Why Collin/Denton Counties continue to grow

[mjblazin]

A telling point in the story is that the jobs are moving out just as fast as the homes move out. Yes, some urbanization will occur, but it is more likely that we will have nuclei that get denser out in the sprawl, not a collapse toward the Dallas core. Dallas' best future is not to get a return of people from suburbs, but to get a share of new people coming to the metroplex. It is not clear exactly how the sprawl will reshape, but they will do it on their own. We in Dallas core will go our way.

[slfunk]

^ I agree to point. I agree there will not be a collapse of the suburbs to the Dallas core, but we will continue seeing patterns change within my lifetime away from sprawl type developments. There are a few things that will preserve this type of growth for the next 50 years. 1. Fuel efficient cars that are more efficient then the prius or similar cars. 2. Changing the mind set of 20-30 somethings that have become less and less inclined to move to the exurbs like Frisco, Little Elm or Princeton. 3. We figure out how to finance major road projects w/o sacraficing our education system. There more than a few advantages Dallas has over the suburbs 1.. People are waiting longer to start a family and those people when single or no kids typically like to be closer to cultural establishments (sports, arts, and nodes of activity) A couple suburbs have responed to this movement with Legacy Town Center, Southlake town center, Garland with Firewheel, Richardson around the Cambell DART station, Carrolton has a masterplan for these developments and Frisco is trying hard with Frisco Square 2. DART has built a system that converges on downtown and so does the highway system 3. Dallas still has large swaths of land to the south that is either not developed or underdeveloped. 4. Private home construction trends show the average american house size has been going down the past 10yrs where from the 80s-90s it kept creeping up (home owners citing energy, more expensive water bills, commute times & expense) 5. The aging suburbs like Richardson and Plano will have less opportunities to throw money to developers or corporations b/c they need to pay for school repairs, maintaining or replacing water service and sewage more so then they have in the past (something Dallas has been doing for decades and is part of their yearly budget and this levels the playing field). 6. Businesses have been moving back to Downtown or Dallas proper growing Dallas's tax base that should in the near future take some of the burden off of the residents and return to coorporations paying the larger percentage of taxes like it was just a couple of years ago when Dallas was able to lower property taxes on its residents (something no suburb and possibly Ft. Worth are able to do currrently b/c the bedroom / suburb communities rely mostly on residents for taxes even with the business parks). 7. Some of the TIF that spurred big reinvestments in city (West Village, Victory, and downtown) have matured or expired allowing the city to use that tax money for other things. Businesses have not come back in droves but the trend of exiting downtown to burbs during the 80s and 90s has now become an exchange of companies and more companies are studying downtown as an option for relocating. Dallas still accounts for 49-51 percent of the jobs in DFW and has the largest tax base out of any city in the metro. That tax base can be used to attract more businesses and development intown through TIF's or a new financing incentive program. As we see cost of energy, cost of water, and the cost of highway construction go up and up there will be new priorities set by local, state, and federal governments that will shape new patterns. TXDot has already publically stated last year they are revaluating how money is allocated and their priority system for funding new and maintence projects b/c they are running on fumes. I would not count Dallas out by a long shot. I actually think we will see Ft. Worth become more compact over time b/c it contains the second most jobs in metro and has not seen the growth that Dallas side of the metro has since the 60's.

[Tucy]

6. Businesses have been moving back to Downtown or Dallas proper growing Dallas's tax base that should in the near future take some of the burden off of the residents and return to coorporations paying the larger percentage of taxes like it was just a couple of years ago when Dallas was able to lower property taxes on its residents (something no suburb and possibly Ft. Worth are able to do currrently b/c the bedroom / suburb communities rely mostly on residents for taxes even with the business parks). 7. Some of the TIF that spurred big reinvestments in city (West Village, Victory, and downtown) have matured or expired allowing the city to use that tax money for other things. Businesses have not come back in droves but the trend of exiting downtown to burbs during the 80s and 90s has now become an exchange of companies and more companies are studying downtown as an option for relocating. Dallas still accounts for 49-51 percent of the jobs in DFW and has the largest tax base out of any city in the metro.

