Affordable
Lower cost of rent and office space compared to other markets.
Market Growth
New companies and workers moving to Dallas.
Supply Growth
Major growth in the flexible office sector.
Dallas Flexible Office Growth
Invigorated by the Dallas charm, investors, businesses and others flock to this southern metropolitan by the thousands. Dallas has gained traction over the years, as evident by rising population rates. Dallas had a population of 1,317,929 as of June 2016 which is a 10% growth from 1,197,816 in 2010. While, the Dallas Fort Worth area as a whole has a population of just under 7 million. Located within the heart of the Silicon Prairie, Dallas, Texas has become a prime city for both new businesses and huge Fortune 500 companies. Dallas Fort Worth is the country’s fourth largest metropolitan area with a high growth rate expected in the near future.
Dallas’ relatively recent rise to stardom comes as no surprise given the city’s affordability, job market, and diverse economy. The Dallas Fort Worth area is a prime player in the commercial real estate industry, with a promising flexible office future.
Population Growth in Dallas
Population
Core and Flexible Office Trends in Dallas
Core
Core – stable office space that companies rent out for terms spanning years, mostly as headquarter spaces in established markets.
Flexible Office
Flexible – offices rented for spans of hours, months, and years for the purpose of satellite space, expansion space, and to provide employees with mobility options.
Corporate real estate managers and C-suite executives are beginning to organize their real estate portfolios into core and flexible offices. Core – stable office space that companies rent out for terms spanning years, mostly as headquarter spaces in established markets. Flexible – offices rented for spans of hours, months, and years for the purpose of satellite space, expansion space, and to provide employees with mobility options. Flexible offices are often furnished or serviced workspaces. They come from coworking providers, serviced office centers and direct from landlords.
Average Annual Cost per Worker
Brokerage firm CBRE predicts that 65% of US companies will use coworking as part of their office portfolio by 2020. The LiquidSpace Q4 2016 Flexible Office Report specifies that technology, finance, and communications companies most commonly use flexible office space. In fact, the Dallas economy centers around technology and communications. Additionally, Dallas’ changing workforce and economy make flexible office space the best option for many companies.
Flexible office space is a lot more affordable than renting traditional core offices. Renters can expect to pay $26.64 per square foot for office space in Dallas. The average yearly cost for core (traditional) office space, considering 150 square feet per worker, is $3,996 per year per person. Whereas, the average price per person for flexible office space is $176 for flexible office space, totaling to an affordable $2,106 per year.
Owners & the brokerage community are dependent on the goals and expectations of the end user/tenants, so as these entities continue to demand flexibility and mobility to achieve their occupancy goals, the CRE community will need to offer opportunities that provide these objectives which go well beyond the Core/Traditional leasing standards…If they don’t, they will be left behind.
Charlie Morris
Principal at Avison Young
altSpace
LiquidSpace is adding to the available flexible office market through a product called altSpace. altSpace combines carefully curated office fit-outs with LiquidSpace-approved landlord and partner spaces. In addition to space and fit-out, the altSpace service layer provides design consultation, IT procurement, and a dedicated LiquidSpace concierge. The LiquidSpace concierge is there to help manage a customer’s move and the facility manager’s needs.
Dallas has quickly adopted the altSpace model, as the tech and communication industries boom in the city. To get insights into how a Fortune 500 company put their team culture first in a Dallas altSpace, read their Customer Story. Building operators are adding flexibility to their asset portfolio to meet the evolving needs for flexibility from customers. Prominent commercial real estate company Olymbec has added altSpace to their portfolio in the Dallas Central Business District. Learn how you can leverage the altSpace program as a building owner.
We didn’t have to do the same level of buildout for altSpace that we normally do, so we could do a shorter term transaction and make it work from a profitability standpoint.
Chad Cook
Managing Member at Quadrant Investment Properties
Dallas – The Economy and Job Market for Flexible Office
Given the booming tech industry presence in Dallas, we predict that flexible office demand will continue to rise.
Technology leads the demand for flexible office space at nearly double the other sectors.
For this reason, Dallas is a hotspot for large corporations and corporate relocation.
Notably, Dallas Forth Worth lays claim to 22 companies on the Fortune 500 list.
The area is home to top corporations like AT&T in Dallas and Exxonmobil in Irvington.
Businesses flock to Dallas at unprecedented rates, often attracted by the probability of cash-on-cash returns.
Toyota recently placed their new headquarters in North Plano, bringing over 1,000 job openings in the process.
The new hires will be joining the 4,000 other Toyota employees from across the country relocating to their Dallas headquarters.
These large corporate relocations are often closely followed by an influx of service providers moving to Dallas to support these large customers.
