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Office Market Report

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Office Market Report Dallas/Fort Worth 2nd Quarter 2014 Office Market Report In partnership with 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved Table of Contents/Methodology of Tracked Set Table of Contents/Methodology of Tracked Set 2 Office Market Map 3 2nd Quarter 2014 4-8 Under Construction & Leasing Activity 9-10 Key Deals Signed in the 2nd Quarter 11 Future Occupancies/Vacancies 12 Advisory Board Members 13 DFW Xceligent Team 14 The Dallas-Fort Worth tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. The total square feet of all single and multi-tenant buildings greater than 10,000sf, Tracked Inventory including owner occupied facilities. Medical, government, data centers and (Office) obsolete/remediation properties are excluded. All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, Total Available SF for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move. The total of the vacant square footage in a building that is being marketed by an Direct Vacant SF agent representing the landlord. The net change in occupied square feet from quarter to quarter, expressed in Net Absorption square feet. Note This report reflects Direct Vacancy and Absorption, Sublease space is excluded 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved 2 Office Market Map 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved 3 2nd Quarter 2014 Overview Throughout the second quarter of 2014 the Dallas/Fort Worth office market has continued to see overall positive activity with approximately 483,000 square feet absorbed compared to around 770,000 square feet in the first quarter of 2014. Major tenants contributing to this quarters absorption were Bell Helicopter, Verizon and USAA. 1st Quarter Statistics (Overall) # of Total Available Total Vacant Total Vacancy Qtrly Net YTD Net Inventory (SF) Bldgs (SF) (SF) Rate (%) Absorption (SF) Absorption (SF) A 506 122,756,678 25,939,668 20,102,757 16.4% 167,804 337,658 B 1,271 113,950,956 19,779,840 16,830,642 14.8% 266,535 855,799 C 246 8,367,810 1,697,954 1,522,347 18.2% 48,849 9,633 Total 2,023 245,075,444 47,417,462 38,455,746 15.7% 483,188 1,203,090 Historical Stats for DFW Office Inventory (SF) Total Vacancy Rate (%) Qtrly Net Absorption (SF) 2014 Q2 245,075,444 15.7% 483,188 A 122,756,678 16.4% 337,658 B 133,950,956 14.8% 855,799 C 8,367,810 18.2% 9,633 2014 Q1 242,646,849 15.7% 770,923 A 120,660,961 16.6% 172,257 B 113,701,850 14.6% 600,926 C 8,284,038 18.2% -2,260 2013 Q4 242,616,909 16.3% 1,737,043 A 119,997,753 17.2% 1,499,937 B 114,359,228 15.3% 309,043 C 8,259,928 17.8% -71,937 2013 Q3 242,762,607 17.0% 1,232,575 A 119,986,127 18.5% 188,750 B 114,513,684 15.5% 1,037,906 C 8,262,796 17.0% 5,919 2013 Q2 241,295,900 17.2% 850,945 A 118,424,868 18.0% 1,051,085 B 114,647,316 16.5% -201,677 C 8,223,716 16.6% 1,537 2013 Q1 240,485,340 17.4% 661,318 A 117,906,599 19.1% -94,788 B 114,332,738 15.8% 736,085 C 8,246,003 16.2% 20,021 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved 4 2nd Quarter 2014 Overview The markets overall vacancy rate is expected to drop further this year, due to several additional large deals that are in the works. For example State Farm will be moving into the first phase of its new campus at Cityline in Richardson for approximately 500,000 sf. Q2 Vacancy Rates by Class Q2 Absorption by Class 16.4% 266,535 167,804 14.8% A B A B As vacancy rates decrease and rental rates rise many areas of Dallas/Fort Worth are becoming more of a Landlord’s market. Q2 Absorption Q2 Vacancy Rates CBD/Suburban CBD/Suburban 61,455 20% 15% (2,429) Dallas CBD Suburban Dallas CBD Suburban 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved 5 1st Quarter 2014 Q1 Average Asking Rates (FSG) Historical Vacancy Rates by Quarter (DFW) A B 17.4% 17.2% 17% Central Expy $23.66 $18.74 16.3% 15.7% 15.7% Dallas CBD $21.78 $16.53 East Dallas $20.75 $14.52 Far North Dallas $25.54 $17.68 Las Colinas $25.74 $23.45 