Regardless of High Vacancies, Construction Progresses
The Richardson/East Plano Sub-Market has shown a decrease in the direct Class A vacancy from 24.7% in the second quarter of 2016 to 22.8% for the start of second quarter 2017. Meanwhile, direct weighted average full-service rents increased from $26.91 to $27.38 per square foot during the same time. Class B vacancy decreased from 15.6% to 13.3% and as a result, full-service rental rates increased from $18.88 per square foot to $19.48 per square foot.
19% VACANCY RATE REACHES A FOUR-YEAR HIGH
The LBJ Corridor is one of the last remaining safe havens for companies that are seeking rent relief. With submarkets like Central Expressway and the Lower Tollway experiencing 10-12% vacancy rates, the East LBJ Corridor has a vacancy rate of just below 25%. We expect this to change drastically in 2017 with companies fleeing surrounding submarkets for the best valued office space in the entire DFW- Metroplex.
The second quarter ended with a vacancy of 14.3%, virtually no change from the first quarter of 14.2%. Rental rates for all property classes on a full-service basis increased marginally to $24.64 up from the first quarter of $24.52. Year-to-date absorption totaled 2,401,965, on pace for another very respectable year assuming the back half of this year reflects the first half of the year.