As strong job growth over the past decade has brought more and more investors to Texas, many of these buyers have looked to office product due to the appealing going-in returns that the property type offers. In addition, many cross-product owners look at office investing to make higher returns outside of their current portfolios.
As buyers look toward the office market, there are many factors that need to be considered before making an informed decision. Along with these basic considerations, the impacts of COVID-19 on real estate investing are also important to understand when looking at an office deal.
The Dallas-Fort Worth (DFW) market in particular has experienced an influx of cross-product buyers from other asset types such as retail, multifamily and self-storage during this cycle. Owners who seek to invest in office product do so as a result of the higher going-in return that occurs.
This rate is usually higher than the return they are getting in their current portfolios and drives their desire to purchase office investments. All asset classes are different and so are their opportunities, whether immediate or long-term. Understanding what sets office apart from other types of commercial investments is key to a successful operating strategy.
Read more about key factors to consider when purchasing office property using the link below:
Cody Payne is a senior vice president in the Dallas-Fort Worth office of Colliers International focusing on capital markets advisory and disposition services of Class A and B office product.