According to a recent article in National Real Estate Investor, office space demand rebounded in the second quarter of this year and the demand continues to drive new construction across the country.
However, new supply growth is expected to catch up with demand in some places, including the Dallas-Fort Worth area and Houston. Houston has more than 15 million square feet, and the Dallas-Forth Worth area has 5.5 million square feet, of new office space under construction. However, Dallas has the highest occupancy rate of the country’s top 13 downtown office markets at 26.3 percent.
Despite over-construction, the future looks bright. Employment in the Dallas-Ft. Worth area is expected to increase over the next three years, and the metroplex is anticipated to be No. 1 in the nation in terms of population and job growth. As new jobs are created, tenants are expected to lease office space in the Dallas-Ft. Worth area at much higher rates.
Office space is still a hugely profitable portfolio area, and future growth in technology and energy will keep office space demand high. This is good news for both job seekers as well as commercial real estate investors with office space assets. If you don’t already have office space in your investment portfolio, now is a good time to diversify.