DFW Q4 Office: 2019 Closes Strong, More of the Same Expected in ’20

Office metrics for Dallas and Fort Worth continued strong in Q4 2019, with robust absorption rates, lower vacancy rates and increased rent growth.

On the Dallas side, the metro “saw one of its strongest years this decade,” due to its more than 4.6 million square feet of absorption, according to JLL. Meanwhile, when it came to Fort Worth, JLL indicated that, for the second consecutive year, the office market absorbed more than one million square feet of space, with vacancy rates, market-wide, “now at their lowest point since 2009.”

Cushman & Wakefield, focusing on region-wide supply, pointed out that 3.8 million square feet is currently in the pipeline on both sides of the Metroplex, and “with less than half of under construction inventory reported as vacant, projects continue to be delivered preleased as occupiers pursued a flight to quality.” CBRE agreed that flight-to-quality was an issue for office tenants when it came to both “build-to-suit or speculative projects.”

JLL’s outlook pointed out that 2020 marks the 10th year of the current growth cycle, with “measured growth” continuing to be the story. Overall, the Metroplex’s “diverse industry base, and strong migration and job growth, continue to bode well for the region’s office market,” the JLL analysts said.

Meanwhile, Cushman & Wakefield’s researchers indicated continued demand for newer product, as landlords renovate and add amenities to older buildings to better compete with deliveries. Additionally, “vacancy will remain relatively steady, as strong population and employment growth continue to support the demand for office space in the market,” the Cushman & Wakefield analysts said.