Friday, October 02, 2009

D-FW office leasing slide continues

The Dallas-Fort Worth office market continued to soften in the third quarter, according to a new report by Delta Associates.

The area's office market recorded negative 1.3 million square feet in absorption, compared to a positive 1 million square feet in the first half of 2009. Absorption measures the net change in occupied space.

Overall office building vacancy climbed to 17.7 percent in the third quarter, rising from 16.9 percent at mid-year and 17 percent a year ago, according to the report from Delta Associates, the research affiliate of commercial real estate firm Transwestern.

Office rents declined slightly during the third quarter and have slid 4.3 percent year-to-date.

Robert Deptula, principal in the Dallas office of Transwestern, called it "the greatest tenant market since the early 1980s."

Deptula said it feels like the market is improving, albeit slowly.

"Based on the number of tours and phone calls and requests for information, it certainly seems like tenants are getting focused on their real estate requirement, and that's slowly starting to translate into some closed deals," he said.

On the development front, 2.8 million square feet of office space is under construction or renovation, dropping from 4 million square feet at mid-year and 6.8 million square feet a year ago. About 60 percent of the space is pre-leased, compared to 46 percent at mid-year and 52 percent a year ago.

Investment sales volume plunged to $162 million through the third quarter of 2009, compared to $1.5 billion during the same period a year ago. These numbers are devastating that is a 89% reduction in investment sales in one year!!

Dallas Business Journal