In a year of firsts, another record has been set in commercial real estate. In normal years, Manhattan would occupy the top spot for US transaction volume, hands down. At various times of market disruption, Los Angeles would topple Manhattan for shorter periods, but this year, Dallas has logged more time at the top of the leader board, or three consecutive quarters, than either city, according to research by Real Capital Analytics.

Other than the anomaly that is 2020, what could be the contributing factors in this great reversal? Granted, year-to-date deal activity across all the top markets diminished amid the COVID-19 crisis. But, Dallas’ drop was less dramatic than the traditionally heavyweight markets.

Manhattan’s rankings descent is the result of a gut punch of apartment market tumult, then the total knockout of the hotel market. After slipping to number eight in apartment sales after rent control regulations skimmed off investor demand in Manhattan last year, more disruption was soon to follow. In 2020, the besieged hotel market, which was buckling to competition and saturation, melted down under the weight of COVID.

What Dallas Has to Offer

Meanwhile in Dallas/Fort Worth, economic diversity has alleviated the health crisis’ employment shock. This has helped to stabilize the metro’s labor force by mitigating sector-specific jolts. While the market’s unemployment rate momentarily reached double digits as almost 410,000 jobs were lost in March and April, it remained below the national average. Additionally, the state’s early reopening underscored an accelerated jobs recovery when 224,000 positions added from May through September pushed the unemployment rate back down to 5.4%, according to a report by Marcus & Millichap.

Overall, the DFW labor force has been one of the fastest growing in the nation during the past decade. From 2010 through the beginning of this year, more than 940,000 metro jobs were added, with six different employment sectors expanding by at least 30% during that stretch.

This has translated to in-migration totaling 420,000 residents from 2015 through 2019. While this trend may briefly pause during the health crisis, the long-term population migration outlook remains favorable and this steady population growth will underpin demand for rental housing.

Specifically, remote worker housing needs may change as employees seek more spacious units in the suburbs. As a result, the East Dallas suburbs are benefiting from renter relocations.

As for office, investors are expecting assets in the northern DFW suburbs to attract firms relocating from denser locales and coastal markets. Particularly, upper-tier offices in suburbs just beyond Interstate 635 such as Richardson and Addison have caught buyers’ eyes.

Moreover, single-tenant retail assets frequently traded in north Dallas suburbs, especially in Garland and McKinney, where household growth has been strong. Neighborhood and strip center transactions were most common in Arlington.

Finally, North Fort Worth is gaining more speculative industrial space and airport-proximate industrial facilities garnered buyers’ attention as online shopping bolsters air cargo volume, says Marcus & Millichap.

In the end, the multiplicity of the Dallas-Fort Worth economy is providing clear-cut advantages that have pulled ahead of other metros, including the once-stalwart Manhattan. Time will tell if DFW has the required staying power after the turmoil of COVID has passed.