More Than $8 Billion in DFW Commercial Properties Sold This Year

More than $8 billion in North Texas commercial properties traded in the first half of 2023.

North Texas commercial property purchases plunged in the first half of 2023.

But even with an almost 70% drop in sales, more than $8 billion in Dallas-Fort Worth commercial real estate investments were recorded, according to the latest estimate by MSCI Inc.

DFW ranked second behind Los Angeles for total commercial property deals in the first six months of this year. In 2022, DFW led the nation in commercial real estate transactions with more than $42.5 billion in sales.

“Dallas was bumped down a spot from the top ranking it has held in the first half of each year since 2020,” according to the MSCI report. “More than half of the $8.1 billion in property trades were tied to apartments.

“Only three other markets among the top 25 markets saw multifamily sales constitute more than half of total deal volume: Austin, Seattle and San Francisco,” researchers said. “One large portfolio sale of 25 apartment assets propelled activity in the Dallas market and accounted for 10% of total volume.”

Investor Cadillac Fairview purchased ownership in the DFW rental units from developer Lincoln Property Co.

Almost $4.2 billion in DFW apartment properties changed hands in the first half of the year — the most for any metro area. And about $1.6 billion in industrial buildings were sold to investors.

The largest share of Los Angeles’ sales — some $3.8 billion — were also industrial properties, according to MSCI analysts.

More than $940 million in DFW retail buildings traded through midyear and about $827 million in offices. More than $383 million in hotels in the area were sold.

North Texas topped much larger markets of Manhattan and Chicago for commercial real estate deals so far this year. Nationwide, property transactions were down almost 60% year over year.

“Commercial real estate deal volume was almost hardwired to fall at double-digit rates in the second quarter,” MSCI analysts said. “Sale activity for the second quarter a year ago closed at a record high level, higher even than the frantic pace set before the Global Financial Crisis.

“The declines in commercial property prices may be moderating, but potential buyers and current owners are still too far apart on price expectations for higher levels of deal volume to close across most property sectors.”

The commercial property sector has been slammed by recent increases in interest rates and the decline office building demand since the start of the pandemic.

The total distressed U.S. commercial real estate market grew to almost $72 billion at midyear with a fourth consecutive quarter of increase.

“Offices constituted more than 80% of the distress added during the second quarter, with $6.7 billion of net inflows” according to MSCI.

Source: Dallas Morning News