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Large corporate office campus deliveries push Dallas’ percent pre-leased lower, as spec projects seek tenants

  • ​​In 2013, there was limited office space under construction in Dallas.  Only 631,000 square feet was underway at the start of the year, and only 260,000 square feet of that was available for lease.
  • By early 2014, the development pipeline hit 4.5 million square feet.  Half of that space was considered “pre-leased”, driven mostly by build-to-suits.  State Farm was the largest project, accounting for 1.9 million square feet. Smaller BTSs also included Raytheon, Richards Group, FedEx, Chief Oil & Gas, and Monitronics.
  • A wave of large campuses followed in 2015 and 2016.  These included Toyota, Liberty Mutual, and JPMorgan Chase, as well as State Farm’s final building), which kept our percent pre-leased in the high 60-percent range.
  • Now that Toyota and JPMorgan Chase have delivered, as well as other BTSs such as Fannie Mae and Capital One, our share of pre-leased has declined to 50 percent.
  • As of year-end 2017, Dallas had 5.2 million square feet under construction, with half of that pre-leased.  ​​
  • Liberty Mutual (1.1 million square feet) will be counted this quarter, notably reducing our share of pre-leasing.
  • In addition, we have begun to deliver  a variety of multi-tenant buildings.  Because they are no longer “under construction” they are not counted in the above pre-leasing numbers.  During 2017,  2.8 million square feet of these “spec” properties were delivered and 75 percent of that space remains available as of year-end. ​​​

Source: JLL Research

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