Goff’s commercial property is doing big deals to get ready for a surge of relocations to Texas.
A year into the global pandemic, John Goff is making some of the biggest real estate deals of his career.
His Crescent Real Estate just paid as much as $700 million to purchase its namesake Crescent complex in Uptown Dallas.
And in Fort Worth, Goff is planning a $250 million mixed-use development — Crescent Real Estate’s first project in its hometown.
While some other commercial real estate companies are hunkered down and putting off transactions, Goff said he’s betting on the Texas economy to make his moves pay off.
“I think we are going to come back fast and hard,” Goff said. “We are going to be surprised how quickly the rebound will occur.
“Dallas-Fort Worth is going to be drowning in opportunity.”
After more than 30 years in the property sector, Goff has been through his share of economic downturns.
He learned the real estate and investment business at the hand of famed Fort Worth billionaire Richard Rainwater. When Goff and Rainwater started their real estate investment venture, it was named after the Dallas landmark Crescent Real Estate just bought.
Through all the economic cycles, Goff has remained upbeat about the Texas market, always looking for the next opportunity.
He completed the latest acquisition of Uptown’s Crescent — the third time he’s bought the property — ahead of schedule.
“It’s an incredible piece of architecture you couldn’t afford to replicate today,” Goff said. “Every quality relocation coming into town that wants to be in the urban core is going to look at the Crescent.
“It’s going to be on everybody’s list.”
A Crescent Real Estate fund bought the Crescent complex from JP Morgan Asset Management, which had owned the property for about a decade.
With office rents averaging more than $40 per square foot, the Crescent is one of the priciest office rentals in Dallas. It’s a favorite of financial firms including the likes of UBS Securities, Goldman Sachs, Deutsche Bank and Rockefeller Capital Management.
“We’ve seen a lot of good leasing activity there while we had it under contract,” Goff said.
He thinks the steady stream of companies coming to Dallas and Texas from coastal markets will turn into a flood as the pandemic subsides. “We are in the epicenter of relocations,” Goff said. “The relocations are only going to be amplified as we continue to see tax policy changes in various states.
“Dallas-Fort Worth is going to get a disproportionate share of those moves,” he said. “Texas is just going to be a magnet for business.”
Goff said his company’s hotels are already bouncing back from the pandemic.
Crescent Real Estate owns both the Crescent Court Hotel and Ritz-Carlton in Uptown, two of Dallas’ top hotel properties that, like most, saw a big drop-off in business with COVID-19.
“We are actually recovering very nicely,” Goff said. “We are going to end the month between the Ritz and the Crescent probably to be 75% occupancy.
“And that’s without much business travel. I never thought I’d be excited about 75% occupancy, but this feels pretty good coming out of the pandemic.”
With more than 60% of local office employees still working from home, Goff expects office populations to increase as we move through 2021.
The Crescent complex recently crossed the mark of over 50% in-person office workers.
“The pandemic by the end of the year is going to be in the rearview mirror,” Goff said. “It certainly is going to impact the way we do things and the way we interact at some level.”
Goff said his firm recently made big changes to an office building it’s constructing for a client in Colorado.
“They called us in the middle of the pandemic and they said they want to go forward with the office project but they want to cut the density in half,” he said. “We are now building twice the building.”