Far North Dallas/Plano Office Submarket “On Fire”

The DFW area’s job growth and impact on the office market is well covered by the press, but the Far North Dallas/Plano office submarket is “on fire,” according to Mary Stoner Yost, Executive Vice president of Colliers International’s Dallas office.

“There’s a shortage of good options,” said Yost about the Far North Dallas submarket, which consists of office space along the Dallas North Tollway in Plano and Frisco. Yost told GlobeSt.com that she is tracking more than 100,000 square feet of demand in the Far North Dallas submarket alone. That demand ties directly into job growth, said Yost. “In fact, the North Texas economy strengthened considerably during the first half of 2011. Employment increased by 83,100 across the Metroplex from April 2010 to April 2011, representing a 2.9% gain. The Dallas/Fort Worth unemployment rate declined to 7.7% in April 2011, from a cyclical peak of 8.5% in January and from 8.1% a year ago,” according to Globe Street.

By the end Q 2 2011, over 1.5 million square feet of office space was absorbed helping to reduce the office vacancy from 18.6% in Q2 2010 to 17.7% in Q2 2010, according to Delta Associates.

Occupancy rates for class-A buildings in the Far North Dallas submarket are over 90% according to Yost. “There has been abundant space for the past five years, but the market has tightened significantly,” Yost said. “The buildings that were built during the most recent development cycle have started to fill up and large blocks of class A space are hard to come by.”

There were a couple of major deals that occurred in the Legacy business Park. Golden Living, which relocated from Arkansas, leased 34,000 square feet at Legacy Town Center I and Cain Waters leased 42,000 square feet at Legacy Town Center III. Two other big deals landed in International Business Park, located at 6100 W. Plano Pkwy: Hyundai Capital took over 50,000 square feet and IT firm Keste leased 35,000 square feet.

Demand is so strong in the Far North Dallas/Plano submarket that rents have started to increase and landlords have some pricing power, said Yost. (7/10/2011)

For the complete Globe Street article, click here.