The general vacancy rate is now 5.4%, a 1.8-point increase from the same quarter in 2000.
Other numbers are even more staggering. The net absorption in the multifamily market for the last quarter was down to 1,400 units, compared to 11,270 units at the same time last year. That factor, along with new construction, is the cause of the nearly 2-point jump in overall vacancies. Henrdicks' report also finds there are currently approximately 50 million sf of available pre-existing space in the area, as well as 8 million sf of space under construction. On the average, the office vacancy number is nearing 20% in the metro area.
Despite the apparently grim distinctions between this year's third quarter and that of 2000, Hendricks officials say Dallas/Ft.Worth will be able to make a speedy recovery without a great deal of suffering. One reason for that is "Dallas is such a diversified economy and our job market has been so robust over the past few years," Hendricks & Partners' Michael Lewis tells GlobeSt.com from his Dallas office.
Lewis notes the area is in better condition than area cities such as Houston because it is not an oil-based market -- the Dallas/Ft. Worth area's economy base varies from textiles to electronics to potato chips. As for the drastic change in absorption, Lewis explains "the gears for developers have slowed down ahead of this recession, so we're in pretty good shape to absorb what needs to be absorbed."
Looking ahead, Hendricks & Partners speculates that building on the outskirts of the region will prove economically prudent for developers. A potentially successful venture, Lewis suggests, would be "a B-class project in a mature area…where you can avoid direct competition from ill-conceived projects (in-town)." He adds most of the new employment is on the outskirts.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
