The Dallas-Fort Worth office market maintained a relatively flat vacancy rate of 19% in the fourth quarter of 2019 as strong demand for space kept demand and supply in balance, Newmark Knight Frank said in a new report.
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At the end of 2019, DFW had 1.6M SF of office space under construction, a steady pipeline considering the area already created more than 3M SF of office between December 2018 and December 2019, Newmark Knight Frank said.
The metro's ability to lease out new high-quality office space quickly is attributed to consistent demand from corporate tenants relocating from other markets, the commercial real estate firm said.
At the onset of 2020, strong rumors of Sherwin-Williams shopping DFW for a new headquarters, among other major contenders, continued to percolate throughout the market, the report said.
Several major leases that took effect in the fourth quarter showed the strength of DFW's corporate relocation and expansion activity. Among those transactions is TripActions' lease of 88K SF inside Downtown Dallas' Renaissance Tower, NKF said.
Meanwhile, BNSF planned a 49K SF move into Coppell's Cypress Waters development and Reata Pharmaceuticals inked a deal for 327K SF in DFW, according to the report.
The most desired DFW office submarkets fell within the established corporate crevices of Uptown/Turtle Creek, Far North Dallas and Las Colinas, NKF said.
In the high-demand markets of Uptown and Far North Dallas, rental rates hovered in the the mid-$30 to $40 range, compared to an average fourth-quarter rental rate of $26.58 marketwide, according to NKF.
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