DFW Tops U.S. Metros in Commercial Property Deals for 3rd Year in a Row » Dallas Innovates

Dallas-Fort Worth has led all major US metros for commercial property deals for three years in a row after extending the streak in 2022.

That’s despite a slowdown in transactions in the final months of the year.

According to the latest MSCI Inc. estimate, more than $42.5 billion in commercial properties were sold in the DFW area in 2022, but that’s down 15% from 2021’s record total for deals.

“The headline figures on real estate investment sales declined in 2022, but growth rates are only part of the story,” MSCI analysts said in a report. “The level of activity for the full year was elevated relative to history, and 2022 was the second most active year for sales volume over time.”

Second-ranked Los Angeles trailed DFW with $30.4 billion in transactions and third place Atlanta registered $28.9 billion in sales.

North Texas “wrested the top slot from Manhattan at the onset of the pandemic and has held it ever since,” MSCI analysts said in the report. “Dallas was the leading market for every property sector but for offices and retail.”

Big deals and trends in transactions

Individual transactions also showed up in MCSI’s report, with the $615 million sale of Trammell Crow Center office tower in downtown Dallas making it onto MSCI’s list of the country’s biggest real estate transactions last year.

In Uptown, the McKinney & Olive tower sold in a transaction valued at nearly $400 million. In Addison, the two-tower Spectrum Center office complex sold to Acram Group and New York-based Oak Hill Advisors for $114.3 million.

And Austin-based Capital Commercial Investments acquired the nearly 300-acre Exxon Mobil campus in Irving for more than $110 million.

Nationwide, commercial property sales fell 15% in 2022 to $729 billion, down from record high transactions in 2021.

While there were notable office building transactions, apartment sales accounted for more than half of DFW’s property deals. DFW had the largest dollar volume of apartment sales nationally.

Job growth, relocations, and resilience

What’s steering the ship in Texas emerging as one of the nation’s top property markets? Experts say it’s strong job growth and major migrations to Texas.

The Dallas Morning News reported that Dallas-Fort Worth is rated as one of the US metro areas predicted to show the strongest overall real estate market in 2023, behind Nashville. That’s according to a recently released annual Emerging Trends in Real Estate forecast by the Urban Land Institute and PriceWaterhouse Coopers.

The newspaper said that some economists are predicting Texas’ real estate markets will be more resilient should there be a national recession.

Other Texas cities in the report include Houston at fourth nationally for commercial property sales last year with more than $24 billion in deals. Austin ranked 10th with $14 billion in sales.

North Texas ranked fourth nationally for office sales last year with about $4.7 billion in property changing hands, a new estimate from Yardi Systems Inc. said.

Also, DFW is among the top five US markets with the most office construction underground. At year’s end, roughly 7.7 million square feet of office buildings were being built in North Texas, according to Yardi Systems’ CommercialEdge report.

Dallas-based CBRE is No. 1 in CRE sales

MSCI also said that for the 17th straight year, Dallas-based CBRE was the top-ranked firm for commercial real estate investment sales nationally in 2022.

MSCI Real Assets credited CBRE with a 15.6% market share across all property types nationwide last year. That’s a 640 basis point lead over the nearest competitor.

CBRE also held the top spot in RCA’s US rankings across the five largest asset classes—office (17.8% market share), industrial (22.1%), retail (13.1%), multifamily (14.0%), and hotels (11.8%).

“As the world leader in the acquisition, disposition and recapitalization of investment properties, we use deep market intelligence, trusted relationships and seamless execution to anticipate trends, command capital and maximize returns for our clients,” Chris Ludeman, global president of Capital Markets for CBRE, said in a statement. “While we are privileged to lead the MSCI Real Assets rankings across many sectors, we continue to work to lengthen our stride to provide ever better advice to our clients and the industry.”

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