Half of 2016 has flown by and the Dallas/Fort Worth office market continues to shine. The first part of the year was very strong for the Metroplex: new companies announced plans to relocate to the area, office rental rates reached record heights, and new office buildings rose on the skyline. The highlights of the first half of 2016 are featured in our Cushman & Wakefield DFW Office MarketBeat and below:
- New Corporate Relocations to DFW: The DFW area is considered one of the best places to operate a business in the US, which continues to attract companies to the area. Several new companies announced upcoming headquarters relocations to DFW, including our client Jamba Juice, Cinepolis, and C&S Propeller.
- Tightening Supply: The above referenced corporate relocations and expanding local businesses have caused overall office vacancy to drop to 15.7%, the lowest in over a decade.
- Rising Rental Rates: The additional demand for office space has resulted in average rental rates in DFW office buildings to increase to an all time high of $25.39/SF.
- New Construction Surging: In response to the increased demand and higher rental rates, as well as relatively low interest rates, developers are capitalizing and constructing new office buildings. There are currently 7.9 million square feet of office buildings under construction in DFW, an increase of 22% over last year.
Looking forward to the 2nd half of 2016, here are several things to look forward to in the Dallas office market:
- Coworking Trend: More coworking facilities will open in DFW, including WeWork, Serendipity Labs, Regus “Spaces” and others as they establish footholds in the area to respond to the burgeoning startup scene in Dallas.
- New Beginnings along LBJ: The old Valley View mall will be torn down as the long awaited Midtown development kicks off and transforms the LBJ/Galleria area.
- The Rangers will win the World Series: They will make key trades before the deadline to pick up new pitchers and steamroll the AL on the way to a World Series Championship over the Cubs or Giants.
The rising office market is causing companies to investigate ways to minimize their real estate expenses. I look forward to speaking with you about strategies we have utilized to help our clients navigate the waters in the current environment.