Population and employment growth is driving demand for new space. The region added 130,100 residents in 2019, more than any other metropolitan area in the country. The same can almost be said for employment: During the same period, the region added 81,800 new jobs, leading the nation in this category, as well. The region's competitive cost of living, accessibility, and highly educated workforce have made it a hotbed for corporate relocations and expansions. Uber has announced that it will open an office of at least 3,000 employees in Deep Ellum, and it plans to turn Dallas into its largest hub outside of its San Francisco headquarters. Joining Toyota, Samsung, and McKesson, which have all recently found a home in Dallas-Fort Worth, many more have announced plans or are looking to expand.
The Texas economy is expected to outperform the United States in the near and long term. Strong economic underpinnings have fostered a healthy office market. Annually, the market has absorbed 4.3 million SF, just above the historical average. Construction activity remains robust, with 7.2 million SF delivered last year and 8.8 million SF of space currently under construction. Even with the building, vacancies should remain stable due to a significant portion of new space being preleased. Several large build-to-suits accounted for the lion's share of positive absorption, including American Airlines moving into its new 1.7- million-SF headquarters in Fort Worth and Charles Schwab moving into its 580,000-SF Westlake Campus.
Rent growth remained positive at 3.3%, with many of the premier submarkets ranging from 3%-5% as tenants continue to clamor for new space in their flight to quality. Nationally, the U.S. economy has entered its longest expansion on record. Mixed economic signals and continued grumblings of a global economic slowdown are themes shaping 2020; economic growth is projected to decelerate in the next few years. At the same time, real estate fundamentals are increasingly divergent, with uneven growth across sectors and regions as some investors are becoming increasingly selective this far into the cycle. With pricing in core coastal markets rising over the past few years, many institutional investors have turned to less expensive secondary markets in search of better yields. As a result, investment has continued to flow to Dallas-Fort Worth: Come for growth and stay for the return. The office market has experienced $4.1 billion in sales over the past 12 months.
The information contained herein was obtained from CoStar; however, Bradford Companies makes no guarantees, warranties, or representation as to the completeness or accuracy thereof. The presentation of this property is submitted subject to errors, omissions, change of price or conditions prior to sale or lease or withdrawal without notice.