A new office inventory report reveals that two of Dallas-Fort Worth’s major submarkets are trading places — one longtime stalwart is shrinking as a nearby upstart has been surging.
Dallas-based commercial brokerage Whitebox has published a report overviewing how the Uptown and Downtown sections of the Dallas-Fort Worth metro have developed in terms of inventory and new construction from 1999 to 2022.
According to the data, Uptown has been steadily growing as a draw for new office construction while inventory in the Downtown
area has declined over the last 20 years.
In 1999, Downtown had nearly 41 million square feet of inventory, while Uptown had barely more than 11 million. Since then, Uptown has grown by 36 percent to over 17 million, with the majority of that growth taking place over the last decade.
Whitebox estimates that by the time all current office construction is completed, Uptown will have over 19 million square feet of inventory.
“When construction closes on current projects, the market will have grown by 42% since the turn of the century,” the report reads.
Office inventory Downtown, on the other hand, has steadily declined over the same period — especially due to the repurposing of older office buildings into mixed-use retail and residential developments that has ramped up in the last decade.
Since 1999, Downtown office inventory has dropped by 15.5 percent to just over 35 million square feet.
While the report notes there are about 1.5 million square feet of proposed office developments in the Central Business District, none of those projects have actually gotten underway.
But Downtown areas like the CBD are even struggling to fill the existing office space.
Although the CBD technically saw a positive net absorption of over 71,000 square feet in the second quarter of this year, that figure was still a 17 percent drop year-over-year. In addition, the area had a vacancy rate of over 32 percent in August, the highest vacancy rate in the entire region.
Uptown, on the other hand, saw its net absorption jump 302 percent year-over-year to over 220,000 square feet.