Texas Office Market Upate | Year-End 2017

by CoyDavidson on February 10, 2018


The Texas Economic Expansion Continues

The Texas economy continues its broad expansion. Texas employment growth accelerated in the fourth quarter and was strong across most metros and industries. In Houston the office market is showing signs of recovery in the wake of the energy sector downturn. Austin continues to establish itself as favored location among technology companies and the Dallas-Forth Worth office market is benefitting from a wave of corporate relocations.

Austin Office Market Report | Q4 2017

The final quarter of 2017 was a strong finish for Austin’s office market. Year-end 2017 net absorption was close to 900,000 SF and rates continued their upward trend. The ease of finding quality space at market rates continues to be dependent on the specific submarket you target and the size of the space. The North/Domain submarket is still one of the hottest office submarkets in the nation. The vast majority of new buildings have been leased in whole prior to delivery. There are three large class A buildings in the pipeline (totaling close to 1 million SF) and another building is expected to break ground in early 2018. In the next 18 months, we will, for the first time, see a 50,000-170,000 SF block of second generation space become available in the Domain. Finding space for a small to medium user in the Domain has been difficult and we don’t expect that to change… read the full report

Dallas – Forth Worth Office Market Report | Q4 2017

After years of speculation, planning, and construction, the relocations and consolidations that have been the hype of the DFW market for the last several years have come to fruition. Toyota moved into its 2.1 million square foot headquarters in June 2017, JP Morgan occupied its 1 million square foot campus in Q4, and TD Ameritrade moved to its Westlake campus in December. Absorption in 2017 was driven by single-tenant build-to-suit projects. Of the 5.6 million in net absorption for the year, 3.6 million, or two-thirds was from single-tenant buildings. Much of the activity in the market was large tenants moving into higher-grade space. While 2017 was a strong year for Class A – with 6.7 million square feet of net absorption, the third highest year since 1982 – Class B posted negative net absorption of 835,000 square feet. One example of this is JP Morgan who consolidated offices… read the full report

Houston Office Market Report | Q4 2017

Houston Office Market Report Q4-2017After six straight quarters of negative net absorption, Houston’s office market posts 673,000 SF of positive net absorption in Q4 2017. Although positive, Houston’s office market 2017 year-end absorption total is still well within the red, at negative 1.7M SF. After three years in an economic energy slump, Houston’s office market is ready for a boost. Even though oil prices have recently increased, the increase is not enough to spur hiring sprees in the energy industry. With the recent increase in oil prices the U.S. Energy Information Administration (EIA) has revised it’s forecast for world oil demand in 2018 by 100,000 barrels per day. Although Brent crude prices are up to $64 per barrel, the highest price since November 2014, it’s not enough to accelerate leasing of vacant office space. Recent news articles indicate that some of the large energy giants reported profits in the fourth quarter. However, profits were largely driven by continued lean budgets and staff reductions… read the full report

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