[00:00:00] Intro: This is the Texas Land Guys podcast, hosted by brothers Tim Dosch and Tom Dosch. With their partners, David Marshall and Tripp Rich, they have built DMRE, the leading land brokerage in Texas. With decades of experience brokering deals between landowners and real estate developers, they take you inside the deals that move the market

 

[00:00:30] Tom Dosch: Welcome to the Texas Land Guys podcast. Today I’ve got Tripp Rich in the Austin office. Tripp, how are you doing?

[00:00:37] Man, I’m good. I appreciate you asking. I am excited to be back on the podcast. It’s always a, a pleasure and a joy, so thanks for having me.

[00:00:46] Yeah, it’s been a while. I w- was just talking to, uh, to Ally here in Dallas, and we were, we were like, “When’s the last time we had the Austin studio on?”

 

[00:00:52] Tom Dosch: And I think just because of summer travel plans and everything that’s, that we’ve been working on, it’s been a couple months. So it’s good to have you back on. [00:01:00] Um, filling in for Tim today, too, ’cause T- Tim is out. We’re still recording this right in the middle of summer, late July. Probably release this sometime in August.

 

[00:01:09] Tom Dosch: And so, uh, it’s not gonna be any cooler when this episode gets released, but it’s been a brutal week. We’re recording this the week that Dallas has had, like, all week Triple digit temperatures. I think we were 108 the other day, which, which was just, for us here in Dallas to get that in July is pretty brutal.

 

[00:01:26] Tom Dosch: So it’s been, it’s been hot. I know it’s been hot down there too in, in the Austin area. 

 

[00:01:30] Tripp Rich: Yeah, it’s funny. I think me and you are both traveling for a good bit, and of course, like we get, like right when we get back, we start getting the triple digit weather here in Austin and Dallas at least, which you just gotta assume it’s the same way in Houston ’cause it’s hotter there.

 

[00:01:44] Tripp Rich: Uh, yeah, it’s, it’s been pretty wild. It’s been a fun summer. It’s, uh, been doing some fun traveling. It’s also been really fun with the business. Um, it’s, it’s been pretty exciting. Like, you try to get away, which is always is fun and like you’re, you know, you come back relaxed and rejuvenated, which is [00:02:00] great, but like during some of these trips I had, like we’ve, you know, I think we had like we’ve closed five deals this summer in, um, in our Austin office or our Central Texas office and, um, I’ve been able to start putting multi deals back into title, which is super exciting and starting to see a little bit of the market pickup and, and usually we see the opposite in the summer.

 

[00:02:18] Tripp Rich: You know, everyone kinda leaves, but we’re actually seeing some activity, which is super exciting. 

 

[00:02:22] Tom Dosch: Yeah, that’s great. I was joking with Trey that I left for Colorado, and as soon as I left, we, we like closed a deal the next day in Dallas, and then the next week we closed a deal in Dallas, and then a couple days later, you guys closed one of our ascent sites in the Austin area, which was a big sale.

 

[00:02:39] Tom Dosch: And then we closed another deal in Dallas, and I was like, “I guess I just need to, to leave. Maybe I just need to be in Colorado and all the deals start to close.” So that’s a really good feeling when you’re like, “Okay, I get to get away, be with the family on vacation,” and there’s actually good things happening back at the office.

 

[00:02:56] Tom Dosch: So that, um, sounds like you had a similar experience when you were out of the country. I 

 

[00:02:59] Tripp Rich: think, [00:03:00] yeah. I… In my experience, the best things happen when I’m on vacation. And, and it- it’s always a reminder where it’s like, “Well, man, take more vacations.” Um, it’s just kinda funny ’cause I, I talk to a lot of older people in the business, and they’re like, “Yeah, the best things always happen when you’re on vacation.”

 

[00:03:14] Tripp Rich: So yeah, it is a great feeling for sure. We must be doing something right. 

 

[00:03:17] Tom Dosch: Yeah. Well, it’s, it’s hard to actually disconnect in the business that we’re in ’cause even when we’re, when we’re out, you’re trying to limit the amount of calls you’re taking ’cause you’re trying to actually take a vacation, but there’s like no way to be completely off, uh, just because, you know, we- we’re in the service business, so there’s things that come in that we, that we handle and, and work on.

 

[00:03:35] Tom Dosch: But it is so important. I felt so much more refreshed just getting back. Part of it was the mountains, the clear air, and the cooler weather, but you just feel like so much more recharged. I think, I think that’s why so many people do get out of town and tend to go cooler places. In the summers, uh, ’cause Texas does get so hot.

 

[00:03:53] Tom Dosch: And even though it actually gets pretty hot in a lot of these mountain towns too, we just decided to go really high elevation, so [00:04:00] all the places we were in were, like, 10,000 feet. So that, that’s how we escaped the heat, and it was, it was pretty cool. I mean, I think the highs that we experienced were, like, in the 60s.

 

[00:04:09] Tom Dosch: And so that… There’s just something about being able to go outside. I think you were talking to me about this. It’s, like, drinking coffee in the morning or sitting on the porch in the evening and just actually wanting to be outside, and even, like, might need a jacket, which is kind of crazy, you know, to, to potentially need to put a jacket on in the summer.

 

[00:04:26] Tom Dosch: But it just, I think you feel way more- It’s the best … charged. So it, it was fun, and lots of really good time with the family. Like, always enjoy those memories with the kids ’cause they’re growing up so fast. So getting to, getting to, like, create those memories together, and we do it as road trips ’cause of all the kids we have, so a lot of, like, crazy, crazy road trip time that, uh, I have fond memories of when I was growing up, and so it’s pretty fun.

 

[00:04:48] Tom Dosch: My kids are great. Like, they’re troopers on these long drives we’ll do, and there’s a lot of fun memories that come with that, too. 

