Dallas-Fort Worth mid-year 2013 outlook highlights

DALLAS-FORT WORTH – Below are highlights from Delta Associates mid-year outlook report.

Economy: Second Quarter 2013

• Dallas-Fort Worth’s economy experienced sturdy growth during 2Q. Payroll employment in the Metroplex grew by 104,900 jobs during the 12 months ending April 2013. This growth represented a 3.5 percent increase, compared to a 1.6 percent increase for the nation.

Office Market: 2Q 2013

The Dallas-Fort Worth office market experienced accelerating momentum during 2Q 2013.

• Net absorption of office space totaled 1.3 million sf in 2Q 2013, as leasing activity picked up after a slow start to the year. Net absorption during the first half 2013 totaled 1.6 million sf for the Metroplex.

• The overall Metroplex vacancy rate declined to 16.0 percent at 2Q 2013, from 16.4 percent at 1Q 2013 and 17.0 percent one year ago. Delta expects overall office vacancy to decline into the mid-14 percent range by the middle of 2015.

• The pipeline of space under construction rose to 2.7 million sf from 1.4 million sf a year earlier, although it still equates to just 0.9 percent of the market’s standing inventory.

• Asking rents for office space in DFW ticked up just 0.1 percent during the first half 2013 as a result of tenant caution and an expanding pipeline. Asking rents are likely to rise gradually during the balance of 2013 as employment growth will continue to support demand for space.

Industrial Market: 2Q 2013

The DFW industrial market experienced significant growth during 2Q 2013.

• The industrial market recorded net absorption of 4.3 million sf during 2Q 2013. Net absorption during the first half 2013 totaled 5.6 million sf.

• The overall industrial vacancy rate declined to 8.5 percent at 2Q 2013, from 9.0 percent at 1Q 2013 and 9.9 percent a year ago.

• There is 5.6 million sf of industrial space under construction or renovation in the Metroplex as of June 2013, compared with 1.8 million sf one year earlier. Two Amazon distribution centers added to the amount of industrial space under construction.

• Confidence in the robust industrial market enabled landlords to push asking rents higher during the first half of 2013. The warehouse/distribution segment represents a majority of the industrial inventory, and it experienced rent growth of 1.7 percent during the past six months.