A quick look at Cushman & Wakefield’s preliminary second-quarter office market report says it all: There’s a lot more black ink in the 2012 column compared to 2011.
At the end of the second quarter of this year, just seven markets show a loss in YTD overall net absorption; last year, there were 13. In the direct absorption column, just six North Texas markets are in the red; for the same period last year, there were 14.
Market-wide, direct absorption totaled 680,982 square feet for first six months of 2012—a whopping 112 percent increase over 2011. Overall absorption, which includes sublease space, totaled 798,453 square feet—a 68 percent improvement. (See chart at the end of this report. Click on image for larger view.)
Available sublease space on the market stands at 3.3 million square feet, a drop of 8.3 percent when compared to to the end of the second quarter of 2011.
So that’s the good news.
In the not-so-good news department, overall leasing activity (new leases signed) dropped 19.9 percent in the first half of 2012, to 5.5 million square feet. And overall asking lease rates dropped four cents to $20.24 per square foot. Class A rents ticked down a slight 1 percent to $24.55 per square foot.
Some of the tenants moving into new space during the first half of 2012:
• Alcon Laboratories
• West Coast University
• General Electric
• Gehan Homes
• Copart of Texas
A look at projects kicked off or under way so far this year, according to C&W’s report:
• Heady Investments broke ground on Headquarters at Legacy I, a 164,000-square-foot building in the Legacy/Frisco submarket.
• A speculative 75,000-square-foot building at 9393 Preston Center Plaza Drive is under way; completion is expected in the first quarter of 2013.
• Downtown Fort Worth saw three new projects break ground in the second quarter; they total 233,000 square feet.
• Build-to-suit activity is robust in the Legacy/Frisco submarket, with 540,000 square feet in new projects under way.
The 18.1 million-square-foot LBJ Freeway submarket remained constant at 28.9 percent. Several others—most notably Turtle Creek/Uptown, Far North Dallas, and Far North Stemmons—saw vacancy drop from 2011 to 2012, including:
• Preston Center (3.1 million square feet), from 11.8 percent to 9.5 percent
• Turtle Creek/Uptown (10.3 million square feet), from 24.3 percent to 17.1 percent
• Far North Dallas (16.8 million square feet), from 25.8 percent to 21.2 percent
• Legacy/Frisco (14.4 million square feet), from 11.1 percent to 9.8 percent
• Dallas CBD (29 million square feet), from 29.1 percent to 27.2 percent
• Far North Stemmons (3.8 million square feet), from 25 percent to 9.8 percent
• West Fort Worth (3 million square feet) from 7 percent to 3.5 percent