Dallas’ office development pipeline – what will the next 12 to 18 months bring?
Currently, Dallas’ office development pipeline totals 15.2 million square feet in Dallas’ core submarkets.
October 23, 2019
- Currently, Dallas’ office development pipeline totals 15.2 million square feet in Dallas’ core submarkets. Of this total, 6.1 million square feet is now under construction.
- These projects are 47 percent “preleased”. This percentage reflects a handful of full-building users like Pioneer Resources, Keurig Dr. Pepper, and Paycom. Excluding these, under construction buildings are 32 percent leased.
- Earlier this year, we noted a lull in active office construction, especially in the urban core. Since then, projects that had been on the sidelines have begun to move ahead, with some considering breaking ground “spec”.
- While many proposed office buildings are on the books, we have looked at their sponsorship, approvals, and timing to move forward. We estimate that 9.0 million square is poised to “break ground”.
- The CBD and Uptown combined could see close to 3.5 million square feet of new development, with Far North Dallas adding 2.2 million square feet. Given this high level of competition, some will probably not break ground.
- Dallas is fairly unique in that office developments are frequently launched without preleasing commitments.
- Local sentiment is that tenants prefer to see that a building is real before committing. Developers also like to get started without having to offer extremely high concessions to the first tenants.
- This puts Dallas, especially our core submarkets, at a unique risk of overbuilding if multiple projects move ahead.
Source: JLL Research