North Texas set records with big commercial property buys in 2019 - The Dallas Morning News

North Texas was at the top of the shopping list for commercial property buyers in 2019.

With days left before the end of the year, investors are scrambling to get deals closed and figure out where the Dallas-Fort Worth real estate market is headed in 2020.

So far this year, the D-FW area has seen close to $20 billion in commercial property sales, and more transactions are set to finish in the final weeks of 2019.

“If you look at the top sales year-to-date in major markets, Manhattan is number one total commercial real estate sales, Los Angeles is number two, San Francisco is number three and Dallas is number four,” said Ted Jones, chief economist with Stewart Title. “Dallas is a phenomenal market.”

The biggest North Texas commercial property buy so far in 2019 was the $584 million sale of energy firm Pioneer Natural Resources’ new headquarters in Irving. The office campus was acquired by a partnership of domestic and international investors.

And with a sales price of about $700 per square foot, downtown Dallas’ new 1900 Pearl office tower set a new office price record for D-FW. The Arts District high-rise was bought by the State Teachers Retirement System of Ohio for $180 million.

The 1900 Pearl Tower sold for a record price of almost $700 per square foot.(Louis DeLuca / Staff Photographer)

Another downtown Dallas office tower — the 5-year-old KPMG Plaza — is expected to fetch about $240 million in a sale to Spanish investors.

“There are a couple of large transactions that are going to get us close to last year’s sales numbers,” said John Alvarado, senior vice president with CBRE. “Last year we tracked about $4.8 billion in office investment sales activity.

“Through the third quarter, that number is $2.9 billion.”

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Alvarado expects the first half of 2020 to see more commercial property transactions in North Texas.

But he wouldn’t be surprised to see a slowdown later next year.

“Looking in the second half of the year, we will have some headwinds” caused by the presidential election, Alvarado said. “Some people will want to wait and see until they commit capital.”

While North Texas property prices touched new high points this year, Alvarado doesn’t see commercial real estate values in the area hitting a ceiling.

“We are still at a relative value compared to what we are seeing in some other markets,” he said.

The KPMG Plaza tower on Ross Avenue is selling for an estimated $240 million.(Vanessa Gavalya | Hall Group)

With D-FW leading the country in employment growth in the most recent figures, investors who would previously have skipped over North Texas are looking for deals.

“As long as Dallas continues to grow, we will continue to see investors wanting to be here,” said Creighton Stark, executive vice president with Colliers International. “There is money being specifically designated for Dallas.

“Dallas is now getting looks from groups that would never have considered us.”

Several of the biggest D-FW commercial property transactions of 2019 have come from international investors, including an almost $100 million acquisition of a major interest in downtown Dallas’ AT&T Whitacre Tower. A Korean investment group made that buy.

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And the Pioneer Natural Resources campus acquisition in Las Colinas was funded in part by Middle Eastern investors.

“We have some great momentum in the market that should keep us going strong into 2020,” Stark said.

Biggest property deals of 2019.(DMN research)

The Solana business park on State Highway 114 in Westlake sold for more than $125 million.(DMN files / GlenStar)

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North Texas set records with big commercial property buys in 2019 - The Dallas Morning News
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