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 LBJ Corridor $21.92 $20.30 Preston Center $31.41 $28.66 Richardson/Plano $20.78 $20.08 Historical Net Absorption by Quarter (DFW) Southwest Dallas $20.00 $14.61 1.7m Stemmons Corridor $15.78 $11.60 1.2m Uptown $30.32 $22.60 851k 661k 770k Greater Fort Worth $23.82 $17.64 483k Mid Cities $21.58 $15.87 Fort Worth CBD $27.53 $17.71 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 Denton/Lewisville $24.33 $18.49 Q1 Largest Changes in Occupancy Property Name Class SF occupied or vacated Company Name Market Bell Helicopter Campus A 200,000 Bell Helicopter Mid Cities 2200 W Airfield Dr B 185,000 Verizon Mid Cities Legacy Business Park Bldg 2 A 105,000 USAA Far North Dallas Lake Vista Pointe B 41,006 Ally Financial Denton/Lewisville Plaza of the Americas North A 40,000 HUB International Dallas CBD Ross Tower A 38,611 Perkins Coie Dallas CBD Trinity Towers A 33,967 Childrens Medical Stemmons Corridor The Commons at Las Colinas II A 32,187 Epsilon Las Colinas International Business Park B 26,847 Great Lakes Educational Loan Services Far North Dallas Savoye Squared B 26,657 HCK2 Far North Dallas Parkway Plaza Bldg I B (18,318) GHA Far North Dallas Trammell Crow Center A (19,096) Perkins Coie Dallas CBD Bluffview Towers East A (25,057) Atrium Windows Preston Center One Ridgmar Centre A (26,580) PAE Applied Technologies Greater Fort Worth Three Forest Plaza B (29,462) QRX Medical Management LBJ Corridor Westway One B (30,000) U of Phoenix Las Colinas Westway One B (33,240) Lennar Homes Las Colinas 801 Cherry St A (81,516) Thompson Reuters Fort Worth CBD Tollway Office Center II B (160,000) Capital One Far North Dallas 5851 Legacy Cir A (318,582) Encana Oil & Gas Far North Dallas 2Q 2014 Market Trends © 2014 by Xceligent, Inc. All Rights Reserved 6 2nd Quarter 2014 2nd Quarter Statistics (By Submarket) # of Total Vacancy Qtrly Net Inventory (SF) Total Available (SF) Total Vacant (SF) YTD Net Absorption Bldgs Rate (%) Absorption (SF) Dallas CBD 72 33,126,552 7,332,392 6,730,292 20.3% 61,455 349,379 A 24 20,275,918 5,750,391 5,173,448 25.5% 60,994 336,820 B 39 11,900,398 1,434,726 1,409,569 11.8% 461 27,898 C 9 950,236 147,275 147,275 15.5% 0 -15,339 Uptown 65 10,596,304 1,471,133 1,138,082 10.7% 56,759 71,260 A 40 8,861,710 1,159,129 870,058 9.8% 46,701 57,085 B 22 1,645,546 278,155 236,539 14.4% 10,058 14,175 C 3 89,048 33,849 31,485 35.4% 0 0 Stemmons Corridor 110 11,266,567 3,457,825 2,937,007 26.1% 59,951 -127,710 A 12 3,970,178 1,124,074 989,248 24.9% 40,006 -136,971 B 68 6,171,391 2,006,249 1,726,289 28.0% -3,889 -5,383 C 30 1,124,998 327,502 221,470 19.7% 23,834 14,644 Preston Center 32 4,018,433 430,025 308,582 7.7% 4,637 9,206 A 19 3,131,126 337,288 222,947 7.1% -14,419 -1,497 B 11 819,629 81,789 74,687 9.1% 17,231 13,579 C 2 67,678 10,948 10,948 16.2% 1,825 -2,876 Central Expy 59 10,835,306 2,516,505 2,024,197 18.7% 26,193 43,194 A 19 6,347,735 1,821,940 1,439,318 22.7% -317 18,026 B 34 4,143,886 629,231 519,545 12.5% 27,375 29,427 C 6 343,685 65,334 65,334 19.0% -865 -4,259 LBJ Corridor 148 20,934,737 6,162,268 5,339,916 25.5% -11,207 -6,838 A 29 9,542,205 2,857,514 2,200,809 23.1% 11,038 41,519 B 94 10,419,606 3,012,657 2,861,913 27.5% -14,959 -25,722 C 25 972,926 292,097 277,194 28.5% -7,286 -22,635 Far North Dallas 359 45,995,541 6,901,477 5,574,451 12.1% -215,008 214,505 A 133 26,101,071 4,007,070 3,051,579 11.7% -161,106 146,868 B 216 19,056,354 2,825,554 2,454,877 12.9% -54,206 61,025 C 10 838,116 68,853 67,995 8.1% 304 6,612 Las Colinas 236 32,453,573 6,210,184 4,928,260 15.2% -6,824 -213,255 A 75 18,193,494 3,305,128 2,512,140 13.8% 19,175 -300,825 B 152 13,950,865 2,882,811 2,393,875 17.2% -25,999 87,570 C 9 309,214 22,245 22,245 7.2% 0 0 East Dallas 63 3,158,473 469,045 442,697 14.0% -3,367 -6,376 A 5 231,927 53,606 50,175 21.6% -782 -2,262 B 40 2,334,639 343,228 320,311 13.7% -2,585 -2,650 C 18 591,907 72,211 72,211 12.2% 0 -1,464 2Q 2014 Market Trends © 2014 by Xceligent, Inc.
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