The Dallas Office Space Market: Holding out for Better News
By Grace on Oct 5, 2009 in Commercial Real Estate
There’s word that commercial property sales in Dallas are due to hit a 20-year low this year, and that’s not good news for anyone.
Where do we Stand?
To better gauge where this market is headed, consider that office sales in the second quarter of 2009 were an astounding 97 percent lower than during the peak of the market in 2007. In terms of money, just $16 billion of office building sales are expected by year’s end.
In addition, many of the commercial property mortgages secured over the last few years are quickly headed for disaster, with a record number of mortgage defaults expected to hit the Dallas market by year’s end.
Many experts estimate that any mortgage secured since 2005 is in danger of going into default.
With all this bad news circulating throughout the industry, is it any wonder that commercial property leases are stagnant and sales are virtually nonexistent?
Because businesses started cutting back as the recession took its hold, the demand for office space plummeted by early 2009 and has gone nowhere fast.
Even those buying and selling office space in Dallas are having a hard time, as comparables are extremely hard to come by these days.
A Bright Spot on the Horizon?
Amazingly, however, there are some analysts who see the office market leveling out and the economy beginning to turn around in Dallas, much to the relief of many anxious commercial space owners and investors.
Another bright spot in all of this mess is the fact that Dallas will not see the loss of the high-tech jobs like they did during the last recession. In addition, unlike other areas of the country, Dallas stepped back and didn’t fall into the building-boom trap. The economy in Dallas is therefore stronger than other large metro areas throughout the country.
Right now, Dallas-Fort Worth construction is at one-third of its level in 2008, and is expected to take additional hits as the year progresses.
Throughout the office market meltdown, there are still a handful of office construction projects still taking place, like the 17 McKinney Tower in Uptown and the Saint Ann Court, also in Uptown.
