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Dallas office absorption on a long-term run – what should we expect in 2018?

  • ​Since 2000, office absorption in Dallas has averaged around 1.8 million square feet annually.  Over this period, Class A comprised 83 percent of total demand.
  • Looking back, 2010 and 2011 essentially served  as “recovery” years, where Class A & B net absorption was positive, but just beginning to ramp up from the downturn. 
  • Dallas’ office market came back strongly in 2012, driven by the 220,000 new jobs added during 2010 to 2012. 
  • Since 2012, we have absorbed 21 million square of Class A & B space – Class A representing 17 million square feet.
  • As we had anticipated, 2017 was a banner year, as the delivery of major corporate campuses, begun 2 to 3 years earlier, reshaped our northern suburbs.  These campuses drove 2017’s 5.8 million square feet of absorption. 
  • 2017 also saw Class A coming in at 93 percent of total demand, underscoring Dallas’ established pattern of preferring “new” space over older options – and willing to accept much higher rents.​
  • Excluding the large new users, 2017 absorption surprisingly tracks with our market’s average performance since the mid-2000s of around 2.2 million square feet annually. 
  • We expect this pattern of base-level demand to continue into 2018, with Liberty Mutual’s recent delivery of 1.1 million square feet adding a to that total.  While not the furious pace of 2017, this should be another solid year.  ​

Source: JLL Research

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