Market Trends
Absorption is strong amid steady vacancy and rates
Strong demand for Dallas and Fort Worth was constant throughout 2017. According to the Bureau of Labor Statistics, the unemployment rate in the DFW Metropolitan Area dropped over the past year by 0.8% from 3.8% in October 2016 to 3.0% in October 2017. Both the United States and Texas unemployment rates have reduced to now current averages of 4.1% for the USA as a whole and 3.9% for the State of Texas. Over 77,000 new jobs were created in the Greater Dallas – Fort Worth area over the past 12 months.
With Dallas – Fort Worth office space being in continuous demand, the tight leasing market is making great office space deals harder to find. This Year End 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 had positive net absorption of over 1.5 million square feet of office space at the end of 2017. With nearly 10 million square feet of new office space currently in development and over 2.7 million SF of office space delivered recently, 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 approximately $0.94/SF higher on average 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 most 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 business expansion needs though and not limit your long-term options.
Vacancy and Rental Rates
Rental rates continue to rise in 2017 as demand remains high for DFW office space. The market-wide office space vacancy rate has remained fairly steady to a now current 14.7% this past quarter. Class A office space in the Dallas – Ft. Worth area had the highest vacancy of approximately 16.9%. Office space rental rates have increased substantially over the past 12 months to a now current average of $25.01/SF gross for office space throughout the DFW marketplace. The now current rates have been fairly constant within recent months though.
Additional Information: DFW Office Market Report – Year End 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 Year End 2017 Dallas – Fort Worth Office Market Report has been obtained from sources deemed reliable. While considered accurate, we make no guarantee, warranty, or representation about it.