Small TX Cities Add Big Office Space in Last Decade

DALLAS—Office construction has been booming throughout the last decade in Texas and demand for new space is showing no signs of slowing down. To be sure, Texas continues to be a top choice for corporate relocations due to favorable tax conditions and a skilled workforce, according to a report by CommercialCafé.

Specifically, more than 100 million square feet of new office space was added within the Lone Star State’s top three office markets, Houston, Dallas-Fort Worth and Austin, in the last decade. According to Yardi Matrix, Austin is leading the nation’s office supply pipeline with more than 7 million square feet of space currently under construction or 10.5% of the total national stock. Dallas and Houston have 6.2 million and 2.9 million square feet under construction respectively.

While the numbers for these markets are impressive, CommercialCafé dug a little deeper to determine which small cities in Texas added the most office space between 2009 and 2019. For this top 10 list, the firm used Yardi Matrix data to research cities with populations less than 300,000 people. Moreover, only office spaces larger than 25,000 square feet were considered. Here are some key findings:

Plano added the most office space at slightly more than 10.5 million square feet, a 40% increase. Most of this space came from buildings larger than 100,000 square feet. And, a majority or 36 of the 49 office buildings added during this timeframe were class A.

Irving came in second. During the past 10 years, the city added 4.5 million square feet of class-A and B office space across 21 properties. In addition, several Irving projects are scheduled to come online by the second half of 2020.

“One of the main reasons Irving rose to second place was the completion of the 1.1 million-square-foot Pioneer Natural Resources headquarters in December 2019,” Robert Demeter, the CommercialCafé writer who worked on this study, tells GlobeSt.com. “Apart from that project, there were no major office developments larger than 330,000 square feet. A total of 21 office properties came online in the city between 2009 and 2019, and the average square footage of these was 168,790 square feet.”

The top 10 was dominated by cities near DFW and Houston, with one Austin area and one Midland/Odessa-area entry. Overall, the 10 cities collectively added 32.4 million square feet of office space for a total of 192 properties. And, 26 co-working spaces were constructed since 2009.