With Q1 sales estimated around $500M, Dallas is on track to meet or exceed the past two years volume (which totaled $1B in 10; $1.7B in 11; and $2B in 12). Three factors influence those numbers.

1) Core CRE Generates Yield

Colliers International senior associate Ben Lurie and SVP Creighton Stark have sold 663k SF across seven properties in Dallas since December. They tell us that buyers are taking advantage of historically low interest rates to generate even more attractive dividend for buyers looking for yield. (Mom always said: "Strike while interest rates are low." Makes more sense now.) This has caused increasing demand for core, which has in turn driven down cap rates by 25 to 50 bps. Their most recent sale: the 74k SF Crestwood Center at 1200 W Walnut Hill Ln.

2) Special Servicers Working Out Loans

Sales volume has also been bolstered as owners, lenders, and special servicers work out troubled loan situations, especially on inferior quality or location properties, which may be non-stabilized (think Lindsay Lohan as an office tower). Investors looking for opportunistic acquisitions, and demanding a higher rate of return, have been attracted to these acquisitions, they tell us.However, lenders have been reticent to provide financing on these types of acquisitions, and many have traded on an all-cash basis.

3) Positive Occupancy Numbers

Creighton says the Dallas office sector has experienced several quarters of positive performance with the office vacancy rate at 15.5% at years end, down from 17% in 2011.Quoted rental rates are up 2.6% over that period.In Uptown, the vacancy rate has decreased from 18.5% in 2011 to 10.9% today and rental rates are up 3.6%.This positive momentum is likely to continue over the next six to 12 months, Ben says, with the strong job growth increasing demand for office space. Pair that with the dearth of new construction and it will be several years before seeing significant new development, they tell us.