Mike Berry

Texas’ record-breaking drought has had a severe impact on agriculture and fueled wildfires statewide. To date, we’ve been fortunate that the drought hasn’t been quite as severe in North Texas as it has elsewhere. Yet the dry conditions are now beginning to take their toll on our region, too.

The Tarrant Regional Water District is at Stage 1 of its drought contingency plan, Dallas Water Utilities will implement Stage 1 water restrictions in December, and the North Texas Municipal Water District recently implemented Stage 3 restrictions (necessitated, in part, because of the impact of an invasive mollusk on the Lake Texoma water supply).

With weather forecasters uncertain when we’ll emerge from the current drought, and with some long-range projections showing us entering a prolonged, multi-year dry period, it’s not just farmers, residents, and manufacturers who need to take note. Water is also a critical issue for the commercial real estate industry.

If we hope to retain our existing businesses and attract new, major employers to the region, we have to be able to offer the right business conditions to those enterprises—and a reliable water supply is one crucial element of that ready-for-business environment.

At Hillwood, we’ve noticed that companies looking for space are increasingly asking about the reliability of local water supplies, and the availability of back-up supplies, in addition to the usual infrastructure-related questions about the power grid, data transmission lines, and impact of traffic congestion. There’s long been awareness of this issue, but the attention to it has been magnified recently by the drought and the continued pressures of growth in our region.

Businesses that require ample water run the gamut from semiconductor manufacturers and data centers that need water for equipment cooling, to foodservice suppliers and corporate office users.

From the standpoint of real estate development, there’s no question that the reliability of a site’s water supply—and deployment of innovative water management practices—may eventually affect a building’s investment grade. These days, having a sound water supply plan or a drought-tolerant landscaping strategy is also critical to a site’s aesthetic appeal and directly affects its marketability.

That’s why everyone in the real estate industry needs to get behind long-term, regional water planning efforts, such as those of the Region C Water Planning Group in North Central Texas. Planners are working on an updated, 50-year plan that will include the optimal mix of water management strategies, ranging from innovative water reuse and conservation measures, to development of new connections to existing water supplies outside our region, and selective creation of new reservoirs. We need to support these planning efforts, while also encouraging enhanced state and federal funding for vital water infrastructure projects.

In the near term, the real estate community should also focus on helping businesses identify ways to stretch existing water supplies. We’re proud of the forward-thinking water conservation and reuse practices at the new Deloitte University campus and throughout Hillwood’s AllianceTexas development, with our master-planned water management programs.

We’ve given a lot of time and attention to water issues—as have many of our corporate tenants—and we expect it to be an even greater focus in the years to come.

Serving as president of Hillwood Properties, Mike Berry leads development efforts the 17,000-acre AllianceTexas development north of Fort Worth. Contact him at mike.berry@hillwood.com.