DALLAS—The Texas office market is looking particularly vibrant development-wise, with 6 million square feet of office space delivered in the second quarter. However, sales activity is still far from its peak in the second half of 2016 and second quarter dollar volume ended 34% below its first quarter level, according to a recent office report from Yardi-Matrix.
The average price per square foot across the four Texas markets decreased by 8%, but even at its current level–resting at $270–it is the second-highest level since 2013, says Yardi-Matrix.
There were 15 deals completed in DFW–twice the number of deals closed in Houston in second quarter–but the average price per square foot in Houston reached $354, making it 76% pricier than the Dallas market's average at $201. Sales volume in Dallas Fort-Worth added up to $407 million, with the market completing more than 60% of all the sales in Texas. The Texas office sales trends demonstrate cyclical historical office sales–where the third and fourth quarters represent the greatest sales volumes during the last four years of history.
In terms of development, Dallas delivered a massive project in second quarter, Toyota's 2.1 million-square-foot office campus in Plano with Legacy Central–another 900,000-square-foot office campus is to deliver in third quarter.
“Dallas-Fort Worth year-to-date has shown steady leasing activity and rent stability,” Doug Ressler, director of business intelligence, Yardi-Matrix, tells GlobeSt.com. “DFW availability rates are showing a decline, and sales are down 36.1% YTD but we believe this is strongly influenced by the seasonality of Texas office sales and expect greater volumes in quarters three and four. The submarket of Plano continues to attract significant attention and the top five asset buyers were Texas REITs, a California-based pension fund and a major foreign investor.”
The report concluded that the Texas office markets show the greatest growth potential based on factors such as net immigration gains, right-to-work and business-friendly governance.
DALLAS—The Texas office market is looking particularly vibrant development-wise, with 6 million square feet of office space delivered in the second quarter. However, sales activity is still far from its peak in the second half of 2016 and second quarter dollar volume ended 34% below its first quarter level, according to a recent office report from Yardi-Matrix.
The average price per square foot across the four Texas markets decreased by 8%, but even at its current level–resting at $270–it is the second-highest level since 2013, says Yardi-Matrix.
There were 15 deals completed in DFW–twice the number of deals closed in Houston in second quarter–but the average price per square foot in Houston reached $354, making it 76% pricier than the Dallas market's average at $201. Sales volume in Dallas Fort-Worth added up to $407 million, with the market completing more than 60% of all the sales in Texas. The Texas office sales trends demonstrate cyclical historical office sales–where the third and fourth quarters represent the greatest sales volumes during the last four years of history.
In terms of development, Dallas delivered a massive project in second quarter, Toyota's 2.1 million-square-foot office campus in Plano with Legacy Central–another 900,000-square-foot office campus is to deliver in third quarter.
“Dallas-Fort Worth year-to-date has shown steady leasing activity and rent stability,” Doug Ressler, director of business intelligence, Yardi-Matrix, tells GlobeSt.com. “DFW availability rates are showing a decline, and sales are down 36.1% YTD but we believe this is strongly influenced by the seasonality of Texas office sales and expect greater volumes in quarters three and four. The submarket of Plano continues to attract significant attention and the top five asset buyers were Texas REITs, a California-based pension fund and a major foreign investor.”
The report concluded that the Texas office markets show the greatest growth potential based on factors such as net immigration gains, right-to-work and business-friendly governance.
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