 

[00:04:54] Tripp Rich: Oh, absolutely. Yeah. No, the s- the summer trips are always, always really cool. And it is… Yeah, you’re right, it [00:05:00] is really hard to check out On any type of like vacation or trip or anything like that from, um, from work just because of, yeah, we’re in the service industry and, you know, time, time and response time and all that kinda kills deals or can, and you feel like you’re missing something.

 

[00:05:15] Tripp Rich: But the reality is, is like if you get back to it the next day or something, it, nothing, nothing really ever changes. Like, if someone ever really needs you, they end up texting me and being like, “Hey, can you get this?” And then it’s like handled and… But yeah. It’s been a, it’s been a really fun summer. Um, it’s super exciting to see the market picking up a little bit more.

 

[00:05:31] Tripp Rich: As I’d love to talk to you about where you guys are seeing that in, in Dallas, like what product types and, um, kinda like what you guys are anticipating over the next 12 to 18 months. 

 

[00:05:40] Tom Dosch: Yeah, I mean, I would say that, you know, if you, if you thought about how active was this summer, how busy was it, it probably just depends on who you talk to.

 

[00:05:46] Tom Dosch: ‘Cause for sure there’s a lot of people that- Yeah … they’re like, “It’s slow, so I’m going on a vacation. I’m, you know, I’m, I’m gonna be in Europe.” We had a lot of different clients that decided to go on couple week vacations and are just out. And then the other side of that is you have, you have [00:06:00] people putting deals together, starting new, new businesses, um, wanting to build pipelines, like really trying to, to, to get ahead.

 

[00:06:07] Tom Dosch: Uh, and also by, by use type, it just depends. Like multifamily remains really difficult to get equity for, so there’s, there’s deals happening, but it’s just… And we’ve talked a lot about this on the podcast. It’s a few clients that are well-capitalized doing most of the deals, and then there’s a lot of groups that they just can’t.

 

[00:06:27] Tom Dosch: They can’t get capital for projects, and so they’re not really doing anything. And then if you talk about industrial, it’s like game on. It’s probably the hottest industrial market we’ve ever had, whi- which is pretty incredible to say, but it’s, it’s so hot out here in DFW for industrial. Uh, and then single family is also pretty cool.

 

[00:06:44] Tom Dosch: So you have, you have a lot of, uh, a lot of people just out, just depending on what they’re focusing on and, and what business they’re in and We actually were catching up on this yesterday. Um, you have, like I said, it’s just weird. It’s like you have groups building pipeline and saying, “I want to put three [00:07:00] deals under contract by the end of the year.”

 

[00:07:02] Tom Dosch: And then you have companies closing down their offices. Like, groups that we’ve worked with, like one of the groups just closed down their office in Houston, and it’s like, gosh, that was really good developers that were on that team, guys that have been in the business longer than I’ve been in the business, working for that company, and they just decided, like, this market is so hard from a development standpoint that we’re gonna, we’re gonna close our doors.

 

[00:07:23] Tom Dosch: And I think we’re seeing more of that on the multifamily side. I’ve seen three groups in the last couple weeks decide to either pull out of a market or just pull out of development in the multifamily space, and they can pivot to either other markets that they’re in, or they can pivot to acquisitions.

 

[00:07:38] Tom Dosch: Um, we’re definitely not seeing that in industrial. We’re seeing, we’re seeing multifamily developers actually stop building multifamily and start building industrial, which is pretty crazy. Uh, and then on the single family side, we definitely saw some layoffs just because of the impacts of, you know, what we’ve seen in oversupply there.

 

[00:07:54] Tom Dosch: But that, that’s kinda how I would frame it. Like, it continues to be industrial is the hottest, [00:08:00] then comes multifamily, but it’s pretty far behind industrial, and then single family. And by that, I mean, like, what can you, what can you get capital for? Like, how easy is it to get equity for development projects?

 

[00:08:11] Tom Dosch: And that’s gonna be the order. So what, what are you guys seeing in the Austin area? ‘Cause it’s been really difficult there because of the amount of overbuilding you’ve had. But it sounds like things might be starting to, to shift and turn a little bit. 

 

[00:08:24] Tripp Rich: Yeah, super slowly and super particularly with the multifamily front, um, or ev- just residential front in general.

 

[00:08:32] Tripp Rich: Like, on the multifamily front, the suburbs are still extremely difficult, if not impossible, to get capitalized right now outside of, like, a couple of pockets. Um You know, that are performing well. But I mean, it’s, it’s slim pickings for sure in the suburbs. Like, a lot of people, you know, have sites from last cycle that are, you know, trying to get out of so they can go place the capital and, and redeploy the equity into, into new deals.

 

[00:08:59] Tripp Rich: [00:09:00] Um, hopefully in the next twelve to eighteen months here, um, as we see the market continue to improve. But yeah, the multifamily stuff the, that we’ve been putting into title has mostly been really well located, um, urban infill wrap. Um, and that’s probably, like, the highest density we’re seeing, you know, put, put into title and actually getting equity interest today.

 

[00:09:19] Tripp Rich: Like, really well located wrap where the rents are, you know, well above three dollars a foot, and there’s, you know, minimal supply. And ultimately, like, it’s a flight back to quality where people want to live, um, where equity wants to be long-term and have seen success, you know, in the past and anticipating more of that in the future.

 

[00:09:36] Tripp Rich: So all of that, that tracks for us. Um, from like a ranking of what we’re seeing be super, you know, hot and, and attractive for equity would be iOS for sure. We’re still slammed with that. It feels like there is unlimited equity for that, and I don’t know if it’s slowing down anytime soon. Um, we’ve closed a lot of those projects this year, and we’re [00:10:00] starting to see a couple of groups locally start to develop it, which is pretty interesting, um, because most of them wanna just buy an asset that’s, you know, already built and doesn’t have any development risk, has income, or has like a- an opportunity to get the tenant out and put a new tenant in at market rents or do some value add or something like that.

 

[00:10:18] Tripp Rich: But, um, there’s like, you know, minimal amount of these iOS sites. They’re all getting called by ten brokers a day, and so we’re starting to see some groups do some development, which is… which will be interesting to see. I think the first one delivers that I’m aware of in Georgetown here pretty soon. Um, so yeah, iOS, super hot.

