By: Steve Triolet
First quarter numbers were recently officially released, which has caused a great deal of discussion in regard to net absorption, which came in much lower (approximately 165,000 sf) than many people anticipated, given the 4.8 million square of net absorption we saw in 2015. The thing about net absorption is that it’s irregular and can swing widely from one quarter to the next, unlike vacancy or rental rates which move in more predictable increments. As you can see in the chart below, even in really good years there are some slower quarters.
2015 (like upcoming 2017) was fueled largely by several large built-to-suit projects. In 2015, State Farm took occupancy of 1.5 million sf, the Richards Group moved into their BTS (250K sf), Raytheon move into their BTS (490K sf) and FedEx moved into their BTS (265K sf). Later this year, 7-Eleven will move into their new BTS in Las Colinas (325K sf) and Alcatel-Lucent will move into their BTS (250K sf) in Richardson. The next wave of big needle movers will impact the market in 2017 (Toyota, Liberty Mutual, Fannie Mae, etc.)
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