Ringing in 2016
A few weeks ago, we said goodbye to 2015 and welcomed 2016. 2015 was one of the best years on record for North Texas commercial real estate. In fact, office building rents in North Texas are at an all-time high. According to the 2015 year-end Cushman & Wakefield MarketBeat, “The Dallas-Fort Worth metro added more jobs during the last 12-month period than 46 state economies and ranked #3 in job growth among other major metro areas; just behind New York and Los Angeles.” The positive momentum continued to grow in Dallas over the past year, and all signs point to 2016 being another strong year.
Highlights from 2015 include:
- Nearly 5 million square feet of new office buildings were completed in DFW, which is almost double the 2014 totals.
- There are currently 6.2 million square feet under construction: 23 speculative buildings totaling 3.3 million square feet and an additional 8 build-to-suit projects totaling 2.9 million square feet.
- Asking full-service rental rates across all classes recorded $24.05 per square foot, an increase of $2.66 per square foot over 2014 levels.
- Class A office asking rents rose 11.5% reaching a new all-time high of $29.63 psf.
The Year Ahead:
Enough about 2015, we have a new year ahead. A leap year, in fact, complete with the Summer Olympics in Rio and a US Presidential Election. So where are we headed? Robert Kaplan, president and CEO of the Federal Reserve Bank of Dallas (successor to Richard Fisher) discussed the economy recently at the N. Texas Economic Forum. The Dallas Morning News had three takeaways:
- “The energy sector will remain troubled in 2016.” The silver lining for North Texas is that Oil and Gas makes up less than ten percent of the overall economy.
- “North Texas job growth will remain steady.” Economists have likened the inflow of jobs in the Metroplex to a river as a result of the massive relocations of companies like Toyota and Liberty Mutual. 2015 was a trickle. 2016 will be a river due to vendors that want to be near these major corporations. They are packing up the families and following their largest clients to North Texas. 2017 will be a torrent.
- “The state is resilient in the midst of economic challenges.” Enough said.
2016 is poised to be a great year. We look forward to partnering with you this to help you with your commercial real estate opportunities!