Trepp: Despite Weaknesses, DFW Fifth-Strongest CRE Market; Houston Ninth

Dallas Skyline Downtown
Dallas-Fort Worth is the fifth-strongest commercial real estate market in a ranking of the top 15 largest metropolitan statistical areas while Houston, the only other Texas metro on the list, came in at No. 9 in a new Trepp report.

DFW catapulted into the top five due to its strong population growth and employment numbers, driven by quality of life and a low- to no-tax rate structure, but not all of its numbers were stellar.

“The Dallas-Fort Worth-Arlington MSA stands out among the top five MSAs due to its surprisingly high delinquency rate,” the report said. “Dallas’ lackluster delinquency performance is accompanied by its underwhelming occupancy rate of 89.20 percent.”

Dallas’ low occupancy and high delinquency rate (2.13%) are historical norms for the MSA, which ranked No. 13 in occupancy and eighth in delinquencies between 2010 and 2018.

The Houston-The Woodlands-Sugar Land MSA had a low delinquency rate of 1.23% but also a low occupancy rate of 89.74%. Its unemployment stood at 4.2%, higher than the national average.

“The Houston MSA has ranked last in occupancy over the last two years, with readings of 91.11% in 2017 and 90.80% in 2018,” according to the report.

“The (Houston) metro’s recent struggles in CMBS and non-CMBS performance can be linked to the shakeouts in the oil industry and, more recently, Hurricane Harvey,” Trepp said in the report.

Kerry Curry, Bisnow Dallas Ft.Worth

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