Written by

Small Texas Cities That Added the Most Office Space Since 2009

Office construction has been booming throughout the last decade in Texas and demand for new space is showing no signs of slowing down. Furthermore, Texas continues to be a top choice for corporate relocations due to favorable tax conditions and a highly skilled workforce.

Specifically, more than 100 million square feet of new office space was added in The Lone Star state’s top three office markets—Houston, Dallas-Fort Worth and Austin—in the last decade. According to Yardi Matrix, Austin is leading the nation’s office supply pipeline with more than 7 million square feet of space currently under construction—10.5% of the total national stock. Dallas and Houston have 6.2 million and 2.9 million square feet under construction, respectively.

While the numbers for these markets are undoubtedly remarkable, we took the time to see which small cities in Texas added the most office space between 2009 and 2019 and came up with a top 10 list. We researched cities with populations less than 300,000 people and only office spaces larger than 25,000 square feet were considered.

We also looked at property characteristics, including office class and type, ownership status, and the amount of office space scheduled for delivery in 2020. Read on to find out more.

More Than 32 Million Square Feet of Office Space Came Online in 10 Texas Cities Since 2009

The ten cities added 32.4 million square feet of office space in the span of 10 years—a total of 192 properties. Just under 28 million square feet came from 107 buildings that were larger than 100,000 square feet, while the remaining 4.4 million square feet was spread across 85 buildings with less than 100,000 square feet. This shows that both small and large offices are in demand in Texas, and the state can accommodate a large variety of companies and businesses.

Of the total 192 buildings, 33 are owner-occupied while the remainder are under lease.

The top 10 list was dominated by Dallas- and Houston-area cities, with only one Austin neighboring city squeezing in at #10, and a Midland/Odessa-area city at #7.

Plano Adds More Than 10 Million Square Feet of Rentable Office Space in 10 Years

Just over 10.5 million square feet of office space hit the market in North Dallas’ Plano between 2009 and 2019—a 40% increase. Two major players relocated their headquarters to Plano a couple of years ago, namely Toyota and JPMorgan. Toyota Headquarters at Legacy West is a massive development encompassing 2 million square feet, while JPMorgan Headquarters at Legacy West is a one-million-square-foot building.

Roughly 9.5 million square feet came from 29 buildings that were larger than 100,000 square feet, while 975,000 square feet was spread across 20 buildings. FedEx’s new headquarters is also among these smaller offices.

Of the 49 total office buildings, 36 were Class A.

With all of this activity happening in Plano, it’s no wonder that the city is ranked as one of the best places to find a job in the United States.

Irving & The Woodlands Combined Add 8.5 Million Square Feet of Space

Irving delivered 21 properties in the span of 10 years, totaling 4.5 million square feet of Class A & B office spaces. The largest addition was the Pioneer Natural Resources headquarters, which is a 1.1 million-square-foot development. The Dallas–area city added 16 large developments and five smaller offices.

Some of the office buildings scheduled to come online by the second half of 2020 in Irving include the 250,000-square-foot and 201,000-square-foot Cypress Waters properties, as well as the smaller 70,000-square-foot Gateway 161 building at 6121 North State Highway 161.

North Houston’s The Woodlands added 4.1 million square feet of space across 23 buildings. Only one of the 23 properties was a Class B asset; the rest were Class A. As in the other cities, large developments greater than 100,000 square feet dominated the market. Specifically, Anadarko Hackett Tower was the most sizeable project; the property encompasses 550,000 square feet.

Most of the new properties built in The Woodlands between 2009 and 2019 are general offices.

Construction Dominated by General Office Property Types

Among the top 10 cities, general office property types led the development pipeline. In particular, 148 of the total 192 buildings built since 2009 are general offices. The remaining properties are made up by several street retail assets, a couple of medical buildings and restaurants.

A total of 26 coworking spaces were also constructed in the last 10 years in these cities. This comes as no surprise, as both the Dallas-Fort Worth metropolitan statistical area (MSA) and Houston MSA are among the leading coworking markets in the U.S. According to Yardi Matrix, Dallas-Fort Worth boasts 3.5 million square feet of coworking space, while Houston encompasses 2.2 million.

About 2.5 Million Square Feet of Space Hit Frisco Between From 2009-2019

Frisco added almost 2.5 million square feet of office space in 10 years—a total of 17 buildings. As far as deliveries go, 11 properties were class A, while the remainder were class B.

The largest and most ambitious project was The Ford Center at The Star, a 400,000-square-foot development at 1 Cowboys Way. The property, owned by Blue Star Land, is a six-story, low-rise building, and was built in 2017.

Despite the substantial office development and healthy economy, Frisco remains a relatively affordable city. In fact, it’s ranked as the 5th-most affordable city in the state.

Austin MSA’s Round Rock Lands at #10

Round Rock is the only Austin MSA city that made the top 10 list; it was just 7,000 square feet short of reaching 1 million square feet added to the city in the span of 10 years. Furthermore, Round Rock is the only city on our list that had a larger number of small developments than larger ones. Roughly 730,000 square feet came from 12 buildings with less than 100,000 square feet, while the remaining 264,000 square feet was spread across two buildings with more than 100,000 square feet.

The two largest buildings were both around 130,000 square feet, and the smallest was just under 30,000 square feet.

By the end of the second half of 2020, another small asset will come online, namely the 25,200-square-foot University Square.

CommercialCafe has completed similar studies on Florida and California. Be sure to check those out, too!

Methodology:

We looked at all office properties greater than 25,000 square feet in Texas cities with populations of less than 300,000 residents.

Data on office square footage for each city is based on properties built or shown as completed between January 1, 2009, and December 5, 2019.

Data on office space currently in development is based on properties currently under construction, with estimated delivery dates between December 31, 2019, and June 30, 2020.

We only included the total amount of office square feet incorporated in these properties, excluding square footage with other uses (such as retail, hotel, etc.).

Data for population, income, employment and housing was obtained from the U.S. Census Bureau reports for 2009 and 2018.

Data extraction date: December 5, 2019.

Data sources: Yardi Matrix and the U.S. Census Bureau.

Comments are closed.