DALLAS–Xceligent recently released its Q1 industrial and office reports, both of which show a great looking first quarter. For the office market, Dallas/Fort Worth saw 770,000 square feet of positive absorption, as compared to the first quarter 2013, which say 660,000 square feet of absorption. On the other hand, the industrial market was more active in the first three months of 2014 that it has been in awhile. The market saw almost 4 million square feet of absorption in the first quarter and nearly 18 million square feet during 2013.
GlobeSt.com caught up with Chris Summers, Xceligent market director for the Dallas/Fort Worth area. In this exclusive interview he shares his thoughts on the first quarter results and where the market is heading.
GlobeSt.com: A number of industry leaders have mentioned they see 2014 shaping up to be the year of industrial. Would you agree with that?
Summers: There are many indicators that would lead me to similar thinking. One if these is new construction. There is currently over 17 million sf underway and multiple projects gearing up like Southport Logistics Park (close to 9 million square feet proposed) in south Dallas. Last year DFW had multiple larger deals commence like Procter & Gamble and Williams Sonoma. The feedback that we receive from our broker advisory boards is that we will continue to see this same trend moving forward thru this year.
GlobeSt.com: With 17 million SF of new construction underway, (according to Xceligent’s Q1 Dallas industrial report) and a lot of it on a spec basis, do you think there is demand in the market for all that supply? Will we be seeing more construction announcements?
Summers: With large deals like LG Logistics and Plymouth Packaging having been announced it looks like there is demand. Dallas has always been a market with lots of opportunity for growth and strategic development.
GlobeSt.com: What would you say are the strengths of the Dallas industrial market?
Summers:Dallas, and Texas in general, are business friendly and focused on growth. Many companies look at Texas as a great opportunity to expand or relocate.
GlobeSt.com: With low vacancy rates and 5.5 million SF of new office development, (according to Xceligent’s Q1 Dallas office report) are you seeing a flight to quality, with companies leaving class B buildings behind in favor of amenity-rich class A space?
Summers: It is across the spectrum. It is great to see companies like KPMG and Jackson Walker moving into their new spaces. With 7 relocating to Cypress Waters we also see opportunities that creates both in Dallas and Las Colinas.
GlobeSt.com: Was there anything in the first quarter that surprised you in the office market?
Summers: Q1 was surprising because of the amount of new construction announced such as State Farm and Raytheon.
GlobeSt.com: How do you expect the rest of 2014 to shape up?
Summers: 2014 will see continued growth both in companies expanding their businesses and taking down more space as well as new companies entering the market. Some of the deals we are tracking that will take occupancy later this year and in 2015, in the office sector include: State Farm, FedEx, KPMG, Jackson Walker, Frost Bank, Invesco; and in the industrial sector: Procter & Gamble, Williams Sonoma, Victory Packaging, AdvoCare, Cornerstone Systems.
Download the full Q1 2014 Dallas Industrial report by clicking here.
Download the full Q1 2014 Dallas Office report by clicking here.