What is your source for the statements that "Businesses have been moving back to Downtown or Dallas proper" or that "the trend of exiting downtown to burbs during the 80s and 90s has now become an exchange of companies and more companies are studying downtown as an option for relocating"?

Can you provide a link to a source showing the percentage of jobs in Dallas?

[tamtagon]

What is your source for the statements that "Businesses have been moving back to Downtown or Dallas proper" or that "the trend of exiting downtown to burbs during the 80s and 90s has now become an exchange of companies and more companies are studying downtown as an option for relocating"?

Can you provide a link to a source showing the percentage of jobs in Dallas?

forum.dallasmetropolis.com is a good link. ATT moved to the traditional downtown, Comerica, Moneygram, Tenent, Joule, Ritz, W, Sterling, Amegy, Capital One, BBVA is pending... many companies have initiated large scale operations in the downtown area.

The North Texas medical services, education and research industry expansion occurring in/around downtown Dallas is vast when compared to the rest of the region.

5,000,000+ square feet of top market office space has been built in Uptown, yet the downtown occupancy rate is about the same.

Derelict downtown buildings are being converted to residential. Cedar Springs/Uptown/Downtown/East Dallas has at least 20,000 more residents than 7-ish years ago, and a post recession residential building boom is underway.

Derelict apartment buildings are being bulldozed all over Dallas proper and in most cases higher residential density is the replacement. The majority of threads on the forum touch on the evolving residential infrastructure in Dallas.

[slfunk]

What is your source for the statements that "Businesses have been moving back to Downtown or Dallas proper" or that "the trend of exiting downtown to burbs during the 80s and 90s has now become an exchange of companies and more companies are studying downtown as an option for relocating"?

Can you provide a link to a source showing the percentage of jobs in Dallas?

Some of it comes from different buisness and real estate publications. Some of it comes from day to day work with different developers. You can go on to the Bureau of Labor statistics and the Texas A&M real estate center. At TAMU they have a break down of migration patterns from other parts of the country, labor stats, employeers, income levels, occupancy levels, etc.

[AeroD]

Well I'll be. Some guy from Richardson is not all for unbridled sprawl...which is why the probably why the City of Richardson zoned the last remaining parcels for high-density development.

[mjblazin]

While Dallas core has had some nameplate improvements, things like AT&T do very little for the overall number of jobs. Same thing with th law firms and design firms. We are talking about millions of jobs in the pool. Moves in the paper talk about a few hundred here and there. If things were truly reversing, we would not have Mary Suhm have to keep whacking the budget each year for 50 or 75 million.

I do agree that the hospitals are the key to future employment. Dallas has the major medical centers for the entire area. They are the real key to any economic dynamism for the city and county. Paradoxically, the great planning by DART in linking these centers makes it less necessary to be in the neighborhood to use them.

I keep seeing car expenses as a the promised big driver to push people back to the core. The market will take care of it will additional hybrids, smaller cars, and natural gas. We already have nationwide gasoline demand at the same levels of 10 years ago while nationwide transit has barely budged or gotten slightly worse. What does that tell you?

[Tucy]

forum.dallasmetropolis.com is a good link. ATT moved to the traditional downtown, Comerica, Moneygram, Tenent, Joule, Ritz, W, Sterling, Amegy, Capital One, BBVA is pending... many companies have initiated large scale operations in the downtown area.

The North Texas medical services, education and research industry expansion occurring in/around downtown Dallas is vast when compared to the rest of the region.

5,000,000+ square feet of top market office space has been built in Uptown, yet the downtown occupancy rate is about.

I suspected it was based entirely on anecdotal "evidence"

You are conveniently ignoring, for this purpose, all of the downtown square footage that has been converted from office space to hotel and residential. Would be interesting to see the total downtown-uptown office space square footage through the years.

[tamtagon]

I suspected you were basing it entirely on anecdotal "evidence"

If someone tells you they saw a thunderstorm rolling across the plains dumping rain, are you going to need an announcement from the National Weather Association that rain fell?

