X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-Texas is being “held prisoner by its past,” asserts Robert T. Edge, new vice chairman of Cushman & Wakefield Inc. who holds the distinction of opening the firm’s first real estate office in Dallas some 26 years ago.

Edge is considered the anchor for Cushman & Wakefield’s Dallas-Ft. Worth presence, says Arthur J. Mirante II, the firm’s president and CEO. “He established the benchmark by which we measure our performance and our success in North Texas,” says Mirante.

Edge is one of the most active tenant representation brokers in the nation, with insight to Texas’ current conditions that have several cities strapped by a lack of space, particularly in the office sector. The problem, says Edge, is that lenders are requiring significant pre-leasing of projects, a product of the real estate crash of the 1980s. “The lenders today remember that disastrous period,” Edge tells GlobeSt.com. “The lenders have good memories. I don’t think any other state or metropolitan city is being held to this extreme.” The pre-leasing clampdown had started about three years ago in Texas and has gotten considerably tighter in the past 18 months. “It’s well beyond the norm because of that gluttony,” he says.

A 22-story, 418,000-sf project in Downtown Austin supports Edge’s contentions. Edge, who is involved in the project, says the building–the first class-A undertaking since the mid-1980s–had to be 50% pre-leased before any funding surfaced. Before it was said and done, the building had been “95% leased at record rental rates and still they couldn’t get financing because Austin had a history of overbuilding,” he says of the Clark, Thomas & Winters PC law firm’s project that is slated for a 2002 completion.

“Twelve to 18 months out, the purse strings may loosen up by the lenders,” says an optimistic Edge. Without relief, he predicts Dallas’ office space in about two years will become as strapped as Austin’s, which is riding at less than 2% in vacancies. Dallas’ economy is not slowing down and overall net absorption has been a record-breaker in the third quarter. In the past year, between five million sf and 6.4 million sf have been absorbed while there has been “very little in new construction,” explains Edge. The subsequent result will be a rise in rental rates in the next six months, Edge predicts, explaining the space crunch is hitting those businesses seeking upwards of 100,000 sf, particularly in Dallas’ hotspot along the Dallas North Tollway.

Even suburban submarkets are absorbing space faster than it can be delivered. Overall, Edge estimates there is only 2.6 years of inventory left, based on his calculations, although there is ample land available for development in the region.

Edge, a senior brokerage professional in Cushman & Wakefield’s suburban Dallas office, has been responsible for many of the regions largest transactions, representing a gamut of deals from build-to-suits, dispositions, acquisitions and corporate headquarters’ relocations. He has represented Mobil Oil Corp. in more than one million sf of assignments.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.