Monday, April 03, 2017

D-FW faces $2B in commercial property debt

Almost $2 billion in commercial real estate debt is coming due in Dallas-Fort Worth this year.

Almost $2 billion in commercial real estate debt financed with securitized loans is coming due in Dallas-Fort Worth this year.

But a new report by analysts at Trepp LLC says North Texas has one of the strongest commercial real estate markets in the country and low commercial mortgage delinquency rates.

“Over the last decade, increased demand has strained core urban assets in major markets such as New York, Miami and Washington, D.C., and has driven investors to emerging New World Cities,” Trepp said in the report. “The Dallas-Fort Worth-Arlington MSA has risen to be one of top property investment markets in this category.”

And D-FW is one of the top U.S. markets for commercial mortgage-backed securities debt, the analysts said.

About $10 billion in North Texas commercial real estate debt is held by owners of these securities, Trepp said. A fifth of those loans come due this year, mostly for office and retail buildings.

But Trepp paints a positive picture of the D-FW market, with increasing rents and occupancy levels.

The report says the area “has a mere 2.6 percent of outstanding debt in special servicing, a low figure compared to the 5.9 percent in special servicing for all U.S. private-label commercial mortgage-backed securities.”

About $260 million in DFW commercial property loans is now in the hands of special servicers. Some of the biggest loans on their watch list are for Vista Ridge Mall in Lewisville and the old Zale headquarters in Irving.

The loans coming due this year have only a 1.4 percent delinquency rate, Trepp said.
“CMBS loans behind Dallasarea properties that are maturing between now and 2021 boast an average occupancy of almost 90 percent,” the researchers said.

The largest recent real estate debt offering to securities investors was a $452.3 million loan on the huge State Farm Insurance campus in Richardson.

 Steve Brown/Dallas Morning News