It’s a tough time for commercial tenants in Dallas Fort Worth. Vacancies are lower than most other places across the country, and that means prices in some key locations are on the rise. It’s highly competitive (and extremely frustrating) for those looking for new office or industrial space, and it may be even more frustrating for renewals.
Fortunately, a good commercial tenant representation company can make the process a little easier. From helping to locate the perfect space to hard-core negotiations on renewals, it’s no time to be passive. DFW office rental rates are making news across the country. Here’s what you should know.
In the DFW commercial real estate leasing market, continual job growth over the past three years has resulted in some of the strongest demand in the country. The strong job growth, along with unprecedented corporate expansions and relocations in the area, is making it much harder to find good commercial space.
As a result, vacancies have dropped by roughly 200 basis points below the last quarter. Experts agree that the momentum will probably continue, and even though commercial construction is on the rise, vacancies should remain below the metro area’s historical average over the coming years.
Vacancy rates are on a serious downward trend. As of September 2017 the vacancy rate for 4 and 5 Star office properties was at 16.2 percent, 3 Star at 14.3 percent, and 1 to 2 Star at a whopping 10.3 percent!
The net absorption rate is the average number of leased properties per month divided by the number of available units. It’s always a good indication of supply and demand. As of September, 4 and 5 Star properties were at 414, which isn’t anything special for DFW. However, for 3 Star properties the absorption rate dropped to a negative 122. We rarely see a negative absorption rate in commercial leasing, so this is a strong indication that good 3 Star properties are getting harder to procure.
What To Do
With indicators like these, it’s no time to be passive. You can’t expect to just stumble across the perfect commercial space for your company anymore. It’s time to be assertive, even aggressive. When you hear of something available, don’t put off making an appointment to go see it, and try to be a little flexible in your criteria, because frankly, it’s getting harder to find that perfect space.
You may have to compromise a little on your expectations. Of course, the best way to find what you’re looking for is to use a professional real estate representation company that will help you and make the whole process much easier.
The strong economy of the Dallas Fort Worth area is not expected to let up anytime soon. Our job growth is among the fastest in the country over the past three years. Abundant job opportunities have spurred a higher standard of living and significant population growth. In fact, population growth in the DFW metro area is more than double the U.S. average, so it looks like the current tight market for commercial real estate is going to be the new normal, at least for a while.