As 2016 enters the final stretch, the Dallas-Fort Worth office real estate market continues to fire on all cylinders. Last week I attended our Cushman & Wakefield National Symposium, and our Chief Economist, Ken McCarthy, said Dallas is currently one of the best office markets in the country. The highlights of the 3rd Quarter of 2016 are featured in our Cushman & Wakefield DFW Office MarketBeat and below:
- Highest Job Growth In USA: Over the last year, DFW has added 330 net new jobs per day. DFW is projected to have the highest job growth in the country over the next 5 years.
- Rental Rate Increases: DFW has had the 2nd highest office rental rate growth in the USA, with a 13.2% rental rate increase in the last year.
- Supply Will Exceed Demand: New office supply in the market (7.7 million square feet currently under construction) will exceed demand in the near future, which will cause vacancy rates to increase slightly. Rental rates are projected to continue to rise because of the high quality of the new buildings.
- Record Sale Prices: Two Uptown office buildings, 2000 McKinney and 1717 McKinney sold for record prices in DFW, $492/SF and over $500/SF, respectively. Union Investment of Hamburg and Gaedeke Group purchased the buildings.
Year End 2016 Predictions:
- Flight to Value Opportunities: With the ever increasing rental rates in hot submarkets, many tenants are beginning to consider new areas that provide more value as their leases expire rather than renewing for rates that are often double their current rent.
- West End Resurgence: Property investors are bullish on the West End, and many of the renovations in the area are nearing completion, including Factory Six03. With the newly renovated options on the market, the West End will be a magnet for creative and tech companies in the Dallas market.
- Momentum in DFW Will Continue: The momentum in the DFW market will continue through the end of the year and into 2017 as companies continue to grow their DFW presence.