The vacancy rate across North Texas continues to fall, coming in at 16.7 percent for the first quarter of 2015, according to a report from Cushman & Wakefield of Texas. This is down from 17.8 percent for the year before. The Dallas central business district took the greatest drop, from 24.9 percent to 21.8 percent, as businesses moved to new or larger spaces in the urban core. Vacancy in the Legacy/Frisco area grew substantially—from 8.3 percent to 15.9 percent—as nearly 1.5 million square feet of new inventory was added to the market since the first quarter of 2014.
Asking full-service rental rates ticked up across the market, to an average of $21.50 per square foot, an increase of 3.7 percent over 2014 levels. Class A rents rose 3.7 percent, reaching an all-time high of $26.65 per square foot. C&W researchers expect rate increasesto begin leveling off in the next 12to 18 months.
About 8.8 million square feet of office space is under construction across North Texas. This is comprised of 18 speculative buildings totaling 3.6 million square feet and another 10 build-to-suits totaling 5.2 million square feet. More than half—about 5 million square feet—is expected to hit the market this year. About 60 percent of the speculative space has been pre-leased, with most located in the Turtle Creek/Uptown, Dallas CBD, and Preston Center submarkets.