So, ABJ reported on the most recent IRR report (that's an industry standard report), which you can access here:
http://www.irr.com/_FileLibrary/Publ...point_2015.pdf
I'd rather provide you with my own assessment than link you to the ABJ article, which is kinda crappy:
1. We're in the first stage of expansion in the office market, which is really good. If we're doing this hot right now, we should expect a few more years of building there especially in the CBD. I'd expect a good two or three more high profile large projects to be announced and built within that time span, and a smattering of smaller projects.
2. Our CBD office vacancy rate is exceptionally low, which is great, whereas our suburban vacancy rate is higher. This usually indicates further development in the CBD with suburban absorption, which is good for us.
3. We're a bit further along in the development expansion cycle for multifamily, but I'm fine with that. Given our population growth, there's still demand there and we should remain in that phase in perpetuity provided that we don't overdevelop. Given that we've been underdeveloping for a few years we might actually see some pent up demand released through a bunch of new announced oncoming supply. I look forward to this.
4. I'm not really sure what to make of the retail market, which shows us at a similar place within the cycle as multifamily. I'm not buying this at all, actually, where my intuition places us still at the late stages of recovery for retail. Either way, the future still looks fine here.
5. Industrial space is in the expansion phase, but who cares. It's a small part of our economic makeup.
6. Lodging is also in the expansion phase, lodged firmly in the middle. Over the next few years given oncoming supply, I expect to see that shift into hypersupply. That's fine, though, provided that we don't see an economic recession country-wide.
Some Texas comparative notes:
CBD Office: Dallas, Fort Worth, and San Antonio are both in the same spot as we are, but Houston is a little bit further alone in the cycle. That comports with my intuition pretty much spot on.
Multifamily: Dallas, Fort Worth, Houston, and San Antonio are at the peak of the development cycle for multifamily, so we should see some significant slowdown over the next few years in their residential markets, even despite their population growth. San Antonio, particularly, is likely to see a sustained slowdown, given that it's rate of growth is significantly lower.
Retail: Dallas and Fort Worth are at the end stages of recovery, whereas San Antonio is at the beginnings of expansion. Houston is similar to Austin. I'm just not buying any of the retail data.
Industrial: Really, only Fort Worth and San Antonio need to care about this sector and they're both in an expansion.
Hospitality: So... all other cities are in a more juicy spot for further hotel development. I'd expect San Antonio to outperform the rest of Texas's cities going forward for the next few years after we exhaust our current development pipeline (inc. those rumored to be announced projects).
Given that I now live in Columbia, S.C., I want to point out that Columbia feels like a smaller version of Austin with much less growth. However, it's stats seem to point to renewed optimism going forward. It's in recovery or expansion in all categories. I'm particularly liking that it's expansion in multifamily is at the upfront of the cycle and the industrial expansion is particularly hot right now (which, I'll note, is a very large sector here).
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