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Market News and Trends
The North Texas 2050 Plan reports that the DFW region’s current population of 6 million will grow to 9 million by 2030. By 2050, our population will double to 12 million souls. Michael Cox, an economist at SMU, estimates that DFW’s population adds 1 million people every six years. DFW will replace Chicago as the third largest metropolitan area in about 20 years or less. Our much larger global economy will keep DFW ahead of Houston and San Antonio in the population race.
Here’s more good news. Al Niemi, the dean of the SMU Cox School of Business, predicts that California will become the next Michigan and most of the jobs will come to Texas. We’ve all heard about the tough business climate in California, but this comparison grabs your attention. It will become a bit crowded around here, but we will surely add enough jobs to fill our real estate.
The Federal Reserve Bank of Dallas just issued its First Quarter 2010 report on the southwest economy. The Texas Leading Index, the Dallas Fed’s barometer of future economic activity, has improved significantly in recent months, suggesting that job growth will pick up in the remainder of 2010. The employment forecast based on the leading index suggests that Texas will see modest employment gains of 1 to 2 percent in 2010 which is far below our historical pace, but still ahead of the nation. Barring further setbacks, the Texas economy should begin to improve in late 2010 and beyond. However, commercial real estate woes will continue through 2011 with the continued rise in the number of office building foreclosures. On a positive note, investor interest in commercial properties is rising in Dallas and Houston.
CAPSTAR Commercial’s “Big Deal List” continues to grow. We are currently tracking 13 million square feet of active prospects for the Dallas area which is an increase of 500,000 SF from January’s numbers. Leasing activity is getting better, but the market is very competitive. The number of alternatives for smaller tenants is astounding.
Leases
• Rexell signed a 92,000 SF new lease at The Addison in Far North Dallas. The tenant signed a 96 month lease for $16.50 +E effective with $20.00/SF in TI. No free rent was given. |
• Advance Homecare Management, Inc. signed a 34,139 SF renewal at Three Energy Square in the North Central Expressway Submarket. The effective rental rate for the 24 month lease was $22.00 F/S with $2.78/SF in TI. No free rent was given.
• Gilsa signed a 24,105 SF new lease at North Park Central in the North Central Expressway Submarket. The 192-month new lease was $20.00 +E effective with $40.00/SF in TI and 12 months free rent
• Total Sleep, represented by Stream Realty, signed a 12,864 SF renewal and expansion at The Meridian in Las Colinas. Economics for the 54-month lease were $14.35 +E effective with $5.00/SF in TI and 4 months free rent.
•New Millennium Title, represented by the Stone Group, signed a 10,242 SF new lease at Tennyson Office Center in Far North Dallas. The 66-month new deal was $17.09 +E effective, Turnkey, and 6 months free rent.
• Reach Local, represented by Studley, Inc., signed a 7,294 SF expansion at 6504 International in Far North Dallas. The economics of the 37-month expansion were $18.00 +E effective with $15.00/SF in TI. No free rent was given.
• Liberty Mutual, signed a 6,199 SF new lease at 6565 MacArthur in Las Colinas. The 60-month new deal was $19.05 +E effective with $15.00/SF in TI and 3 months free rent.
• Cruse Financial, signed a 6,016 SF renewal and expansion at Hall Office Park in Far North Dallas. The economics of the 60-month lease were $19.15 +E effective with $13.05 in TI. No free rent was given.
• McGuire Oil, signed a 5,500 SF new lease at The Berkshire in Preston Commons. The 60-month new lease was $28.00 +E effective with $25.00/SF in TI. No free rent was given.
• Summit Consolidated, represented by Grubb & Ellis, signed a 4,913 SF renewal at Lincoln Centre I in Far North Dallas. The economics of the 63-month renewal were $22.10 +E effective with $7.00/SF in TI and 3 months free rent.
•Sorrells, Udashen & Anton, represented by Cushman & Wakefield, signed a 4,608 SF renewal at Cedar Maple Plaza III in Uptown. The 94-month deal was $22.95 +E effective with $32.25/SF in TI and 10 months free rent
• Masterlink, represented by Chuck Green & Associates, signed a 4,150 SF new lease at North Central Plaza I in the LBJ Submarket. The economics for the 66-month new deal were $15.00 F/S with $15.00/SF in TI and 5.5 months free rent. |
Deals in Play
• US Postal Service, represented by Kelly Wynn with Studley, Inc., is in the market for 50,000 SF of office space along the Stemmons Corridor.
•University Center of Dallas, represented by Brook Partners, is in the market for 30,000 SF of office space in the Central Business District.
• MMC, represented by Cresa Partners, is in the market for 25,000 SF of office space in Las Colinas.
• FNMA, represented by Dan Patterson with Swearingen, is in the market for 90,000 SF of office space in Far North Dallas.
• Brierley, represented by Alan Wood with Jones Lang LaSalle, is in the market for 50,000 SF of office space in Legacy..
•AON, represented by Frank Ricca and Brad Selner with Jones Lang LaSalle, is in the market for 40,000 SF of office space in the Central Business District or Park Central. This prospect is currently in Cityplace.
• Frost Bank, represented by Mike Gosslee with Cushman & Wakefield, is in the market for 40,000 SF of office space in the Central Business District or Uptown Submarkets. This prospect is currently located in Uptown.
• Huitt Zollars, represented by Jim Cooksey with Jackson Cooksey, is in the market for 30,000 SF in the Central Business District or Uptown. This prospect is currently located at McKinney Place.
•TWG Insurance, represented by Steve Thelen of Jones Lang LaSalle, is in the market for 25,000 SF of office space in Las Colinas. This prospect is currently located in Carrolton.
• Pursuant, represented by Jones Lang LaSalle, is in the market for 25,000 SF of office space along the Tollway Connection.
Investment Activity
• California-based real estate investment trust KBS REIT II has purchased three buildings totaling more than 283,500 SF of industrial and office space at the Plano Business Park.
• Cole Real Estate Investments, a Phoenix based firm, bought the Cigna Pointe office project on the Dallas North Tollway for $237 per SF. |
