Dallas Office Market Guide

The Dallas office market consists of about 337,000,000 square feet of office properties consisting of just over 10,000 buildings. Over the last 2 years the Dallas office market has continued to improve from the recession lows of 2009 and 2010. Even so, absorption (an indicator of weather vacant space is growing or shrinking)remains anemic. An example of this is provided in the table below:

First   Quarter Office 2012 Absorption:                328,000 Square Feet
Fourth Quarter Office 2011 Absorption:            1,140,000 Square Feet
Third    Quarter Office 2011 Absorption:            1,150,000 Square Feet

As you can see the first quarter has been characterized by a slow-down in the Dallas office absorption of vacant space in the area. The fact that we had positive leasing absorption continues to be a good thing, however; it is hard to predict weather the slow-down in the last quarter will result in a downward trend to negative absorption or just a blip that will bounce back in the second quarter.

Dallas office market vacancy rates have continued to improve. This is due in part to the lack of new office development. It stands to reason that if there aren’t any new buildings coming into the market and the existing vacant space gets leased up overall vacancy rates will continue to drop. The table below will show the historical trend over the last few quarters:

Description Total Class A Class B Class C
First Quarter Dallas Office 2012 Vacancy: 16.2% 17.9% 16.7% 10.6%
Fourth Quarter Dallas Office 2011 Vacancy: 16.3% 17.6% 17.0% 10.9%
Third Quarter Dallas Office 2011 Vacancy: 16.7% 18.0% 17.5% 10.8%

While this table shows improvement across all classifications of office space over time, the Dallas area continues to trail the national averages for vacancy. Currently Dallas is running about 5% above the national average of 12%.

We believe the abnormally high vacancy rates coupled by the recent quarters slow down in leasing absorption creates opportunity for our clients. We use this information as leverage when we assist our clients negotiating leases on their behalf. It is all part of the process we use to deliver the highest quality services and the most aggressive deal terms for you.

Dallas Office Space for Lease’s Dallas Market Office Guide, provides a comprehensive detailed overview of Dallas’ first quarter office market using CoStar Group’s entire database of existing and under construction office buildings in the Dallas Area.

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