By Greg Langston (Dallas)
Healthy job growth is helping drive investment in the Dallas real estate market, with the office market in particular experiencing nation-leading expansion. This growth is driven by a significant number of corporate relocations and expansions, increasing the value of existing space while promoting additional development. Demand is expected to remain high for the remainder of 2014, but current construction projects are expected to be complete in 2015, freeing up additional space and relieving the tight demand.
Healthy job growth is helping drive investment in the Dallas real estate market, with the office market in particular experiencing nation-leading expansion. This growth is driven by a significant number of corporate relocations and expansions, increasing the value of existing space while promoting additional development. Demand is expected to remain high for the remainder of 2014, but current construction projects are expected to be complete in 2015, freeing up additional space and relieving the tight demand.
These trends, and others, are explored in greater detail in
Avison Young’s Dallas Office Market Monitor for the Third Quarter of 2014. Read
the full report here.
The Dallas-Fort Worth market is experiencing steady job
growth, with 101,500 jobs being added over the 12 months ending in August 2013.
In fact, every economic sector--excluding manufacturing and information--has
experienced employment gains over the period. As you might expect, these
factors have also led to robust growth in single-family and multi-family
construction and, ultimately, the Dallas office market.
We can connect this job growth to the significant number of
corporate relocations and expansions in the market, with corporations like
FedEx and Toyota expanding their D-FW holdings. Although Downtown Dallas
remains a top market, we’re seeing marked growth in the suburbs, most notably
North Dallas. All in all, there are over 7.4 million square feet of office
space currently under construction, 70% of which is already pre-leased.
All of these factors have combined to make the Dallas office
market one of the nation’s top performers. The market absorbed over 1.8 million
square feet of space during the third quarter, bringing year-to-date absorption
numbers above 2013’s final tally with months to go. Although vacancy is down
and gross asking rates are up, we expect to see some relief in terms of asking
rates once major construction projects are completed in 2015.
In summary, the Dallas office market has continued its trend
of steady growth through the third quarter of 2014. Thanks is no small part due
to favorable business conditions in the region--and the job growth that comes
as a result--we can look forward to the next year with some degree of optimism.
Read the full Dallas Office Market Monitor for the Third
Quarter of 2014. or send us an email to learn more.
