Monday, November 23, 2009

Fed economist: Dallas-Fort Worth job losses will top 100,000

North Texas job losses will top 100,000 this year – more than current estimates, a top local economist warns.

“Our numbers are showing that we’ve lost almost 115,000 jobs this year,” D’Ann Petersen, business economist with the Federal Reserve Bank of Dallas, said Friday at a real estate outlook panel organized by The Dallas Morning News. “We are actually performing worse than the other Texas metro areas.”

The latest local employment statistics from the Texas Workforce Commission show that the Dallas-Fort Worth area lost about 60,000 jobs in October compared to a year earlier. The non-seasonally adjusted numbers say that the area shed another 9,800 jobs just between September and October.

But Petersen said those statistics understate employment losses in North Texas.

“The reason it hurts so bad here is it happened so quickly and we weren’t ready for it,” she told several hundred commercial real estate industry members at the meeting. “We had been one of the fastest-growing markets in the country.

Petersen is the second local analyst in two days to forecast a job lost of 100,000 or more for D-FW this year.

Greg Willet, vice president of apartment analyst MPF Research, said at a Thursday meeting that employment declines here are much larger than what is being reported.

“We think when the revisions for the data come out in 2010, they will reveal the D-FW area is struggling moreso than the numbers have actually suggested," Willett said.

That’s bad news for the commercial real estate market, which is already struggling with a national recession and credit crunch.

“Real estate depends on job growth,” Petersen said. “Our forecast doesn’t bode well for housing and commercial real estate.

Top commercial real estate executives aren’t looking for a sharp rebound in 2010.

“I don’t think next year is going to be much different from this year,” said Clay Smith, CEO of retail property firm SRS Real Estate Partners. “You are going to see very little if any new retail development for a while.

“When you build it hoping they will come – well, they are not coming,” he said.

Smith said most major retailers are bracing for a dismal holiday shopping season.

Overall, he said the local and regional merchants are doing the best.

“Clearly there are some retailers that are hanging on,” Smith said. “They have been betting on the holiday season to bring them out of it, and it’s not going to do it.”

Still, Smith said, Texas is in the best shape of any market across the country his firm works in.

A recent flurry of office building leases is a good sign of what businesses are thinking, said Jim Yoder, managing director of Jones Lang LaSalle.

“The panic has ended and people are trying to position their business,” Yoder said. “Unfortunately for us, there is not a lot of velocity in the market.

“Many tenants are still pushing off decisions.”

Yoder said he had been hopeful that Dallas would “dodge the bullet” in the national recession.

“But our rents are down 10 percent, and 13 to 15 percent in some markets,” he said. “We expect building vacancies to peak in mid to late 2010.

Larry Hamilton – one of the few developers in town still looking for loans to do new deals – said the credit market is still frozen.

“We think we got close to the last construction loan in America in 2008 for our Aloft Hotel,” which just opened in downtown Dallas, Hamilton said.

Hamilton, whose company is the largest developer of downtown residential space, is trying to borrow about $20 million to kick off redevelopment of downtown’s historic Lone Star Gas buildings. That’s about half of what the project will cost.

“A lot of bankers are tempted – they’d like to do it,” Hamilton said. “But something is blocking them.”

By STEVE BROWN / The Dallas Morning News