Dallas Real Estate Outlook

The Challenge after the whiplash of the dot-com stock market fall, investors turned to real estate. Bricks, Mortar, Land. It all seemed solid. Due to our Low interest rates drew more American buyers, while the weak condition of the dollar attracted foreign speculators. Recently, though, there has been talk of a dot-com-style bubble about to the sudden burst in real estate.

Although several markets particularly on the coasts are overvalued, and prices could drop or may go higher, good job growth and population growth mean nationwide demand probably won't slow drastically. Meanwhile, the industry leaders expects the areas with strong job markets and good income-tax receipts to continue to chug along, a few places such as Florida's Miami-Dade and Broward counties, Nevada's Clark County, and Arizona's Maricopa County are the best chosen areas by the marketing professionals.

The Commercial Dallas Real Estate Outlook is based on different patterns and should continue upward. Job growth means employers need more space to work properly and efficiently, and in markets such as Washington, D.C., and midtown Manhattan where there's not too much room to build, that demand will shove lease rates higher. Eventually, high occupancy rates and low area of the work space should create more supply by attracting developers in areas such like Dallas and Phoenix where there is room to build. "If you get into single-digit vacancy rates, generally speaking, you see speculative development activity coming back," says Kevin Hayes, head of CRESA Partners, an international real estate advisory firm. "And it is coming back, but it's coming back slowly."

Higher interest rates are pushing up development costs and create more difficulties for the developers are the scarcity and price of construction materials. Katrina and Rita hurricanes knocked out some supply--New Orleans-area cement factories, and high oil prices are raising prices for insulation, plastics, and roofing.

What You Can Plan for an increase in commercial rents. We would predict that there will be several markets in 2006 that will reach to new heights all-time; almost all of southern California, Washington, D.C., and midtown New York. If you have a choice in where you're leasing, look for cities with job growth and lots of space. Dallas, Salt Lake City, Denver, San Diego, Atlanta, downtown New York, and Phoenix are considered good values.

The combination of rising interest rates and rising commercial rents will mean companies must rethink their real estate strategy. Growing companies usually sign operating leases, since they free up cash and provide all the services by taking the cost as hidden costs. And some companies tell their customers about all the service costs they are taking from them in details, but one the professional Mr. Hayes says variations on operating leases can be lucrative. Leases with a purchase option give you a strike price within a specified time frame; after buying, you can either flip the property or stay on as an owner depends on your will (and replace the landlord). "Net profit interests" leases give the tenant a share from the landlord's profits and are often used when a developer needs to sign a tenant in order to get the profit on the construction going. However, sometimes our Professional warns, it's becoming a landlord's market, and when occupancy rates of the land are high, landlords usually force would be tenants to buy outright or sign a strict operating lease particularly with existing tenants. "The only way that a tenant is going to effectively secure a favorable transaction in a renewal circumstance is to convincingly threaten to leave," Hayes says.

What Insiders Watch

The National Association of Realtors tracks median sale prices for residential homes. The Mortgage Bankers Association forecasts mort age statistics.

The Real Estate Outlook & Research Corp. produces regular reports on commercial real estate.

Job growth and population growth are together the key drivers of the real estate market. After a ten years boom that sent rents soaring and sale prices through the roof, the commercial Dallas real estate market is slowing down as the rapidly shrinking economy leads businesses to bail out of leases and defer office expansions. Also When the Vacancy rates are continuously rising and the rents are falling from Boston to San Francisco. Frenzied bidding wars among would-be tenants, common a year ago, are no more.

The commercial real estate market is loosening up as companies, especially high-tech firms, are either pulling out or downsizing their office space due to the difference in the market interest rates, area and location that we offer. And also due to the high hiring rates of the property. These reversals are sharpest where the high-tech frenzy has been the greatest. Commercial rental rates in the big cities such as Phoenix and Dallas have dropped 10% to 15%, while San Francisco is the home of many high-tech firms, and has seen a sharper decline since the last few years. In Silicon Valley, rents have dropped 25%.

As a result of these faltering numbers and decline in the interest rates and the rents, Equis Corp. has been called upon by numerous major corporations for advice on how to handle outlook real estate matters in today's troubled and much different economy. We prefer to separate these tips into macro tips and micro tips for buyers, renters, lessors, investors and sellers.

For Advertisement among the macro tips, or pieces of advice affecting a whole building or a portfolio, we encourage buying, selling, renting or leasing while prices are down, and renegotiating leases during a down market to take advantage of most favorable rates. When selling or liquidating, we are working to find some ways to reduce lease operations are to consolidate holdings and facilities into fewer buildings.

Our micro tips, or those applying to parts of a building or to internal space utilization etc, include getting rid of excess warehouse space by unloading surplus inventory and parts, and providing necessary space for the employers to work more efficiently, and ordering less to cut down on space requirements. We also advocate "lean manufacturing," a practice in which manufacturing space is compressed and internal aisles are reduced in width. Troy, Mich.- based Delphi Automotive, are one of our clients, is implementing "lean manufacturing," a process which the client also calls "rationalizing their real estate."