How DFW’s Office Market Fared In Q2
Like the previous 29 quarters, DFW reported positive net office absorption in Q2 2017. The office outlook still looks healthy with more than 120K SF of net absorption for the quarter, according to CBRE Research. Some smaller indicators are less cause for celebration.
For the first time in five years, Class-A office space had negative absorption, losing 5K SF. Class-B offices absorbed more than 100K SF in Q2. Both asset classes showed modest decline in occupancy, accounting for 20 basis points in Class-A and 10 bps in Class-B, according to PMRG.
Though tenants absorbed more modest amounts of office space this quarter, the build-to-suit pipeline will soon clear as corporate giants such as Cypress Waters' Signet Jewelers, Harwood's Rolex and Music Factory's Ethos Group Inc. deliver. The 5.5M SF pipeline is 37% pre-leased, according to CBRE Research.
The Arlington submarket led all others in absorption gains, thanks to DR Horton’s 200K SF campus. The West Plano submarket saw positive absorption, largely due to NTT Data moving into 127K SF at Gaedeke Group’s One Legacy West. Uptown rebounded from a sluggish Q1 with new tenants such as CrossFirst Bank’s 26K SF at McKinney & Olive, Leon Capital Group’s 22K SF and Payne Mitchell Law Group’s 12K SF at Parkside Tower. This quarter proved healthier than the previous one for Dallas’ central business district with 97K SF of absorption, but it is still working to counteract a net loss of 59K SF for 2017.
From May 2016 to May 2017, the Metroplex added slightly less than 120,000 jobs, according to the U.S. Bureau of Labor Statistics.