The Dallas office space market saw a slight reversal of fortune in the second quarter of the year, as net absorption turned negative, making it the nation’s only metro in the top 10 to lose ground.
The local office vacancy rate rose by 0.4 percent to 15.2 percent, with more uncommitted construction set to deliver by year-end, according to a report released Tuesday by Colliers International.
The shift in absorption was modest, at negative 288,945 square feet, meaning that much less space was leased than the amount of space vacated or newly constructed.
Dallas was the only market in the study’s top 10 to post negative absorption during the quarter. Dallas’ net absorption in the first quarter of 2018 was a robust 973,175 square feet. Nationwide, four markets posted negative absorption in Q1.
Vacancy rates rose in all three core submarkets tracked by the report — most notably from 11.9 percent to 13.1 percent in Uptown/Turtle Creek, according to Colliers.
Office space under construction across DFW has dropped by more than 3 million square feet since Q2 2017.
There has been a shift away from Far North Dallas, which includes Plano and its Legacy West development. Liberty Mutual’s 1.1 million square foot campus, which was completed in early 2018, was the last of the recent wave of major build-to-suit projects in the far north market.
Uptown/Turtle Creek is the city’s hot construction market now, with a total of 1.2 million square feet of space scheduled for completion by the end of the year. This space is 56 percent available, according to Colliers.