Episode 77: What Happens When Capital Returns to Texas Real Estate? (Part Two)

In this episode of the Texas Land Guys Podcast, Tim and Tom Dosch continue the conversation with David Marshall and Trey McGhin in part two of their deep dive into the state of Texas real estate. The group kicks things off discussing the new Fed chair, Kevin Warsh, and what potential rate cuts later this year could mean for liquidity, recycled capital, and the wave of unsold deals developers are sitting on.The conversation dives into construction costs, with the team comparing historical cost bases on Houston high-rises and garden-style deals to today’s market, noting that while pricing has cooled in the short term thanks to compressed sub margins, it’s only a matter of time before costs climb again. Houston’s all-in construction costs continue to run 10–15% below Dallas, with garden-style product penciling in the $170–$190 per unit range. Industrial remains the standout asset class across both markets, with equity chasing well-located sites along the Grand Parkway and into McKinney, even as developers push further out to fringe areas in search of supply. Data center development is generating buzz but few closed deals, slowed by long power-delivery timelines and growing public pushback. Meanwhile, single-family is working through an oversupply of lots, BTR remains largely stalled outside of a handful of larger sites, and land/lot banking continues to be a release valve for builders trying to manage balance sheet risk.The episode wraps on a lighter note as the group shares their summer plans with family, from Hawaii and Italy to Colorado road trips, before reflecting on the importance of stepping away from the deal grind to spend time with their kids.Tune in for the second half of this candid conversation on where Texas real estate stands today and where it's headed next.Key TakeawaysIndustrial is the clear winner. Equity is flowing to industrial projects across Texas.Developers are pushing to fringe areas. Core sites have become scarce.Construction costs are softening. Subcontractor margins are compressing.Houston garden-style costs ($170–$190/unit) are now 10–15% below Dallas.Single-family is stalled. Oversupply of lots and slow sales are hurting builders.Activity is limited to smaller infill sites.BTR is nearly dead. Poor performance has sidelined top developers.Data centers face power hurdles. Delayed delivery is killing most deals.Land banking is on the rise. Builders seek capital partners to offload land risk.In This Episode:[00:00] Introduction[00:31] Liquidity and rate cuts[02:00] Construction costs reality[04:02] Houston multifamily build costs[05:41] Industrial capital hotspot[08:24] Data centers and power[11:36] DFW industrial expansion[16:26] Single-family slowdown[18:36] Townhomes and zoning traps[21:12] Houston homebuilding outlook[22:55] Cities forcing bad zoning[24:05] Townhome exit strategies[24:22] Scottsdale rent reality check[24:59] Markets always turn[25:21] Build to rent slowdown[27:34] Why BTR math breaks[29:17] Summer plans and travel[34:18] Work stress and family time[37:59] Closing thoughts Resources and LinksPodcastTexas Land Guys Podcasthttps://dmre.com/Trey McGhinlinkedin.com/in/trey-mcghin-14926960https://dmre.com/https://ascentinv.com/https://100xharvest.org/David Marshalllinkedin.com/in/david-marshall-91b3a2252https://dmre.com/https://ascentinv.com/https://100xharvest.org/Tom Doschhttps://www.linkedin.com/in/tom-dosch-37263b3b/https://dmre.com/https://ascentinv.com/https://100xharvest.org/Tim Doschhttps://www.linkedin.com/in/tim-dosch-67a07899https://dmre.com/https://ascentinv.com/https://100xharvest.org/