Warehouses at DFW International Airport, landmark buildings in downtown Dallas, Uptown high-rises — the list of major properties just listed for sale is growing.

During the early months of the COVID-19 pandemic, commercial property sellers headed for the sidelines. Now that the local economy is starting to rebound, more investment properties are coming up for sale.

While there are still big questions about how quickly business will rebound and what property changes are permanent, building owners and potential investors are lining up to make deals.

“We are now beginning the new cycle,” said John Alvarado, vice chairman in the Dallas office of commercial property firm Newmark Knight Frank. “We are seeing a 3,000% increase in activity — both inbound calls from buyers looking for product and sellers considering bringing their assets to the market.

“It feels significantly better than back in April, May and June.”

In the early days of the pandemic, some properties were taken off the market and most buyers hit the pause button as the business shutdowns and layoffs from COVID-19 grew.

But in the past 60 to 90 days, more Dallas-Fort Worth commercial properties have been tagged for sale, including Uptown Dallas’ landmark Crescent complex and Renaissance Tower, one of downtown’s largest skyscrapers.

Dozens of other buildings around North Texas — big and small — are appearing in real estate brokers’ listings.

Alvarado said buyer demand is strongest for industrial, apartments and life science properties.

“Those three sectors around the country are experiencing a V-shaped recovery or better,” he said.

The office buildings and retail in Uptown Dallas' Crescent complex are on the market.
The office buildings and retail in Uptown Dallas’ Crescent complex are on the market.(Lawrence Jenkins / Special Contributor)

Hotels and retail are expected to lag, Alvarado said.

The surge in work-from-home and the addition of social distancing needs created by the pandemic have clouded the office building sector’s outlook.

“People are wrestling with how tenants are going to use office space going forward,” Alvarado said.

Unlike in previous downturns, there’s plenty of money looking for Texas property buys.

“Record amounts of capital have been raised,” he said. “There will be some generational opportunities to pick up assets at a reduction of the previous owner’s cost or replacement costs.”

Longtime real estate market analysts say they’re encouraged by the uptick in sales listings.

“I believe we will see a deals-driven recovery, absent an unmanageable spike in cases or a further economic lockdown,” said R. Byron Carlock, a partner in PricewaterhouseCoopers’ real estate practice. “With bond yields at a protracted low, investment dollars are attracted to private equity and real estate and combinations therein.”

Carlock said investors will still be cautious.

“The dislocations in retail and hospitality will require continued restructurings, and it’s too early to tell about the lasting effects in office,” he said.

While the hotel market is expected to take years to recover, that doesn’t mean there won’t be buyers.

Downtown Dallas’ landmark Magnolia Hotel was recently put up for sale and is already attracting interest.

“The balance of this year and into next year, we are going to see a lot of buying opportunities,” said Hodges Ward Elliott managing director John Bourret, who is marketing the Magnolia. “There will be a wide variety of hotels on the market — some distressed and some not distressed.”

JLL senior managing director Andrew Levy said Dallas appears to be a winner in the economic and real estate rebound.

“Dallas is emerging as an early market, recovering better than a lot of the others,” he said. “The Sun Belt markets with Dallas as kind of a leader are meaningfully outperforming the historic darlings of our business, the gateway cities” on the coasts.

Unlike during previous economic downturns, Levy thinks the real estate market will come back faster this time.

“A lot of investors are viewing COVID as a short-term event that we will recover from quickly, as opposed to previous cycles,” he said. “There is not a lot of distress in the market — particularly in Dallas.

“Sellers are being very selective about the assets they are bringing to sell.”

The Dallas-Fort Worth area was one of the top markets in the country for commercial property sales in the first half of 2020, due to some huge property transactions before the pandemic hit.

“Overall sales around the country of all property types are down in a very big way — down 40% to 60% overall,” Levy said.

He said D-FW commercial property transaction totals are down 39% from a year ago.

“That compares to San Francisco that’s down 50% and Manhattan, down bigger than that,” Levy said. “Generally speaking, Dallas is outperforming a lot of markets.”

Downtown Dallas' 56-story Renaissance Tower, with its lighted towers on the roof, is one of the biggest properties offered for sale during the pandemic.
Downtown Dallas’ 56-story Renaissance Tower, with its lighted towers on the roof, is one of the biggest properties offered for sale during the pandemic.(Lawrence Jenkins / Special Contributor)
Doctors look at a lung CT image at a hospital in Xiaogan,China.