The 25.2-million-square-foot Fort Worth general purpose, multi-tenant office market is improving slowly. Vacancy tends to be high is this market, as developers build in anticipation of demand, but the 17.0% rate for the second quarter was down 40 basis points on 88,000 square feet of net absorption. Developers may be encouraged by a lower Class A rate of 14.5%, down 20 basis points during the quarter, but the Class B/C rate of 20.1% fell faster during the second quarter, by 60 basis points. Overall occupancy was flat in July.
New supply has been limited during the 2010 to 2012 period by a stall in new construction during the financial crisis. Reis reports three suburban buildings completed during the first half of 2012, but with a total of just 65,400 square feet, leaving one building with 50,000 square feet under construction. But three planned buildings with 275,000 square feet in the Central Business District (CBD) now have development schedules, in addition to the 357,000-square-foot Federal Aviation Administration building planned for the Northwest submarket. Reis predicts new supply will nearly match demand, keeping the vacancy rate above 15.0% through 2016.
Rents are barely moving. In the second quarter both the average asking rent and the average effective rent increased 0.1%, to $19.33 psf and $15.79 psf, respectively. Another increase of 0.1% for each followed in July. Reis nonetheless expects gains of 1.1% asking and 1.8% effective for all of 2012, ramping up year-by-year to 3.6% and 4.9% in 2016.
Cushman & Wakefield reports an overall vacancy rate of 7.2% and a weighted average net rental rate of $22.78 psf for 22.6 million square feet on the Fort Worth side of the Metroplex. The inventory is 181 million square feet on the Dallas side according to this source, with a vacancy rate of 21.1%.