The gap in rent prices between the most desirable and least desirable office space in the Dallas-Fort Worth office market continues to grow and is about to cross the $20/SF mark, according to a new study out from Savills Studley.
Preston Center is at the top of the rental rate comparison, at $34.32/SF, $20 more than in East Dallas, where rents are $14.92/SF. New space is running at $29.88/SF, compared to existing space at $23.53 and sublet space at $21.06.
“The rent gap between the most sought-after locations — Uptown/Turtle Creek, as well as West Plano/Frisco — and lagging locations, such as Dallas CBD and LBJ Freeway — continue to widen,” Savills Studley Executive Managing Director Frank McCafferty said in a statement. “Taking rent in the very top-tier properties is exceeding $50/SF. On the other hand, tenants can find mid-$20s/SF space in the Dallas CBD.”
A broad labor pool and reasonable office rents have continued to attract companies that want to expand, such as Charles Schwab at Circle T Ranch and The Boeing Co. at Legacy West.
The Q1 report outlines other DFW highlights: Leasing is down from 3.7M SF to 3.1M SF quarter over quarter. The overall asking rent is up slightly, from $24.04 to $24.49, and remains unchanged year over year. Office property sales are down over the last two quarters, to $1.7B, which is a 34% decrease compared to the prior two quarters.