Market Trends
Vacancy rates and office space absorption remain stable
High demand for Dallas and Fort Worth office space has continued into 2017. According to the Bureau of Labor Statistics, the unemployment rate in the DFW Metropolitan Area rose slightly over the past year by 0.6% from 3.8% in February 2016 to 4.3% in February 2017. This increase is believed to be due to new people entering the job force again at high rates. Nearly 112,000 new jobs were created in the Greater Dallas – Ft. Worth area over the past 12 months. This is one of the highest job producing markets in the country.
With Dallas – Fort Worth office space being in continuous demand, the tight leasing market is making great office lease deals harder to find. This 1st Quarter Dallas – Fort Worth Office Market Report newsletter is distributed as a means of informing our clients and commercial tenants about ways to save time and money during the office leasing process.
The DFW office space market absorbed nearly 900,000 square feet of office space in the 1st quarter of 2017. With over 7.6 million square feet of new DFW-area office space currently in development and over 920,000 SF of office space delivered in this past quarter, developers are doing their best to keep up with continuous requests by growing and relocating tenants. The trend of growing rental rates has continued throughout the Dallas – Fort Worth, TX metro to the dismay of many small business owners. The current asking rates are now over 5% higher than they were at this time last year.
If you are seeking Dallas – Fort Worth office space for lease, it may be in your best interest to sign the longest lease term that you are comfortable with. Market rental rates have been rising faster than the annual rent escalations found in many commercial leases. This has been an existing trend for the past several years and it is expected to remain as the metroplex continues to grow. It is important to plan for future growth needs though and not limit your long-term options.
Vacancy and Rental Rates
Rental rates continue to rise in 2017 as high demand for DFW office space endures. The market-wide office space vacancy rate has remained steady at 15.2% over the past quarter. If you include office space that is listed for sublease, the direct market vacancy rate is 18.6%. Office space rental rates have shown a sizable increase over the past 12 months to a now current average of $24.50/SF Gross for office space throughout the Dallas – Fort Worth market. This reflects an increase of $1.31/SF from an average $23.19/SF Gross twelve months ago.
Additional Information: Dallas – Fort Worth Office Market Report Q1 2017
If you are interested in rental rates for a certain location or are seeking Dallas – Fort Worth office space for lease, please contact us with your requirement.
Information in this Dallas – Fort Worth Office Market Report Q1 2017 has been obtained from Xceligent, Inc., a source deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.