Chart of the Week – Office Construction Pipeline

Dallas continues to make the national real estate headlines about our office construction pipeline.  While the big number is always quoted – 7.7 million SF of space now under construction – there is little to no commentary about what is driving this number.  I’m somewhat sensitive about this because, being in Texas, there is sometimes to leap by pundits to the impact of energy on our TX economy.

As we all know, our market has become very diverse, and while energy is a part of our make-up, it is not the driver it was back in the 1980s or 1990s.  Rather, our sizable construction pipeline is made up of several diverse build-to-suits.  When we think of these, Toyota clearly comes to mind, as does the newest phase for State Farm.  In addition, other smaller projects round out the list, such as 7-Eleven and Raytheon.  As of the beginning of the third quarter, 48% of our pipeline is accounted for in the large BTSs.  The remain 10% is in spaces that have been preleased in multi-tenant buildings.

Overall, this level of “preleasing” is a solid showing and does not suggest that our market is over-heated.  What’s even better, is that this economic cycle still has legs, so we expect rent gains to continue, even though vacancy may begin to drift up gradually in 2016.

Chart of the Week 9.28.15

Chase still looking at North Texas office locations, including one in Legacy West

Plans for a huge J.P. Morgan Chase business campus are moving forward.

Commercial real estate firms JLL and CBRE have been representing Chase in its hunt for locations with 50 to 75 acres.

Read more on the Dallas Morning News

Frost Bank signs big deal at new downtown Fort Worth tower

On the heels of announcing plans to build a new 25-story office tower in downtown Fort Worth, Frost Bank has signed a big lease for the building, making this the second Frost Tower to land in Dallas-Fort Worth.

The first Frost Tower recently was completed in the Harwood District and has leased up rather quickly.

Frost Bank will occupy the lobby-level banking facility and move its regional headquarters and other lines of business to the three upper floors in the tower.

In all, Frost Bank will have more than 175 people working from the tower with room for expansion. In addition to the bank’s 87 corporate employees that will move from its offices at 777 Main St., Frost will relocate more than 90 employees to the tower, including Frost Wealth Advisors, Frost Insurance and the bank’s finance and treasury management.

Telecom Corridor campus sale will bring opportunity for another Richardson business move

A big Telecom Corridor office campus has changed hands. And the new owners plan to remodel and market the buildings to attract more business to Richardson.

The almost 400,000-square-foot, 4-building campus at 2400 N. Glenville Drive is now occupied by Verizon.

But the telecom firm plans to move out at the end of next year. Verizon intends to consolidate the operations to other locations.

Read More Here on The Dallas Morning News

DFW office vacancy reaches 15-year low

Office space in Dallas-Fort Worth has reached a 15-year low as lease rates continue to climb, driven by the region’s booming economy that brought in roughly 110,500 jobs in the past 12 months, according to the latest JLL data for the second quarter of 2015.

“We are a major job generator and there’s nothing in the cards to show it will change in the near future,” Walter Bialas, vice president and market research director for JLL, told the Dallas Business Journal.“This is an interesting economic cycle we’re in right now.”

Read More Here on the Dallas Business Journal