News Article | 2/6/2009

Ross Perot Jr.: Texas is best place to ride out recession

Texas is the best place to be to ride out the national recession, Ross Perot Jr., chairman of Hillwood and Perot Systems, told about 250 attendees of the 2009 Economic Forecast breakfast in Dallas on Tuesday. The event was hosted by Cushman & Wakefield of Texas.

Historically, Texas has led national economic booms and busts, such as the real estate downturn in the 1980s and the Enron debacle in the late 1990s, Perot said. This time, it’s different because Texas didn’t have the excessive home price appreciation like some other states, he said.

Reports have shown that the recession has hit hardest in states such as California and Florida, which had the biggest housing booms.

“Texans have always been around these big cycles,” Perot said. “We’re very aggressive and very positive, and that’s not going to change.”

Perot sees opportunity for many companies to “reinvent” themselves. For example, Hillwood has gone from being mainly a Texas single-family home developer to a national developer in the past year as it has added to its portfolio, he said.

Down markets often provide bargains, Perot said. Hillwood has bid on single-family lots for 6 cents on the dollar, he said.

Perot foresees opportunity in the industrial real estate market in 18 to 24 months, but not right now because the market has excess space and rising vacancy rates. Last year, Hillwood finished building 9 million square feet of industrial space, but he doesn’t expect the company to break ground on any new industrial buildings this year.

Developers added 20.5 million square feet of industrial space to the Dallas-Fort Worth area last year and 7.8 million square feet was under construction in December, according to data from Cushman & Wakefield.