STATE FOCUS: Texas
The Lone Star State
With job growth among the most robust in the nation, Dallas/Fort
Worth, Houston and other markets are seeing rising demand
Throughout the recession, Texas held strong, and the Lone Star State is well-positioned to outperform the national economy in 2011. The
state boasts several economic bright spots
including a booming energy sector, strong
military presence, growing manufacturing
output, rising exports and robust population growth.
The Federal Reserve Bank of Dallas has
forecast employment growth in Texas of
3% for 2011, one of the biggest gains in the
By Jennifer Duell Popovec
nation. The most recent employment data
shows that the state gained 35,700 jobs in
April after adding 29,000 in March. Texas’
employment now stands at 10. 52 million.
The Texas unemployment rate fell to 8%
in April, roughly 100 basis points below the
US rate. Moreover, the Dallas Fed’s Texas
Leading Index, which uses key economic
indicators to forecast future economic activity, rose 2.8% from January through March.
Texas’ major markets—Dallas/Fort
Worth and Houston—continue to experi-
ence growth, as do the state’s smaller mar-
kets—Austin, El Paso and San Antonio
The Metroplex’s impressive job growth
has impacted the region’s office market.
During the second quarter, the market
recorded 1. 5 million square feet of net
absorption, according to Delta Associates.
Office inventory in Dallas, plentiful in recent years due to new construction, has tightened significantly as
employers add jobs. The Metroplex’s year-over-year employment growth has surpassed the national
average, helping make large blocks of space scarce.
That brings the mid-year total to roughly
2. 1 million square feet.
At the end of Q2, the marketwide office
vacancy rate stood at 17.7%, down from
18.2% in Q1 and 18.6% a year ago. Asking
rents for office space were relatively flat
with just a 0.2% decrease during the first
half of 2011, according to Delta Associates.
The strongest submarkets across the
Metroplex are: Dallas’ Uptown Dallas; Far
North Dallas (the Frisco area along the
Tollway); and the West 7th Street Corridor
in Fort Worth, according to local experts.
“Uptown and the Far North Tollway are on
fire,” says Mary Stoner Yost, executive vice
president with Colliers International’s
Dallas office. “There’s a shortage of good
options.” She is tracking more than 100,000
square feet of demand in the Far North
Dallas submarket alone.