Office sales plunged in the first two months of 2023, but Dallas-Fort Worth is still performing well compared to other major markets.
From January to February, office sales in DFW amounted to $227 million, down 80 percent from $1.1 billion in the same period in 2022, the Dallas Morning News reported, citing data from Yardi Systems’ CommercialEdge. The good news: North Texas still ranks ninth in the nation for office sales so far this year.
DFW led the nation in commercial sales volume in 2022 for the third year in a row, totalling $42.5 billion. However, rising interest rates, decreased demand and upcoming maturity dates have caused markets around the country to cool since they peaked last summer, and that has finally caught up with North Texas.
“With so many headwinds impacting the sector, office landlords are faced with tough decisions as the future of offices remains unclear, especially as sales activity continues to rapidly decelerate,” Yardi Systems’ analysts said in the report.
The largest office sales so far include Reserve Capital Partners’ purchase of the 12-story Crestview Tower, at 105 Decker Court in Irving, and Charter Holdings’ acquisition of the seven-story Founders Square at 500 Jackson Street in Dallas.
Net office leasing dropped by nearly 680,000 square feet amid lingering pandemic-related issues, as companies continuously struggle to lure employees back to the office.
Demand is likely to remain low in 2023 due to the sheer quantity of developments in the works. About 5.6 million square feet of projects are underway, and just 30 percent of the new office space under development is pre-leased, the outlet said.
Elsewhere in Texas, Houston ranked third in the nation for office sales on Yardi Systems’ list, with $431 million to start the year.
—Quinn Donoghue
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