With the 3rd Quarter of 2015 in the books and the end of the year in sight, the Dallas/Fort Worth office market is on pace for a record breaking year. Our Cushman & Wakefield 3rd Quarter 2015 Marketbeat details the activity this year, and the highlights are below:
- A major trend is emerging in DFW – Rehabbing empty buildings. Because of the increasing price of occupied office buildings, property investors are purchasing empty buildings and repurposing them for office tenants and other uses. In 2015, there has been a flood of these types of buildings purchased, including the historic West End Marketplace (Granite Properties), Dallas High School (Jack Matthews), Statler Hilton (Centurion American Development Group), and the old Republic Insurance Buildings on Turtle Creek Blvd (Prescott Realty Group). All of the developments will be renovated for office tenants in 2016.
- DFW Office rents reached a record high with an average of $22.76/SF. The rates are $1.17/SF above the rates at the same point last year. With new buildings completing construction, these rates are expected to increase.
- Outside investors are flooding the market with new money. Major buildings such as the Galleria Towers Complex, Energy Square, and 2100 Ross were all sold in the 3rd Quarter. National and international investors have targeted DFW for real estate investment, and PwC ranked DFW the top market for real estate investment in the US in 2016.
- The LBJ Submarket will rebound in 2016. With the completion of the seven year renovation of LBJ Freeway, tenants and investors are targeting LBJ as the best value submarket in DFW. One of the largest projects in the city is about to begin on LBJ at Midtown (old Valley View mall site). Other buildings in the submarket have undergone major renovations to prepare for the new companies interested in the submarket.
The region’s diverse economy, favorable taxes, pro-business environment, affordable housing, major airports, and central location are just some of the reasons DFW is an ideal location for individuals and companies. The Dallas office market is generating national attention and will continue to be one of the highlights in the US in the future.
Robbie Baty and Grant Pruitt
Cushman & Wakefield, Inc.