Texas Market Reports

By Mike Otillio, research director, Colliers The Dallas office market and North Texas region as a whole continue to evolve as leading destinations for corporate relocations, led in part by a favorable business climate.  This reputation as a top landing spot for regional workforce consolidations and outright relocations from other states has helped Dallas become a national leader in some key back-to-work metrics. According to research from security firm Kastle Systems, which monitors keycard, fob and app usage within thousands of office buildings across the country, the average occupancy rate in December across 10 of the country’s biggest markets was 40.6 percent. Dallas was one of the 10 markets tracked in the report, posting an above-average occupancy rate of 52.3 percent. The basic business-friendly climate and healthy pace of job and population growth, along with evidence that users are making stronger pushes to return to their workspaces, have accelerated the market’s office investment sales recovery for value-add, core-plus and stabilized product.  Barring any unforeseen circumstances, such as a prolonged spike in cases from the Omicron variant, we expect this trend to continue through 2022. Dallas recorded several notable sales of iconic office assets in 2021, plus numerous deals for suburban …

By Taylor Williams Office owners in Texas remain acutely aware of how the pandemic has changed the game and are not shying away from promoting health and wellness within their buildings. According to data from security firm Kastle Systems, which tracks keycard, fob and app access to some 2,600 office buildings across 138 cities and 47 states, office space in America’s largest markets continues to be underutilized. Across the 10 markets that Kastle Systems tracks, including Austin, Houston and Dallas, the average office occupancy rate in early December was 40.6 percent.  Yet the three Texas markets all registered occupancy rates considerably above the national average — 59.3 percent, 54.9 percent and 52.3 percent, respectively — for Austin, Houston and Dallas. A more temperate climate in Texas could bear some responsibility for these above-average performances, given that access to functional outdoor spaces has undeniably become a key tenant demand during the pandemic. Along those lines, tenants have understood for some time now that successfully bringing their employees back to their offices is somewhat contingent on making sure those workers feel safe on the job. The onus, therefore, has fallen on office owners to ensure that their buildings have protocols through which …

By Blake Virgilio, SIOR, CCIM, vice president at Colliers The Houston office market continued its very gradual stabilization with 27,000 square feet of positive absorption in the  third quarter. While that volume of absorption only represents roughly one floor of office space in a typical Houston office building, it’s the first time the market has posted a quarter of positive net absorption in the last two years. The key activities of tenant tours and the return of employees to the office continued to increase throughout the third quarter. Nonetheless, the vacancy rate rose over the course of the quarter by 400 basis points from 22.9 to 23.3 percent, a historical high.  Also in the most recent quarter, Houston’s office inventory increased slightly, with approximately 1 million square feet of new product added. There is still 3.2 million square feet of office space under construction, and most of the new inventory, which is 47 percent preleased, is expected to deliver this year. Of that total new product, about 2.3 million square feet is spec development, of which 60 percent is preleased. Houston has one of the highest physical office occupancy rates in the country, though many larger corporations began phasing their …