The Dallas-Fort Worth area led the country in commercial real estate investment last year.
North Texas topped all the other major U.S. metros for commercial property deals for the third year in a row – even with a slowdown in transactions in the final months of 2022.
More than $42.5 billion in commercial properties were sold in the D-FW area last year, according to the latest estimate from MSCI Inc.
The 2022 North Texas commercial real estate volume was down 15% from 2021′s record total of deals.
But property activity in D-FW far surpassed second-ranked Los Angeles with $30.4 billion in transactions and third place Atlanta’s $28.9 million in sales.
North Texas “wrested the top slot from Manhattan at the onset of the pandemic and has held it ever since,” MSCI analysts write in their year-end report. “Dallas was the leading market for every property sector but for offices and retail.”
Apartment sales accounted for more than half of D-FW’s 2022 property investment volume.
The $615 million sale of downtown Dallas Trammell Crow Center office tower made it onto MSCI’s list of the country’s biggest real estate transactions last year.
And the McKinney & Olive tower in Uptown Dallas sold in a deal valued at almost $400 million.
The two-tower Spectrum Center office complex in Addison sold to Acram Group and New York-based Oak Hill Advisors for $114.3 million.
And Austin-based Capital Commercial Investments acquired the almost 300-acre Exxon Mobil campus in Irving for more than $110 million.
Nationwide commercial property sales fell 15% in 2022 to $729 billion down from record high transactions in 2021.
“The headline figures on real estate investment sales declined in 2022 but growth rates are only part of the story,” MSCI analysts said. “The level of activity for the full year was elevated relative to history, and 2022 was the second most active year for sales volume over time.
“Distressed asset sales remained a minimal portion of the investment market in 2022, representing only 1% of all deal activity.”
Texas’ major metro areas have emerged as the country’s leading property markets thanks to strong job growth and huge migrations to the state.
The D-FW as rated as one of the U.S. metro areas expected to have the strongest overall real estate market in 2023, behind only Nashville, according to the recently released annual Emerging Trends in Real Estate forecast by the Urban Land Institute and PriceWaterhouse Coopers.
And some economists are predicting Texas’ real estate markets will be more resilient if there is a national recession.
Houston ranked fourth nationally for commercial property sales last year with more than $24 billion in deals. Austin was in the 10th spot with $14 billion in sales. “Austin did post declining deal activity but held the #10 slot as it had in 2021,” according to MSCI.
The D-FW area had the largest dollar volume of apartment sales of any U.S. market.
And North Texas ranked fourth nationally for office sales last year with about $4.7 billion in property changing hands, according to a new estimate from Yardi Systems Inc.
The D-FW is among the five U.S. markets with the most office construction under way. About 7.7 million square feet of office buildings were being built in the area at the end of 2022, according to Yardi Systems’ CommercialEdge report.