Office sales in Dallas/Fort Worth down, leasing remains strong
Office property sales in the Dallas/Fort Worth area during the six months through February 2018 totaled $1.7 billion, a 34 percent decrease compared to the previous six-month total of $2.7 billion, according to Savills.
Leasing in the region, however, remains strong as U.S. and global firms continue to choose Dallas/Fort Worth. Many employers are attracted to the region's demographic upside. According to the latest U.S. Census Bureau data, the Dallas/Fort Worth region added more people than any other metropolitan area in the United States; in the year ending July 2017, it gained nearly 400 new residents per day. This steady influx of households supports robust demand for houses, retail, office buildings, outpatient clinics, schools and a myriad of other structures. According to NAIOP, Texas topped the nation with $24 billion in direct construction spending, leading the United States in warehouse and retail development.
Texas was second only to California in spending on office development in 2017, according to Savills. Contractors from other markets are expanding locally. A general contractor and construction management firm based in Minnesota was recently selected to develop the $110 million resort hotel at Craig Ranch in McKinney, Texas.
Although leasing activity showed some signs of retreating, there are no signs of a sharp pullback. The U.S. economy appears to be poised for at least one more year of payroll expansion, reports Savills. Corporate tax reform should give added support for investment in R&D, equipment and properties. The Dallas/Fort Worth region and the Dallas CBD stand to capture a fair share of this hiring and investment.
