Commercial property sales in Dallas-Fort Worth are perking up through the end of the third quarter after a mostly dormant first half of the year. Sales totaled $15.4 billion year to date through the end of the third quarter of 2024, up 12% compared to the same time last year.

Several observers have commented that buyers and sellers have focused on the Federal Reserve's recent 50-basis-point rate cut. However, lending rates are tightly related to the 10-year Treasury rate, which continues to trend near or above 4%. Still, market observers share that there remains a wide bid-ask spread among buyers and sellers across property types.

Interest in industrial space has been on the rise. Compared to the first three quarters of 2023, overall transactions are up 33% higher. Focusing on the third quarter in isolation, this estimated transaction volume has increased by almost 90% to the current value of $2.2 billion. This broke the region’s streak of nearly six consecutive quarters with transaction volumes under $2 billion and reflects an overall sentiment echoed by leaders in the industry that dealmaking would be back-ended to the second half of the year.

An additional factor is the proliferation of off-market deals in the current borrowing environment. Seen as an increasingly popular option for private buyers and sellers, these transactions allow owners to quickly flip properties and secure capital without drawing attention to more distressed assets in their portfolios.

Driving some of this expansion are large strategic trades like the sale leaseback of DHL Supply Chain’s newly completed, 1.2 million-square-foot warehouse in the Elizabeth Creek Gateway business park for $126 million. This transaction was one of the largest across the entire country during the third quarter and was the single-most expensive property to trade in Texas. The buying company, Ponte Gadera, a family office for Zara founder Amancio Ortega, stated earlier in the year that they would be active throughout 2024 in search of discounted properties for debt-free investors.

There are early signals that multifamily sales are turning a corner. While year-to-date sales of $5.2 billion are below the same level this time last year, the third quarter registered $3 billion, which is the highest quarterly volume since mid-2022. Executives within acquisitions have cited greater anticipation for deal-making as Dallas-Fort Worth’s supply picture is improving, thereby improving the prospects for rent growth and net operating income.

Some institutional players remain active, especially in submarkets that benefit from stable population growth and corporate presence. For example, the Ayla Stonebriar apartment complex was purchased in August as part of Equity Residential’s acquisition of Blackstone’s portfolio valued at $964 million. Equity targeted several Sun Belt markets in this move and has signaled a retreat from coastal markets, according to the latest earning calls.

Office sales have trended higher, even as an overall volume of $2.9 billion remains well below pre-2020 averages. Despite continued repricing in the market, occupiers have emerged as key players on the buy side.

Among the latest examples, chicken finger purveyor Raising Cane’s acquired The Campus at Legacy for the company’s restaurant support function. Located in Plano, the approximately 395,000-square-foot building was completed in 1988 and was previously part of Electronic Data Systems' headquarters decades ago. Another example includes Triumph Financial's acquisition of One Lincoln Park from Atlanta-based Piedmont Office Realty Trust earlier this year for $54 million, or about $210 per square foot. Piedmont purchased the building in 2013 for $56 million, or about $220 per square foot, reflecting a decline of about 5% compared to pricing 11 years ago.

Occupiers taking advantage of lower office values reflect their prevailing confidence in Dallas-Fort Worth. Almost all cases involve firms’ expansion within the market with plans to expand head count. These transactions also buoy office demand, especially among vintage buildings in prime office nodes.

Retail continues to benefit from the reshuffling of funds away from office. Shopping centers, especially those anchored by grocery stores or other major national users, have become highly sought-after properties, attracting both the usual private buyers as well as institutional firms.

Perhaps the most coveted of all these properties is the H-E-B-anchored shopping center. In late July, one of these properties in Waxahachie sold for more than $23 million — marking one of the biggest retail deals in Dallas-Fort Worth this year. The buyer, Kentucky-based BC Wood Properties, acquired the property from another out-of-state owner, Global Net Lease in New York.

On the other side of the development coin, H-E-B has gone forward with plans to acquire land from an outparcel connected to the former Fry’s Electronics location in North Irving. This 12.5-acre property is located right off I-635 and has been carved out from the rest of the land where the former 145,000-square-foot electronics storefront is located. The owner plans to retain this property and convert the building into a self-storage facility. The move is associated with the newest phase of H-E-B's expansion into the D-FW metroplex, where it first started in the rapidly growing outer communities before making its way toward more central locations like Irving and Bedford.