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Demand for office space rises
But all first-quarter leasing growth is seen in suburbs, report says
09:46 AM CDT on Tuesday, April 4, 2006
By STEVE BROWN / The Dallas Morning News
Demand for office space surged in the Dallas area in the first quarter, with more than 1 million square feet of net leasing.
But all the business growth was in the far suburbs. Dallas office markets including downtown, Uptown and the Stemmons corridor lost office tenants in the early months of 2006.
Expanding and moving tenants leased about 1.04 million square feet of office space in Dallas and its suburbs during the first quarter. That compares with an 85,000 square foot decline in office leasing a year earlier, according to a report released Monday by real estate broker Cushman & Wakefield of Texas.
"With the job growth in the area, I think this is the kind of leasing we are going to see," Cushman & Wakefield executive vice president Bill McClung said.
Most of the office leasing so far this year has been in the Las Colinas area of Irving, in Frisco and in West Plano's Legacy business park.
Las Colinas has had one of largest office vacancies in the area in recent years.
"The office space in that area should start tightening up," Mr. McClung said.
At the end of March, office vacancy in the Dallas area was about 23 percent.
Downtown – which lost about 175,000 square feet of tenants in the first quarter – is about 28 percent vacant.
While leasing has improved, the rate of office construction continues to swell. In the first quarter, about 3.5 million square feet of office space was being built in the Dallas area – twice as much as a year earlier.
E-mail stevebrown@dallasnews.com
D-FW OFFICE UPDATE
First quarter 2006 preliminary net office leasing numbers, in square feet.
BIGGEST GAINERS
Las Colinas 800,000
Legacy-Frisco 288,588
Far North Stemmons corridor 120,450
BIGGEST LOSERS
Downtown 175,148
Stemmons corridor 34,020
Mid-cities 26,251
Total net leasing 1,041,975
SOURCE: Cushman & Wakefield of Texas
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