 

[00:10:34] Tripp Rich: Um, next one’s probably, like, retail land, you know. And it makes sense. I think we’ve had, you know, so much single family homes and multifamily deliver over the past, you know, five to seven years here in Austin. And as, as we all know, retail, like, follows the rooftops. And so we’ve sold quite a bit of retail land and continue to have a really strong interest there, and we’ve had a couple of listings, um, [00:11:00] where buyers have gotten really aggressive.

 

[00:11:01] Tripp Rich: We’re closing another big one in Hutto in, like, sixty days, uh, for a retail development project. Um, yeah, but re-retail, lots of retail development. So I’d say like iOS, then retail land, and then from there, you know, it’s, it’s probably gonna be a combination of Really w-well located multifamily in the urban core.

 

[00:11:23] Tripp Rich: And then, um, same goes for industrial. I think industrial’s super interesting here because we kinda got overbuilt, but we’ve had a lot of leasing activity this year, and I think we’ve got another five million square feet in tenant requirements that we’re anticipating getting leased between now and the end of the year.

 

[00:11:40] Tripp Rich: Um, so we’re, we’re looking, you know, 12 months out, we think industrial’s gonna be… Industrial land, like, for development, is gonna be really hot, um, ’cause I don’t think we’re gonna have a lot of, like, these larger spaces that are r-required, uh, by these tenants here in, like, 12 months. So we’re pretty excited about that and kind of being on the forefront and go ahead and, [00:12:00] um, chasing a lot of those industrial sites and getting with those owners now to kinda educate them on where we’re at today versus where, where we could be in 12 to 18 months.

 

[00:12:08] Tom Dosch: Yeah. That’s… So you made a really good point. I totally glossed over retail, and I wanna spend, I think, the majority of our time talking about industrial, ’cause that’s just- Yeah … it’s, it sounds like that’s the trending use type there, and then that’s definitely the dominant use type here. But I think you’re right.

 

[00:12:23] Tom Dosch: Retail would fall right behind industrial here. It’s just from a, from an activity standpoint because it makes so much sense. There was, there was almost no retail built for so long. Like, I remember the days when Target didn’t build a store in Texas for, like, several years, and now you have- Yeah … all of these big retailers, whether it’s Costco, Target, Kroger, H-E-B, whoever it is.

 

[00:12:44] Tom Dosch: Like, a lot of the grocers and then a lot of the, the just, uh, junior anchors, they’re building again and building actively because some of these communities that have exploded with growth, like, just name a city that’s the top fastest growing city in the country, they don’t have, like, any commercial or [00:13:00] any services, but there’s thousands of people.

 

[00:13:02] Tom Dosch: Oh, it’s wild. Yeah. So it actually makes sense again. Yeah. It’s… But there for a while, you know, there was speculation, like, is, is retail dead because of e-commerce? And, like, brick and mortar. Is brick and mortar gonna be dead? And, um, like, during COVID, right? It was like, are we gonna need all these big retail stores anymore?

 

[00:13:17] Tom Dosch: Is everything gonna be done online? And, um, obviously, it’s a combination. There’s a ton of online e-commerce, a lot of shopping happening, but at the same time, people still need to be able to, like, swing by a store and pick something up. And so you have a ton of that development, ton of services, restaurants.

 

[00:13:33] Tom Dosch: Kind of every, every part of the food chain of retail is being developed right now. 

 

[00:13:37] Tripp Rich: Yeah. Yeah. No, I mean, it is dr- interesting. It’s funny you said about Target, and I remember us talking about that during COVID and being like, “Oh, it’s, maybe it’s all going online,” but I don’t know. I feel like we do this every cycle.

 

[00:13:47] Tripp Rich: Um, and then, you know, the residential gets overbuilt, and then retail rips, and it’s like, well, yeah, you have all these homes and you… Yeah, you need that convenience. You need the, you know, the, the driving home retail center that’s got the [00:14:00] H-E-B or the Target. I think we’ve seen two Targets be built here in the past 12 months.

 

[00:14:04] Tripp Rich: You know, you’re talking about Target. It’s funny, um, seeing a couple of those happen, but yeah, it’s, it’s been exciting to And, and it’s just been a blessing for us to, like, close a lot of these, like, bigger retail projects. You know, sometimes they’re– they can be a little bit difficult or brutal on the smaller ones, but we’ve had a lot of success with the bigger projects and getting time and getting sellers that are willing to give the time so the retail group can go out and, like, actually get their tenants lined up so that they can close.

 

[00:14:29] Tripp Rich: And a lot of them are having, you know, great success, which is exciting, so. 

 

[00:14:32] Tom Dosch: Yeah, and the numbers they can pay for the land, you’re starting to see some huge numbers, and the cities love them because of the sales tax revenue that you can get. And so now finally being in a market where it makes sense to develop it again because of the rooftops that have been developed.

 

[00:14:46] Tom Dosch: And also, you know, br- it brings jobs, brings jobs to the, a lot of these areas. So you have areas like Georgetown, right, that have had so much development where it’s like, oh my goodness, like, who’s gonna live in all these apartments? Well, what’ll help over time will be a lot of this [00:15:00] commercial that’ll get developed because there’ll be a lot of jobs associated with that, and that’ll start to help fill some of these apartments with, you know, good, good tenants that are making money, that are working at these different stores and different locations.

 

[00:15:10] Tom Dosch: So it, it’s a good… It’s, like, important. You can’t just have rooftops, you know, and then you can’t, like you said, you can’t have retail before rooftops. And so it, it all has to kind of work together, and we’re finally getting to that point where we’re seeing it again. Um, but a- another point you made was just on the absorption you’re seeing in Austin.

 

[00:15:29] Tom Dosch: I wanna dive a little bit deeper into that on the industrial side, but I want to throw out a couple stats first of just what I’ve heard in some meetings around the rest of the state. Just as of this week, I met with a couple different industrial developers and For our audience, like on in, in any given week, we’re, we’re sitting down in our office, whether it’s Houston, Dallas, or Austin, with kind of the who’s who of the industrial developers across the country.

