October 13 2020

Dallas-Fort Worth Office Market Report – Third Quarter 2020


Like the rest of the country, the Dallas/Ft. Worth economy continues to weather the effects of the ongoing COVID-19 pandemic. Fortunately, in the DFW area the midsummer surge in hospitalizations has steadily declined since the beginning of July and the positivity rate on tests has trended closer to the 5% threshold indicative of community control of the coronavirus. While caution is still warranted, it is encouraging that more retail, restaurant, and office businesses are poised to reopen as Texas Governor Abbott announced an easing of restrictions to allow these businesses to increase their capacity to 75%.

Looking at the most recent payroll numbers from the Bureau of Labor Statistics, DFW lost 381.7K jobs in March and April, quickly recovered 178.6K of those jobs in May and June, then stalled out in July and August as Texas responded to a resurgence in coronavirus cases. As of now, using seasonally adjusted payroll data, we have recovered 51.7% of jobs lost during the March/April lockdown. It is important to note that the recovery has been uneven with the recovery less robust in key industries like the oil dependent Mining and Logging and Manufacturing sectors. However, it is extremely encouraging that more office dependent industries are recovering at an impressive 91.9% pace through August. Looking ahead, economic forecasts from both Oxford Economics and Moody’s Analytics project the metroplex will end 2020 down 131K to 235K jobs respectively but enjoy a period of above trend economic growth in the coming years. According to the base case projection from Moody’s Analytics, this amounts to a robust 150K new jobs in 2021 and 163K jobs in 2022.

While a broad recovery has not yet arrived for the oil and gas sector, the overall outlook has improved. The quarterly energy survey produced by the Dallas Federal Reserve shows that the pace of contraction has significantly lessened now that prices have stabilized near $40 and are expected to end the year in the $40-45 range. While most respondents to the survey do not expect a substantial increase in the rig count to come until prices are at least above $50, more respondents report their primary goal is to either grow or maintain production levels than reducing costs. Fortunately, the recent string of corporate relocations to the Dallas area have helped diversify the economic base and allowed the region to withstand the challenges of the pandemic.

[Click here to download the full report]

©2021 Madison Marquette, A Capital Guidance Company. All rights reserved.


Site Design: Connect CREative