Really Tucy, the anecdotal evidence collated in abundance on this forum is sufficient to support the claim, "Businesses have been moving back to Downtown or Dallas proper". As you know the DMN, Dallas BizJournal, and several Real Estate Industry inventory reports are sited daily as sources; a good number of downtown residents share street level observations that back up the claim that businesses are moving into town. I understand and agree with the need for reliable information, and I have always appreciated your request for reliability, but you may be overreaching to request a source for information that has become 'common knowledge.'

You are conveniently ignoring, for this purpose, all of the downtown square footage that has been converted from office space to hotel and residential. Would be interesting to see the total downtown-uptown office space square footage through the years.

Not really, I did say, "Derelict downtown buildings are being converted to residential. Cedar Springs/Uptown/Downtown/East Dallas has at least 20,000 more residents than 7-ish years ago, and a post recession residential building boom is underway."

Quarterly reports from Cushman Wakefield are linked to the forum frequently, but I've never tried to see how far back the data is shown. It would be interesting to see how the numbers tabulate.

[Tucy]

If someone tells you they saw a thunderstorm rolling across the plains dumping rain, are you going to need an announcement from the National Weather Association that rain fell?

Really Tucy, the anecdotal evidence collated in abundance on this forum is sufficient to support the claim, "Businesses have been moving back to Downtown or Dallas proper". As you know the DMN, Dallas BizJournal, and several Real Estate Industry inventory reports are sited daily as sources; a good number of downtown residents share street level observations that back up the claim that businesses are moving into town. I understand and agree with the need for reliable information, and I have always appreciated your request for reliability, but you may be overreaching to request a source for information that has become 'common knowledge.'

Yea, I am well aware of the reams of anecdotal "evidence" on this forum. I am also aware of the fact that, in spite of all of that anecdotal "evidence" of businesses now choosing downtown Dallas and the city of Dallas over the suburbs, downtown still has sky-high vacancy rates, Uptown's vacancy rate is not particularly impressive and the office sub markets all across the city of Dallas are mostly not performing very well. The problem with common knowledge is that it is often little more than mythology, especially in a boosterish echo chamber like this forum.

[tamtagon]

The problem with common knowledge is that it is often little more than mythology, especially in a boosterish echo chamber like this forum.

Sure can be!! Sometimes it's fun to separate the blind boosterism from the directive observations, sometimes it's taxing.

... in spite of all of that evidence of businesses now choosing downtown Dallas and the city of Dallas over the suburbs, downtown still has sky-high vacancy rates, Uptown's vacancy rate is not particularly impressive and the office sub markets all across the city of Dallas are mostly not performing very well.

word

[AeroD]

Yea, I am well aware of the reams of anecdotal "evidence" on this forum. I am also aware of the fact that, in spite of all of that evidence of businesses now choosing downtown Dallas and the city of Dallas over the suburbs, downtown still has sky-high vacancy rates, Uptown's vacancy rate is not particularly impressive and the office sub markets all across the city of Dallas are mostly not performing very well. The problem with common knowledge is that it is often little more than mythology, especially in a boosterish echo chamber like this forum.

Ah scheiss. Tucy just blew one.

[Tucy]

Another interesting fact from Transwestern apropos to the theory that the trend is for businesses to choose downtown Dallas: For the period 2008 - 4th quarter 2011, Uptown and CBD combined had a cumulative negative absorption of 811,000 square feet of office space. Hardly what one would expect in a sub-market that is supposed to be gaining jobs at the expense of suburban areas. Moreover, During that same time period, the entire metroplex (excluding the drag of downtown Dallas) had a positive absorption of 9.43 million square feet.

Further, during the same 2008-2011 time period, all of the sub markets in the city of Dallas had a collective, aggregate net office space absorptionof only 101,000 square feet.

[Tucy]

Dallas still accounts for 49-51 percent of the jobs in DFW.

No, it does not. The DFW area has almost 3 million jobs, just over 1/3 of those are in Dallas.

http://www.bls.gov/ro6/fax/dfw_ces.htm

http://www.dallas-ecodev.org/SiteCon...ors/PayEmp.pdf

[tamtagon]

Excellent data! Thanks, T.

