DALLAS—The Metroplex's diverse economy is boding well for area office assets. Strong absorption is spurring healthy rent gains as companies grow throughout the region. For a second consecutive year, deliveries will reach pre-recession levels, and this influx has been met with a high degree of interest as numerous businesses expand operations and take both new and existing space, according to a second half 2016 office report by Marcus & Millichap. More than 11 million square feet of office space is underway, including a number of large projects that are pre-leased to major companies.
Toyota Motor Corp.'s new 2.1 million-square-foot North American headquarters is currently underway in Plano and Liberty Mutual is building a 1.1 million-square-foot regional hub in the same Legacy West mixed-use development. Strong demand for office space is prompting other large office projects to move forward and the Verizon-backed Hidden Ridge transit-oriented development is awaiting approval. The project would add 3.5 million square feet of office space to the Irving area, attracting numerous companies.
Area builders will complete 6.3 million square feet of office space this year, falling slightly from the 6.9 million square feet delivered in 2015. Though declining from last year, completions remain nearly double the previous five-year average.
As office developers remain on a building spree with more square feet of office space under construction in the DFW area since 1999, further employment gains in office-using payrolls will help minimize supply imbalances. This will keep vacancy relatively steady from last year and encourage rent advances. Supply additions in the final two quarters of the year will keep vacancy from tightening further, and the rate will end 2016 at 19.5%, down 10 basis points from last year, says Marcus & Millichap.
Metroplex employers will create 105,000 positions during 2016, an annual gain of 3%. Office-using payrolls will expand by 3.3% as nearly 31,000 jobs are added. Last year, total employment grew by 126,800 workers, including 37,900 office-using positions. In addition, creative spaces and technology have become a competitive advantage for hiring, and developers, architects and designers are using them as demand drivers.
“We've seen an impact of more tech-enabled, modern and collaborative/creative space in the market and the demand for this type of space,” Joshua McLeod, associate vice president, Regus, tells GlobeSt.com in preparation for the upcoming RealShare conference in Dallas on November 16. “We have 51 business centers in Greater DFW and have opened five this year; most recently, a large coworking spaces center in Uptown at 1919 McKinney. We have seen a significant increase in the market demand for our newer spaces. Our spaces center opened at nearly 60% occupancy and is filling fast.”
Joining McLeod during the session, the “Office Advantage: Changing More than the Rules,” will be moderator Saadia Sheikh, vice president, E Smith Realty Partners; David Cohen, managing director, Ready Capital Structured Finance; Colin Fitzgibbons, vice president, KDC; and Ron Hebert, vice president, investments, Marcus & Millichap.
Industry experts during this session will discuss timely topics including the latest trends, whether tech is a bonus or necessity, active areas, where new capital is being invested and who is financing the deals, and predictions for the future. Above all, can the trajectory continue or will the bubble burst soon?
RealShare Dallas Fort Worth will be held on November 16 at the Hilton Dallas/Plano Granite Park, 5805 Granite Pkwy. in Plano. #realsharedfw
DALLAS—The Metroplex's diverse economy is boding well for area office assets. Strong absorption is spurring healthy rent gains as companies grow throughout the region. For a second consecutive year, deliveries will reach pre-recession levels, and this influx has been met with a high degree of interest as numerous businesses expand operations and take both new and existing space, according to a second half 2016 office report by Marcus & Millichap. More than 11 million square feet of office space is underway, including a number of large projects that are pre-leased to major companies.
Toyota Motor Corp.'s new 2.1 million-square-foot North American headquarters is currently underway in Plano and
Area builders will complete 6.3 million square feet of office space this year, falling slightly from the 6.9 million square feet delivered in 2015. Though declining from last year, completions remain nearly double the previous five-year average.
As office developers remain on a building spree with more square feet of office space under construction in the DFW area since 1999, further employment gains in office-using payrolls will help minimize supply imbalances. This will keep vacancy relatively steady from last year and encourage rent advances. Supply additions in the final two quarters of the year will keep vacancy from tightening further, and the rate will end 2016 at 19.5%, down 10 basis points from last year, says Marcus & Millichap.
Metroplex employers will create 105,000 positions during 2016, an annual gain of 3%. Office-using payrolls will expand by 3.3% as nearly 31,000 jobs are added. Last year, total employment grew by 126,800 workers, including 37,900 office-using positions. In addition, creative spaces and technology have become a competitive advantage for hiring, and developers, architects and designers are using them as demand drivers.
“We've seen an impact of more tech-enabled, modern and collaborative/creative space in the market and the demand for this type of space,” Joshua McLeod, associate vice president, Regus, tells GlobeSt.com in preparation for the upcoming RealShare conference in Dallas on November 16. “We have 51 business centers in Greater DFW and have opened five this year; most recently, a large coworking spaces center in Uptown at 1919 McKinney. We have seen a significant increase in the market demand for our newer spaces. Our spaces center opened at nearly 60% occupancy and is filling fast.”
Joining McLeod during the session, the “Office Advantage: Changing More than the Rules,” will be moderator Saadia Sheikh, vice president, E Smith Realty Partners; David Cohen, managing director, Ready Capital Structured Finance; Colin Fitzgibbons, vice president, KDC; and Ron Hebert, vice president, investments, Marcus & Millichap.
Industry experts during this session will discuss timely topics including the latest trends, whether tech is a bonus or necessity, active areas, where new capital is being invested and who is financing the deals, and predictions for the future. Above all, can the trajectory continue or will the bubble burst soon?
RealShare Dallas Fort Worth will be held on November 16 at the Hilton Dallas/Plano Granite Park, 5805 Granite Pkwy. in Plano. #realsharedfw
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