Younger Partners Research Director Steve Triolet took a long look at how much asking rates increased on a submarket level over the past five years (1Q13 vs 1Q18). It probably won’t come as much of surprise that Preston Center and Uptown have seen the biggest increases over that time period, which has in turn pushed rates in Central Expressway (Central often attracts tenants priced out of Uptown and Preston Center), but some of the other submarket trends are a little surprising. LBJ Freeway has seen a good push in rates, but this is partially due to the freeway expansion project wrapping up a couple of years ago.
Meanwhile, the Fort Worth CBD has struggled over the past four years largely due to the energy price collapse that started in mid-2014. While, oil prices have been recovering some in recent months, any rate growth in the Fort Worth CBD in the near term is unlikely as the XTO division of Exxon Mobile is leaving several large blocks of space in Fort Worth this summer and moving 1,200 jobs to Houston.
By Steve Brown
A new 2014 forecast predicts that the Dallas-Fort Worth area will be one of the top leasing markets in the country this year.
Marcus & Millichap Real Estate Investment Services says that the D-FW area will see close to 8 million square feet of net office leasing this year. Only Houston and New York are expected to see higher office space demand in 2014.
Only about 3.5 million in net office leasing was recorded in the D-FW area in 2013.
“Markets in Texas, with their exceptional forecast employment growth, will dominate the office demand index,” researchers with the commercial real estate firm say. “Expanding service industries such as Associa, Kohl’s and State Farm have boosted the Dallas-Fort Worth regional performance.”
Marcus & Millichap predicts that overall office vacancy rates in North Texas will fall to 17 percent this year, even though about 4 million square feet of new office space will hit the market.
According to the final estimate from the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) in the U.S. grew at an annualized rate of 1.8 percent during the first quarter of 2013, a downward revision from the prior estimate of 2.4 percent annual growth. In comparison, real GDP growth was was a very weak 0.4 percent in the fourth quarter of 2012. Growth in real GDP during the first quarter of 2013 was tempered by government spending which contracted at an 8.7 percent annual rate and consumer spending which grew at a tepid 2.4 percent annual rate.
The Federal Reserve Bank of Dallas expects modest to moderate economic growth through the remainder of the year as employment growth is projected to accelerate to an annualized rate between 1.8 and 2.2 percent during the second half of 2013, while inflation is forecast in the range of 1.5 to 2 percent over the next year. As of June 2013, the Federal Reserve Board Members and Federal Reserve Bank Presidents projected the change in real GDP for 2013 would be in the range of 2.0 to 2.6 percent.
Fortunately, we live in Texas which accounted for 9 percent of the the total U.S. GDP in 2012 and should continue to garner a large portion of future gains in total U.S. economic growth. Although the largest share of Texas’ annual growth in 2012 GDP (1.38 percent) occurred in the mining, logging and construction sector resulting from the boom in energy-related businesses, the Texas economy is diversified with a highly educated workforce and relatively low business costs that position the state for sustained economic expansion. The Texas Comptroller of Public Accounts expects Texas to achieve 3.4 percent annual growth in GDP in 2013, much stronger than the 2 to 2.6 percent growth anticipated for the U.S., led by gains in the Professional and Business Services, Trade, Transportation and Utilities, and Manufacturing sectors.
All the world’s a stage, but if Texas were a country where would it rank on the global stage? One measure of comparison is the Gross Domestic Product (GDP) or total output of goods and services produced by a country or, in this case, Texas. According to statistics just released by the Bureau of Economic Analysis, the GDP produced by Texas in 2012 totaled $1,397,369 million and would rank 13th in the world, behind Canada and Spain but ahead of Australia and Mexico.