10 Dallas Experts Share 2016 Predictions, Part 2
It’s no surprise that Big D’s 2016 outlook continues to be rosy. We asked 10 experts for their predictions in the coming year. Monday, we brought you the first five; here’s the rest of the list.
6. Office Absorption
Dallas added 101,200 jobs over the past 12 months, and that improving labor market has office net absorption running at more than double the 10-year average, says JLL South Central region president Jeff Staubach. Almost 4.8M SF was absorbed in 2015, while the 10-year average is about 2.2M SF. Though a significant amount of new construction has hit the market, the vacancy rate didn't increase and upward rate pressure remains strong. Jeff says another good year of net aborption (2.5M to 3M SF) would keep Class-A and B vacancy flat around 18.7% or maybe even drop slightly. Pictured: Jeff with wife Jenny and children Joe, Elizabeth and Caroline.
7. Continued Job Growth Boosts Multifamily
Dallas is adding about 260 jobs per day, says Sperry Van Ness/TJF Investments managing director Todd Franks (right, ski biking with Dr. Ted Smith). Rivaling that is the 360 people added to the population per day. He expects both to maintain pace in 2016. That's allowed multifamily absorption to outpace new supply even though Dallas is No. 6 in the nation for apartment construction (No. 3 if you include the Fort Worth Metro with approximately 13,000 units coming on line in 2016). Rent growth should also continue to rise, but probably at a more moderate pace than we’ve seen in the past five years (historically 6% to 8% growth year-over-year since 2010). Finally, occupancy is maxed out at 95% in DFW, so more housing will be needed through 2018.
8. More Relocations & Investors
DFW will continue to attract new corporations and new investors, says Accesso Partners asset manager Abbey Rowsey (with 4-year-old daughter Collins). Institutions still have record funds to deploy, and DFW continues to be one of the most competitive regions for corporate relocations in the US and globally. Corporations are attracted to the strong labor force. Investors are attracted to the diversified economy. A good example, she says, is that Accesso has strong interest from corporations across multiple sectors on its 124k SF Royal Ridge project at SH 114 and Beltline in Irving. More than half of the firm’s active prospects are relocations from outside the state, she tells us. The proximity to DFW airport, efficient floor plates, 6/1,000 parking, and freeway visibility have made this plug-and-play space particularly attractive to firms looking for quick occupancy.
9. Construction Activity To Peak
There will be a flurry of construction activity in 2016 for multifamily, hotels, and student and senior housing in the Dallas metropolitan area, says VistaPointe Partners VP Karla Peterson (with daughter Lauren). While 2015 seemed like the crest of development, she expects the surge to continue through mid-2016 because of projects already in pre-development. But around Q3, she predicts market surveys will start showing vacancy increases, so development will slow thereafter. (Never fear, product should only exceed demand for a minor blip and will be quickly balanced by continued economic growth.)
10. More Office Gardens
2016 is going to be a banner year for innovative workspaces, incorporating more gardens and high design than ever before, says Harwood International’s Jihane Boury. The Federal Reserve Bank of Dallas is a great example of a building that showcases high design. Harwood International’s new Rolex Building and Bleu Ciel are under construction, incorporating curated gardens by world-renowned landscape architect Sadafumi Uchiyama. 2850 Harwood will have its own landscape program as well, designed by Dallas-based HDF. Pictured: CBRE’s Phil Puckett, Jihane and Swearingen’s Dan Paterson