Call it a sign of North Texas success, but one that comes with a costly side effect.
Research finds people running businesses in Dallas-Fort Worth are facing major sticker shock when it comes to the rent they pay.
Real Estate firm JLL researched historic rents and vacancies in DFW and found that over the past five years businesses have paid 30% more in rent.
In part because corporations are moving into the Dallas area and bringing along businesses that support them like law firms, accounting firms and public relations firms.
Every kind of business is seeing the rent increase, according to JLL.
At Harvey’s Charcoal Burgers in Dallas, longtime customers stopped by on Sunday evening to bid farewell.
“We’re sad to see you go, Harvey,” said one patron.
Owner Harvey Gough is shutting down the grill just as other businesses are faced with a red hot rental market.
“Rents are at an all-time high for this metro market,” said Brooke Armstrong, executive vice president of JLL in Dallas. “It’s affecting everybody from the very smallest business to the largest law firm or accounting firm in town.”
Armstrong says their research found rent hikes are especially being felt in the Uptown and Legacy West areas.
“I think it is a good problem because it reflects the health of the Dallas-Fort Worth business environment,” she said. “It’s hard for people to stomach when they’re experiencing 30% increases in their rent but really all of these businesses are doing well. This is a great place to be, a great place to be doing business.”
Gough is not directly attributing rising rents in the Preston Valley Shopping Center for his decision.
“The lease is up at the end of February,” he said. “February is a slow month so I thought I’d go away when I wanted to.”
Gough is also not discounting a possible comeback.
“If the location was right, not back in the middle of a shopping center, we would be interested,” he said.
Gough, a veteran, may be shutting down his business but a mission close to his heart will continue.
He will keep making trips around the world to feed our troops.
He says he already has two missions planned this year.
When it comes to the impact the rental hikes may have on businesses, JLL doesn’t foresee businesses will leave DFW.
But the firm does encourage business owners to start researching the market earlier than before.
One to two years before your lease is up, recommends Armstrong, in order to study the market and how it’s changing so you can find ways to negotiate flexibilities needed in a new lease.