DFW Office Listings Hit 5-Year High As Investors Search For Yield In Secondary Markets

Dallas Skyline
Dallas Skyline

Investors suffering sticker shock when shopping for office assets in New York and San Francisco are scoping out secondary markets like Dallas-Fort Worth for yield-worthy assets, CoStar said in a new report.

As a result, the number of DFW offices placed on the sales block climbed to a five-year high in 2019 with the average office asking price shooting up 12% from last year, a study from CoStar Director of Research and Market Economist Paul Hendershot said.

Hendershot said DFW has 1,000 offices for sale in the region today. Of those, 94 are considered Class-A and trophy office listings, up 47% from 64 assets last year.

Class-B office listings jumped 54% from this time last year.

Meanwhile, the average office asking price hit a five-year high at roughly $170 per SF, according to CoStar.

“There are opportunities for investors across the Metroplex,” Hendershot wrote in his latest report.

North Dallas — Frisco, Allen and McKinney — has 23% of the listings, though they are smaller listings averaging just over 5K SF, according to CoStar. Those average $284 per SF and spend 6.5 months on the market before being snapped up, compared to the Metroplex average of 7.6 months on the market.

Hendershot also pointed to a flight-to-quality trend with leasing increases tied to higher-end office buildings accounting for 52% of all leasing activity this year.

“As these buildings lease-up, more offices are set to hit the market, as a fully leased building is a trigger for many owners to list a property on the market,” Hendershot wrote in his report.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Dallas-Fort Worth Newsletters
Related Stories

Cushman & Wakefield, NYC Added To Suit Alleging $250K Agency Lease Shakedown

Hudson Pacific's Historic San Francisco Conversion Project Gets Approval

KDC Pursues $3.5B In Financing For AT&T's Huge HQ Campus In Plano

Bouwinvest, Tishman Speyer Launch U.S. Office Venture With Chrysler Building As Debut Deal

FoxRock Buys Quincy Office At 78% Discount After Luring Tenant Away

SL Green's $2.5B Sell-Off Hits Interest Rate Snag

Carrier To Invest $600M In Fort Worth Advanced Manufacturing Facility

Bill Barr's Law Firm Expands Footprint In Move To Pennsylvania Avenue

Conversions Ramp Up As New Report Calls For Resident-Led Downtown Denver Recovery

Venu Closes $60M Sale-Leaseback Deal For McKinney Concert Venue Land

Trammell Crow Breaks Ground On Office-To-Resi Conversion In Dallas: The DFW Deal Sheet

Elecor, Formerly Paramount Group, Gains New Muscle With Rithm In Its Corner