Monday, February 02, 2009

Dallas-Fort Worth Real Estate Execs don’t expect quick market turnaround

Don’t expect any quick deals in Dallas-Fort Worth’s stalled real estate market.

Oh, investors are out there, but they’re waiting for the right time to strike.

“There has been a huge amount of money lost by getting in too early,” said Herbert Weitzman, who recently formed an acquisition partnership with Dallas investor Craig Hall.

Weitzman - who’s also chief executive of Dallas-based retail broker Weitzman Group - was on a panel of industry veterans who spoke Wednesday evening at a meeting of the Society of Industrial and Office Realtors.

“Things are not going to get better very soon,” he said. “The deals that are going to happen are going to be later in the year.

“There is going to be a huge amount of retail REO [foreclosed property] coming on the market later this year.”

Property sales in North Texas have slowed to a trickle because of the lack of credit and worries about the economy.

“We are all hoping there is a lot of pent-up capital on the sidelines that wants to get back into real estate,” said Jack Fraker, a top investment broker with CB Richard Ellis. Fraker said his property sales were off 65 percent or more in 2008.

At the same time, property values have fallen.

“There is still a disconnect between the sellers and the buyers,” he said. “Hopefully that will change later this year.

“Most of the institutional investors have tried to avoid writing down their real estate values,” Fraker said. “They can’t hide from that for long.”

The rents that investors can get from Dallas office buildings are already falling, said CB Richard Ellis’ Phil Puckett. “I see some landlords trying to hang onto what was,” Puckett said.

While overall office vacancies in North Texas are at about 20 percent, they won’t stay there, he said.

“It’s going to go up,” Puckett said. “The question is how much space are we going to get back from company closings?”

Steve Brown

Industrial property brokers are counting on a supply of well-located buildings and competitive pricing to lure tenants from other areas of the country.

“Our mantra this year is Dallas is ‘on sale,’ ” said Tom Pearson of Colliers International. “Companies are going to continue to focus on lower costs.”

In 2008, Dallas-Fort Worth led the country in both industrial leasing and new space put on the market, Pearson said.

There will be almost no more warehouse construction in 2009, he said.

“Hopefully, that will give us some time to absorb all this new space coming on the market.”