How New Dallas Office Projects Are Impacting Fundamentals

JLL's skyline report
Courtesy of JLL

JLL's Skyline report focuses on top-tier offices in the highest rent properties within CBDs and urban cores. With more than 1M SF under construction in the Big D, this snapshot gives insight into the ever-changing Dallas skyline.

Sorry, landlords: JLL believes new office deliveries will shift the balance from owner-favorable conditions to be more favorable to tenants by 2018. Direct vacancy hovers around 23% and absorption is around 2%.

 By 2018, JLL predicts the market will be more favorable to tenants, not landlords. Direct vacancy hovers around 23% and absorption hovers around 2%.
Courtesy JLL

Premium pricing for better amenities and locations will continue to rise as newer and flashier buildings deliver Uptown. The average asking rent is $27/SF in the submarket, but McKinney & Olive is asking upward of $50 a foot and is expected to deliver at 86% occupancy (thanks in part to a recent deal with Cushman & Wakefield). On the other hand, Renaissance Tower, built in 1972, is asking $19/SF with only 68% leased.

Competition makes skyline assets harder to acquire, so secondary markets will become an appealing alternative. Our money is on Victory Park, but its plan for office space is still under wraps.

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