Industry veteran Sergio Grado, who has worked across Houston, Dallas, Austin, and San Antonio for over two decades, says Texas’s major real estate markets now face distinct challenges that generic investment strategies cannot address.
Grado, a second-generation builder with experience in construction, business development, and distribution throughout Texas, observes that the differences among Houston, Dallas, Austin, and San Antonio have become increasingly pronounced in recent years. “Dallas always stays a little bit ahead because it has a few more diverse industries,” Grado says. “Houston is more oil and gas-based. Austin is like the next Silicon Valley-type market. San Antonio is slow and steady.”
These distinctions, Grado argues, are now producing sharply different market conditions that require tailored approaches for investment and development.
Houston’s Downtown Struggles
Grado’s perspective on Houston highlights the city’s vulnerability to sector-specific downturns. “When I worked for the central plant business, my focus was just downtown,” he says. “I got to know all the building owners downtown. And downtown Houston was tanking. There were totally vacant office buildings. They were trying to convert them to apartments. Studies were being done.”
Houston’s heavy reliance on oil and gas has historically provided stability but also exposed the city to risk when energy prices fall or demand shifts. Grado notes that Houston is now seeing some diversification, with increased construction of data centers and other infrastructure projects. “We’re starting to see a lot of construction towards data centers,” he says. “That’s what’s feeding a lot of industries right now.”
Dallas: Diversified, But Slowing
Dallas has long been favored by companies entering Texas due to its broader economic base. Grado says this diversity has allowed Dallas to maintain steadier employment and commercial activity. “Dallas has a lot of other diversity in its market with companies that can level the economy,” he explains. “In terms of economic stability for workers, for developers, you’ve got more of a steady base.”
However, Grado also notes that Dallas is experiencing some moderation in growth as companies become more cautious about expansion. While Dallas remains ahead of Houston in economic health, the pace of new development and business relocation has slowed compared to previous years.
Austin: From Boom to Correction
Austin, long considered Texas’s fastest-growing market, is now experiencing a pullback. “There’s been kind of an exodus of major corporations leaving Austin,” Grado says. “You’re seeing the real estate market start to dip, starting to go down. Home prices that were considered astronomical are now coming down to be a little bit more reasonable.”
Grado attributes this change to a shift in corporate investment attitudes. “Companies that are entering the Austin market are a little bit more cautious,” he says. “It’s not the mentality of ‘I’ve got all this venture capital, I’m going to build my own skyscraper office.’ It’s more like, ‘We know we want to be in Austin because there’s a lot of key industries, but we have to be cautious.’”
San Antonio: Stability, Not Speed
San Antonio stands apart as the most stable but least dynamic of Texas’s big four metros. “San Antonio is mostly a military market,” Grado explains. “Any development that’s going on is going to be more moderate to accommodate the middle to lower-end businesses. That’s what makes it slow and steady.”
San Antonio offers predictability and measured growth, Grado says, but is less likely to attract high-growth companies or significant venture capital. “You don’t see a lot of major businesses jumping to set up shop in San Antonio,” he notes. “Businesses that are starting want to be surrounded by like-minded, creative people. That’s why Austin was always popular.”
The Implications for Investment Strategy
These diverging trends have made one-size-fits-all Texas investment strategies increasingly ineffective. Grado argues that approaches successful in Dallas may not translate to Austin, and business models suited for San Antonio may not offer the same scale as those in Houston or Dallas.
“I would not shy away from the Texas market,” Grado says. “They’re still affordable. They’re great environments for startup businesses. There’s plenty of land. The challenge might be with current economics getting the financing, but if you can get around that, there’s plenty of business to be had.”
Grado’s comments reflect a broader shift in the Texas real estate landscape, where local market knowledge and adaptability have become critical to identifying viable opportunities and avoiding costly missteps.
A New Kind of Opportunity: Infrastructure Solutions
Grado’s company, GradCo Distributors, is pursuing opportunities to address infrastructure challenges across multiple Texas metropolitan areas. The firm has begun distributing the Broncho Power Boost, a battery backup system designed for condominiums and townhouses where installing traditional generators is not feasible.
“This product installs inside the home, the townhouse, the condo,” Grado explains. “It attaches to the service panel and works automatically. There’s no fumes, no noise.”
Grado reports that property management companies throughout Texas have shown strong interest in the product because it addresses a practical problem that is relevant regardless of local market cycles. “We’re working to roll this out across the U.S. by partnering with franchise electrical contractors,” he says. “When a call comes in, we already have an installer who can go and meet them.”
Looking Ahead
Whether Texas’s primary real estate markets will eventually align around new growth drivers or continue to diverge remains unclear. For now, Grado warns, investors and developers who ignore these differences risk applying outdated strategies to markets where they no longer work. Localized analysis and adaptability have become essential for anyone seeking success in Texas commercial real estate.
