(Source: The Dallas Morning News)
By Steve Brown, The Dallas Morning News
Sep. 25--Dallas-Fort Worth area office occupancy declined by another 650,000 square feet in the third quarter as the economic downturn continued to trigger business space reductions.
The drop in net office leasing pushed overall vacancy in the area up to 22.7 percent, according to preliminary third-quarter statistics released Thursday by CB Richard Ellis. That's the highest vacancy rate in five years.
Average quoted rental rates also dipped to $18.83 per square foot in the current quarter, the commercial real estate service firm estimated.
The biggest third-quarter drop in office occupancy was along the LBJ Freeway corridor, where net leasing was down 234,000 square feet. Far North Dallas lost about 150,000 square feet of occupancy, and downtown net leasing fell by 53,000 square feet, CB Richard Ellis analysts say.
The highest office vacancy rate was along Stemmons Freeway, where more than 30 percent of the building space is empty.
North Fort Worth had the lowest vacancy rate: 4.19 percent.
The greatest percentage of office vacancy is in older "class B" buildings.
The recession and financial sector woes caused tenants to vacate almost 950,000 square feet of office space in the current quarter, CB Richard Ellis said in its report. Some of the biggest building move-outs were by Credit Solutions, AmeriCredit, Citigroup and Capital One Auto Finance.
About 2.3 million square feet of office construction was recorded in the area during the third quarter, a sharp decline from the more than 4.4 million square feet being built last year.
About 40 percent of the office space added to the market in the third quarter was already leased.
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