The region, though, won't escape unscathed: it's going to get even slower than it is now. In taking the region's temperature for CRE fundamentals, Gregory Leisch, president and CEO of Delta Associates, the research arm of Transwestern Commercial Services, said Dallas/Fort Worth is destined to stay "reasonably healthy if we continue to grow jobs." His crystal ball shows North Texas will add 30,000 jobs per year for the next three years, falling 26,500 jobs short of its average annual gain.
"It's a sufficient rate for a sturdy real estate market if we don't overproduce product," Leisch told brokers, investors and bankers at last night's TrendLines, the firm's sixth annual forecast event for Dallas/Fort Worth held at Northwood Club in North Dallas. He pointed out that the region added 59,800 jobs between January and July, starting into the hard times as the US leader for new jobs.
Transwestern's leaders reassured the crowd that the economic climate is primed with opportunity. And their marching orders are to perceive the glass as half full and not half empty, accept the reality and be proactive. Larry Heard, Transwestern's president and CEO, said the brokerage firm did just that earlier this year when it cleared all its corporate debt "to put ourselves into a position to take advantage of what's ahead."
Delivering the lay of the land in Dallas/Fort Worth and the nation, Leisch concurred with Transwestern's Heard and Jack Eimer, president of its Central region, that the economic news might be tough to take, but it's laden with opportunity. "We've seen these times before and we'll see them again," Leisch said. "We will survive this."
Leisch said it's far from being a Great Depression. The fix to restore consumer confidence lies in restarting the housing market, positive media coverage, stabilizing credit markets, a rising US dollar and less volatile stock markets.
Leisch's predictions for the next two years for Dallas/Fort Worth calls for rent growth of 0.5% to 1% for the office sector; 1% to 2% for the multifamily market; and 0.5% for the industrial sector. And, he believes there will be a rise in cap rates of 35 to 75 basis points annually. "Our core industries are holding up well," he said about the region.
Each year, Transwestern honors a local company or executive as its TrendSetter. This year's recipient was Granite Properties Inc. and its president and CEO Michael W. Dardick.
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