[tamtagon]

... For the period 2008 - 1st quarter 2011, Uptown and CBD combined had a cumulative negative absorption of 811,000 square feet of office space....

How much did the office market grow for the period 2008- 1st qtr 2011? They're gonna keep building nice office space to replace the aging-out inventory. Residential repurposing is downtown's best friend.

[tamtagon]

The DFW area has almost 3 million jobs, just over 1/3 of those are in Dallas.

So, what does it say that one third of the all the jobs are within the town with one sixth of the population? How has this metric changed since the 70s?

[Tucy]

How much did the office market grow for the period 2008- 1st qtr 2011? They're gonna keep building nice office space to replace the aging-out inventory. Residential repurposing is downtown's best friend.

If by "office market", you mean the demand side, it did not grow at all, but rather shrank by 811,000 square feet from 2008-2011 (and my post should have said 4th quarter 2011, rather than 1st quarter, since corrected).

The supply data is not in the Transwestern reports and I have not been able to find it elsewhere.

[Tucy]

So, what does it say that one third of the all the jobs are within the town with one sixth of the population? How has this metric changed since the 70s?

I guess it says that Dallas is one of the central cities of the DFW metropolitan area; nothing much more than that.

I have not been able to find historical info, but one might surmise that in the 70"s Dallas had a much higher portion of the population and a higher portion of the jobs. The gap between the % of jobs and % of people was almost certainly narrower 40 years ago.

Edit: in 1970, Dallas's share of metro population was approximately 1/3. Still can't find the employment numbers for 1970, but I would guess it might have been close to 50%, maybe even more?

[tamtagon]

If by "office market", you mean the demand side, it did not grow at all, but rather shrank by 811,000 square feet from 2008-2011 (and my post should have said 4th quarter 2011, rather than 1st quarter, since corrected).

The supply data is not in the Transwestern reports and I have not been able to find it elsewhere.

Sorry, by office market, I mean total inventory - ultimately wondering how much newly constructed office space became available from 2008-2011. If the vacancy rate increased by 2% while the denominator increased by 3%, demand did not shrink, it simply did not grow as much as availability. During a major recession, that's doing good.

It will be interesting to see what happens when Dallas' over abundant supply of under-maintained office buildings bottoms out.

[Tucy]

Sorry, by office market, I mean total inventory - ultimately wondering how much newly constructed office space became available from 2008-2011. If the vacancy rate increased by 2% while the denominator increased by 3%, demand did not shrink, it simply did not grow as much as availability. During a major recession, that's doing good.

It will be interesting to see what happens when Dallas' over abundant supply of under-maintained office buildings bottoms out.

I thought that was probably what you meant. But we don't need that information to gauge demand. The office space absorption numbers give us the demand information, and the demand did indeed shrink . . . 811,000 fewer square feet of office space was occupied in downtown/uptown at the end of 2011 than had been occupied at the end of 2007.

FWIW, I did calculate that about 2.1 million square feet of office space was added to downtown/Uptown during that period (not taking into account square footage that was removed from the office market in that time... I have not been able to find this information). Whatever the number, the combination of new supply and reduced demand has raised the downtown vacancy rate from 21% to 26% and the Uptown vacancy rate from 12% to 16%.

[tamtagon]

FWIW, I did calculate that about 2.1 million square feet of office space was added to downtown/Uptownwe're urging that period (not taking into account square footage that was removed from the office market in that time... I have not been able to find this information). Whatever the number, the combination of new supply and reduced demand has raised the downtown vacancy rate from 21% to 26% and the Uptown vacancy rate from 12% to 16%.

Before returning to the topic of a rapidly growing Collin County, I've gotta find or make conclusions about the downtown/uptown office market. I trust your calculations, Tucy, but something seems not right.... unless the amount of derelict office space repurposed to residential/retail space amounts to about 1.3 million sq ft. -- which is entirely possible.

