The Dallas/Fort Worth metro area is rising on powerful growth that will lift it past Chicago to become the third-largest metropolitan statistical area in the nation, experts said during a session at the ULI Fall Meeting in Dallas.

“We’ve definitely been experiencing a boom,” said Cullum Clark, director of the George W. Bush Institute–SMU Economic Growth Initiative and an adjunct professor of economics at Southern Methodist University.

The extended growth spurt is not limited to Dallas/Fort Worth, a North Texas spread of communities with a combined population of more than 7.7 million. The Texas Triangle, made up of Texas’s largest cities—Houston, Austin, San Antonio, and Dallas/Fort Worth—is poised for significant growth. Already 54 Fortune 500 companies have their headquarters in the Texas Triangle, Clark said at the session, titled “The Texas Miracle: How’d We Get Here and What’s Next for DFW?”

The Major Growth Driver of Dallas

Ron Kirk, Dallas mayor from 1995 to 2001, attributes the city’s outstanding growth to one major transportation project.

“There is one magic bullet: the one big centrifugal force is DFW,” Kirk said, referring to Dallas/Fort Worth International Airport, which opened in 1973. It is largest hub for American Airlines and the third-busiest airport in the world, according to Airports Council International.

Kirk, senior of counsel in Gibson, Dunn & Crutcher’s Dallas and Washington, D.C., offices, said the far-reaching scope of the airport and its location in the middle of the nation make corporate travel efficient and convenient.

Dallas’s track record of corporate relocations has been impressive: the metro area landed the headquarters of JCPenney, Exxon Mobil, Toyota Motors U.S., McKesson, and CBRE, along with the influx of thousands of employees from other companies. The lower home prices and lighter taxes lure companies to Dallas and its fast-growing suburbs.

Dallas lacks the features of natural beauty, such as sandy beaches or mountains frosted with snow, Kirk admitted, but it is perceived as a good place to live. “We are a great place to live and raise your families.”

Plus, there was land available for suburban expansion that spread to the north in many cases. “We are the largest real estate play in the country,” he said.

“More people are moving here, and that’s been great for our business,” said Michael Levy, chief executive officer of Dallas-based Crow Holdings, which was founded by legendary developer Trammell Crow about 75 years ago.

Levy said the Dallas/Fort Worth area has evolved into a number of growth nodes—cities or self-sustained submarkets with housing, offices, retailers, civic management, and schools. These large-scale communities allow families to live, work, and play, and move through the “daily grind” of life without the excessively long commutes required in some metro areas, he said.

Shifting Population

The suburban growth detracts from some of the central city tax base, Kirk said, but younger people return to the city’s core seeking the density and urban excitement.

“We may lose out on those families, but the younger people don’t want to live 45 minutes out of the city,” Kirk said.

The past growth and latent potential of the Dallas market has gained attention throughout the real estate community. In ULI and PwC’s Emerging Trends in Real Estate® 2023 forecast report, released at the meeting, Dallas/Fort Worth ranked behind only Nashville in terms of its overall real estate prospects. The report also ranks the Dallas/Fort Worth market sixth in homebuilding prospects.

With its strong population and economic growth, Texas has been a star in homebuilding, with Dallas/Fort Worth and Houston leading the nation in single-family housing starts for many years. According to the RCLCO Real Estate Consulting firm, the Houston metro area led the nation in 2021 with 52,195 housing starts, following by the Dallas/Fort Worth market with 51,681 starts. The Phoenix metro area ranked a distant third with 36,729 starts last year, RCLCO reported.

Houston is also expected to surpass Chicago among metropolitan statistical areas in the next decade or so, Clark said.