DFW Leads Nation in Commercial Sales Through Q3

Dallas-Fort Worth remains king of commercial property sales, despite a sharp decline in investment activity.

The region ranked first in the nation with $13.2 billion in commercial real estate investment through the first nine months of 2023, surpassing Los Angeles’ $12.8 billion in transactions, the Dallas Morning News reported, citing data from MSCI.

DFW continues to put up prolific numbers, similarly to the midyear mark, even though commercial sales are down 64 percent year-over-year. Last year, the region amassed $42.5 billion in commercial investment, leading the nation for the third consecutive year.

The bulk of DFW’s commercial property investments stemmed from apartment sales, accounting for over half of investments at $6.84 billion. Industrial deals reached $2.9 million through three quarters, and retail transactions totaled $1.3 billion.

Between other major Texas markets, Houston ranked sixth in commercial sales, Austin ranked 10th and San Antonio took the 18th spot.

More broadly, the U.S. commercial real estate market has taken a hit this year due to high interest rates, a tight lending environment and a struggling office sector that’s still grappling with pandemic-related challenges, such as remote-work trends. All major U.S. markets experienced double-digit declines in deal volume at the three-quarter mark, with the sharpest decrease coming in office investments, plummeting by 65 percent year-over-year, the outlet reported.

Roughly $79.7 billion of U.S. commercial real estate was distressed through the third quarter, with office buildings accounting for $32.5 billion of this total. In DFW, approximately $1.4 billion of commercial properties are distressed, with the potential for an additional $8.8 billion in troubled properties.

“Still, the current distress level remains less than half that reached during the height of the Great Financial Crisis,” MSCI analysts wrote.

—Quinn Donoghue