I would have to say, though, that despite decades of extremely high vacancy rates maintained in downtown/uptown, the benefit of building before it's truly needed far outweighs the downside. In a market like downtown Fort Worth with extremely low vacancy rates, a company looking for a big chunk of office space has very limited option, and one of primary options is to build; however the same company looking at downtown Dallas will have more choices than need be examined. If the population center is on an upswing, it's better to have extra than not enough.

[mjblazin]

I question whether anyone not knee deep in the commercial real estate business would ever pursue the idea of building downtown or anywhere for office pace. I do not know why Hunt Oil decided to build its building, but I suspect the name on the outside had one thing to do with it. Almost all other public corporations will opt for someone else taking the risk. Even banks that finance these buildings are exiting ownership. Yes, building to suit your needs has benefits on capability and timing. Evidence is almost all corporations are more concerned about costs and risks for non-essential elements of the business. If downtown does not have space, they will look elsewhere. No one not in real estate has any desire to predict or get ahead of the market. It is a lesson that corporations will carry forward for several generations, much like dogma acquired from Great Depression veterans.

[slfunk]

Major corporations like Hunt Oil have real estate divisions. While having their own building with their name on it was the big driver, the other was studying the demographics of current andfuture talent. The numbers that get presented for vacancy have to be taken with a bit of salt. I was exposed to some of the inner workings of the real estate profession when I started attending a real estate networking group many years ago. The guys have some 'hidden' facts behind the numbers that are not available through A&M and the Labour Bureau. There is a good supply of office space in the market, I do not argue against that. But you have to dig deeper to find what triggers some of the developers decisions. For example, a lot questions arose as to how much office real estate was available during the time of the Mercantile renovation and what makes the most sense. There were a number of renovation proposals (six I believe) for that project including a Fashion Incubator with a combination of office / residential, a residential tower or even just repurposing the tower for office space. What I learned at that time was how the market is evaluated at the 10,000 foot level vs. at the street level. From 10,000 feet their is a large oversupply of office space in downtown in the 20 plus percentile. You can not argue against that number and at the surface arguements against new development make sense. At the street level you see the quality of the office space and what some buildings have to undergo to become marketable that makes new development sensible. While condemened buildings are not counted in available office space, those buildings that require substanstial up grades (vacant or not) or make more sense in being repurposed for another use get counted as well until there is a change in use. Late 80's and early 90's after the real estate crash left a lot buildings that have sat vacant for a long period of time with little to no reinvestment. Available Class A or AA office space turned into Class B space or below due to owners not keeping up. If developers can not make the numbers work for existing buildings then they will build new. Thats why you see the city coming up with tools like TIF's to spur renovations or reinvestments in key areas. Most (not all) of the 'trophy' towers downtown have been picking up the slack the last several years with new owners and some renovations, while some developers push forward with new projects to bring that Class A or AA space downtown to meet what was an idled office demand into what has becoming a growing office demand for this quality of space downtown / uptown. Meanwhile in the multifamily sector we are seeing developers respond to pent up and increasing demand for new housing for the young talent right out college, mid level positions, growing number of singles, empty nesters, and a growing number of families looking for housing close to their jobs. The developers in multifamily are currently reevaluating projects that went quiet after the recession, and some are being bullish to bring new product to our core properties. Core meaning downtown / uptown as one. The occupancy numbers for residential speak for themselves when looking at this trend. While suburban multi family occupancies during the recession slipped to the lower 90 to high 80 percentage, uptown / downtown has maintained a mid 90 level occupancy since 2008 with some isolated properties maintaining a high 90 percent occupancy through speciales. Since mid 2011 both numbers have increased, and rental rates have crept up intown. While most economist where predicting national averages for those numbers to drop even more so b/c they predicted big populations of singles becoming roommates or moving back home with the parents during the recession; places like Houston / Dallas / Austin did not see the substantial drops in occupancy. Meanwhile the dooming wide spread predicitons of low occupancy levels did not materialize except for in markets that were over built like Miami and Las Vegas.

