1223 Economic Snapshot
Content
LOCAL ECONOMIC SNAPSHOT | COMMERCIAL REAL ESTATE
North Texas office market bouncing back
By STEVE BROWN
Real Estate Editor [email protected]
By TROY OXFORD
Staff Artist [email protected]
The North Texas office market has roared out of the recession with new construction and a resurgence in leasing. With Dallas-Fort Worth at the top of the list of the country’s fastestgrowing job markets, expanding and relocating businesses are scrambling to lock in additional office space. Rents are rising in most local business districts as the supply of available space is shrinking. While developers are rushing to build office projects, the amount of construction is still small compared with previous building cycles.
Dallas-area construction
Office building construction is at its highest level since 2007 and is expected to increase further. 5.4 million square feet
Where’s the new office space?
Most of the office space under construction in North Texas is in the Telecom Corridor and along Dallas North Tollway in West Plano and Frisco.
Total square footage of space under construction in each business district
Top office leasing markets
35E
6 million square feet
West PlanoFrisco 1.4 million
75
5
4
Las Colinas-Irving 333,515 Preston Center 190,000
Telecom Corridor 1.8 million North Central Expressway 250,000
The Telecom Corridor and West Plano and Frisco are the top business districts for net office leasing increases in 2013.
Total square footage net leased
Telecom Corridor
1.1 million
3
635
West Plano-Frisco
965,354
2
Arlington-Midcities 75,000
30
UptownTurtle Creek 154,000
45 20
Las Colinas-Irving
687,236
1
360
Downtown 454,500
Uptown-Turtle Creek
249,367
Preston Center
83,979
0
’02
’13
Leasing
Net office leasing in North Texas is on track this year to be the strongest since 2006.
Net change in occupied office space
5 million square feet 4 3 2 1 0 -1 -2 -3 ’02 ’13
Vacancy
Overall office vacancy for each year.
30% 25% 20% 15% 10% 5% 0 2000
Rents
North Texas average office rents haven’t regained everything lost in the recession, but rental rates are higher in some districts.
Average price per square foot
$25 $20 $15 $10 $5 $0 ’13 ’02 ’13
Top construction projects
The largest office developments in the Dallas-Fort Worth area as of third quarter 2013.
1. State Farm Insurance regional campus • 1.5 million square feet • Plano Road and Bush Turnpike, Richardson • Developer: KDC
2. Hall Arts Center • 500,000 square feet • Ross Avenue in the Arts District in downtown Dallas • Developer: Hall Financial
3. Legacy Tower • 342,000 square feet • Dallas North Tollway and Legacy Drive, Plano • Developer: Trammell Crow
4. Granite Park IV • 300,000 square feet • Near Dallas North Tollway and State Highway 121, Plano • Developer: Granite Properties
5. 3001 Dallas Parkway • 200,000 square feet • Dallas North Tollway at Gaylord Drive, Frisco • Developer: Hall Financial
NOTE: 2013 figures are for third quarter; SOURCE: Cushman & Wakefield of Texas.
The bottom line
“We know there is going to be quite a bit of construction. There are 17 speculative buildings coming up. Construction is the highest since 2008. And I think you will see people who have been talking about building a building go ahead.” “I think we are in the fourth inning of a solid nine-inning game. We have had very robust office leasing activity and have filled up lots of the big blocks of space. We’ve got two or three more years of solid, robust growth.” “The North Texas office building market is in a sweet spot right now. Business demand is growing with our economy, and development activity is unlikely to get out of hand. As long as job growth is strong, the office sector will do well.”
Bill McClung, executive vice president, Cushman & Wakefield
Jeff Ellerman, vice chairman, CBRE Group
Steve Brown, real estate editor, The Dallas Morning News
North Texas office market bouncing back
By STEVE BROWN
Real Estate Editor [email protected]
By TROY OXFORD
Staff Artist [email protected]
The North Texas office market has roared out of the recession with new construction and a resurgence in leasing. With Dallas-Fort Worth at the top of the list of the country’s fastestgrowing job markets, expanding and relocating businesses are scrambling to lock in additional office space. Rents are rising in most local business districts as the supply of available space is shrinking. While developers are rushing to build office projects, the amount of construction is still small compared with previous building cycles.
Dallas-area construction
Office building construction is at its highest level since 2007 and is expected to increase further. 5.4 million square feet
Where’s the new office space?
Most of the office space under construction in North Texas is in the Telecom Corridor and along Dallas North Tollway in West Plano and Frisco.
Total square footage of space under construction in each business district
Top office leasing markets
35E
6 million square feet
West PlanoFrisco 1.4 million
75
5
4
Las Colinas-Irving 333,515 Preston Center 190,000
Telecom Corridor 1.8 million North Central Expressway 250,000
The Telecom Corridor and West Plano and Frisco are the top business districts for net office leasing increases in 2013.
Total square footage net leased
Telecom Corridor
1.1 million
3
635
West Plano-Frisco
965,354
2
Arlington-Midcities 75,000
30
UptownTurtle Creek 154,000
45 20
Las Colinas-Irving
687,236
1
360
Downtown 454,500
Uptown-Turtle Creek
249,367
Preston Center
83,979
0
’02
’13
Leasing
Net office leasing in North Texas is on track this year to be the strongest since 2006.
Net change in occupied office space
5 million square feet 4 3 2 1 0 -1 -2 -3 ’02 ’13
Vacancy
Overall office vacancy for each year.
30% 25% 20% 15% 10% 5% 0 2000
Rents
North Texas average office rents haven’t regained everything lost in the recession, but rental rates are higher in some districts.
Average price per square foot
$25 $20 $15 $10 $5 $0 ’13 ’02 ’13
Top construction projects
The largest office developments in the Dallas-Fort Worth area as of third quarter 2013.
1. State Farm Insurance regional campus • 1.5 million square feet • Plano Road and Bush Turnpike, Richardson • Developer: KDC
2. Hall Arts Center • 500,000 square feet • Ross Avenue in the Arts District in downtown Dallas • Developer: Hall Financial
3. Legacy Tower • 342,000 square feet • Dallas North Tollway and Legacy Drive, Plano • Developer: Trammell Crow
4. Granite Park IV • 300,000 square feet • Near Dallas North Tollway and State Highway 121, Plano • Developer: Granite Properties
5. 3001 Dallas Parkway • 200,000 square feet • Dallas North Tollway at Gaylord Drive, Frisco • Developer: Hall Financial
NOTE: 2013 figures are for third quarter; SOURCE: Cushman & Wakefield of Texas.
The bottom line
“We know there is going to be quite a bit of construction. There are 17 speculative buildings coming up. Construction is the highest since 2008. And I think you will see people who have been talking about building a building go ahead.” “I think we are in the fourth inning of a solid nine-inning game. We have had very robust office leasing activity and have filled up lots of the big blocks of space. We’ve got two or three more years of solid, robust growth.” “The North Texas office building market is in a sweet spot right now. Business demand is growing with our economy, and development activity is unlikely to get out of hand. As long as job growth is strong, the office sector will do well.”
Bill McClung, executive vice president, Cushman & Wakefield
Jeff Ellerman, vice chairman, CBRE Group
Steve Brown, real estate editor, The Dallas Morning News
