North Texas office construction tripled in the last year

legacytowerTrammell Crow’s Legacy Tower is under construction on the Dallas North Tollway in West Plano.

Dallas-area office construction jumped in the first quarter.

Almost 6 million square feet of new office buildings is under construction — more than three times what was being built a year ago in North Texas, according to a new report by Cushman & Wakefield of Texas Inc.

The good news is that much of what’s being built is already spoken for by businesses that are expanding or relocating in this area.

“And it’s still less than what we had under construction in 2008,” said Cushman & Wakefield’s executive director Matt Heidelbaugh. “I don’t think we are getting overheated at all.

“We are being wise about what we are building.”

The 5.8 million square feet of offices being constructed compares with 6.3 million square feet in first quarter 2008, before the recession.

More than half of what’s now being developed is in Richardson’s Telecom Corridor — where State Farm Insurance is building its 1.5 million-square-foot campus — and in the West Plano and Frisco market where several speculative buildings are under construction.

Cushman & Wakefield said that 18 speculative office buildings are now underway across North Texas. And those projects are about a quarter leased.

Net office leasing during the first three months totaled just over 1 million square feet — less than in the same period of 2013, Cushman & Wakefield says.

But those numbers don’t reflect lots of office leases signed where tenants haven’t yet moved into the properties. That’s certainly the case with all the new buildings under construction.

“Part of the slight decline [in net leasing] is the fact that there are limitations on blocks of empty space now,” Heidelbaugh said. “It’s pushing things out further until we get some supply.”

The largest volume of office leasing in the first quarter was in Richardson’s Telecom Corridor, in West Plano and Frisco and in downtown Dallas. Even the LBJ Freeway corridor — which has lost tenants during the road construction project — had an uptick in net leasing this year.

Business districts in Las Colinas and the mid-cities area lost office tenants during the period.

Cushman & Wakefield estimates that office vacancy in North Texas is now just under 18 percent — the lowest level in more than a decade.