DFW Q3 Office: One Region, Two Stories

In examining the Dallas-Fort Worth region’s Q3 office market numbers, it’s a good idea to study the two metros separately, given their diverse actions and focus. The main story for the Dallas metro has been continued positive absorption. According to CBRE’s numbers, net absorption was at 589,834 square feet; Cushman & Wakefield indicated 418,092 square feet, while JLL reported 454,377 square feet.

All three reports also indicated that the construction pipeline is ramping up. “Construction in Q3 2019 saw a solid uptick from last quarter, with a total of 25 buildings currently being built,” CBRE’s analysts noted. The Cushman & Wakefield researchers agreed, pointing out that flight to quality continues driving the pipeline and net absorption, while JLL pointed out that “optimism is spilling over into development activity.”

The story was slightly different for the Fort Worth metro, with all three brokerages reporting little, if any, product in the pipeline, and absorption figures that were all over the place, clocking in at 2,847 square feet (JLL) and 381,904 square feet (according to Cushman & Wakefield). Meanwhile, CBRE reported negative absorption at 82,845 square feet. All three brokerages indicated little, if any, product in the pipeline. JLL noted that the office market’s vacancy rate continues to drop, “thanks to large blocks in the North Fort Worth submarket leasing up.” In addition, investment activity continues strong in Cowtown’s suburban markets. “With few projects under construction, relocation of tenants to downtown Fort Worth . . . will continue, opening up space in the tightest submarket,” the JLL report noted.