DALLAS-The return of institutional investors to Dallas has everyone buzzing as deals start to pop for cream-of-the-crop product of all type. The quiet interest of three months ago is now so hyped up that 15 to 20 offers, instead of the usual three to five, are being plunked down for well-stabilized properties with no near-term lease rollovers.

The likes of RREEF buying in Dallas is “good testimony that the downside risk barrier or safety nets are in place,” Russell Ingrum, first vice president of CB Richard Ellis Inc. in Dallas, explains to GlobeSt.com. “The stigma associated with the Dallas market seems to be evaporating.”

Everyone’s taking a “best guess” as to what caused the attitude adjustment. More important than the cause is it appears to be a clear sign institutional investors are positioning themselves in key markets with historical growth patterns that spell profit. “The investment community is assuming those will be the first to come back,” says Ed Frieze, research director for Holliday Fenoglio Fowler LP, headquartered in Dallas.

Frieze says the region’s job numbers are partly responsible for the current interest. Yes, Dallas-Fort Worth did lose 26,100 jobs in the past year, but–and it’s a big but–job growth for the first six months of 2002 showed a gain of 35,600 positions. The numbers teamed with Dallas’ history as a moneymaker for the corporate world translate into a good formula for those with the ability to buy.

Investors’ sights, though, are aimed at Dallas and not its rival to the west, Fort Worth, where the market is smaller and a “go with the flow” attitude falls short of windfall returns that they believe can be gleaned from the Big D.

The Dallas spotlight has building owners testing the waters to see if they can attract a hefty check. The newest asset to come to market is the 374,165-sf Reverchon Plaza at 3500 Maple Ave. in Dallas’ Uptown/Turtle Creek submarket. Town’s talking about the Reverchon coming to market, but mostly tongues are wagging about the low asking price that Fort Worth’s Crescent Real Estate Equities Co., has attached to the class A property, being marketed by Holliday Fenoglio Fowler’s Jeff Stone.

Crescent isn’t talking about the 18-story Reverchon’s asking price, but did say it was flagged to go partially because of its 40% occupancy. In contrast, RREEF’s headline buy, 5950 Sherry Lane, is fully leased, baiting a near-record price. Investment brokers around town reported RREEF paid $194 per sf, but one insider close to the deal now confides that it spent a lot more to wrest the deed from the dozen or so suitors.

Unlike six months ago, today’s market has the capital and the product. And, it’s not a narrowing of the bid-ask that is drawing out the sellers, but rather the investment community’s willingness to pay “a premium for predictability of income,” Ingrum says.

P. Michael Hardage, investment services director for Dallas-based Trammell Crow Co., says the guarantee of returns of 8% and 9% holds the key for those fleeing stock and equity markets for bricks and mortar. And yes, he agrees, “there is definitely a lot of capital that is focusing on Dallas.

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