Get Out While the Gettin’s Good

With over 1,000 office buildings on the market for sale today, the DFW market has reached a 5-year high in property owners trying to cash in on their holdings. This is according to Costar, a commercial real estate research firm.

And more of the buildings available for sale are class A and class B properties. This has resulted in the asking price average increasing by 12% as well at a little more than $170 per square foot.

Why is this happening? Speculation abounds on that question. One theory mentioned by Costar is that DFW is riding on the coattails of more-expensive markets like San Francisco and New York where properties are much more expensive. Investors scared off by those prices are moving to markets which are a bit more affordable. Of course, that explains the buy side and not the sell side.

Others speculate that sellers are just trying to cash in at the top of the market. Many have been expecting a downturn in the economy for a while now since we’re 10 years into an expansion. But unemployment just hit a 50-year low at 3.5%. That doesn’t sound like a downturn to me. So, it appears that many are fearing the “expectation” of a recession without having an actual recession.

Of course, a recession will occur at some point. It just doesn’t appear to be happening quite yet.

But it’s still better to sell before the recession hits.

Bob Gibbons is a Real Estate Advisor & Tenant Advocate (also known as a tenant rep) with REATA Commercial Realty, Inc. which is a tenant advisory firm based in Plano, Texas. Bob serves companies in Plano, Frisco, McKinney, Allen, Richardson, Addison, Dallas, and the surrounding areas and specializes in companies that lease or buy office and warehouse properties.