suprising. Let’s dig into the numbers

Nothing says the Big D like big data. 2017 was a big year for US real estate, especially for commercial construction in Dallas. Well, it depends how you define big.

We went a little crazy and drilled down into the permit records from last year. The City of Dallas (aka Dallas County) issued an amazing 45,483 permits last year.

How does these numbers compare to years past?

In 2016, Dallas County reports indicate that 45,911 permits were issued, so maybe 2017 was not so big after all. For perspective, in 2009 permits totaled only 31,542.

That is a 45% increase from 2009 to 2016!

Let’s be clear, total permits is not the same as building permits.

Commercial Building Permits – 2017

The numbers related to building permits tell an interesting story for both the commercial real estate and construction industries in Dallas.

Only, yes only, 5,284 permits were issued in 2017 for commercial building work.

That is just 11.6% of all the permits processed by the City of Dallas.

What is strange to us is how the permits are grouped.

When we look at this list, so many questions run through our heads!

Who are the top contractors when it comes to new construction?

Who pulled the most permits?

What is the average dollar amount of each permit type?

What do these permit descriptions even mean?!

Where were the most building permits pulled (zip code)?

While we plant to attack those questions (and answers) soon, right now we just want to address commercial permits and the top ten contractors with the most permits.

Commercial Building Permit Types

Sorting through the City’s data, there are six types of categories they use for commercial buildings:

1. Addition
2. Alteration
3. Finish Out
4. New Construction
5. Reconstruction
6. Renovation

Either through my own incompetence or my inability to use the internet (ie, Google), I cannot find clear definitions of these permit types.

Heading to the International Building Codes, we could only find two of the six types in the definitions chapter. So naturally, I just worked through the list and did the best I could to define the types of permits.

• Addition – an extension or increase in floor area or height of a building or structure.
• Alteration – any construction or renovation to an existing structure other than a repair or addition
• Finish Out – we imagine this one is similar to a renovation; we are told by some contractors that this type of permit could refer to a “1st Generation” Tenant Improvement (TI) in a new building. For example, if KPMG was the first tenant in Hall Financial’s Art District Building, their TI permit would have maybe been a Finish Out.
• New Construction – easy. Ground up, starting with a piece of dirt.
• Reconstruction – seems to be a “catch-all” category that rarely gets used (for instance, 26 of 5,284 total commercial building permits)
• Renovation – similar to finish out, but includes interior remodels as well as exterior work (think roof replacements, facade repairs)

Who’s Who in Commercial Construction – 2017

Ironically, of the 5,284 permits listed in the Dallas records, 69 permit numbers had No Name.

896 contractors held only one permit. That pencils out to roughly 17% of the total permits.

Top 10 Contractors with the Most Permits

The top ten permit holders by number will definitely surprise you. Why?

Because the top “Contractor” listed on over 200 permits is not even a contractor.

The #2 group on the list is you guessed it, not really a contractor in the way most people think…

They’re a telecom company.

#1 BOXER PROPERTY

With locations in 13 cities, Boxer appears to be more of a property manager/ leasing broker for landlords.

Most of their permits seem to include interior remodels or spec suites.

All permits were filed under the Commercial Renovation “type.”

#2 NEXIUS SOLUTIONS INC.

Nexius appears to be a telecommunications company that has their own crews to install their own cell towers and antennas.

The majority of their permits on file were for renovations. But it looks like they had a few for addition, reconstruction, and new construction…albeit all for cell towers or other communications equipment.

#3 SCOTT & REID

Finally a real contractor on the list! Turns out, almost all of their permits fall under the City’s renovation type.

This group is what you think of when you hear tenant improvements. They work on finish outs.

FUN FACTS:

They pulled 12 permits for Trammell Crow Center at 2001 Ross Avenue.

Based on the permit data (which we know is not perfect) the per square foot construction costs ranged from $25/ sf to $80 /sf.

In August, four different suite projects kicked off ranging from $72 /sf to $80 /sf.

There is one project that is listed at $162 a square foot!

#4 HC BECK CONTRACTORS

Beck seemed to have a little bit of everything. With over 844,000 sf under construction, their work varied from office remodels, to construction on schools, museums, government buildings and parking garages. Their permits were also a mix of new construction with alterations, renovations, and others.

#5 JOHN A ARNOLD INC.

To show you how important it is to understand the numbers, this contractor had just a few permits less than Beck. However, the total area of their work was only about 230, 225 sf and it was exclusively interior remodels for office buildings.

#6 METROPLEX GENERAL CONTRACTORS

Metroplex appeared to concentrate their work on a few areas that some Dallas folks might recognize, Crescent Court, Sherry Lane, Noel Road. Most of their permits were focused on interior remodels of office assets. When looking at the total value of their work (over $16.4MM) across the total area of 414,947 sf, their average TI construction costs are around $39.72.

#7 AUSTIN COMMERCIAL LP

Here is where I throw out a massive disclaimer about this list, these numbers, and the overall trends. The data is not perfect. The analysis and trends are sound, but not necessarily exact.

How I know? Simple, because Austin Commercial has 41 permits spread over just two addresses. While they are building a new ground up hotel, each major phase of work has a permit associated with it.

Like Beck, the majority of their work appeared to be new construction of hotels, parking garages, museums, and office buildings.  

#8 LEMCON USA CORPORATION

Telecom. Again. Not my forte. But it seems that the going rate to remove and replace cellular antennas is $12,500. That number repeats often among all of Lemcon’s permit records. The average cost for all 66 permits is $10,827.

#9 BALFOUR BEATTY CONSTRUCTION LLC

Balfour seemed to have work on new office construction as well as interior remodels. A few parking garages were also included in their permit records.

Despite being “low” on the list, the total value of their construction work from last year was reportedly $127.98MM!

#10 BAUMAN CONSULTANTS

Telecom. Third time’s a charm. Never heard of this group, which is not a bad thing. It seems they are your go to contractor/ consultant if you need a cell tower or antenna installed in the DFW area.

Let’s wrap this thing up.

Who were the top 10 contractors that pulled the most permits in Dallas in 2017?