Job Growth, Absorption And Rent Up For Office In Q2
Office market fundamentals remain solid, and a new Q2 report from Cushman & Wakefield proves it.
Absorption increased 9.3% from mid-2015 and totaled 3.4M SF so far in 2016. Vacancies are expected to flatten over the next 12 to 18 months as new inventory is delivered.
Average asking rents have risen across all submarkets. Full-service rates top $25 a foot and Class-A rents top $31/SF. All office rents have increased by more than 14% since Q2 2015.
Construction completions are 32% lower than last year, with nearly 1.8M SF of office to be delivered in 2016. Build-to-suit projects remain the largest source of buildings. Since Q2 2015, space under construction has increased by 27% and totaled about 8M SF.
Overall vacancy dropped 70 bps since Q2 2015 and stands at 16%. Northeast Dallas County, North Central Expressway and Stemmons Freeway markets report the largest decreases. Far North Central, East Fort Worth and Dallas CBD marked the largest increases in vacancy.
Service-sector employment grew at 3.7%, more than double that of the state and national average. DFW added 125,000 jobs over the last year. DFW's unemployment stands at 3.5%, compared to Texas' 4.2% and the nation's 4.5%.