Office rental rates may have stabilized in West Fort Worth, slowing an upward momentum that’s lasted for three years, according to a new report by NAI Robert Lynn.
The commercial real estate firm’s mid-year Tarrant County office market report also sees rental rates remaining about the same for downtown while North Fort Worth rates are on the rise.
In North Fort Worth, “rental rates have strongly crept up over 33 percent in this submarket over the last two years, which is a result of new supply as well as increased demand,” reads part of the report.
But North Fort Worth absorption is expected to outpace new office additions while vacancy rates drop somewhat since the submarket continues to attract large, national tenants.
Meanwhile, downtown continues commanding rents of about $26 per square foot, with existing buildings expected to remain in that range, according to NAI Robert Lynn. But new inventory such as Frost Tower charges rates as high as the low $40s per square foot.
“The spike in the vacancy rate [downtown] beginning mid-2015 is a product of a flood of sublease space, downsizing and move-outs of hurting oil and gas tenants,” the report said.
In West Fort Worth, rental rates have plateaued at around $24 per square foot, about $2 per square foot less than the downtown sector as well as quoted rates for new construction in the area.
“Vacancy continues to hover below 8 percent; however, this will begin to tick upwards as more new office developments are delivered into the market,” according to the report.
Continuing to fuel market growth will be what the report called ease of accessibility, parking inventory and robust retail-housing options.
Other submarkets have seen mixed activity.
In Arlington, quoted rental rates have risen about 6 percent in the past year due to Skymark Tower and other high-profile properties changing hands and new owners considering rate increases, according to the report.
“However, the rate increase does not appear to be in harmony with the demand for space, which will likely result in further increase in vacancy rates in the near future,” the report said.