Advisory Experience 4th QUARTER INSIGHT Mac D. Morse ADAPTIVE REUSE OFFICE LEASE Advisor North Central Expressway [email protected] (972) 980-2917 The Domain, Austin, TX – 70 Acres Weaver – 58,000 SF
VACANCY SLOWLY INCREASING Maxim – 700,000 SF Knoll Trail Plaza – 120,000 SF Build-to-Suit The North Central Expressway Submarket is defined geographically as the area that is bordered by Hillcrest Avenue to the West, N Haskell Avenue to the South, Greenville Avenue to the East, and Forest Lane to the North. This analysis is focused on Class A and B office buildings that are existing or under construction and contain a minimum of 75,000 rentable square feet.
The North Central Expressway Submarket has seen an increase in the Class A vacancy from 12.5% DISPOSITION TECHNOLOGY LEASE at the end of first quarter 2017 to 13.2% at the end of the fourth quarter 2017. Average full- service rental rates of Class A space increased slightly per square foot, from $29.43 to $29.46 Invensys – 45,000 SF Sublease Flextronics – 1,500,000 SF during the same timeframe. Class A direct net absorption is currently sitting at negative 41,867 square feet for forth quarter 2017.
Texas Instruments – 70.537 Acres with a ESI – 70,000 SF TOTAL NET 441,362 SF Semiconductor ABSORPTION DELIVERED (past 12 months) (past 12 months) 2017 -161,150 SF 2017 0 SF 2016 318,873 SF 2016 0 SF
DIRECT MULTIPLE TRANSACTIONS FULL SERVICE DIRECT RENTAL RATE (Q4) VACANCY (Q4)
Texas Instruments – 1,200,000 SF Weaver – 171,000 SF Multi-market 2017 $29.37 PSF 2017 12.9% 2016 $28.99 PSF 2016 11.5%
DIRECT VACANCY BY CLASS (Q4) Class A 13% Class B 11%
This document has been prepared by Citadel Partners, LLC. for advertising and general information only. Citadel Partners, LL C. makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Citadel Partners, LLC. excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Citadel Partners, LLC. and/or their licensor(s). All rights reserved. New Dallas office tower on the Total Office Submarket Q4 Statistics wayOffice at Park Sub Lane-Market Highlights
Existing Inventory Vacancy YTD Net YTD Under Quoted development on NCX Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates The owners of one of North Dallas' biggest mixed-use Central Expressway 277 15,168,384 1,542,622 1,603,573 10.6% (94,993) 0 0 $27.09 projects are planning a new office development that would Dallas CBD 142 33,696,568 6,871,390 7,511,962 22.3% (72,789) 92,237 424,425 $25.35 bring more business tenants to the complex. East Dallas 1,071 13,061,022 1,033,731 1,061,010 8.1% (97,604) 27,255 370,120 $25.38 The Park Lane development on North Central Expressway Far North Dallas 1,112 61,803,030 7,167,157 7,971,966 12.9% 4,284,439 4,894,640 2,872,292 $27.96 Ft Worth CBD 118 11,882,631 1,088,005 1,127,739 9.5% 157,769 0 280,489 $26.51 already has shopping, high-rise apartments and three office Las Colinas 440 40,101,047 5,274,213 5,838,118 14.6% 915,233 1,037,992 1,946,913 $24.74 buildings. serious upward movement in the rents in our existing LBJ Freeway 266 22,688,579 4,773,544 5,025,490 22.1% 246,874 0 0 $22.37 offices," Spurgin said. "We think we'll garner significant Lewisville/Denton 938 13,172,376 1,441,016 1,598,979 12.1% (578,439) 178,533 69,369 $21.86 Owner Northwood Investors is teaming up with commercial interest with this building.“ Mid-Cities 2,621 41,157,910 5,565,698 5,682,507 13.8% 221,993 1,096,477 683,555 $21.83 property firm Cushman & Wakefield to work on an office North Fort Worth 601 6,886,457 572,060 631,815 9.2% (118,948) 104,588 92,406 $21.26 tower that would be built at the corner of Park Lane and The easy access to the eating and shopping locations and Northeast Ft Worth 343 5,421,125 1,873,347 1,873,347 34.6% 78,580 0 0 $20.37 U.S. 75. Preston Center 148 6,089,641 604,952 650,936 10.7% 11,219 176,089 127,034 $39.33 the residential options will help attract business tenants, Richardson/Plano 1,434 42,099,572 6,641,600 6,997,786 16.6% 236,397 827,105 781,085 $24.69 said Ward Eastman, Cushman & Wakefield senior director. South Ft Worth 1,657 20,208,193 1,531,774 1,602,664 7.9% 129,517 261,514 195,689 $22.83 The 35-acre Park Lane mixed-use project, across the Southwest Dallas 820 7,716,008 543,856 549,790 7.1% 169,970 114,272 12,024 $20.86 highway from NorthPark Center, opened in 2009. "Where else can you easily walk to 11 restaurants and Stemmons Freeway 285 15,094,149 3,307,846 3,335,203 22.1% 158,323 63,000 0 $16.88 The owners want to build an office tower with up to 11 more than 500,000 square feet of retail space? It just Uptown/Turtle Creek 302 14,436,682 1,341,406 1,601,438 11.1% (88,520) 214,765 1,305,014 $38.01 floors and as much as 340,000 square feet of space. doesn't happen," Eastman said. Totals 12,575 370,683,374 51,174,217 54,664,323 14.7% 5,559,021 9,088,467 9,160,415 $25.01 Source: CoStar Property® "The motivation behind this new building is we've seen Dallas Business Journal Office Submarket Absorption / Deliveries / Vacancy NCX News Momentum & (All Classes)
2017 Y-T-D SUBMARKET HIGHLIGHTS Forecast Quoted rental rates and creeping Top Leases (2016) Size Tenant vacancy tells a story for the North Meadow Park Tower 24,154 Eberstein & Witherite, LLP Central Expressway Submarket. As institutional investors start Deliveries (2015-2016) Size % Occupied Quoted Rate becoming less aggressive and The Offices at Park Lane Q3 ‘15 149,510 SF 80% $33.56 buildings are lowering their asking Preston Hollow Village Q2 ‘15 57,531 SF 24% $34.84 rates, it gives reason for Lease Rates – Full Service contemplation when considering (All Classes) Select Sales (2015-2016) Size Date your office lease. Meadow Park Tower 251,755 SF Q1 2016 There are signs that point to change $30.00 Walnut Glen 464,289 SF Q1 2016 $28.00 in the market which favor the $26.00 $24.00 Rambler Park 310,711 SF Q1 2016 corporate user and provide the $22.00 $20.00 opportunity to reconsider the $18.00 2008 2010 2012 2014 2016 Q3 structure of your lease. 2017 Direct Rental Rate
citadelpartnersus.com New Dallas office tower on the Total Office Submarket Q4 Statistics wayOffice at Park Sub Lane-Market Highlights
Existing Inventory Vacancy YTD Net YTD Under Quoted development on NCX Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates The owners of one of North Dallas' biggest mixed-use Central Expressway 277 15,168,384 1,542,622 1,603,573 10.6% (94,993) 0 0 $27.09 projects are planning a new office development that would Dallas CBD 142 33,696,568 6,871,390 7,511,962 22.3% (72,789) 92,237 424,425 $25.35 bring more business tenants to the complex. East Dallas 1,071 13,061,022 1,033,731 1,061,010 8.1% (97,604) 27,255 370,120 $25.38 The Park Lane development on North Central Expressway Far North Dallas 1,112 61,803,030 7,167,157 7,971,966 12.9% 4,284,439 4,894,640 2,872,292 $27.96 Ft Worth CBD 118 11,882,631 1,088,005 1,127,739 9.5% 157,769 0 280,489 $26.51 already has shopping, high-rise apartments and three office Las Colinas 440 40,101,047 5,274,213 5,838,118 14.6% 915,233 1,037,992 1,946,913 $24.74 buildings. serious upward movement in the rents in our existing LBJ Freeway 266 22,688,579 4,773,544 5,025,490 22.1% 246,874 0 0 $22.37 offices," Spurgin said. "We think we'll garner significant Lewisville/Denton 938 13,172,376 1,441,016 1,598,979 12.1% (578,439) 178,533 69,369 $21.86 Owner Northwood Investors is teaming up with commercial interest with this building.“ Mid-Cities 2,621 41,157,910 5,565,698 5,682,507 13.8% 221,993 1,096,477 683,555 $21.83 property firm Cushman & Wakefield to work on an office North Fort Worth 601 6,886,457 572,060 631,815 9.2% (118,948) 104,588 92,406 $21.26 tower that would be built at the corner of Park Lane and The easy access to the eating and shopping locations and Northeast Ft Worth 343 5,421,125 1,873,347 1,873,347 34.6% 78,580 0 0 $20.37 U.S. 75. Preston Center 148 6,089,641 604,952 650,936 10.7% 11,219 176,089 127,034 $39.33 the residential options will help attract business tenants, Richardson/Plano 1,434 42,099,572 6,641,600 6,997,786 