Dallas-Fort Worth dethrones Manhattan as nation's top CRE investment market, new report says

While every commercial real estate market has been impacted by the pandemic, North Texas was impacted the least of all U.S. markets.

This is according to new data from Real Capital Analytics, which ranked Dallas-Fort Worth as the No. 1 market for commercial real estate deals between January and November this year. Show Full Story

While total deal volume year-over-year has decreased by 28 percent in DFW, the region has seen $15.39 billion in commercial real estate deals close as of November. In terms of total deal volume in the U.S., Dallas has been ranked 5th in the country every year since 2015.

Manhattan, which has held the top spot every year since at least 2010, has fallen to fourth place with just under $11 billion in total deal volume. This represents a 56 percent decline year-over-year. The data includes sales of all major commercial property types, excluding development sites, and includes only deals of $2.5 million and more.

Holding second place, as it has since 2018, is Los Angeles with $14.93 billion in deal volume, followed by Atlanta with $11.37 billion in deals. Atlanta’s rise has been nothing short of spectacular, having been ranked 9th in total deal volume just last year.

“Deal activity for the year to date across all the top U.S. markets has fallen amidst the COVID-19 tumult. Dallas simply fell less than the other heavyweight markets,” the Real Capital Analytics report says.

Some local property types are selling better than others. While apartment sales haven't seemed to slow much since the year started, other asset types like hotels, retail and office buildings have been trading at a predictably slower pace. Leading the charge, however, has been industrial.

As commercial real estate investment in North Texas dipped 7.5 percent between second quarter of 2019 to second quarter of 2020, industrial investment grew 24.8 percent, according to Real Capital Analytics data compiled by CBRE.

A number of high-profile industrial sales have happened this year, including a 2.31 million-square-foot Home Depot distribution center, a $730 million portfolio that included 1.7 million square feet of local warehouse space, a $700 million portfolio featuring 1 million square feet locally, a 1.2 million-square-foot Stanley Black & Decker distribution center and at least two 1 million-square-foot Amazon fulfillment centers.

"Since about May or June, it's been full steam ahead in the market. We’ve jammed about 12 months of deals into the last six months of this year. This last half has seen a ton of velocity and pricing has been up about 5 to 8 percent of what we were at before all this," said Dustin Volz, managing director of Capital Markets at JLL. "We'll have a record year in 2020. This will be the busiest year that our team has ever had in DFW."