 

[00:15:51] Tom Dosch: Uh, and so it’s gonna be, you know, the, the, the big, big institutional industrial developers all the way down to, like, the startups and the, the flex guys that [00:16:00] a lot of times we like working with because they’re, they’re nimble, they can move quickly, uh, they’re local, you know, so they understand the market and, and they can, like, get projects done.

 

[00:16:08] Tom Dosch: And so we’ll, we’ll work with kind of everyone in that spectrum. Uh, but some of these stats that we’re hearing around just the strength of the industrial market are pretty incredible. So, like, I was with a group the other day that was talking about Houston. They cover Houston and, and really DFW, that’s their focus right now.

 

[00:16:25] Tom Dosch: And they were saying that in Houston, the Q2 absorption was 8 million square feet of industrial. And Houston in, in a given year would normally do about maybe 20. And so Houston almost did half of their normal absorption in one quarter. And, uh, one of these guys had worked at one of the larger industrial kind of institutional development groups, and based off of all their data, he said that Houston was projected to be the number one industrial market in the country for the next three years.

 

[00:16:55] Tom Dosch: Um, and you have, you have the great absorption numbers. You, you do have a ton of d- of [00:17:00] supply and a lot of building that’s been going on in Houston, but they’re absorbing it. And then you also have some huge tenants out in the market in Houston right now for some pretty significant space. So Tesla being one of them.

 

[00:17:12] Tom Dosch: Obviously, Tesla’s a, a major player in Central Texas, uh, but they’re in the Houston market for, you know, multi-million square feet of space right now. So Houston, very strong. I mean, it’s not common that probably you and I go into meetings, and we hear Houston’s the number one market. But when groups talk about industrial, we actually do hear that.

 

[00:17:31] Tom Dosch: We’ll hear Houston’s the number one market in Texas for industrial. Sometimes groups are still saying it’d be DFW, so it just depends on who you’re talking to. But Houston’s a very robust, strong market And then DFW, incredible numbers coming out of DFW. I was meeting with one of the largest, uh, Dallas-based in- industrial developers in the country, uh, earlier this week, and they were saying they’re completely out of space.

 

[00:17:57] Tom Dosch: And they had millions of square feet of available space going into the [00:18:00] year. So they just kicked a tenant out of the building to be able to s- lease that space. Exactly what you were just talking about, like being able to move a tenant out so they could bump rent. And then he called me back after the meeting.

 

[00:18:10] Tom Dosch: He was like, “I just got a lease on our very, very last spot.” Like last, last spot. He was like, “It was a 90,000 square foot space was all we had left, and I just got a lease on it.” And so he’s like, “We’re, we’re… We need deals. Like we’re hungry. We’re looking for more.” He’s like, “Six weeks ago, you know, we weren’t gonna kick off construction of some of this land that they had.

 

[00:18:29] Tom Dosch: They had some legacy land.” And he’s like, “Now we’re kicking off construction of multi-million square feet, and six weeks ago we would’ve been like, ‘No way.'” But there’s so many big tenants in the market, and the absorption has been so good, and just the number of big buildings getting leased in Dallas. So by big buildings, I mean 500,000 square feet, a million square feet, more than we ever see getting leased even just this year.

 

[00:18:52] Tom Dosch: So I think in Dallas, it’s something like nine million square feet of big buildings has been leased year to date. Wow. In a given year- That’s amazing … [00:19:00] normally it’d be like five. So it’s almost double- Yeah … what we would normally see And what’s interesting about that, and we’ve been talking about this as part of our predictions in 2026, what will we see in the industrial space?

 

[00:19:12] Tom Dosch: What’s interesting about that is, like, pretty much all industrial developers now are looking to build big box space. Like, that’s what everyone… Whether you’re a group that historically does build it, uh, or you’re a group that historically would be building, like, smaller space. It’s like, well, it’s just four walls- Yeah

 

[00:19:27] Tom Dosch: in a building. Like, I think we can do it. So you’ve got groups out cobbling together 100 acres, 150 acres, getting aggressive, wanting to build these bigger deals. Um, so I’ll stop there for a second so you can, you can chime in, but I just think the activity in Dallas and Houston has been at such an incredible level, and there really has not been as much focus on Austin.

 

[00:19:47] Tom Dosch: And so I think it’s very interesting to think about how Austin’s gonna start to enter the picture from a development standpoint over the next, you know, 12 to 24 months. 

 

[00:19:56] Tripp Rich: Yeah. No, same here. I think it’s, uh, it is super [00:20:00] interesting because if you look at certain sub-markets here in Austin, you’re like, “Oh, man, it’s, it’s still, you know, it’s still slow.

 

[00:20:05] Tripp Rich: We’ve got some buildings to lease up.” And then you look at like, you know, particularly north, um, like in Georgetown and then kind of southeast, almost, like, around the airport, um, down 130, we’ve had a lot of success in, in lease up there. Um, it’s been, it’s been great to see. But again, like, flight back to quality, right?

 

[00:20:23] Tripp Rich: And I think we’re having a lot of these, um, users or tenants that are feeding into or feeding off of, you know, Tesla and The Boring Company, all the companies that Elon’s, Elon has here and is expanding here, um, I, I think is creating a l- a lot of buzz, which is super exciting. But yeah, the tenant demand has just skyrocketed, like, in the past month here, which is, is super exciting because I thought it was gonna be pretty slow for a while.

 

[00:20:48] Tripp Rich: So it was, it was great to hear from some of our clients that we have a ton of these tenant requirements out in the market today, um, which gets us excited to go chase, you know, bigger land deals, which is always [00:21:00] fun. 

