Dallas office leasing rises in 2013 as vacancy falls to decade-low point
The 1.5 million-square-foot State Farm Insurance campus is the largest office project in D-FW. (Tom Fox/DMN)
By Steve Brown, Dallas Morning News, 11:11am, 12-30-13
Demand for Dallas-Fort Worth office space in 2013 increased to its highest level in seven years.
Expanding and relocating companies rented an additional 3.5 million square feet of office space in North Texas this year.
Net office leasing in the area was up about 15 percent from 2012 levels, according to a preliminary report from Cushman & Wakefield of Texas.
D-FW-area office vacancy has dropped to just under 18 percent – the lowest level in more than a decade.
Vacancy rates are even lower in some business districts in North Dallas, West Plano and Frisco where the supply of empty office space has fallen below 10 percent.
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At the end of 2013, about 5.4 million square feet of new office space is being built in North Texas. That’s only slightly less than was in the development pipeline in 2007, before the recession hit.
The current construction volume is also about twice the average annual office building rate during the last decade, according to Cushman & Wakefield’s estimates.
Currently there are 16 speculative office projects under construction in the D-FW area totaling about 3 million square feet.
The rest of the construction is corporate projects that are already spoken for.
Even with the high percentage of spec building, Cushman & Wakefield reports that more than half of the office space currently on the way for North Texas is already leased to businesses.
Average quoted office rents in the D-FW area have now regained most of the declines suffered in the recession. And in some business districts in Downtown Dallas' Uptown and North Dallas, average rents are at record high levels of more than $30 per square foot.
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