Some pretty incredible rent growth is starting to feel inevitable in Dallas. (Just like warm weather and Mark Cuban being fined.) Stream Realty Partners managing director of the Dallas office division Ramsey March tells us why.
Ramsey, right, and fellow managing director Matt Wieser took the helm eight months ago. He tells us 1.9M SF of office space was delivered across DFW in ’13 with about 72% pre-leased or build-to-suit. Though a lower percentage of the 4.5M SF expected to deliver in 2014/'15 will be pre-leased, Ramsey says the lack of spec building since 2010 coupled with the anticipated swell of demand offers landlords a three-year running head start on new supply. It’s a formula for big rent growth.
We joined Ramsey at Ascension Coffee in the Design District (delicious coffee, and art that sort of looks like Ramsey). He tells us the Dallas market is at an all-time low point for spec development. Meanwhile, job growth in DFW was at 3.1% year-over-year as of late ‘13, making it best in the nation. Conveniently, the strongest job categories are ones that gobble up office space, including 31k new professional service jobs. Moody's forecasts average annual job growth for Dallas to be 26% higher than the average for 1997-2001, a cycle that delivered 38.9M SF (that’s 7.8M SF/year, for those scoring at home).
Ramsey and Matt took their 3-year-old boys (Jack Wieser and Michael March) to their first Rangers game last year and each kiddo got a foul ball. More good news, Ramsey says landlords in Dallas closed 14 lease transactions greater than 100k SF and six above 200k SF in ‘13. Of those, five companies were new to North Texas. Early signs point to an even better year in ’14 with nearly 150 big deals totaling 13.5M SF already in the works throughout North Texas. Ramsey says there are more buyers than sellers for high-quality deals and space, which means prices and rental rates must go up. Some of Ramsey's latest deals: the 183k SF renewal of CVS Caremark at Sterling Commerce Center in Las Colinas and Kohls Department Stores' new 231k SF deal at Waterview 190 in Richardson. The 2000 Baylor grad and his wife have three children (9 months, 3, and 6), which means he has very few hobbies these days.
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