March 9, 2017
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Much of the recent Connect Dallas conference focused on how well the region was doing, thanks to job creation and corporate relocation. Speakers chatting it up at the “Investing in Dallas: Shaping the City for Tomorrow,” which was moderated by JLL’s Walter Bialas, indicated that investors seem to be just as bullish on Big D and surrounding environs.
Stephen Luik with Cresent Real Estate LLC, discussed the office side of investment, pointing out that foreign investors are looking at Dallas with interest. The last four major office trades in the Dallas area went to foreign investors, he said. “They bought so much in the coastal markets, that the yields are so thin there,” Luik added. “So, they’re coming to Dallas.”
Greysteel’s Doug Banerjee and Maria Zubillaga with Hunt Mortgage Group said the multifamily sector is doing well, with 4% rent growth projected. Banerjee went on to say that the investment competition was fierce, especially among Class B and Class C space. When it came to Class A product, however, “Institutions are taking a step back, to see how many of the newer units will be absorbed,” he said. Banerjee said that there could be a slight increase in vacancy (which is at 3.8%), but “I expect most of it will get absorbed.”
And in the area of multifamily financing, Zubillaga told Connect Dallas attendees that, despite the increase in interest rates, they’re still at historic lows. “It’s still a good time to place permanent debt on properties, as interest rates will go up further this year,” she advised. She added that Fannie Mae and Freddie Mac also continue to be bullish on Dallas. “They feel good about the market,” she said. “But they’re a little more hesitant about new construction.”
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