Is DFW the most profitable CRE investment market in the nation?

Investors say they plan to increase spending in 2024

CBRE Predicts DFW Market Will Have Highest Returns This Year

Real estate investors are hot on Dallas-Fort Worth, although not without reservations.

DFW is the strongest-performing market in the nation for total property returns in the first quarter, and it is the most attractive investment market nationwide, according to a CBRE Research survey, the Dallas Morning News reported

North Texas’ success coincides with broader challenges facing commercial real estate, including high interest rates, tight lending standards and discrepancies between buyers and sellers. But after a sluggish 2023 that was defined by subdued sales and mounting distress in the office sector, the industry is poised for a bounce-back year. 

More than half of the surveyed investors expressed intentions to increase their investments in 2024 compared to last year, while nearly three-quarters anticipate selling the same amount or more. Moreover, there’s a prevailing expectation among investors that transaction activity will accelerate in the latter half of the year, both at the market level and within their respective firms.

In anticipation of a potentially improved capital markets environment, developers in North Texas are already making moves to finance projects, while investment firms are gearing up for potential market distress among overleveraged entities. 

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Hints of potential rate cuts from Federal Reserve Chair Jerome Powell during a recent speech have buoyed optimism. 

Multifamily assets remain the top preference among investors, followed closely by industrial and logistics properties, the outlet reported. While DFW is expected to see a dip in construction starts compared to previous years, it’s still poised to outpace many other metros in the United States.

The survey’s respondents primarily comprised developers, owners and operators, along with representatives from real estate funds, private equity funds and real estate investment trusts.

—Quinn Donoghue 

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