 

[00:21:00] Tom Dosch: Well, it’s interesting to think about land pricing, and so, um, I can kind of tell you a little bit of what we’re seeing in Dallas and what I’ve heard Tim talk about in Houston, and then, uh, it’s…

 

[00:21:10] Tom Dosch: It’d be kind of interesting to talk about what we might see in Austin, because obviously the, the activity- Yeah … has to come, and then when the activity comes, and it gets, it gets kind of frothy, then you start seeing land pricing move again. And, like- Sure … we’re kind getting to the point now in Dallas where those areas where you’ve wondered, like, “Why, why haven’t industrial developers gone there?”

 

[00:21:28] Tom Dosch: And, and then it’s like- Yeah … “And why are prices not higher?” Well, now they are going there, and now prices are much higher. And it happened- Yeah … it almost seems like it happens overnight. And so at first, that was the McKinney, McKinney airport area. So a lot of the activity and industrial development the last couple years have been really core, like, around the, the, uh, the airport.

 

[00:21:48] Tom Dosch: And so you saw some incredible pricing. I mean, the, uh, the deal that everyone talks about is the Park & Fly site that sold for north of $30 a square foot for industrial, which was a record [00:22:00] for, uh, industrial land at DFW. Uh, so that was a lot of the activity, and it was just like everyone was focused on that area.

 

[00:22:07] Tom Dosch: And then it started to go out, and if you were gonna develop up north where a lot of the rooftop growth was and just a lot of the general growth is headed, you were gonna have to redevelop. And it was getting so expensive that finally developers just all kind of started following the path to growth to McKinney.

 

[00:22:24] Tom Dosch: And within just a couple months, we saw land prices go from six dollars a foot to fifteen dollars a foot and higher. And now we have several, like, closed comps at fifteen a foot. And it’s, it’s a wide spectrum. It’s everything from, like, local small industrial developers to REITs that went up there and paid fifteen a foot.

 

[00:22:44] Tom Dosch: Um, and so that, that happened. And then the next area was, uh, the tollway, so back, back west of, of McKinney. And it was like, when are people gonna start, you know, doing industrial in kind of this Frisco prosper area? There’s been, like, a little bit of activity, but only a handful of projects. We did [00:23:00] a project, uh, with Dalfin, um, gosh, like around COVID time, like just after COVID.

 

[00:23:05] Tom Dosch: But like, there’s just not much else that had gotten done up there ’cause of zoning. Well, now you’re starting to see just some, like, really aggressive north of twenty dollar a square foot numbers to be up north of three eighty way out in the suburbs. But in these locations where I think the way we look at it as land brokers, if you don’t go m- take your position now, like that land’s gonna be a Target or that land’s gonna be like a mixed-use project.

 

[00:23:28] Tom Dosch: Like, you can’t make land on the tollway, or you can’t make land on Seventy-Five. And just the way it’s zoned, you know, you better, you better go jump on it now if you wanna go do industrial development. So we’ve seen land prices explode, both in the urban area because the highest pricing had been probably, you know, low twenties a foot.

 

[00:23:45] Tom Dosch: We did a project in twenty twenty-one at twenty-four a foot, which was a huge number for an industrial site, but then it went to thirty-four a foot, you know, two years later in a more- It’s crazy … in a higher interest rate environment in what should have been a harder market. Um, and then [00:24:00] the same thing again, McKinney sixteen, or sorry, six to north of fifteen a foot.

 

[00:24:04] Tom Dosch: And just so where we’ve seen that gone, and I, I know Houston tracks quite a bit behind Dallas per square foot-wise, but they’ve seen something similar. It was all single digit, now it’s double digit, now it’s low teens. And so you’ve gone from, you know, six to eight dollar a foot industrial land in Houston, and now it’s twelve to fourteen a foot industrial land, and then you’re hearing about higher land pricing.

 

[00:24:25] Tom Dosch: And so It is interesting, like if you’re a landowner that owns industrial land right now, your land has become much more valuable. More, more than likely, depending on where it is, right? There’s obviously caveats there. Sure. It’s probably become much more valuable, whereas if you’re a multifamily or a single family landowner, probably hasn’t become more valuable the last couple years.

 

[00:24:46] Tom Dosch: And so it really does depend on what you own. And I was having this conversation with, uh, Trey yesterday because we were talking to a client that owns an industrial site, and he had got an offer off market from a REIT. And I told Trey, I was like, “This is not the market [00:25:00] where you take an off-market offer for your site.

 

[00:25:02] Tom Dosch: Like, you 100% take that site to market for industrial.” 

 

[00:25:06] Tripp Rich: Sure. 

 

[00:25:06] Tom Dosch: Like, especially if a REIT is calling you off market. 

 

[00:25:10] Tripp Rich: Yeah. 

 

[00:25:10] Tom Dosch: Like, you definitely need to go find a higher buyer because, like, it means they’re, it’s checked the box from, like, it’s, it’s a good site because REITs are all about managing downside risk.

 

[00:25:19] Tom Dosch: But also REITs don’t pay the highest price. And so being able to go and, and market that site, there’s gonna be a lot of value there. So I in- anyways, what do you think happens as industrial activity picks up? Do you think there’s an increase in land price, or do you think that land needs to catch up to the point…

 

[00:25:36] Tom Dosch: Like, the pricing needs to really just catch up to where owners already are, and they’re so far to go there from where sellers want to be that, like, it’s just probably you’re not gonna see these markets like McKinney, where sellers were at six bucks a foot, they just weren’t getting the offers, and then suddenly it, you know, doubled and almost tripled in value.

 

[00:25:53] Tripp Rich: Yeah, it’s a good question. Um, we were seeing some of that more aggressive, like low double digit [00:26:00] pricing, um, in the, in the last cycle, like call it in, you know, ’21, ’22, ’23. And, and then we saw like a, a dip, a little bit of, you know, overbuilding on the industrial front and a little bit of a lull. Um, so I’d say pricing’s kind of hung around in that like six to 10 bucks a foot range.

