Holt Lunsford Commercial

Employment in Dallas/Fort Worth increased
by 248,000 jobs in September 2014. The
unemployment rate declined by 0.2% to a total
of 5.9%. Overall, the business sectors with the
most job growth were professional and business
services, retail trade, and health care. Dallas/
Fort Worth continues to outperform national
employment and job growth numbers. Out of the
twelve largest metropolitan areas in the country,
Dallas ranked second in both job growth rate and
in the number of jobs added. Professional and
business services had the largest annual increase
among job sectors with an increase of 9.5% since
July 2013.*
The DFW region posted positive net absorption
of 1,993,456 SF in the third quarter of 2014. Net
absorption was positive 1,444,868 SF in Class A
buildings, positive 515,827 SF in Class B buildings,
and positive 32,761 SF in Class C buildings. Yearto-date net absorption over all building classes in
Dallas/Fort Worth is 4,081,494 SF for 2014, and
2,285,762 SF of that is in Class A buildings.
As 2014 comes to a close, expect absorption to
remain high among all asset classes.
-94,086 SF
Vacancy Rates by Building Class 2010 - 2014
23%
21%
18%
2010
2011
2012
2013
2014
*Source: Bureau of Labor Statistics, News Release October 3, 2014
2013
2010
19%
2012
20%
YTD 2014
2011
22%
901,299 SF
152,315 SF
32,716 SF
-79,243 SF
-53,013 SF
2013
YTD 2014
2012
2010
2011
YTD 2014
2012
1,444,868 SF
2,600,358 SF
1,814,882 SF
1,155,590 SF
2010
The 3rd quarter of 2014 saw a total office vacancy
rate of 18.1% across all building classes, a 0.7
percentage point decrease over the previous
quarter, and a 1.2 percentage point decrease from
year-end 2013. The average vacancy rate in Class
A buildings was 17.8%, 18.7% in Class B buildings,
and 15.8% in Class C buildings.
2011
2013
Absorption by Building Class 2010 - 2014
1,304,391 SF
497,523 SF
582,241 SF
515,827 SF
-395,470 SF
Quoted rental rates have continued to increase,
with an average rate of $21.45 per SF at the end of
the third quarter, an increase of $0.33 per SF from
the previous quarter. Rent concessions continue to
lessen, but TI’s remain high. Preston Center had the
highest average quoted rate across all asset classes
at $32.77 per SF, followed by Uptown/Turtle Creek
at $31.85 per SF. As the Dallas office market continues its positive momentum rental rates should
continue to remain strong through the end of 2014
and into 2015.
YTD Net Absorption
$2.48
$1.76
$1.41
Class A
Class B
Class C
Dollar Increase in Average Quoted Rental Rate
From 2010 to 2014
YTD Net Absorption
CLASS A
Vacancy Rate 2014
Average Quoted Rental Rates 2010 - 2014
average class a
rental rate
The DFW market has continued its high volume
of construction activity over the 3rd quarter of
2014, with 1,110,957 SF (22 buildings) in new
deliveries, as compared to a total of 1,192,757 SF
(14 buildings) in the second quarter and 315,786
SF (6 buildings) in the 1st quarter. The most notable
deliveries in 2014 were Granite Park IV at 306,292
SF which is 64.3% leased, and 3001 N Dallas
Parkway, at 200,000 SF, which is 14.5% leased, both
in Far North Dallas.
Additionally, there is 5,832,056 SF currently
under construction throughout DFW compared
to 5,762,315 SF in the previous quarter. The most
notable projects under construction are the Future
State Farm Campus in Richardson at 2,000,000
SF as well as KPMG Plaza at Hall Arts in the Dallas
CBD, (450,000 SF, 66.4% pre-leased) and will deliver
April 2015. Construction activity remains strong as
developers continue to break ground on new office
product in response to increasing demand.
Total Square Footage Delivered 2010 - 2014
Overall Dallas/Fort Worth Absorption, Deliveries & Vacancy 2011 - 2014
Absorption
Deliveries
Vacancy
Overall Dallas/Fort Worth Inventory 2010 - 2014
Class A
Class B
Class C
Total
Total Office Market Stats
The Far North Dallas submarket continues to lead the market in construction activity with 1,673,555 SF under construction.
Richardson / Plano is a close second with 1,530,043 SF under construction. Expect a steady pipeline of speculative
development to continue through the new year, as Dallas remains one of the fastest growing metroplexes in the United
States in terms of employment growth.
