Dallas office rents jump the $50 mark
Steve Brown of the Dallas Morning News has some big news: Dallas office building rents have for the first time topped the $50-per-square-foot mark.
That’s what developers are asking for choice business digs in new buildings on the way in Big D’s booming Uptown market.
“Based on recent proposals, rents continue to skyrocket in these premier, existing assets — and are now coming in at around $52 per square foot,” said Walter Bialas, vice president with commercial real estate firm JLL. “We must emphasize that these existing buildings are not run-of-the-mill class A properties — they are the premiere players in the submarket.
“They also are essentially full in terms of occupancy, so limited space options exist,” he said in a new report. “Combine that with the need to wait for 6 to 18 months for the new properties to be completed, and you have a unique situation where existing tenants and renewing tenants have few top-tier location options.”
The sky-high office rents being quoted in some of Uptown’s newest office developments are about twice the citywide average. Those rents are more than $20 per square foot higher than the average downtown and in the Legacy-Frisco market in Collin County.
Since 2011, office rents in Uptown’s prime buildings have shot up by almost 30 percent, according to JLL.
Some of the the city’s largest legal and accounting firms have made the move from downtown north of Klyde Warren Park to land in the newest Uptown towers.
So far there’s no sign of oversupply and a slowdown in rent growth. If anything, higher land prices are adding to the pressure on office rents in the area north of downtown Dallas.
“With a continued strong local economy for the next two plus years, there is no sign of rents plateauing in high-demand locations,” Bialas says.
While a high-water market for Dallas, rental rates in Uptown are still significantly below what first class offices go far in coastal cities including New York, San Francisco and Los Angeles.
“$50 per square foot for our new buildings is a new high, but still low compared to other major cities existing stock,” Bialas said.