Friday, January 22, 2010

TEXAS' Q4 OFFICE PERFORMANCES VARY

 The office markets in Dallas–Fort Worth and Houston struggled in fourth quarter 2009, while Austin and San Antonio showed some positive signs, according to Grubb & Ellis.
Dallas–Fort Worth ended 2009 with a total negative absorption of 941,499 sf, 265,402 sf of which was posted in the fourth quarter. Vacancy rose 30 basis points to 22.8 percent in the fourth quarter, its highest level in over four years. Overall asking rents declined $0.20 in the last quarter to $20.68 per sf across all property classes.
Houston posted 295,713 sf of negative absorption in fourth quarter 2009, bringing the annual absorption to negative 2.4 million sf. Overall vacancy increased 30 basis points to 16.4 percent and overall full-service asking rents decreased across all classes, falling $0.46 to $23.35.
The office market looked a bit better in Austin, where 129,885 sf of positive absorption was recorded in the fourth quarter. However, the capital still posted 189,280 sf of negative absorption for the year. Overall vacancy declined by 20 basis points to 20.7 percent during the quarter, but ended the year 190 points higher than last year, reaching a five-year peak. Class-A and -B rents fell $0.21 and $0.10 in the fourth quarter, respectively, bringing Class-A asking rents to $28.83 and Class-B asking rents to $21.17.
Positive postings continued in San Antonio’s office leasing market, where fourth quarter 2009 wrapped up with 212,000 sf of positive absorption. However, the city’s annual absorption remained in the red at negative 57,221 sf. Vacancy rates dropped 90 basis points to 18.2 percent during the fourth quarter, but so did overall asking rents, falling $0.17 to $21.43 per sf. Class-A asking rents were the only ones to increase, rising $0.07 to $25.02.