[Tucy]

Major corporations like Hunt Oil have real estate divisions. While having their own building with their name on it was the big driver, the other was studying the demographics of current andfuture talent. The numbers that get presented for vacancy have to be taken with a bit of salt. I was exposed to some of the inner workings of the real estate profession when I started attending a real estate networking group many years ago. The guys have some 'hidden' facts behind the numbers that are not available through A&M and the Labour Bureau. There is a good supply of office space in the market, I do not argue against that. But you have to dig deeper to find what triggers some of the developers decisions. For example, a lot questions arose as to how much office real estate was available during the time of the Mercantile renovation and what makes the most sense. There were a number of renovation proposals (six I believe) for that project including a Fashion Incubator with a combination of office / residential, a residential tower or even just repurposing the tower for office space. What I learned at that time was how the market is evaluated at the 10,000 foot level vs. at the street level. From 10,000 feet their is a large oversupply of office space in downtown in the 20 plus percentile. You can not argue against that number and at the surface arguements against new development make sense. At the street level you see the quality of the office space and what some buildings have to undergo to become marketable that makes new development sensible. While condemened buildings are not counted in available office space, those buildings that require substanstial up grades (vacant or not) or make more sense in being repurposed for another use get counted as well until there is a change in use. Late 80's and early 90's after the real estate crash left a lot buildings that have sat vacant for a long period of time with little to no reinvestment. Available Class A or AA office space turned into Class B space or below due to owners not keeping up. If developers can not make the numbers work for existing buildings then they will build new. Thats why you see the city coming up with tools like TIF's to spur renovations or reinvestments in key areas. Most (not all) of the 'trophy' towers downtown have been picking up the slack the last several years with new owners and some renovations, while some developers push forward with new projects to bring that Class A or AA space downtown to meet what was an idled office demand into what has becoming a growing office demand for this quality of space downtown / uptown. Meanwhile in the multifamily sector we are seeing developers respond to pent up and increasing demand for new housing for the young talent right out college, mid level positions, growing number of singles, empty nesters, and a growing number of families looking for housing close to their jobs. The developers in multifamily are currently reevaluating projects that went quiet after the recession, and some are being bullish to bring new product to our core properties. Core meaning downtown / uptown as one. The occupancy numbers for residential speak for themselves when looking at this trend. While suburban multi family occupancies during the recession slipped to the lower 90 to high 80 percentage, uptown / downtown has maintained a mid 90 level occupancy since 2008 with some isolated properties maintaining a high 90 percent occupancy through speciales. Since mid 2011 both numbers have increased, and rental rates have crept up intown. While most economist where predicting national averages for those numbers to drop even more so b/c they predicted big populations of singles becoming roommates or moving back home with the parents during the recession; places like Houston / Dallas / Austin did not see the substantial drops in occupancy. Meanwhile the dooming wide spread predicitons of low occupancy levels did not materialize except for in markets that were over built like Miami and Las Vegas.

While all of that may be true, it is nevertheless an unavoidable fact that downtown Dallas has had for neary 30 years, and continues to have, a miserably high office vacancy rate, whether viewed from the 10,000 foot level or viewed from the street level; whether counting all classes of space or just Class A space. Uptown, while not as bad, is highly oversupplied as well, again, no matter how one looks at it. (Uptown's Class A vacancy rate is actually higher than its overall vacancy rate.)

[Tucy]

Before returning to the topic of a rapidly growing Collin County, I've gotta find or make conclusions about the downtown/uptown office market. I trust your calculations, Tucy, but something seems not right.... unless the amount of derelict office space repurposed to residential/retail space amounts to about 1.3 million sq ft. -- which is entirely possible.

I would have to say, though, that despite decades of extremely high vacancy rates maintained in downtown/uptown, the benefit of building before it's truly needed far outweighs the downside. In a market like downtown Fort Worth with extremely low vacancy rates, a company looking for a big chunk of office space has very limited option, and one of primary options is to build; however the same company looking at downtown Dallas will have more choices than need be examined. If the population center is on an upswing, it's better to have extra than not enough.

I'm not sure what you are seeing in my numbers that doesn't add up... Can you explain?

