Current Houston, Dallas, and Fort Worth Commercial Real Estate Trends
Central Texas is a hotbed for doing business and for relocation. Not only that, but Texas has relatively inexpensive land and favorable construction regulations. As a result, Texas is a great place for commercial real estate. Below are trends and market information for Houston, Dallas Ft Worth, and San Antonio.
Houston Commercial Real Estate Market Trends
- Vacancy Rates — In general, average office vacancy is up. At the same time, vacancy rates vary. For example, some suburban submarkets have vacancy rates as high as 44%. In contrast, highly-coveted submarkets near Houston’s center have single-digit vacancy rates.
- Leasing Rates — Closer to the Houston CBD, rents are higher. For example, CBD Class A office space leases for over $43/ SF. In comparison, suburban Class B office space costs as little as $16/ SF.
- Westward Growth — West Houston is one of Houston’s fastest-growing areas. As a result, westward growth has spurred commercial real estate growth. On top of that, this expansion is predicted to continue.
- Development Slowdown — The end of Q2 2018 saw only 176,000 new SF of new Houston commercial office deliveries. What’s more, there is only 503,000 SF of delivery planned by the end of 2018. As a result, 2018 will be the lightest year for new development since 2010.
Dallas Commercial Real Estate Market Trends
- Logistics and Distribution — In areas like South Dallas, there is a good amount of reasonably-priced land. Not only that, but this area is near several major transportation arteries. As a result, the distribution market has taken hold in this part of Dallas.
- New Construction — The booming Metroplex is seeing lots of new construction. Specifically, in Far North Dallas, beyond the LBJ corridor. This area has the highest concentration of new construction in all of DFW. Specifically, millions of new square feet have been completed bringing the submarkets total to over 40 MSF of rentable space. On top of that, the Las Colinas/ DFW Airport (northeast of Dallas CBD) has also added millions of new square feet in the past few years. The submarket now has over 30 MSF of rentable space.
- High Profile Suburban Relocations — Toyota relocated its US headquarters to Plano. Not only that, but State Farm relocated to Richardson. These relocations have boosted the area’s profile. Moreover, the area has attracted other new corporate tenants.
- Leaders in a Depressed Submarket — In spite of their location in one of the least active DFW submarkets, the areas around Arlington and Mansfield are seeing gains. Even though other Mid-Cities submarkets have higher vacancy rates than the rest of the DFW metro area, Arlington/ Mansfield have seen strong direct net absorption gains.
- South Fort Worth — This desirable area to do business has one of the highest occupancy rates in DFW. At the end of Q2 2017, South Fort Worth reported some of the largest annual Class A rent increases – 9.1%.
Fort Worth Commercial Real Estate Market Trends
- A Strong CBD — The Fort Worth CBD is poised for new Class A tenants when the $115 million Frost Tower is completed. On top of that, new seven hotels are either planned or under construction.
- Occupancy Rates — Throughout Fort Worth, occupancy rates vary. For example, the North/ NE Fort Worth submarket has seen higher vacancy rates than the rest of Fort Worth. At the same time, South Fort Worth one of the highest occupancy rates in all of Dallas-Fort Worth.
Stay on Top of Texas Commercial Real Estate Trends
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