One-Quarter Of All U.S. Office Construction In The Past Decade Was In Texas

Texas metropolitan areas have been leading the nation in office construction and have no reason to pump the brakes on future construction projects since demand only continues to grow, a new report from CoStar says.

“The Texas miracle still has lots of steam,” CoStar Group Director of Market Analytics Paul Hendershot said.

“We continue to be on top of the list in terms of best places to do business. We also have a highly skilled labor force and favorable tax conditions. I would say it is a combination of things that are driving the Texas economy.”

Texas’ top three office markets — Houston, Dallas-Fort Worth and Austin — housed roughly 104M SF of the 430M SF of new U.S. office space that came online during the last decade, CoStar data shows. In totality, Dallas-Fort Worth, Austin and Houston accounted for 24% of the nation’s new office construction pipeline during the 10-year span running from 2009 onward.

DFW in particular is keeping that pace up: Roughly 7M SF of office space is under construction in Dallas-Fort Worth, with 4.7M SF scheduled to deliver in the second half of 2019, Younger Partners Co-Managing Partner Moody Younger said.

Corporate relocations from other states, alongside intermarket moves from older to newer properties, have kept the office construction pipeline robust in Texas.