards industrial. I think we’ll see that trend continue.
This interview has been edited for brevity and clarity.