My daughter came home the other day and told me her kindergarten class was getting a new student. I asked her where her new classmate was from but I already had a good idea what the answer was going to be. “He’s from California, Mom.” The reality is: it is good to be in Dallas-Fort Worth, and others are figuring that out.
With all the growth and changes we’ve seen over the past several years, it’s good to have perspective every now and again on how we stack up with other metros across the U.S.
According to JLL’s latest U.S. Office Outlook, this is the ninth year in a row for office expansion, highlighted by the 7.5 million square feet of new office space currently under construction across DFW. This accounts for 7.14 percent of total office construction happening in the entire U.S. Dallas and Fort Worth rank sixth and 10th, respectively, in total U.S. office construction. The Austin market ranks ninth, Houston is 21st, and San Antonio came in 24th—a testament to the strong economic fundamentals of our state.
When it comes to the price of doing business here versus anywhere else, it’s all a matter of perspective. Asking rental rates are increasing across the U.S., up 1.6 percent nationally, but the amount of incentives have also increased to help offset these costs. Additionally, comparing percentage increases from one market to another doesn’t give us a true apples-to-apples comparison, especially when you take a look at the total average asking rates.
For example, even with the national increase, Dallas and Fort Worth remain extremely affordable when compared to other major metro areas like New York and San Francisco. Dallas’ average asking rate, $27.62 per square feet, is 63 percent cheaper per square foot than New York, at $74.99 per square foot, and Fort Worth, at $22.85 per square foot, is 69 percent cheaper per square foot than San Francisco, at $74.64 per square foot. That’s a huge savings which allows companies more flexibility and even bigger return on investment when you factor the regions deep and diverse labor pools.
Additionally, our report touches on the growth of co-working/flexible space sector. In North Texas, co-working space has emerged significantly thanks in part to our region’s increased recognition as a hub for innovation, tech and startups. New co-working options, like WeWork and Serendipity Labs, have established themselves in our market over the past few quarters and we expect others to be on their way.
We are also seeing an increased number of established companies, like ourselves, finding success in having a flexible office option available. Our new Far North Dallas location at WeWorks at Legacy West allows us to stay ahead of our expanding clients’ needs and reinforces our commitment to providing the best service possible for our clients.
Dallas-Fort Worth continue to be one of the hottest office markets in the nation. We’re attracting new companies with our economic fundamentals, quality of life, and our strong, diverse labor pools. We’re welcoming new neighbors and friends to the area thanks to new job opportunities and companies entering our market each day—with no signs of slowing anytime soon.
The next time you hear someone say, “There’s no better place to do business than North Texas,” you’ll have a better understanding of how true that is.
Welcome to the neighborhood, new kid.
Brooke Armstrong is an executive vice president at JLL in Dallas.