"It has not shifted over to a landlords' market," says David Busker of Grubb & Ellis Co.'s Dallas research office. "But, it has shifted towards equilibrium from the tenants' market of six to nine months ago."
The latest report has vacancy riding at 8.6%, with a shade less than 4.3 million sf under construction. "With vacancy still above 8%, it will not become a landlords' market by the end of the year," Busker predicts. But, the limited new supply is applying just the right pressure to dealmaking to keep the terms balanced.
The development hotspots are the DFW Airport and Northwest Dallas submarkets, which have 1.4 million sf and 1.5 million sf rising respectively. Researchers say 1.3 million sf of the under-construction total is coming out of the ground as spec product. Thus, the effect on metroplex vacancy will be minimal, the research team says.
With its strong 2002 showing to date, the DFW region, for the most part, seems to be bucking the national trends. The market is well positioned to continue its upward tracking based upon national and regional economic indicators. As for the rent side of the equation, the average across all product is $4.74 per sf, a number predicted to grow by year's end.
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