Two Texas cities are among the busiest in the U.S. for new office construction and workers returning.
Dallas-Fort Worth and Austin ranked 3rd and 4th in the nation for new office construction, according to a new report by Yardi Systems, featured in the Dallas Morning News.
As of April 2022, Austin boasts 10.3 million square feet of office buildings under construction with its office supply set to grow by almost 12 percent. The month before, the Texas capital was miles ahead of the rest of the country in year-over-year in-office employment growth when compared with March 2021, as Austinians returned to desks in droves.
Dallas-Fort Worth wasn’t far behind with almost 8 million square feet of office space in the works. Compared with Austin, the construction underway in the DFW metro represents less than 3 percent growth for its total office supply. The area also is one of the country’s leading markets for office investment, with more than $1.3 billion in property purchases between January and April.
The two metros trail Manhattan’s 19.1 million square feet of office space under construction and Boston’s 13.5 million. However, those two East Coast markets ranked well below Austin and DFW in Yardi’s return-to-office metric.
“While the pandemic and remote work have slowed development in many places, a handful of markets are seeing elevated levels of new construction despite the challenges,” the report noted, adding that “Austin and Dallas have led the pack in adding office-using jobs over the last two years.”
Dallas-Fort Worth was also among the biggest office investment markets, with more than 5.7 million square feet changing hands in the Metroplex in the first quarter of 2022. That represents a 23.9 percent improvement year-over-year, according to Commercial Property Executive. In the same period of 2021, only some 4.6 million square feet had traded.
The largest property that changed hands in the metro was the 1.1 million-square-foot Trammell Crow Center. Regent Properties acquired the 50-story skyscraper in the heart of downtown Dallas from institutional investors advised by J.P. Morgan Global Alternatives. The transaction also included an adjacent full city block that has an existing parking garage, ground-floor retail, and a development site.
[DMN] — Maddy Sperling and James Bell