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The coronavirus may not be the death knell some economic forecasters expected for the commercial real estate market in Dallas-Fort Worth, but for the office market it's certainly no picnic either.
Anecdotal data from the market suggests office rates could decline as much as 3% even as industrial continues to perform, a blog post from Whitebox Real Estate President and Managing Director Grant Pruitt says.
"For office, we are already seeing a softening of the market with the deals we are working," Pruitt wrote. "In my opinion, if you are lucky, you will see a 3% decline in rate. But you are in that window as we speak, point being, I cannot tell the future, but in my best guess, this is a window to garner more concessions as we are evaluating how to go back to work and what the new workplace looks like."
Despite a decline in rates, Pruitt sees office stable for now and sees industrial in even better shape with increased demand in play.
Overall, when you subtract retail from the equation, the commercial real estate market in DFW is relatively in balance, Pruitt said.
"Most of the headlines people read are based on retail (which is to be expected), but I have yet to see bad news in office or industrial."
DFW is benefiting from companies more aggressively scouring the area after seeing how states other than Texas issued more onerous economic shutdowns during the coronavirus pandemic.
"In Dallas-Fort Worth, we are already seeing an increase of companies from California, New York and Chicago coming to the area," Pruitt said. "This has been a general trend over the last 10 years, but as a firm, especially over the last 30 days, we have been engaged to help companies from California to move to DFW. We expect this trend to continue to increase."
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