22
Fortune 500 Companies in Dallas
1,000
New job openings at Toyota headquarter
Employment growth in Dallas has also been soaring, given the rising availability of quality jobs. Dallas is responsible for 8 percent of the U.S job growth rate since January 2008. There has been a recent emergence of large corporations placing their headquarters around Dallas. More jobs created in Texas come from the DFW than San Antonio, Austin, or any other metropolitan area. The unemployment rate, as of June 2017, is 4% compared to the United States at large, at 4.5%. In addition to affordable living in Dallas, the average weekly wage rate continues to rise, reaching $1,100 as of this past year. Workers are represented in a wide range of fields, including but not limited to information, trade, utilities, transportation and manufacturing.
Originally we reached out to LiquidSpace for a solution for booking conference rooms. Later we found they were listing some really great office space. So we started out listing our executive suites, collaborative space, and private offices. Those listings started doing really well. Meghan, Ricki, and Esther from the LiquidSpace team worked really closely with me to optimize the listings and update availability every month. We’re in regular communication with them for any relevant deals.
Heather Shuttleworth
Marketing Director at Boxer Property
The Future of Dallas Commercial Real Estate
Dallas is the city to watch in commercial real estate.
With a promising job market and affordable prices, flexible office space in Dallas is bound to make a huge splash.
Just last month, 123 people searched for space in Dallas on LiquidSpace.
And LiquidSpace has 1579 workspaces available.
Paramount Property Analysis stipulates that most new office space development will still be concentrated in Uptown and Far North Dallas. Dallas’ rising employment and population trends make flexible office space a stronger option than traditional office space. A significant rise in millennials within the workforce will further impact the specifics of flexible office space demand.
Millennials, aged 16-35, comprise 32% of the Dallas population with an expected growth rate of 12.2% in 5 years. The rise in millennials can be attributed to Dallas’ high post-grad university student retention rate. Our previous research shows that millennials prefer more comfortable and collaborative workspaces.
Paramount Property Analysis stipulates that most new office space development will still be concentrated in Uptown and Far North Dallas. Dallas’ rising employment and population trends make flexible office space a stronger option than traditional office space. A significant rise in millennials within the workforce will further impact the specifics of flexible office space demand.
Millennials, aged 16-35, comprise 32% of the Dallas population with an expected growth rate of 12.2% in 5 years. The rise in millennials can be attributed to Dallas’ high post-grad university student retention rate. Our previous research shows that millennials prefer more comfortable and collaborative workspaces.
Millenials
An expected growth rate of 12.2% in 5 years
A focus on flexible office space will also solve many of the problems that come along with Dallas’ rising population rates and popularity.
Flexible office space will address Dallas’ rising commuting times for employees.
Currently, commuters in Dallas are fortunate enough to spend only 26 minutes traveling to work on average.
However, rising population rates will most likely increase traffic during peak commuting times.
Also, the demands for new office construction are high enough to drive a construction labor shortage.
Dallas boasts vast open and available land space for real estate development.
Yet this could change given expert predictions of an occupancy max out by 2018.
More flexible workspace options will contribute to more efficient land usage.
Ultimately, flexible office space is still the optimal means to accommodate Dallas’ new influx of companies in an affordable and efficient manner.
Texas Market Flexible Office Summary
In Texas three cities are poised to become the rising stars of the flexible office sector.
Austin
$393/mo
the average monthly price per person
39,583 sq/ft
flexible office space
Austin is a city with a total of 39,583 square feet of coworking space with an average monthly cost per person of $393.
With the tag line “Keep Austin Weird” the capital of Texas is poised to be a leader in the future of office space.
Austinites and the tech scene will continue to grow as more and more companies decide to move to the city.
Dallas, the Silicon Prairie, has been growing rapidly and is largest hub of coworking space in the state of Texas.
With over 1,210,843 square feet already Dallas is an industry leader.
With Dallas coworking space costing $176 monthly per worker it is one of the most affordable in the country.
Thanks to the influence of technology in the city, Dallas is attracting young growing businesses and Fortune 500 international corporations.
Dallas
$176/mo
the average monthly price per person
1,210,843 sq/ft
flexible office space
Houston
$162/mo
the average monthly price per person
1,925,855 sq/ft
flexible office space
Houston, people are still moving in record numbers.
According to the U.S. Census Bureau, Houston added 125,005 residents in the 12 months ending July 1, 2016.
Houston is again fueling growth for the coworking sector. Moreover, Houston remains an international destination.
Over 28,000 people moved to Houston from abroad in 2016.
The coworking sector in Houston costs about $162 per worker per month, with over 1,925,855 square feet of space throughout the city.
Top Monthly Office Space in Dallas
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