 

[00:26:18] Tripp Rich: You know, a lot of that depends on the sub-market and the site and kind of where that site is. For more like entitled shovel-ready sites, you know, we saw stuff, you know, being put under contract or trading, you know, closer to 40 to then, to the net rentable, like to the buildable, um, bucks a foot. And, you know, now that’s dipped below.

 

[00:26:37] Tripp Rich: Outside of like the urban infill stuff, that’s, you know, I’d argue like this, to make it underwrite today, you got to kind of be in the mid-20s a foot, um, to the buildable to make, make deals make sense. Um, but with all this tenant de- you know, a lot of it’s just rents and, and tenant demand, right? And so with all this demand happening, um, we’re anticipating there being a lot more interest in [00:27:00] larger industrial land plays in specific submarkets here.

 

[00:27:02] Tripp Rich: And, and we’re getting the calls. Like we got, you know, two last week and one wanted southeast, you know, something that’s very close to entitled along 130, and another one wanted one up in Georgetown. And, um, you know, we’ve already found opportunities and made offers, and we’ll see where those go. But yeah, I’d, I’d anticipate the land pricing probably increasing.

 

[00:27:23] Tripp Rich: And if I’m an owner, I’m probably recommending them to like market it and give someone some time to go get their deal done and, and, um Yeah, it’s, it’s, it’s gonna be exciting. It’s gonna be interesting to see where, where it goes, like where the, where the demand’s been and where we think demand’s gonna go.

 

[00:27:40] Tripp Rich: Like, I think we’ll continue to see it a- up north where all the growth is happening and, and like, you know, Georgetown along the I-35 corridor, probably the same along 130, especially like around the airport. Um, I think and, and closer to Bastrop, you know, there’s a big gra- gap off of 71 where there’s, you know, not really any utilities.

 

[00:27:58] Tripp Rich: Um, but with everything that [00:28:00] Elon’s doing with his economies of scale with, with Tesla and The Boring Company and everything, SpaceX, it’s like you, you gotta think that industrial keeps performing really well around, um, the airport. So we’ll see what happens on pricing, but I’m, I’m anticipating demand picking up and then naturally with demand on, on buyers picking up for development sites, pricing will just go out ’cause there’ll be more competition.

 

[00:28:23] Tripp Rich: There hasn’t been a lot of competition the past few years, so I think that’s allowed land prices to kind of settle and, and a lot of these owners saying like, “Hey,” like, you know, “I was getting offers at 15-plus bucks a foot,” and it’s like, “Hey man, that’s great,” but a lot… Most of those people have just been waiting it out.

 

[00:28:38] Tripp Rich: Um, so I think, I think we’ll, we’ll see over the next 12 to 18 months, but I’m anticipating it being, starting to get a lot more aggressive, which is exciting for us. 

 

[00:28:47] Tom Dosch: Well, it’s interesting ’cause Austin did get so hot that pricing did go to a point where, like, you didn’t really see Houston go get, get as frothy and as hot like that.

 

[00:28:56] Tom Dosch: And so in the mind of a landowner, we were talking actually together the other [00:29:00] day with, with a guy that, or a group that’s based out of Austin and talking about some of their land holdings and ascent and maybe working together on some stuff, and he, he brought up such a good point that we hear all the time.

 

[00:29:09] Tom Dosch: It’s like you got an offer for $50 million back in 2021, and so your investors are always kind of wondering, like $50 million, and now any offer that you get from here on out, you know, at $30 million or whatever feels like you’re taking a 50% haircut, um, but maybe the site was only ever worth $30 million. And so I, I think that, that like emotional, you know, mental state that a lot of these sellers are in, which we can both relate to, right?

 

[00:29:36] Tom Dosch: It’s like That’s tough. I mean, it, it’s gonna be hard to wanna, to wanna go sell for nine d- bucks a foot if you had offers at 15, depending on your motivation. Obviously, if you need to sell, you need to sell, but for a lotta, for a lotta sellers, especially if it’s a family situation, you know, what we have to explain to a lot of our developers is, if they don’t have to sell, they’re probably gonna believe that there’s gonna be a market someday where the [00:30:00] price is 50 million again.

 

[00:30:01] Tom Dosch: So they’ll be like, “Oh, well maybe it didn’t happen in 2021, but if I can hold it for 15 more years, I’d rather sell for 50 than 30.” And that’s, it, that’s kinda how people think, even though there’s a good chance that 50 may never, may never be a number, you know? And if you hold it for 15 years and it comes up to 32 million, it wasn’t a good investment to, to wait you know, that long for, for that small of a percentage increase.

 

[00:30:26] Tripp Rich: Yeah. Yeah, no, it’s, it’s interesting bec- for a few different reasons. I think, you know, unfortunately we were a lot of those offers. You know- Yeah … like, we represented a lot of those, like, really big offers last cycle and, um, in hindsight, I, I probably would’ve gone to the sellers and been like, “Would you sell if we got to some…”

 

[00:30:43] Tripp Rich: You know, like, and I, like, you obviously do it, and it’s hindsight, it’s 2020. But I say that kinda jokingly, but it’s like, well, yeah, if they, you know, if they didn’t know, or if they didn’t get that offer, they wouldn’t have that number in, in mind. ‘Cause you call them back today and they’re like, you know, it, it, the offer was at [00:31:00] 26 million on South Congress and, and, you know, you call them back and Today, you know, three years later and you’re like, “Hey,” and maybe it works like 15, 16 million.

 

[00:31:09] Tripp Rich: And they’re like, “Yeah, like I can’t, you know, like I’ll do 22, but it’s gotta be north of that.” And it’s like, “Man, you’re not even- we’re not even close.” And they’re like, “Well, it offers at 26.” And I was like, “Yeah, and what year?” And they’re like, “2021.” I’m like, “Yeah, we’re in 2026. Market’s changed.” Yeah. Price of money’s doubled.

 

[00:31:24] Tripp Rich: Um, so yeah, it is interesting to, to see that and, you know, it’s always interesting with the landowners that, you know, especially some- for things that don’t have income and, and, you know, what their situation is. I think we’ve run into that on listings too where, you know, we took it out to market at, at the end of, um, kind of the bull run, you know, for specifically for multi deals and, you know, we put it under contract, pretty good number.

