The research team uncovered 200,000 sf of direct-leased, WorldCom office space coming due in the next 18 months in Dallas-Fort Worth. The upshot is that it's unlikely it will get renewed. As previously reported by GlobeSt.com, the bulk of the DFW space or more than 1.5 million sf is situated in the Telecom Corridor in North Texas. According to G&E, WorldCom leases 752,030 and owns 746,482 sf, mostly all carrying Richardson or Plano addresses. For previous story, click here
San Antonio is home to a 400,000-sf, five-building campus. Houston plays host to 197,000 sf of office space.
True to form, the team presented best case, most likely and worst-case scenarios in packaging the report, put together prior to WorldCom's Chapter 11 filing and released this week. "The worst-case scenario has turned out to be the case scenario and at least we now know how low it can go," Robert Kramp, G&E's client services director for the Southern US, tells GlobeSt.com in an interview yesterday.
The worst-case scenario, as laid out by the team, was predicated on bankruptcy. Researchers forecast some one million sf in Texas alone will be returned to building owners. That could push the Richardson-Plano submarket vacancy to 33.8% and jack Houston's to 16% by midyear 2003.
The San Antonio campus is positioned 19 miles from the city's CBD. It started to rise in the 1990s and now consists of five buildings that under a worst-case scenario would be shuttered, pushing vacancy citywide to 21.1% for the short term. In actuality, the team says San Antonio is fairly well insulated in the overall picture due to its workforce and low cost of living.
According to G&E, there are no Houston leases poised to expire before midyear 2003. Even with a worst-case scenario, "Houston's office leasing market will see minimal adverse effects of the telecom giant's collapse," says the team.
Of the 8,300 WorldCom workers in Texas, close to 800 of the 8,300 in the DFW were laid off; 220 of 1,250 in San Antonio; and none of the 800 employees in Houston, according to G&E.
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