Conservative Predictions for Q1 2002

"It's no different than other markets," George Roddy Sr., president of Dallas-based Roddy Information Services, tells GlobeSt.com. Ironically, the fourth quarter picked up some momentum over the prior two reporting periods. Still, Roddy doesn't see much swing coming into play in Q1 2002. "I think the market will move laterally for four to six months," he says.

All of the 2001 space that delivered will need to be absorbed before the market moves ahead, Roddy explains. "In a soft market, it takes longer and will cause somewhat of a respite in new starts," he says. On the flip side, he sincerely believes "we've probably had all the bad news that we're going to have in this cycle. There is nothing in the DFW economy that I can see that is materially going to affect us."

Roddy, like others, says all crystal ball predictions hinge on the nation's state of affairs being what it is today. Factor in another terrorist attack...well, that's a different story entirely. All speculation is predicated, Phil Baker, executive director of Insignia/ESG's Dallas office says, "on what we know today. We've stood the test, but if it happens again there's going to be this Chicken Little again."

The post-Sept. 11 wounds have been slow in healing. Baker says some CBD clients are talking about splitting space between the Downtown and a suburban office building. It's not come to pass, but the undercurrent talk is there. In other cases, he's heard tales of clients refusing to visit firms that office above the 45th floor of a CBD high-rise.

The office sector is trying to bandage the concerns while retail goes head-to-head with consumer spending cuts. With Texas being a national leader in population growth, multifamily appears poised to grow right along with the head count. And industrial...well, say the execs, it remains the least impacted of the commercial real estate family. "The Dallas market is still vibrant," Baker emphasizes. "People still need space...and the opportunities are there for real estate brokers. All the reasons that sell value of real estate professionals are at play today."

Baker predicts first quarter 2002 will bring more renewals as tenants take the safe path to doing business in the New Year. He says many tenants now are looking ahead to their second- and third-quarter lease expirations. The uncertainty of the times can hold a measure of certainty via a renewal. Still, there are those who will hold out until the last minute to sign on the dotted line as they clutch to a perception that rental rates will drop substantially. That may not be the case and the bottom-fishers could be in for a bit of a reality shock when everyone sits down at the bargaining table, even in today's mad scramble for tenants.