In terms of growth, the Dallas office market has seen better days. So, what does this mean for those seeking to lease office space? A golden opportunity.
Let’s start off by saying that many industry analysts predict that the Dallas-Fort Worth Metroplex will be the hardest hit metro area in the country. The recession’s done a number on the office market, to say the least.
Downtown Fort Worth office buildings saw many tenants moving to smaller spaces in an attempt to save money, and virtually no new leases for space, in the fist half of the year. Now, the downtown office vacancy rate sits at about 19 percent, including leased space that’s not being utilized. Many companies that aren’t using their leased space attempt to find sub-leasers, but that’s usually easier said than done.
Office building construction has come to a grinding halt, office building sales are following closely behind, and leased space continues to free fall.
What Happened?
Perhaps the catalyst that drove the Dallas-Fort Worth Metroplex downturn was due to the decline of the oil and natural gas companies found here. Many of these companies have shrunk in size and have therefore reduced their need for office space, thereby driving the office market down. And this low demand for office space has sent a ripple through the market, thereby affecting the market as a whole.
Where’s the Silver Lining?
Well, if you’re a landlord of office space, this is not your year. However, if you are looking to lease Dallas office space, then this could be the opportunity you’ve been looking for.
Rates for leased office space in Dallas have fallen nearly 16 percent to about $23 a square foot.
Although the industry as a whole is certainly suffering, there are areas where the office market remains strong. Take Sundance Square, for example: Johnny Campbell, the chief executive of Sundance Square, reports that the office space there – as well as the City Center, the Carnegie and the Chase Bank Building – is anything but distressed.
Occupancy rates in Sundance Square are now at an impressive 96 percent, down just two percent from a year ago.