North Texas CRE Sales Plummet 70% in 1H23

While North Texas continues to be a coveted location for real estate, it has recently recorded a significant drop in commercial property sales during the first half of the year.

North Texas CRE Sales Plummet 70% in 1H23

While North Texas continues to be a coveted location for real estate, it has recently recorded a significant drop in commercial property sales during the first half of the year.

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Good morning. North Texas commercial property sales slumped nearly 70% YoY, yet a silver lining emerges. Montgomery County, MD, has put a 6% cap on rent increases. Meanwhile, major online real estate marketplaces will now include hidden costs in upfront pricing.

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North Texas Sees 70% Drop in CRE Sales in 1H23

More than $8B in North TX CRE sales traded hands in 1H23, down 70% YoY (Dallas Morning News)

North Texas may still be a real estate darling, but the region recently reported a substantial decline in commercial property sales in the year's first half.

Slippery sales slope: North Texas brokerages aren’t panicking yet, but the numbers are perhaps panic-worthy. The upper half of the Lone Star state saw CRE purchases drop 70% in the first half of 2023. However, despite the decline, the DFW region still recorded more than $8B in CRE investments, the second-highest in total CRE deals for the year's first six months. Back in 2022, DFW led the nation with over $42.5B in CRE transactions.

Multifamily dominance: Most CRE trades in North Texas were tied to apartments, accounting for more than half of the $8.1B total volume. Only three other markets among the top 25 saw multifamily sales constitute more than half of total deal volume, including Austin, Seattle, and San Francisco. Notably, a large portfolio sale of 25 apartment assets contributed significantly to the Dallas market, comprising 10% of the total volume.

Property sector breakdown: In the first half of 2023, approximately $4.2B worth of apartment properties changed hands in the DFW area, making it the metro area with the highest multifamily sales. Industrial followed with about $1.6B in sales. LA also saw a significant share of sales come from industrial properties, amounting to around $3.8B. Additionally, DFW recorded sales of over $940M in retail buildings, $827M in offices, and more than $383M in hotels.


Persistent challenges: North Texas CRE is facing growing challenges shared by the rest of the country, including rising rates and a decline in office building demand since the start of the pandemic. In 2Q23, CRE deal volume experienced a double-digit decline, continuing the trend from the previous year. Despite slower declines in CRE prices, potential buyers and current owners still have differing expectations, stifling deals across most property sectors.


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Maryland Council Adopts Rent Stabilization Bill With 6% Cap

The Montgomery County Council at its Tuesday meeting

After months of deliberation, the Montgomery County Council in Maryland has finally passed a rent stabilization bill, capping increases at 6%.

The people have spoken: Montgomery County, a suburb of Washington DC, approved a rent stabilization bill with a maximum increase cap of 6% for apartments built before 2000 with a 7-4 vote. Landlords will be able to increase rents by the rate of inflation plus 3%, but cannot exceed the 6% cap. The new measure aims to address concerns over rising rental costs and provide stability for tenants in the area.

Alternatives considered: During the debate, council members weighed two other proposals. One suggested a cap of 3% to keep rental increases minimal, while the other proposed an "anti-rent-gouging" policy allowing for increases of up to 8% plus inflation. The final measure, which compromised with all parties at 6%, is scheduled to take effect 91 days after being signed into law by County Executive Marc Elrich.

Not too hot, not too cold: The ‘Goldilocks’ cap is expected to have significant implications for the rental market in Montgomery County. It will limit the ability of landlords to drastically raise rents and provide a measure of affordability for residents. But at the same time, the bill includes exemptions for certain units, like apartments owned by landlords with four or fewer units, licensed assisted living facilities and nursing homes, and buildings that are less than 23 years old.


Deal with it, folks: The Apartment and Office Building Association of Metropolitan Washington expressed disappointment, arguing that the legislation could hinder investment and worsen housing affordability. Rent control continues to be a hot-button topic across the country, with measures to limit rent increases being considered in Chicago and Boston. New York landlords have even petitioned the Supreme Court to challenge the constitutionality of 2019 rent stabilization laws. 


