It's no secret that markets in the commercial real estate industry are volatile. Currently, and since the pandemic, the industry faces several hurdles due to rising interest rates, return to work, and other external influences. Raising federal interest rates has become a top concern for investors and property owners across the board. When one service line struggles, the industry often sees another soar, but record interest rate increases are impacting all sectors. But the advantage of North Texas is that there is always a chance to take advantage of it, and a market that should recover faster than many other markets across the country.
Currently, in the industrial sector, 67 million square feet of product is under construction and in operation in North Texas. We are absorbing industrial property at a healthy pace similar to pre-COVID levels, which is a positive sign. This market rebalancing has stabilized rents and land prices. There are encouraging signs in the office sector as well, with people returning to work accelerating. At Colliers, we've seen this start with office leases, especially with smaller users and Class B office space.
Additionally, Texas is a pro-business state, which is a major advantage in attracting businesses and investors to the region. Population growth and business relocation are also impacting North Texas' fast-growing multifamily market. With the influx of migrants to the region, there are ample opportunities for this sector to take advantage of. There is flat, developable land in all directions, and growth continues in the city center and on the outskirts.
One of the important things when the market is predicting a recession is to remain optimistic and remind your clients and colleagues that there is still trade. It may look different than last year, but it's actually there. Being cautious is necessary and that's when professionals in this industry start to show their strengths. True talent and grit are revealed in the midst of uncertainty. That's why these professionals are experts at growing portfolios and maintaining healthy relationships with their clients. These are the types of professionals who keep their clients calm and excited about their investments when a deal closes.
Our clients also appreciate being surrounded by reliable, up-to-date research highlighting market statistics, trends, and forecasts. This gives clients peace of mind knowing that their presentation is in tune with current times and looking to the bigger picture. The easier it is to simplify things, the better. At the end of the day, it's important to reassure investors about North Texas' continued potential.
Texas is resilient, and North Texas is one of the driving forces behind our state's success. It's easy to get discouraged in this industry when there's economic uncertainty. However, if you play your cards right, it can be an exhilarating time. That's why it's important to thoroughly educate your clients and keep them optimistic. Texas is unique. No matter what the economic situation, it tends to maintain its strength.
Daniel Taylor is Executive Managing Director of Colliers |texas
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