D-FW dodges overbuilding thanks to steady flow of new jobs

By now in most building cycles, it's typically time for overbuilding. So far there's no sign of a glut building in Dallas-Fort Worth's development sector.

"With D-FW topping charts across U.S. construction totals, some question if, or when, this new supply will outstrip demand," CBRE research director Robert Kramp says in a new report. "The market is different now than past expansion cycles for several key reasons and it impacts all major asset types across D-FW - mainly due to job growth and population gains."

With almost 400 people a day moving to North Texas to fill new jobs, there's so far room in the local real estate market for more building, Kramp concludes.

About 40 percent of the office buildings under construction in North Texas are already spoken for by tenants. And 50 percent of the warehouses being built are already leased.

"By the close of 2017, 22 new office projects were in the pipeline totaling 4.4 million square feet, with the majority being speculative," Kramp found. "D-FW industrial developers delivered 26.8 million square feet of industrial space in 2017 -- a market record; 20.6 million square feet was absorbed immediately.

"Developers delivered 102.3 millions square feet since 2009, more than the total existing Austin and San Antonio industrial market inventories combined."

While North Texas employment growth is forecast to slow to below 100,000 jobs this year, the economy is still expected to be one of the strongest in the nation. It should be enough to support the current pace of building.

"Since 2010, D-FW has seen 16.7 million square feet of new office space completed," Kramp said. "Meanwhile, 96.7 million square feet of industrial space was added to the Metroplex inventory and 115,499 multifamily units constructed.

"No wonder D-FW developers have been busy."

By Steve Brown, Real Estate Editor. Original article published on April 2, 2018 and a link to it can be found here.