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State of the U.S. & Local Office Market – 2016 Mid-Year Review

 

 

 

 

 

 

 

 

 

 

  • National Drivers:
    • National Vacancy – 10.5% (Best Indicator of a Healthy Market)
    • Rent Growth – 3.6%
    • Under Construction – 135 million SF
    • Sales Volume – 79 million
  • Top Markets for Employment Growth:
    • #1 DFW 3.4 % YoY
    • #2 Austin 3.3% YoY
    • #6 Atlanta 2.9% YoY
      • National Average 1.7%
  • Unemployment Rate @ 5%:
    • Layoffs still low, quit rate high (employees feeling good about finding another job).
  • Submarkets:
    • High Number of submarkets vacancies declining across the board.
    • Secondary markets w/ strongest occupancy trends – #3 Denton/Lewisville at 2.9%.
  • Summary:
    • Tenants moving from 3 star to 4-5 star office space to attract & retain quality employees.
    • Expect Occupancy rates to continue to grow through 2018.
    • DFW @ 15% vacancy rate (Due to high supply).
    • 2000 McKinney Ave. 447,595 SF sold for $503/f at a 4.5% cap, A new record for Dallas Office Market.

by DAN CAMPANELLA, Broker/Owner @ R.E.INVEST Brokerage, LLC. on October 28th, 2016.

Source: CoStar

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