TCN Worldwide's State of the Market: Central Edition, 4th Quarter 2016 Prepared by Hugh F. Kelly, PhD, CRE, Consulting Economist to TCN Worldwide In this edition: –National and Macroeconomic Overview –Regional Conditions in the Central States –Commercial Property Investment Trends
Net absorption for the year was at negative 1.9 million square feet. • Vacancy grew to 19.2%. • These dropping statistics were aided by Zurich moving into its new build to suit as well as Jim Beam and ConAgra moving from the suburbs downtown.
Net absorption for the year dropped to 833,000 square feet. • The vacancy rate reached 11.0%. • The first of Chicago’s two new office towers opened its doors, 444 West Lake had tenants move into around 140,000 square feet of the one million square-foot building.
Over the course of 2016, 2.5 million square feet (msf) of office space was returned to the market, causing the vacancy rate in downtown Calgary to increase by 6.2% year-over-year from Q4 2015. Downtown vacancy sat at 23.5%, representing 9.8 msf of space available for lease within a 41.6 msf inventory. Despite renewed activity among A Class and B Class headlease spaces, the overall trend of negative absorption continued, though as a slowed pace when compared to 2015 and early 2016. It should be noted that 3.9 msf were vacated during the previous year.
As the third quarter for 2016 ends, the Texas economy gained momentum as recent data from the Federal Reserve Bank of Dallas shows. All indications are that Dallas has moved past the economic slump attributable to oil prices. Fort Worth has been slower to rebound, as they were deeply impacted by the dramatically lower oil prices. The Metroplex continues to experience job growth as reported by The Dallas Business Journal in November, and our in migration of residential remains strong. It appears that the Dallas/Fort Worth Metroplex has moved to a diversified economy and a lessening dependence upon the energy sector.