Much has been written about Valley View Mall’s demise and rebirth as Midtown Dallas. It’s as though all the ink will somehow grease the wheels and return Valley View to productivity. On Tuesday, the North Dallas Chamber of Commerce hosted an event that included a keynote and panel discussion.
The panel consisted of Scott Beck (owner of the property and chief developer), Edwin Flores from DISD, and Dallas City Council member Lee Kleinman. In a nutshell, everyone just wants the show to get on the road for this enormous, multi-billion dollar redevelopment.
Sure, considering we already have Uptown, calling this development Midtown is a head-scratcher. I believe the answer is part hat-tip to New York’s Midtown and it’s adjacency to Central Park (our Midtown will have a central park too). The other part is the realization that in the Dallas of today, LBJ is mid-town between where you want to live and where the new jobs are locating (spoken by a reformed suburbanite). Midtown hopes to act as flypaper to catch some of the northerly migration to the boonies.
Personally, I hope some of the Midtown shine catches the Galleria. What was once a destination in the 1980s and 1990s, isn’t. I’ve probably visited three times in my 10 years in Dallas, and can’t recall spending a dime.
The waiting is almost over. Demolition of the old Valley View Macy’s begins this month while the remainder of the mall will come down in the summer.
Of course, Midtown will be a live/work/play development, that while cliché, actually returns urban development to its roots. The only missing piece is linkages to public transportation. Like much of Dallas between I-35 and Central, Midtown is in the public transportation desert.
Midtown is lucky — It’s currently in an area without enough residential for people to bemoan the increased traffic and parking the development will bring.
Steve Brown Market Update
The keynote speaker was Dallas Morning News real estate columnist Steve Brown. He painted a picture of Dallas real estate. Most of which we instinctively know. We’re “little black dress” hot. But a few things jumped at me.
We’re building a warehouse full of warehouses around town that act as distribution points for all manner of products that eventually wind up in retail shops. But we’re also building warehouses to service online retailers like Amazon. Warehouse growth is at the expense of physical retail. New retail construction isn’t as strong because we’re all ordering more junk online. I know as a renovator, I ordered everything online from doors to cabinets to flooring. I did it because of price, convenience, selection, free shipping, and no sales tax. But warehouse jobs aren’t well paid, nor are they heavily-staffed. So for all their millions of square footage, they’re not adding as much to the economy as other types of construction.
The other interesting point is something I’ve said before (but without as extensive data). Dallas is adding 200-300 people a day. Dallas is seeing the largest, by far, population growth in Texas. In fact, our population growth is more than the rest of the state combined. We think there are too many apartments being built, but vacancy rates are just 4 percent. So yes, we’re building a lot of apartments, but not too many yet.
There are two apartment trends that are hurting us though. New construction rentals are expensive. Old construction apartment complexes are being snapped up, renovated and flipped back on the market with leases the prior tenant can no longer afford. Combined, it’s really hard to find a decently-priced rental, and that hurts those at the bottom rungs … like people who work in warehouses.
We all know that during the current boom, wages have not kept pace … not even close. We must keep a handle on this or face the problems of other cities where lower waged workers can’t afford to live anywhere near where they work.
We also have to be aware that the current boom, like all booms, will not last forever. We’ve been seeing areas of softness crop up already. Million-plus market is slow. Rents are beginning to level off. As interest rates rise, the mid-market will begin to cool as buyers get priced out of the market. Ensuring the boom slows rather than busts is key to retaining the value created during the boom. Of course if you’re trying to get on the property ladder, you’re hoping to jump on board a bust.
Finally, on a heartening note, yes our market is hot and it’s “real hot” with the economics to back it up (jobs and population growth). What we’re not seeing so far is a dramatic influx of piggy-bank buyers. You know what I mean, rich folks who buy property for investment (or to park cash) that they leave vacant. In cities like Seattle, Portland and Vancouver, it’s estimated that 30-50 percent of homes are vacant every night. The granddaddy of piggy-bank cities is London where last week a group of self-proclaimed anarchists took over a £15 mansion owned and kept vacant by a Russian oligarch to use as a homeless shelter.
So Dallas you’re hot … and not spray-tan hot.
Remember: High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016, my writing was recognized with Bronze and Silver awards from the National Association of Real Estate Editors. Have a story to tell or a marriage proposal to make? Shoot me an email firstname.lastname@example.org.