 

[00:31:47] Tripp Rich: And then, you know, interest rates start to rise and construction costs start to rise, rents start to dip and, you know, you know, they drop it or they extend and pretend and then they end up dropping it. And now it’s been, you know, the seller, you know, it’s we’ve been sitting [00:32:00] for two, three years now and they’re like, “Man, I’m, you know, I wanna get sold.”

 

[00:32:03] Tripp Rich: I’m like, “Yeah, I do too, but unless we’re willing to take like a massive haircut, then we’re gonna have to wait it out or give someone a ton of time,” which is never fun when like the market looks like it’s gonna pick up over the next 12 to 18 months. Yeah. Um- 

 

[00:32:17] Tom Dosch: That, that’s so 

 

[00:32:18] Tripp Rich: interesting … yeah, it’s an interesting point.

 

[00:32:19] Tom Dosch: I think, uh- Yeah … not to get, not to get too off the topic of industrial, so I wanna get back, back to industrial, but a lot of it is what’s your outlook? What’s your, what’s your outlook on the market? Trey and I were talking about a site yesterday where we had it under contract and the group needed some more time late last year and the seller just said no.

 

[00:32:34] Tom Dosch: And I told Trey, I was like- Yeah … “I, I really think the reason he said no,” ’cause he’s calling us now wanting to sell, right? I was like, “It’s because he thought- Yeah … the market was getting better.” He thought that- Yeah … we were going into 2026, the market was getting better and he thought, “I don’t wanna stay under contract with this group.

 

[00:32:49] Tom Dosch: The market’s gonna be better and, and I’ll get something better.” And it ended up we went to war with Iran and it’s been another challenging year very similar to last year. And what’s unfortunate is that group went and bought a [00:33:00] different site. And I think that’s what a lot of sellers aren’t realizing in today’s market is groups just have a lot fewer arrows to go fire and it’s like if they fire them, they may not be back.

 

[00:33:10] Tom Dosch: Like, they may love your site, but it’s just like, “Guys, I love your site, but I bought another site.” And so even though I, even though I love it, like you would sell it for less now, it doesn’t make sense anymore. So but not, not to, not to harp on that, but you made me think of that when you were, uh, hitting that point.

 

[00:33:24] Tripp Rich: No, it’s Yeah, it’s, it’s, it’s real. It’s a real thing for sure. Um, I mean, we’re, we’re seeing it happen on, yeah, in- industrial deals. Uh, even on, even on some multi areas where like… But yeah, people will come in and offer on a site, and seller kinda messes around. And a lot of it’s, like, building trust with those, those land sellers.

 

[00:33:42] Tripp Rich: You know, I think that they, they’ll follow the economy, or they’ll, they’ll look at a, a stat, or they’ll see a headline that just doesn’t directly correlate to the demand for their property. But they see s- like, one good news in the ABJ or the Dallas Business Journal, and they think, “Oh, the market’s booming.”

 

[00:33:58] Tripp Rich: And it’s like, man, that’s the media. Like, you need [00:34:00] to listen to the brokers that are, like, talking to the buyers and the sellers every day and, and night, um, or day in and day out, you know. And the sellers that usually listen to us usually succeed, and then the ones that end up not, it’s… I mean, it’s sad, um, because yeah, to your point, they’re like, “Oh, well yeah, it’s getting better.”

 

[00:34:16] Tripp Rich: And you’re like, “No, Mr. Seller, it’s not. Like, we need to do this to have a chance.” And then it, and then it turns, and it’s, it’s unfortunate. Yeah. But I think that Get back to industrial. It’s like, I think that’s gonna be a big, um, we’ll have another big wave here. And sou- honestly, sounds like just across Texas in general.

 

[00:34:32] Tripp Rich: Like, it seems like the Texas triangle is continuing to expand and grow, and a lot of equity is floating into that commercial space, which is super fun. 

 

[00:34:41] Tom Dosch: Well, we didn’t hit on it, but I think a massive driver of all of this is that Texas is the data center capital of the world with the number of data centers that we have developed.

 

[00:34:50] Tom Dosch: And so you’ve mentioned on the podcast seventy proposed, and maybe it’s more than seventy now, seventy proposed data centers in the Central Texas region. I don’t know what number [00:35:00] of those- Yeah … will get developed, but a lot of the- … a lot of the leasing absorption we’re seeing up here in DFW is data center suppliers.

 

[00:35:08] Tom Dosch: It’s, it’s the components of- Yeah … these data centers, and it’s also… it’s all adjacency to AI. So it’s AI startups, manufacturing. But that whole data center world that we’re living in in Texas, it’s getting more and more restricted and regulated in other states outside of Texas. If you go and see a large percentage of those or even probably a, you know, fifty percent of those data centers get developed, that’s gonna be such an incredible boom to the Central Texas industrial, like, leasing for…

 

[00:35:37] Tom Dosch: I mean, it’s just gonna be unbelievable, and that’s just, that’s kind of one aspect. But that’s driving our… The global economy, the US economy right now is all this, all the AI and all the advancements, and I think you’re gonna really see the benefit of that in Central Texas. ‘Cause you guys are unique too because you have, you have so much investment in technology.

 

[00:35:56] Tom Dosch: You have groups like SpaceX and Tesla that wanna be [00:36:00] in Central Texas, and now you’re just gonna have more and more, I think, of those types of companies wanting to move there. And so that’s gonna drive… I think that’s what’s gonna drive a lot of this and, you know, leasing and investment and development.

 

[00:36:12] Tom Dosch: And you can’t look at historical numbers to say Austin’s a lot smaller industrial market, you know, ’cause that’s what a lot of people do. They’ll say, like, “Austin’s, Austin historically is actually just a really small market. It’s…” You know, and they’ll compare it to, like, Shreveport or something. And they’ll say, you know, it, “It’s, it’s a smaller market, and it got way overbuilt, and it can’t rebound,” or, “It’s gonna be ten years.”

