Bill Baumgardner, Executive Vice President – Dallas, VanTrust Real Estate

In an interview with Invest:, Bill Baumgardner, Dallas executive vice president of VanTrust Real Estate, said that onshoring and nearshoring trends are increasing demand for industrial projects along the U.S.-Mexico border. He also discussed the company’s focus on upscale hospitality, retail, and multifamily developments, and how strong community partnerships drive growth.

What have been some major highlights for the company over the past 12 months?

Last year, there was still a lot of uncertainty about the economy, where interest rates were going, and how investors were feeling. Now, there is a degree of certainty, and we’ve an interest rate cut.. We’re looking for the CFOs of the world to understand what the direction is and to feel better about spending money.

Corporate America is also waking up in terms of what they want to do with their office space. More companies have a more solidified approach since they know what they’re hybrid schedule is. Many companies realize they need to get people back in the office in some capacity to grow them professionally and create a sense of purpose and belonging within their organization.

Downsizing has really tapered off because companies don’t want to be short on space, especially when making long-term decisions. We’re also seeing existing companies in the Dallas-Fort Worth area that are landlocked in their Class-A buildings actively looking for expansion opportunities. Overall, the direction of the economy and future rate cuts will provide CFOs with more certainty, allowing them to make capital decisions that have been on hold for the last two years.

Reflecting on the past year, what have been the major projects and achievements for VanTrust in North Texas, specifically for build-to-suit projects?

To put it briefly, we’re capitalizing on upscale hospitality retail, and multifamily developments. In North Texas, we continue to work on Frisco Station, where we’ve seen a lot of activity, especially on the food and beverage front and in high-end hospitality. We’ve listened to what corporate real estate executives want, which is a live-work-play environment. We’ve reimagined the Towers District at Frisco Station and made significant enhancements to the food and beverage offerings and upscale hospitality options. Tenants also have accessibility to walking trails throughout Frisco Station further showing our commitment to giving them the ideal work environment. 

We’ve also developed a three-pack of hotels that offer a range of price points, and now we’re looking to add an upscale touch. The reimagining of The Towers District at Frisco Station has been a major focus for us, and we’re excited to execute that vision. 

Which services and projects have seen the biggest spike in demand in Texas, and how do you plan to capitalize on these opportunities? 

We’re active on the Texas border due to the onshoring and nearshoring happening in Mexico, which has created significant demand. We have projects in El Paso and Laredo, and we’re working on a couple of projects in Brownsville and McAllen. The border is a big focus because of the number of companies relocating from the Pacific Rim to the United States to implement manufacturing operations.

Laredo is now the No. 1 port by dollar volume in the United States, surpassing the ports of Long Beach and Los Angeles. About 15,000 trucks cross that border daily, heading into Monterrey, Mexico, which is the manufacturing capital of Mexico.

We’ve also moved into the Austin market, where we‘ve purchased 250 acres and have another 1,000 acres under contract. We’re making a big play in Austin to take advantage of the growth driven by Samsung’s chip plant and Tesla’s continued expansion. 

Up in Denison and Sherman, Texas Instruments and GlobalWafers are investing close to $40 billion in chip manufacturing, which is moving the chip supply chain into the United States. The semiconductor industry, which barely existed in the United States four years ago, now has companies investing $250 billion in chip manufacturing. 

Additionally, solar manufacturers from the Pacific Rim are setting up operations in the United States to avoid tariffs, and data centers continue to grow, driven by AI. Some of the land we’re looking at in Austin is being set aside for data center use because of the demand for power.

What are the key growth drivers in Texas, and how do they influence your strategy?

Texas is an overall growth market, with population increases in all major cities like Houston, Dallas, Fort Worth, San Antonio and Austin. These areas are seeing job creation, making Texas attractive to corporations that see it as a business-friendly state with great air transportation and access to a skilled workforce.

For example, TIAA relocated to The Star in Frisco, purchasing 500,000 square feet, which is estimated to bring in 2,500 jobs. They even shut down an operation in Denver to bring an additional 1,000 people here. We expect this type of growth to accelerate over the next 24 months across Texas markets.

What are some of the biggest obstacles you are facing in the real estate development sector right now? 

The industrial market right now is overbuilt. There’s a lot of space still sitting that’s waiting to be absorbed, and that will likely happen over the next 18=24 months. The only way to solve this is by getting additional rent, but since there’s a lot of space available, rent growth hasn’t kept up where yields need to be. It’s a bit of a wait-and-see game.

The office sector is another challenge. Only A and double-A spaces are getting absorbed right now, so you need to be willing to play in those markets to be a factor in the Dallas-Fort Worth area. The good thing is there are only about five or six cities in the United States where you will see significant investment in speculative office spaces, and Dallas-Fort Worth is one of them. Austin is another. Austin has had a similar issue, with a lot of tech space coming back onto the market. Tech is always a leading indicator. They were the first ones to lay off people and hopefully they will be first to start hiring again.

If you look at examples like Meta, they recently gave up almost a million square feet in Austin, and IBM stepped up to take 320,000 square feet of that space. NVIDIA and other AI companies are currently looking for 320,000 square feet down there, so there are signs that part of the industry is coming back.

What is your near-term economic outlook for the Dallas-Fort Worth area and its impact on the real estate market?

We see conditions improving because interest rates will start to come down, which will help. Again, I go back to the growth factor in the Dallas-Fort Worth market and Texas, in general. As you add population and jobs, it makes up for a lot of the challenges that are out there. Real estate is always cyclical. We consider this period as coming out of a down cycle and going back into a growth cycle. It’s just a matter of time before things pick up again.