CBRE: DFW Office MarketView 1Q 2015

DALLAS-FORT WORTH – The DFW office market experienced its 19th consecutive quarter of favorable leasing fundamentals in 1Q 2015 and appears poised for a strong first half of 2015. 2014 yielded the most net absorption in a single year since 2006, coming in at 3.2 mission sf.

Q1 2015 surpassed the deliveries of 4Q 2014 with 1.5 million sf coming online. Pre-leasing among delivered construction is currently 52.2 percent; this figure includes State Farm, who is phasing into CityLine in stages.

Demand was strong among certain submarkets in 1Q 2015, especially in Richardson/Plano and Far North Dallas. State Farm is largely responsible for the absorption within Richardson/Plano.

Q1 2014 was the first time the market had seen sub-18 percent vacancy since 2008, when vacancy reached its prerecession low.

Since Q1 2014, there have been substantial deliveries in the DFW office market that were not leased prior to completion, contributing to the increase in vacancy since early 2014.

Gross asking rents continued to experience growth. Class A rates increased at an especially strong pace, rising from $26.62 per sf to $27.00 per sf.

In 1Q 2015, the total office square footage under construction registered 6.3 million sf, down from 4Q 2014 to 1Q 2015. Construction starts for 1Q 2015 totaled 649,674 sf.

Source: CBRE Research

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