 

[00:36:32] Tom Dosch: But I don’t think what they’re recognizing is the velocity of the advancements and the investment in Austin is at a pace that is, like, not even close to historical. And then again, like, it’s a, it’s a greater Texas thing too. And it’s a fact that with Texas- Right … being the data center, you know, really the, the data center hub for the, for the whole world, a lot of that, a lot of that’s gonna happen in these Central Texas areas.

 

[00:36:56] Tom Dosch: So a- I don’t know if you have any thoughts on that, but I think that’s gonna drive a ton of the growth. [00:37:00] 

 

[00:37:00] Tripp Rich: Yeah. It has been really impressive, Tom, what’s happened with the data center space here in Austin, especially what’s with h- happening with, you know, obviously our, our heavy focus in technology and AI and all the suppliers that are feeding into these data centers.

 

[00:37:15] Tripp Rich: Um, you know, like, we’re getting a lot of calls You know, specifically just this summer for land sites, in particular submarkets that are close to these proposed or, or data centers that are underway, um, that are planning on feeding into these projects. And so time will tell on like how many of these actually get done.

 

[00:37:33] Tripp Rich: You know, there’s– we’re tracking 70 proposed right now. If I had to guess, I’d say it’s like, um, you know, one in seven or one in 10 get done. So maybe it’s, maybe it’s 10 to 15 of these, um, you know, bigger projects. But, you know, all the big names are either have land and title or have closed on it, and you know that they’ll get it done.

 

[00:37:54] Tripp Rich: I think it’s, you know, it’s like Amazon, Google, Meta, um [00:38:00] handful of others that are going to get done, and we’re anticipating that. And honestly, we’re already seeing the positive impact from a land demand standpoint from the industrial front, which is, is just awesome. But, you know, power and local sentiment, um, certainly is misconstrued.

 

[00:38:19] Tripp Rich: You know, a lot of people think that these data centers are going to use up the rest of the very little water that Central Texas has. Um, in, in their defense, we are very short on, like, water and utilities in most of these submarkets. Uh, but you know, they’ve also figured out a way to utilize that water one time and then kind of like reuse it each time, which has been a blessing that I think most people are, are not aware of.

 

[00:38:43] Tripp Rich: And a lot of this, you know, data center demand, I think, is necessary for the growth of AI and compute power. So, which I think is, you know, is where we’re headed, whether people like it or not. So if, if we can’t get them done locally, then people are just gonna be waiting on Elon to put them on Mars. 

 

[00:38:59] Tom Dosch: [00:39:00] Well, and that’s a, that’s a good plug for the episode we just released, uh, a couple of weeks ago on data centers, and a lot of the misconceptions around how water is being used, you know, pull on natural resources and like, why are data centers more opposed than nuclear power plants right now from the consumer standpoint?

 

[00:39:15] Tom Dosch: Right. And so that was a good episode- 

 

[00:39:17] Tripp Rich: Yeah … 

 

[00:39:17] Tom Dosch: Tim and I recorded where we, we really kind of hit a lot of those myths. So check that out. Um, but I wanna, I wanna say in conclusion, as we kind of wrap up, I’m predicting a Texas industrial land rush. I think it’s, it’s not a bold prediction at all when it comes to Houston and Dallas because we’re in the middle of it.

 

[00:39:32] Tom Dosch: What I’ve been telling the guys here is, um, you know, when markets are challenging, markets are challenging. When markets are good, the challenge is you think, what are we missing? Because the market’s so hot in a certain area, and that’s how industrial is right now. You know, second place is last place, as you know.

 

[00:39:46] Tom Dosch: And so the good thing is, every industrial listing we’ve been taking out, we’re getting several offers. We’ve had a lot of success. We’re getting to closing. We’re signing up good groups. And so on the, on the seller representation side, if you own [00:40:00] an industrial site, really anywhere in these major Texas markets, give us a call.

 

[00:40:03] Tom Dosch: This is a really good time to be in the market. I mean, I think in Houston and Dallas, you need to be in the market ASAP because you want to be in the market right now when it’s this hot, because you’re really thinking down the road to when you’re closing. Um, and in Austin, I think you want to be thinking about getting in the market too, because again, these deals don’t close in thirty days.

 

[00:40:20] Tom Dosch: So you want to be positioned in the market as the market’s rising. You don’t want to be positioned as you’ve peaked and you’re coming down. Um, so I would say, I would say, I, I think we’re gonna see a land rush across the entire state. I think all we need is Austin to kind of start coming more into the picture.

 

[00:40:35] Tom Dosch: And I think what you’ve hit on today, Tripp, and just what we’re starting to see, I think it’s going to. The question is, is it gonna be something we’ll see really start to pick up the back half of this year, or is it gonna be starting more, you know, early part of next year? But I think it’s definitely inevitable it’s gonna happen.

 

[00:40:53] Tom Dosch: Tripp, thanks for joining. Good to have you back on. This was, this was fun. We’ll, uh, we’ll get Tim back on the podcast. We’ll get all three of us [00:41:00] in here, and we’ll, uh, we’ll hit the overall market, and, uh, hopefully he’s not too upset that I took the liberty of talking about Houston today for him. But, um- … I think we catch up enough that I, I know, uh, I know, uh, a little bit of what’s going on down there, so.

 

[00:41:15] Tripp Rich: Yeah. Well, thanks for having me, man. This has been great. I’m excited. 

 

[00:41:17] Tom Dosch: Yeah. And to our audience, thanks for listening. Please subscribe. Check us out on YouTube, where you can watch these, uh, episodes as we record them. And then also definitely, uh, visit our LinkedIn page to follow us and keep up with our content.

 

[00:41:30] Tom Dosch: See you next week.

 

[00:41:34] Outro: Thank you for listening to our podcast today. If you have questions about land you own in Texas, send us an email at texaslandguys@dmre.com and follow us on LinkedIn to stay updated