The Dallas-Forth Worth area, although caught up in the weak commercial real estate market like much of the country, may not have as much to worry about, thanks to a strong job market. This area still out performs when it comes to providing jobs, thereby buoying the commercial real estate sector.
Commercial Market Continues to Struggle Nationwide
Federal Reserve Chairman Ben Bernanke recently remarked that the demand for commercial properties remains down across the nation, thereby causing a “sharp deterioration in the credit quality of commercial real estate loans on the banks’ books and on loans that back commercial mortgage-backed securities.”
He also warned that many banks may be facing the decision to either roll over their maturing debt or foreclose on many of their loans. Because of this, most economists see 2010 as a tough year for the commercial real estate sector.
Job Growth Driving Dallas Commercial Market
The risk of mortgage-backed securities isn’t due to affect Dallas as much as other cities, however, because the job growth in this area continues to drive the Dallas commercial real estate market. Many economists, as a result, see the economy in Dallas really taking off by 2011, which will further help commercial real estate because of the new activity expected in the commercial market.
Most analysts also agree that the Dallas-Fort Worth area will not experience the market decline of the 1980s; in fact, they see the commercial real estate slowly improving as the economy improves.
A sharp rebound for 2010 isn’t expected; in particular, retail growth will be all but stagnant for the better part of the upcoming year. And, as we know all too well, the commercial real estate market relies heavily on the retail market.
Even despite the lackluster commercial sector, there has been a nice increase of office building leases in the Dallas area as of late, thereby indicating that the general panic of 2009 is over and that individuals are looking to move forward with their businesses.