NAI's Miller Gives Mid-Year Status Report

DALLAS—Just past the mid-year mark, GlobeSt.com's Anna Caplan spoke with NAI Robert Lynn president Mark Miller to find out his local take on the state of the industry.

GlobeSt.com: At the mid-year mark, how would you describe the state of the DFW market?

Mark Miller: Very positive. The businesses NAI Robert Lynn is working with are all doing well. We are seeing significant activity, including clients looking to expand. Dallas, and Texas overall, have always been viewed as one of the top places in the country to conduct business. With companies such as Toyota, Liberty Mutual and smaller companies like Hilti, relocating their headquarters to DFW, it has spurred the economy and will continue to do so as other companies follow suit. We are seeing a healthy market with a demand for space across all industry sectors--office, industrial, retail, etc.

GlobeSt.com: What are some trends that you're noticing?

Miller: It has become much more of a challenge to close deals. Tenants who have not moved or renewed their leases in more than five years have lower rate expectations. With less vacancies and increased rates, it has become a landlord's market, causing sticker shock. With a large expectation gap between tenants and landlords and both parties remaining bullish, it takes time to find a middle ground.

GlobeSt.com: Any concerns or challenges to the local market?

Miller: There are more transactions in the mid-size range – 10,000-20,000 square feet on the office side and 50,000-100,000 square feet on the industrial side. A surplus of large space is available; however, some landlords are holding on to spaces with large, rental square footage in order to close large transactions versus splitting the rentable space to accommodate multiple mid-size transactions. With vacancy percentages low and landlords holding out for larger transactions, it is harder to find space for the mid-size deals. Other challenges, or constant looming threats, include the national economy and foreign affairs.

If the stock market drops or the recent oil price fluctuations don't settle, or even if affairs in the Middle East take a negative turn, it could negatively affect the market. Although the local market is strong in DFW, it's important not to forget how the national and global stage can impact business at home.

GlobeSt.com: How will this impact the larger developments in the area?

Miller: Timing is critical. There is always risk, but at some point, one of these looming factors may take a negative turn, drastically impacting the economy. Now is the time to follow through with breaking ground on developments and aggressively close deals while the market is thriving.

GlobeSt.com: What can we look forward to for the remainder of the year?

Miller: I believe the market will remain positive with strong activity throughout 2015.