Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-If all economic indicators are on target, Dallas/Fort Worth’s commercial markets are headed in the right direction, according to a statistical overview presented at Transwestern Commercial Services’ third annual Trendlines.

“This has definitely been a better year than last year,” Jack Eimer, president of the Houston-based Transwestern’s central region, told the crowd of clients and brokers attending last night’s confab in the Park City Club at 5956 Sherry Lane in North Dallas. He says building owners are starting to smile, whether they’re selling at higher prices or leasing with fewer concessions.

Gregory A. Leisch, CEO of Delta Associates, Transwestern’s Washington, DC-based research affiliate, forecasts that the flex industrial market will transition to a landlords’ market in mid-2006; office will swing in the first half of 2007; and multifamily will roll around before 2007 closes its door. Throughout the transition, cap rates will remain relatively low and moderately rise as interest rates go up, he said.

Leisch predicted Dallas/Fort Worth will gain 68,300 jobs annually for the next three years. “That will be plenty enough jobs to support commercial real estate in the next few years,” he said. “The good news isn’t the quantity of jobs that we’re growing, but the good news is the quality of jobs.” The leading sectors are government, business/professional and health/education–all categories that translate into class A space needs, both office and residential.

In his office overview, Leisch said the region is on track to meet its historical absorption of 4.9 million sf despite the 4.5 million sf that’s under construction. “It’s half preleased,” he said.

Office vacancy, the hot button for local and national market watchers when discussing Dallas, should taper to 17.6% next year, Leisch said. It’s currently 19.3%, significantly lower than other analysts because Delta includes single-tenant and owner-occupied buildings in its collation. Fort Worth’s current vacancy is 11.7%; it should dip to 9.7% in the coming year, according to Leisch. The upshot of the office overview is Dallas will remain at a level that keeps rents flat while Fort Worth is sure to see some gains, he said.

In the industrial sector, the region ranks fourth in the nation for absorption, with 9.4 million sf as its historical average. Of the 4.5 million sf that’s under construction, one-third is preleased, Leisch said. “The fundamentals of this product type look promising,” he added. “Demand is likely to outstrip deliveries over the next 12 months.”

Including retail into the presentation for the first time this year, Leisch said absorption is running 1.2 million sf in a 127-million-sf market. He predicted “asking rents will continue to climb up at a nicely metered rate.”

Leisch reported the multifamily sector made its first gains in same-store rent growth after 2.5 years of negative effective rents. “We should see some improvement in the periods ahead,” he added, citing an overall 8.8% vacancy versus the 6.4% national average.

Leisch said the condo market is gaining in popularity and pricing in Dallas/Fort Worth. He predicted the year will end with a 57% increase in sales over last year’s 825. To date this year, there have been 650 condo sales. However, prices are running 25% to 40% higher than last year. As for the pipeline, mostly adaptive reuse product, shows 1,704 units will come on line this year, up 237 from last year.

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
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


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 © 2021 ALM Media Properties, LLC. All Rights Reserved.