The White House Aims to Eliminate Unjustified Fees in Apartment Rentals

In a big win for renters, major online real estate marketplaces, including Zillow (ZW),, and, have agreed to disclose hidden costs in their listed pricing for apartments.

Wait, what hidden costs? The Biden Administration has called for greater clarity on added charges that renters may face when applying for and finalizing rent agreements. These formerly ‘hidden’ charges, such as application and convenience fees, can add up to hundreds of dollars per month. Additionally, renters may encounter fees for online rent payment, mail sorting, and inexplicable "January fees."

Cracking down on "junk fees": By including hidden costs in upfront pricing, online real estate marketplaces aim to eliminate surprise charges and provide greater transparency. This will help renters make more informed decisions and manage their finances effectively. The White House has also been addressing price gouging in airfare and concert tickets.

Combating limited competition: The Agriculture Department is partnering with 31 state attorneys general to address the high prices resulting from limited competition in the food industry. Last year, the administration found that only four companies in each beef, pork, and poultry market controlled over 50% of the product nationwide.

Updated guidelines for mergers: Meanwhile, the Justice Department, in collaboration with the FTC, released updated draft guidelines for evaluating the impact of mergers on competition. These guidelines ensure that mergers do not eliminate all contenders or create a company that controls essential products needed by rivals. The revisions reflect changes in the economy and the agency's interpretation of legal precedent.


Sweeping changes incoming: The U.S. hasn’t seen an anti-monopoly shakeup like this one since the good old days when Microsoft (MSFT) was forced to split up. Updating tried-and-true guidelines for the evaluation of mergers and including hidden fees in upfront pricing reflects the Biden administration's commitment to maintaining competition in the modern economy. Rental listings are just part of the bigger equation.

✍️ Daily Picks
  • Distressed CRE delights: Distressed CRE assets in 2023–2024 present a unique opportunity for patient investors as lenders sell notes and mortgages instead of foreclosing properties.

  • Dotting ‘i’s and crossing ‘t’s: The Biden administration is starting to focus on getting rid of rental housing "junk fees" that burden families with unnecessary costs.

  • Multifamily market plunges: YTD multifamily sales volume in greater LA dropped 66% compared to last year, down to $2.3B from $6.6B, with an 8% YOY decrease in average price per unit.

  • Legal chaos: Location Ventures CEO Rishi Kapoor steps down amid scandals and lawsuits as the company's $300M in projects sit in jeopardy.

  • McLaughlin returns: Former Compass CA President, Mark McLaughlin, returns to the residential brokerage as chief real estate strategist after leaving in 2021 to focus on his VC fund.

  • Shopping superstar: Soccer star Lionel Messi was spotted shopping at a Publix in Sea Ranch Lakes, Broward County, potentially living in the private waterfront community.

  • Building debacles: 1 Park Row Development is seeking $15M in damages from MJM Associates Construction and JNR Flooring due to alleged construction mistakes and project delays.

  • Showing out for housing: NY Mayor Eric Adams received $1.3M in campaign donations while Governor Kathy Hochul received $4.5M, mostly from real estate leaders.

  • The rise of Jersey City: Namdar Group secures a $160M bridge loan for 9 Homestead Place, a 27-story mixed-use building in Jersey City.

📈 Chart of the Day


The shift to remote work, prompted by the pandemic, has resulted in significant behavioral changes affecting urban centers. With office attendance decreasing, city dwellers are migrating away, and consumers are favoring online shopping over physical stores.

Consequently, we anticipate a substantial decrease in demand for office and retail spaces by 2030. Although the demand for residential spaces is not expected to drop as significantly, it's still projected to be lower than pre-pandemic levels.

These trends could lead to slower price and rent growth, rendering vast amounts of office space obsolete and potentially triggering significant macroeconomic complications.

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