As to the benefits of having extra supply, you are absolutely correct, to a point. But downtown Dallas is literally years (more likely decades) away from having any concerns over a short supply of office space interfering with potential relocations. In the meantime, the massive oversupply will inexorably lead to deferred maintenance and upgrades not done, foreclosures, empty buildings, etc etc. ... All of which makes it more difficult to recruit relocations into downtown.

[AeroD]

. But downtown Dallas is literally years (more likely decades) away from having any concerns over a short supply of office space interfering with potential relocations. In the meantime, the massive oversupply will inexorably lead to deferred maintenance and upgrades not done, foreclosures, empty buildings, etc etc. ... All of which makes it more difficult to recruit relocations into downtown.

Link?

[txdore]

So, what does it say that one third of the all the jobs are within the town with one sixth of the population? How has this metric changed since the 70s?

One anecdote: When I told my dad I would be working downtown after college, he observed how dead it would be and how when he worked there last in the 80's(?), the place was nothing but homeless after 5pm. Then he added that it used to be the place to meet single women back in the 70's because of all the secretaries and such.

[txdore]

Per REIS 4Q2011, the Dallas CBD (defined as the area between the levee, IH30, IH45/75, and Woodall):

Office Vacancy:
27.2% overall, compared to Dallas 23.8% and US 17.3%. CBD 5-year forecast 26.4%.
0.7% built after 2000
46.5% built before 1970

63% of the submarket was built between '80-89, 2% since 2000, and 18% before 1970.
Asking rents $19.55. 5 year forecast $21.98.


Year Inventory Completions Vacant Occupied Absorption
2006 25,872,000 0 5,692,000 20,180,000 -302,000
2007 26,414,000 542,000 6,075,000 20,339,000 159,000
2008 26,414,000 0 6,313,000 20,101,000 -238,000
2009 26,281,000 0 7,201,000 19,080,000 -1,021,000
2010 26,281,000 0 7,359,000 18,922,000 -158,000
2011 26,138,000 0 7,110,000 19,028,000 106,000
2012 26,138,000 0 7,162,000 18,976,000 -52,000
2013 26,138,000 0 7,120,000 19,018,000 42,000
2014 26,562,000 424,000 7,073,000 19,489,000 471,000
2015 26,763,000 201,000 6,953,000 19,810,000 321,000
2016 27,007,000 244,000 6,698,000 20,309,000 499,000

[Tucy]

Per REIS 4Q2011, the Dallas CBD (defined as the area between the levee, IH30, IH45/75, and Woodall):

Office Vacancy:
27.2% overall, compared to Dallas 23.8% and US 17.3%. CBD 5-year forecast 26.4%.
0.7% built after 2000
46.5% built before 1970

63% of the submarket was built between '80-89, 2% since 2000, and 18% before 1970.
Asking rents $19.55. 5 year forecast $21.98.


Year Inventory Completions Vacant Occupied Absorption
2006 25,872,000 0 5,692,000 20,180,000 -302,000
2007 26,414,000 542,000 6,075,000 20,339,000 159,000
2008 26,414,000 0 6,313,000 20,101,000 -238,000
2009 26,281,000 0 7,201,000 19,080,000 -1,021,000
2010 26,281,000 0 7,359,000 18,922,000 -158,000
2011 26,138,000 0 7,110,000 19,028,000 106,000
2012 26,138,000 0 7,162,000 18,976,000 -52,000
2013 26,138,000 0 7,120,000 19,018,000 42,000
2014 26,562,000 424,000 7,073,000 19,489,000 471,000
2015 26,763,000 201,000 6,953,000 19,810,000 321,000
2016 27,007,000 244,000 6,698,000 20,309,000 499,000

Interesting stuff. Thanks for sharing. I wonder how they come up with their forecasts.

[profbarium]

Interesting stuff. Thanks for sharing. I wonder how they come up with their forecasts.

Me too. "They" think we're going to lose net occupancy this year and only gain 42,000 sq. ft. in 2013?

[txdore]

Well, I don't follow office markets much, but if its anything like forecasts of the other real estate sectors, it's a shot in the dark.

This would have been done by REIS's national research group, so they probably have some model. And their local talent may review and sign off on it. Maybe not.