3 Dallas Submarkets Have Negative Net Office Absorption So Far In 2018
Dallas' office market is having a good year, but things are not so rosy for submarkets named after major thoroughfares.
JLL's Q3 data shows that the Dallas area (excluding Fort Worth) has absorbed 1.7M SF of offices year to date, soaking up 0.9% of inventory. That was led by a strong Q3 that clocked 1.2M SF of positive net absorption.
But of the nine submarkets JLL tracks, three have negative absorption figures for the year.
Stemmons Freeway is hurting the most, with -2.1% net absorption so far this year. It has lost 186K SF of occupancy this year, with tenants giving back 49K SF in Q3. Its direct vacancy rate is sitting at 28.1% as we enter Q4.
LBJ Freeway had 112K SF of negative net absorption in the first three quarters of 2018, largely thanks to a moribund Q3. JLL reports the submarket clocked -143K SF of absorption last quarter, bringing its direct vacancy to 22.4%. Year to date, its absorption is -0.6% of inventory.
The North Central Expressway submarket has -181K SF of net absorption year to date, a loss of 1.7% of its stock. Q3 actually helped its numbers, with the area posting 29K SF of positive net absorption, and it isn't feeling the annual decrease as sharply — its direct vacancy is 13.8%, one of the stronger numbers in Dallas. (Overall, the city has 18.8% of direct vacancy.) At $30.17/SF average rent, the North Central Expressway is also commanding some of the highest average rents in Dallas.