Construction
Name
Developer
Size
Delivery Commencement
Submarket The Offices at Park Lane
KPMG Plaza at Hall Arts
Frost Tower
Wade Park 1
Legacy Center
Dallas Cowboys Future HQ
Sundance Square
Hillwood Commons I
Future State Farm Campus
Toyota Motor Corp. HQ
Raytheon Headquarters
Legacy Tower
Granite Park V
Knoll Trail Plaza
River Run - West Bend New Office
McKinney & Olive
Harvest Partners
Hall Financial Group
Harwood International
Undisclosed
Haggard Property Group
City of Frisco
Sundance
Hillwood
KDC
KDC
KDC
Trammel Crow Company
Granite
Cawley Partners
Trademark/Dal-Worth
Crescent RE Equities
149,510
450,000
167,735
400,000
175,000
200,000
75,971
154,063
2,000,000
1,000,000
490,000
342,066
306,000
123,167
57,650
530,000
Q2 2015
Q2 2015
Q2 2015
Q2 2016
Q3 2015
Q3 2016
Q4 2014
Q4 2014
Q1 2015
Q3 2017
Q4 2015
Q4 2014
Q3 2015
Q4 2014
Q3 2015
Q4 2016
Central Expressway
Dallas CBD
Dallas CBD
Far North Dallas
Far North Dallas
Far North Dallas
Fort Worth CBD
North Fort Worth
Richardson/Plano
Richardson/Plano
Richardson/Plano
Far North Dallas
Far North Dallas
Far North Dallas
South Fort Worth
Uptown/Turtle Creek
Name
Address
JP Realty Portfolio
777 Main Street
Infill Office Portfolio
Spectrum Center
Star Telegram/Oil & Gas Bldg
Galleria N Tower II
The Centrum
4455 LBJ Freeway
700 - 740 E Campbell Road
Commerce Plaza Hillcrest
Granite Tower
Canal Centre
Multiple
777 Main Street
Multiple
5080 Spectrum Rd
307-309 W 7th St
13727 Noel Road
3102 Oak Lawn Ave
4455 LBJ Freeway
700 - 740 E Campbell Rd
12800- 12890 Hillcrest Rd
4055 Valley View Ln
400 E Las Colinas Blvd
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Size
Seller
Submarket 2,200,000
954,895
675,167
598,250
439,802
306,244
367,251
295,357
247,360
243,649
240,153
238,051
JP Realty Partners
Cousins
Undisclosed
Granite
Dr. Michael Malka
Metzler Real Estate
Undisclosed
Undisclosed
Skyrise
UBS
Undisclosed
LaSalle Investment
Multiple
Fort Worth CBD
Central Expressway
Far North Dallas
Fort Worth CBD
Far North Dallas
Uptown/Turtle Creek
LBJ Freeway
Richardson/Plano
LBJ Freeway
LBJ Freeway
Las Colinas
Name
Price
Price/SF Size
Buyer
Seller
Submarket
Galatyn Park Office
Chesapeake Plaza
Toll Hill Office Park
The Plaza at Legacy
One Hanover Park
Lake Vista Pointe
1700 Pacific
$134,723,064
$92,000,000
$19,250,000
$51,000,000
$34,000,000
$28,257,128
$120,000,000
$168.00
$244.40
$80.52
$237.00
$174.00
$173.00
$89.52
Spear Street Capital
Hines
Cawley Mgmt
Hines
PMRG
Champion Partners
Richardson/Plano
801,923
409,977
239,059
214,499
195,754
163,336
1,340,481
Chesapeake Energy Corp. Fort Worth CBD
Cannon Commercial
JP Morgan
Cawley & Stockbridge
Second City Capital Ptnrs Frontier Equity
Olymbec Corp. Group Berkeley Investments
LBJ Freeway
Far North Dallas
Far North Dallas
Lewisville/Denton
Dallas CBD
Far North Dallas:
1. Leader in YTD Deliveries: 1,323,857 SF
2. Leader in Under Construction SF
1,673,550 SF
lewisville/denton
Far North Dallas
Richardson/Plano
Dallas CBD:
1. Leader in YTD Absorption: 820,627 SF
north
fort worth
Preston Center:
1. Highest Average Quoted Rate: $32.77
2. Lowest Vacancy Rate: 7.8%
las colinas
LBJ
Preston Central Expressway
Center
Richardson/Plano:
1. Second in Under Construction SF:
1,530,043 SF
northeast fort worth
Fort worth cbd
mid-cities
Uptown/Turtle Creek
stemmons FWY
CBD
East Dallas
south fort worth
Matt Carthey
Partner, Fort Worth
Cullen Donohue
Marketing Associate,
Dallas
southwest Dallas
David Cason,
Vice President,
Fort Worth
James Engels
Marketing Analyst,
Dallas
Geoff Shelton,
Marketing Director,
Fort Worth
Brittnye Schroeder
Director of Promotional
Marketing, Dallas
Holden Lunsford,
Marketing Director,
Dallas
Lori Vukovich
Marketing Coordinator,
Dallas
Brittany Cusic
Graphic Designer,
Dallas
www.Holtlunsford.com
Dallas • 5055 Keller Springs, Suite 300 • Addison, TX 75001 • 972.241.8300
Fort Worth • 300 Throckmorton, Suite 550 • Fort Worth, TX 76102 • 817.710.1110
This information is deemed reliable, however Holt Lunsford Commercial makes no guarantees, warranties or
representations as to the completeness or accuracy thereof. Statistical Source: CoStar Analytics