DFW Office Market Gathers Head of Steam

DALLAS—After a rather tepid 2017 performance, the US office market gathered a bit of steam in 2018, adding 76 million square feet of new office space and completing roughly 396 new projects in its top 40 most active markets for office completions. In fact, for the past 10 years, the US economy has had more than 110 consecutive months of growth, making this the second longest economic expansion since the Great Depression.

On a national level, 662 buildings and a staggering 115 million square feet of new office space are on track for delivery this year, according to Yardi Matrix data recorded up to April 9. Despite concerns about how the pace of development will be affected by tariff and trade wars, growing construction costs and labor shortages, the office sector is expected to hold up better than it has in earlier downturns. This is mainly due to more restrained lending practices, a more moderate pace of development and the concentration of new office properties in markets with significant job growth.

There was roughly 8.3 million square feet of new office space completed in Manhattan, Brooklyn and Queens in 2018, increasing the city’s 520 million square foot office inventory by 2% and landing it in first place among the top 40 markets for office deliveries.

Dallas office completions totaled 7 million square feet last year, second only to New York City. The metro had 31 completed projects in that square footage. Additional office projects are expected to deliver 6.6 million square feet of new space by the end of 2019.

“American Airlines’ four-building 1.8 million-square-foot Robert L. Crandall Global Support Campus in Fort Worth is the biggest office project to be completed in the DFW market and the fifth biggest in the country,” Lehel Harcsa, research analyst at CommercialCafe, tells GlobeSt.com. “This is followed by the three-building 1 million-square-foot JPMorgan Headquarters at Legacy West.”

Rounding out the to-be-completed list for this year are Pioneer Natural Resources Headquarters in Irving, TX with 1.125 million square feet set to deliver in October, followed by the Charles Schwab Westlake Campus/Phase I with 555,000 square feet in Westlake with a September delivery, Offices At The Realm with 235,921 square feet at The Colony slated for October delivery and Offices Two at Frisco Station with 210,000 square feet also with an October completion, GlobeSt.com learns.