The most expensive rents in Dallas-Fort Worth’s office market are not in Uptown or Preston Center or even Plano’s Legacy. The Arts District has, at an average of $43.40 per square foot, the highest rates in North Texas.
This data comes from Cushman & Wakefield. Only three days into the second quarter of 2018, and Cushman & Wakefield has already released preliminary research recapping the first quarter.
For the first time, the real estate firm has bifurcated three submarkets within the downtown loop defined by Woodall Rodgers, Interstate 345, Interstate 30, and Interstate 35E.
“Office buildings in the Arts District along Ross Avenue are more aligned with Uptown, as they’re newer or are being substantially updated. The West End has an innovation culture and attracts a different type of tenant. The same is true of traditional buildings in the core of downtown. For these reasons, we thought it was important to measure the micro-markets separately, while still providing total Dallas CBD data,” Cushman & Wakefield Senior Director Lauren Napper says.
By defining the submarkets—CBD Core, the Arts District, and the West End—we have greater insight into the (sometimes vast) differences between the three. Other key findings include:
- At 26.9 percent, the West End has the highest vacancy in downtown, followed by the CBD Core at 24.5 percent, and the Arts District at 21.1 percent. As a whole, DFW’s average vacancy sits at 17.7 percent.
- The first quarter of 2018 saw negative absorption for both the CBD Core (10,694 square feet) and the West End (45,837 square feet). The Arts District absorbed more than 245,000 square feet in the first quarter.
- Rent in the CBD Core comes at a discount to the surrounding submarkets at an average of $27.17 per square foot (and about a $1.44 more, on average, for Class A space).
- Rent in the West End averages $30.82 for all classes and about $1 more for Class A space.
- The Arts District has no difference in its average asking rent ($43.40) and it’s average Class A rent because only Class A properties exist in the district.
- Across all three downtown submarkets, vacancy averages 24.1 percent. Following the first quarter of 2017, downtown vacancy averaged 24.3 percent.
- Napper notes that expenses average $11 to $13 per square foot in the Arts District compared to $20 per square foot in Uptown. Considering that, Uptown can be home to the regions most expensive rents, depending on taxes and other operating expenses.
