Two months into 2012, and indicators are signaling a local market uptick and a healing in our economy. We are seeing more of a promise of sovereign funds entering our office market in a potentially significant way, and it is bringing a renewed excitement to the landscape. Whereas in days gone by we were passed over by those same funds for the higher profile “gateway” cities, mirrored more recently by certain institutional players who narrowed their focus and abandoned various primary markets to the gateways for liquidity purposes, the foreign players are now taking note of the pluses in the Lone Star State. So also are new capital and acquisition players that have never previously entered our market, and some who did indeed enter it only in the last couple of years have loudly said they are here to stay.
Even better news yet, the lending community for the most part is predicting more capital is targeted at commercial real estate in 2012 and in much greater volumes and across multiple sources, i.e., commercial banks, life companies, and, yes, even CMBS originators. Unlike the roller-coaster ride last year, CMBS originators are predicting a 2012 volume as high as $50 billion. Last Friday’s market rally was an uplifting indication of good things to come, fueled by better than expected U.S. home sales and higher consumer confidence levels.
So, once again we can confidently say we are glad to live in Texas and more pointedly Dallas. And why shouldn’t we? We are continuing to see the fruits of the efforts of our chambers of commerce and EDC ambassadors who have traveled incessantly across the country to court corporations and growth companies that want a better environment and quality of life for their business, employees, and respective families. Last week’s announcement of Copart’s relocation from California to Dallas this summer, where they will create 250 jobs in North Texas by 2015, is a win in anybody’s book, especially the owner of a stabilized asset!
Positive momentum kind of creeps up on you, and then one day the culmination makes you sit up and take notice. Case in point: Even through the last three years of downturn, struggle and in some cases borderline starvation, we saw glimmers of hope in commitments made to the DFW area through build-to-suit activity and uptick in year-over-year sales volume in the office sector. We have seen an incredible transformation and rebirth of downtown Dallas districts and still promises of great things to come from investors who have built, renovated, and re-branded to make it better.
Our skyline now has a world class architectural bridge and will soon have a much-awaited park on Woodall Rodgers that will tie the central business district and Uptown together and provide the urban dweller with an even greater quality of life. I could go on and on, citing the uniqueness of our Art’s District, future Museum of Natural Science & History, medical districts, etc., but we all know this and at least one thing more. The desirability and marketability of assets in DFW will continue to get better over time and bring higher rewards as we have built it, and now they will come.
Susan Gwin is an executive director for Cushman & Wakefield of Texas Inc.’s capital markets group. Contact her at [email protected].
