X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-With midyear tallies chalking up record volumes, the Southwest’s major metros are on track to once again raise the bar for office building sales. Unlike years past, the 2005 sales to date have been core properties, with higher occupancies, more space and higher prices across the board.

John Alvarado, senior vice president of investment sales for Dallas-based Trammell Crow Co., says the pipeline through the end of the year “is almost equal to an entire year’s worth of production in the Southwest.” Each quarter, he collates sales data for buildings with more than 100,000 sf in TCC’s southwestern region, which takes in Dallas, Denver, Austin, Houston and New Orleans.

By midyear, the Southwest metros racked up $2.3 billion in sales or $1.1 billion more than in 2004 for the same period, according to Alvarado. Denver led the pack with $732 million in 12 sales. Dallas logged $727 million in 21 trades while Houston came in third with $331 million in 11 passes, but that doesn’t include the latest EOP hand-off. For that story, click here. In Austin, five properties sold for $264 million and New Orleans racked up $175 million with three sales. In all cases, volume and transaction totals are running higher than last year. Clearly, Chicago-based Equity Office Properties’ disposition is leaving a mark across the region, Alvarado says.

The Southwest’s $2.3 billion in sales, though, puts it fourth in the nation. So far this year, the Northeast has pulled in $10.8 billion; the West, $5.6 billion; Midwest, $3 billion; and Southeast, $1.4 billion. By Alvarado’s calculations, the per sf breakdown is $268 in the Northeast; $227 in the West; $153 in the Southeast; $125 in the Southwest; and $112 in the Midwest.

Boring down into the Southwest’s numbers, Alvarado says Dallas’ top buyers have been pension funds, which spent $402 million to date. Private investors, with national portfolios, plunked down $241 million. To date this year, 6.7 million sf in 21 properties have changed hands versus 6.3 million sf in 28 hand-offs, which collected $495 million by midyear 2004, he says. “We are at a very good, rapid clip right now,” he assesses. “We are probably on track to have a record year again. It is consistent with trends elsewhere in the US.”

Denver has been this year’s dark horse, ringing up $732 million by midyear versus $119 million in 2004. This year’s top buyers have been REITs with $386 million while private buyers spent $318 million.

Private buyers are controlling the deal flow in Houston, spending $307 million of the $331 million by midyear. Pension funds led the charge in Austin with $103 million going on the line. And New Orleans’ three sales–that’s three more than last year–all were closed by the private investor sector.

Alvarado says Dallas’ top sellers were REITs, which collected $350 million by midyear. Denver’s sellers were REITs, $344 million, and private investors, $343.6 million. Austin’s lead sellers were corporate/users, $103 million; Houston, private investors, $185 million; and New Orleans, REITs, $115 million.

“There’s definitely been a big comeback in the Southwest,” Alvarado says. “The numbers confirm what we have been hearing from buyers and confirm the challenging environment that buyers are facing.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.