Most Active Office Submarkets for 2021 (YTD and Pending Move-ins)

Far North Dallas and Las Colinas are the two most active submarkets.  They both have high levels of construction (both recently completed and projects currently underway).  For Far North Dallas, JPMorgan Chase has a phase 2 built-to-suit and along with other construction projects in the Legacy area (Keurig Dr Pepper, Reata Pharmaceuticals) and various spec projects.  Las Colinas has Cypress Waters, which continues to deliver multiple properties per year.   Mid-Cities has emerged over the past couple of years as a very active submarket due almost exclusively to large built-to-suits like the American Airlines Headquarters that was completed in late 2019 or the multiple phases of Charles Schwab built-to-suits.

Submarket outliers to watch in the future include Uptown and Preston Center (with 1 million and 700K SF, currently underway, respectively).  These two smaller, more expensive submarkets have high levels of construction underway, but leasing activity and pending move-ins has not been keeping pace.

DFW Office Rates Showing First Overall Decline in Asking Rates This Cycle

Asking rates are a lagging indicator to the market fundamentals.  After a market downturn, asking rates are not typically significantly impacted until 4 to 6 quarters after the market has shifted.  The decline in both direct and sublet asking rates since the end of the second quarter of 2021 should not be surprising as it falls into the typical time range.  This decrease in rates, however, has only been slight to date, with overall averages still up on a year-over-year basis.

Specific properties that have reduced their rates since the end of the second quarter include International Plaza II, The Palace Office Center, Westpark Plaza and the Lakes at Bent Tree.

Top Office Design Trends for 2021

By CeCe Grosz, Marketing Intern

Many companies in the Dallas-Fort Worth Metroplex are enjoying the normalcy of returning to the office, with employees once again able to chat by the coffee machine or mingle in the break room. However, some aspects of office design will continue to adapt to the post-pandemic state of the world, and likely won’t return to how they were before. These new office design trends will incorporate new technology and practices into the work environment to improve employee wellness boost employee morale, promote collaboration and corporate culture. Here are the top office design trends we are noticing for 2021:

Hybrid Office

COVID-19 prompted most companies to have their employees work fully from home for several weeks or months. This rapid change in the work environment resulted in employees realizing that they could be productive outside of the office, while being in closer proximity to family and the comfort of their homes. While most employees have already returned to the office, many expect to maintain some remote work, even for one or two days a week: according to Fortune, 63% of high-growth companies are embracing a hybrid work model. Companies can adjust to that by requiring less office space and having employees come into the office in shifts.

Employers are adjusting their office design to feel more “homey” and reduce the stark contrast between working at home versus the office. This includes natural lighting, relaxing spaces around the office for rest or social interaction, as well as incorporating more artwork into the environment.

Increased Sanitization Practices

A trend that has manifested itself throughout the past year is the importance of employees feeling safe when coming to work. Office spaces now feature hand sanitizing stations, increased cleaning of surfaces and touchpoints such as elevator buttons, and the addition of handwashing sinks in kitchen/break room areas.

Hot Desks

A new phenomenon for most offices is unassigned seating for employees, also known as “hot desks.” While previously thought that Coronavirus particles were transmitted heavily through shared surfaces, now that we know transmission mainly happens through the air which means unassigned seating could have many benefits for your office.

Research from the University of Arizona found the average office desk to be covered in 400 times the number of bacteria that a toilet seat has. This unsettling finding is the result of office cleaning crews being told not to touch employees’ desks and personal areas. If offices forgo assigning desks and have employees reserve their space before work, the desks can be sanitized after hours to promote a much cleaner workspace.

Biophilic Design

This concept, which aims to incorporate living plants into the corporate office, is taking off in 2021. Biophilic design is inspired by the visual connection between humans and nature. Bringing the outdoors inside boosts the overall quality of life for employees, as well as improving air quality of the office. Companies should consider investing in a “living wall” or adding more plants around the office to improve the health and happiness of their employees. Offices that incorporate plants see increased productivity, improved oxygen flow, and reduced toxins in the air.

Air Quality

In addition to biophilic design, companies have many options to choose from to promote improved air quality around the office. Since COVID-19 began, many offices are updating HVAC systems to enhance the circulation and filtration of air throughout the space.

According to Younger Partners’ Roy Smith, we should be on the lookout for updating HVAC systems to a rating of MERV13. The MERV rating scale stands for Minimum Efficiency Reporting Value and measures the efficiency of the air filter based on what particles it can filter out. “The higher the number, the higher the efficiency of filtration,” says Smith.

While the highest ratings of 16-20 are used mostly in hospitals or nuclear power plants, many offices are upgrading their filtration systems to MERV 13. This rating means that pollen, dust, dust mites, mold, bacteria, pet dander, cooking oil smoke, smoke, smog, AND virus carriers are all filtered out of the air. This would be an excellent investment for the health and safety of your workplace.

When new office spaces are built, companies should seek smart materials that resist mold and have antimicrobial properties, such as copper. The use of these materials will promote better air quality for employees.