A swath of new office construction in the 2010s kept Dallas-Fort Worth's office vacancy rate relatively unchanged despite the market aggressively absorbing 31M SF during the same time period, CBRE said in its latest Office MarketView study.
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With 25M SF of new office built during this past decade, the pipeline of fresh product largely offset the impact of robust leasing activity, while also pushing more tenants to modern high-quality assets from older products, CBRE reported.
Net DFW office demand remained positive from 2010 through 2019 even in the wake of a major U.S. recession, with the market recording its peak absorption rates of 5.22M SF and 5.28M SF in 2015 and 2016, respectively.
A steady stream of demand and a flight to quality also pushed DFW rental rates up, with rates rising 34% on average over the course of the past 10 years, according to CBRE.
The decade ended strong: In the fourth quarter of 2019, office absorption in DFW was 1.48M SF, pushing annual absorption to 3.49M SF and making it the third-highest year on record for demand in the last decade, CBRE said.
DFW's vacancy rate in the fourth quarter experienced only a slight dip even as 1.9M SF of new inventory came online.
Going into the new year, DFW has 28 office projects with a total of 4.62M SF in its construction pipeline, CBRE said.
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