X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

FORT WORTH-Fort Worth and Tarrant County have been more or less immune to the economic woes hitting other parts of the nation. However, experts at the recent Tarrant County Commercial Real Estate Forecast symposium pointed out that the trend could be headed the other way.

Keynote speaker Matt Valley, editor-in-chief of National Real Estate Investor said the good news is that unemployment in Tarrant County is at 5.5%. The not-so-good news is that job creation will determine real estate trends and “there isn’t a lot of job security these days,” he acknowledged.

Daniel P. Wright, director with Integra Realty Resources’ local office gave a list of predictions across the board that included increased cap rates, decreased rental rates and investors losing equity. This, in turn, will lead to distressed property sales. “In other words, a lot of California investors will return their property back to Texas,” Wright commented.

The retail side offered up some especially dour news. “As we head into 2009, we’ll see retailers continue to close non-profitable locations, while some close altogether,” remarks James M. Makens, president, the Makens Co. in Bedford, TX. “Full-price stores will feel it, while discount and membership stores will continue to do relatively well.”

Other speakers pointed out that the real estate business is cyclical. After some wonderful high points from the mid-2000s, we’re now on the down side. “The market, like the seasons, ebb and flow,” Locally based Village Homes LP partner Rob Sell commented. “We’re in the winter of the market, and have been for awhile.”

Jones Lang LaSalle Inc.’s George D. Duncan Jr., in the meantime, commented that the office side will likely experience negative absorption, the first time Fort Worth and Tarrant County have experienced something like this in years. “There’ll be office buildings that trade hands, but not necessarily because the owners want that to happen,” added Duncan, who is with the company’s Fort Worth office.

However, even amid the rather gloomy predictions, the speakers were somewhat optimistic. The fundamentals of job growth, particularly from the Barnett Shale, should help aid a quick turnaround when the economy starts to revive. Furthermore, Michael K. Berry, president with Dallas-based Hillwood Properties said the industrial side would likely outperform the other markets in terms of leasing, namely because of what’s on the ground today.

“I do believe we have a chance to make a few big national, or at least regional, consolidation deals,” he commented. “We’ll out-perform the other markets because of the fundamentals.”

Wright acknowledged things wouldn’t be nearly as bad as they were in the RTC days of the early 1990s. Sell remarked that with great interest rates, it could be a banner year for buyers. “Most developers are probably willing to make deals right now,” he comments.

Makens agrees that 2009 will be a great year for investment deals. He goes one step further, saying that rail-focused infrastructure could likely see the emergence of more emphasis on transit-oriented development, which will likely attract retail.

The experts also agreed this down cycle was past due. “2009 will be a challenging year, and it will be a slow process to get out of it,” Valley remarked. “But we needed for the bubble to burst. We needed some correction in the economy.”

Adds Duncan: “It could be stormy weather. Not that we won’t get through it. And not everyone will be affected.”

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?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

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