Dallas Area ranks 12th in Commercial Real Estate Forecast

Dallas Morning News

 

Dallas-Fort Worth gets middling marks in the latest commercial real estate market forecast.

The closely watched "Emerging Trends in Real Estate" report usually favors coastal and Northeastern markets, and this year is no exception.

Washington, D.C., New York, Boston , San Francisco and San Jose, Calif., were on the top 10 list of U.S. markets to watch for commercial property investment opportunities.

Some Texas cities also did well. Austin ranked fourth, and Houston was eighth in the annual list.

Although D-FW significantly outpaces other Texas cities and most U.S. markets in economic growth, the area was rated 12th out of more than 50 U.S. markets in the 2011 forecast

The D-FW area got an even lower rating for development prospects in the year ahead.

The survey showed that industry executives across the country are optimistic that 2011 with be a turnaround year.

"Investors with cash could have excellent opportunities to seize market bottom plays by recapitalizing cash-starved owners or buying foreclosed assets," said Stephen Blank, a senior fellow with the Urban Land Institute, which sponsored the study with accounting firm PricewaterhouseCoopers.

The report gives D-FW high marks for stable housing prices and low business costs.

But North Texas was slammed for its persistently high office vacancy rates and the ease of building new projects here.

The D-FW area was second only to Los Angeles as one of the best places to buy industrial properties.

Missed Payment Rate Jumps on Dallas-Area Commercial Property

The Dallas News

An increasing number of Dallas-area commercial properties are falling behind in their mortgage payments.

At the end of last month, the missed payment rate for Dallas-area buildings with securitized mortgages was more than 33 percent higher than the national average, according to a new report by Trepp LLC.

The New York-based analyst tracks thousands of commercial properties across the country that are financed with securitized mortgages.

More than 9 percent of Dallas-area commercial properties with securitized debt were behind in payments at the end of February, according to Trepp's report, released Wednesday. The national delinquency rate was 6.72 percent.

The Dallas-area late loan rate has increased almost 200 percent from a year ago, said Paul Mancuso, vice president of Trepp, which provides real estate data and analytics.

"Although elevated, the [Dallas] region is well below the double-digit delinquency rates experienced in troubled states such as Arizona, Nevada, Florida and Michigan," he said.

Almost 160 Dallas-area commercial and investment properties are on the list of troubled real estate deals. The debt on these properties adds up to about $1.28 billion.

Among the largest real estate deals cited in the report is the Four Seasons Resort and Club in Las Colinas, which has been posted for foreclosure.

"Excluding the delinquent $175 million loan to the Four Seasons Resort and Club, the current delinquency rate would decrease significantly to 7.9 percent," Mancuso said.

Downtown Dallas' Harwood Center office tower and the Village on the Parkway shopping center in Addison are also on Trepp's watch list.

The Dallas apartments sector with the highest mortgage delinquency rate is hotels. Almost 17 percent of securitized hotel loans here were behind in payments at the end of February. The office building delinquency rate was just over 12 percent.

Loan data from properties with securitized debt provides an important window into the health of the commercial real estate sector.

Trepp said the nationwide increase in late loans in February was 23 basis points,. It was the smallest increase in six months, but late loans are still at an all-time high.

In 2009, the number of commercial properties posted for foreclosure such as Dallas-Fort Worth  apartments area jumped almost 27 percent.