Fort Worth commercial real estate activity is struggling to hold its own, much like other markets in the North Dallas area.
Fort Worth’s commercial real estate market was at a standstill in 2009, much to the chagrin of many landlords and building owners, and it looks like 2010 will be much of the same.
Disconnect between Buyers and Sellers
One of the problems still existing in the Fort Worth commercial real estate market is that there appears to be a general disconnect between buyers and sellers regarding pricing for commercial real estate. In fact, much of the Fort Worth commercial real estate activity is done out of necessity, such as an upcoming loan expiration or low occupancy. In other words, the only activity seen is by those who absolutely must buy or sell.
Most commercial real estate tenants are staying put, at least for the foreseeable future, thereby creating a virtual standstill for Fort Worth commercial real estate activity.
Many buyers are also waiting on the sidelines for distressed sales to come into the market. However, given the fact that many lenders are delaying foreclosure proceedings, there isn’t a whole lot of activity on this side of the market. Unless lenders begin foreclosing, the activity will remain close to dead.
Landlords and Renters at a Standstill
Fort Worth commercial real estate activity in the office sector is also expected to see much of the same as landlords hold out for more money and tenants hold their ground on rent prices.
Overall vacancy rates for downtown Fort Worth Class A office space is at 11 percent, but when sublease space is taken into consideration this number nearly doubles.
Many businesses, still unsure of where the economy is headed and whether improvements will happen sooner than later, are simply waiting it out to see what happens.
This factor has certainly played a large role in driving down the rental rates of Fort Worth office space.
There are many incentives, however, being offered by landlords to get tenants in the door. Many leases are falling $1 to $2 per square foot, and many landlords are offering one month of free rent for every year the lease is signed.