16.6% 236,397 827,105 781,085 $24.69 said Ward Eastman, Cushman & Wakefield senior director. South Ft Worth 1,657 20,208,193 1,531,774 1,602,664 7.9% 129,517 261,514 195,689 $22.83 The 35-acre Park Lane mixed-use project, across the Southwest Dallas 820 7,716,008 543,856 549,790 7.1% 169,970 114,272 12,024 $20.86 highway from NorthPark Center, opened in 2009. "Where else can you easily walk to 11 restaurants and Stemmons Freeway 285 15,094,149 3,307,846 3,335,203 22.1% 158,323 63,000 0 $16.88 The owners want to build an office tower with up to 11 more than 500,000 square feet of retail space? It just Uptown/Turtle Creek 302 14,436,682 1,341,406 1,601,438 11.1% (88,520) 214,765 1,305,014 $38.01 floors and as much as 340,000 square feet of space. doesn't happen," Eastman said. Totals 12,575 370,683,374 51,174,217 54,664,323 14.7% 5,559,021 9,088,467 9,160,415 $25.01 Source: CoStar Property® "The motivation behind this new building is we've seen Dallas Business Journal Office Submarket Absorption / Deliveries / Vacancy NCX News Momentum & (All Classes)
2017 Y-T-D SUBMARKET HIGHLIGHTS Forecast Quoted rental rates and creeping Top Leases (2016) Size Tenant vacancy tells a story for the North Meadow Park Tower 24,154 Eberstein & Witherite, LLP Central Expressway Submarket. As institutional investors start Deliveries (2015-2016) Size % Occupied Quoted Rate becoming less aggressive and The Offices at Park Lane Q3 ‘15 149,510 SF 80% $33.56 buildings are lowering their asking Preston Hollow Village Q2 ‘15 57,531 SF 24% $34.84 rates, it gives reason for Lease Rates – Full Service contemplation when considering (All Classes) Select Sales (2015-2016) Size Date your office lease. Meadow Park Tower 251,755 SF Q1 2016 There are signs that point to change $30.00 Walnut Glen 464,289 SF Q1 2016 $28.00 in the market which favor the $26.00 $24.00 Rambler Park 310,711 SF Q1 2016 corporate user and provide the $22.00 $20.00 opportunity to reconsider the $18.00 2008 2010 2012 2014 2016 Q3 structure of your lease. 2017 Direct Rental Rate
citadelpartnersus.com Advisory Experience 4th QUARTER INSIGHT Mac D. Morse ADAPTIVE REUSE OFFICE LEASE Advisor North Central Expressway [email protected] (972) 980-2917 The Domain, Austin, TX – 70 Acres Weaver – 58,000 SF
VACANCY SLOWLY INCREASING Maxim – 700,000 SF Knoll Trail Plaza – 120,000 SF Build-to-Suit The North Central Expressway Submarket is defined geographically as the area that is bordered by Hillcrest Avenue to the West, N Haskell Avenue to the South, Greenville Avenue to the East, and Forest Lane to the North. This analysis is focused on Class A and B office buildings that are existing or under construction and contain a minimum of 75,000 rentable square feet.
The North Central Expressway Submarket has seen an increase in the Class A vacancy from 12.5% DISPOSITION TECHNOLOGY LEASE at the end of first quarter 2017 to 13.2% at the end of the fourth quarter 2017. Average full- service rental rates of Class A space increased slightly per square foot, from $29.43 to $29.46 Invensys – 45,000 SF Sublease Flextronics – 1,500,000 SF during the same timeframe. Class A direct net absorption is currently sitting at negative 41,867 square feet for forth quarter 2017.
Texas Instruments – 70.537 Acres with a ESI – 70,000 SF TOTAL NET 441,362 SF Semiconductor ABSORPTION DELIVERED (past 12 months) (past 12 months) 2017 -161,150 SF 2017 0 SF 2016 318,873 SF 2016 0 SF
DIRECT MULTIPLE TRANSACTIONS FULL SERVICE DIRECT RENTAL RATE (Q4) VACANCY (Q4)
Texas Instruments – 1,200,000 SF Weaver – 171,000 SF Multi-market 2017 $29.37 PSF 2017 12.9% 2016 $28.99 PSF 2016 11.5%
DIRECT VACANCY BY CLASS (Q4) Class A 13% Class B 11%
This document has been prepared by Citadel Partners, LLC. for advertising and general information only. Citadel Partners, LL C. makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Citadel Partners, LLC. excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Citadel Partners, LLC. and/or their licensor(s). All rights reserved.