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Office Market Survey

Download the 2018 Office Market Survery Here

The Office Market Survey is an annual publication produced by Burns Commercial Properties in September. The Survey assesses the total Class A, B and C office space availability and occupancy in Tyler, TX.

Companies interested in acquiring office space will find the survey an excellent tool for comparative research of lease rates and options. The survey can be downloaded by clicking the link or picture to the left or can be viewed at the Burns Commercial Properties.

 

 

OVERVIEW

The annual Burns Commercial Properties Office Market Survey indicates that the
trends of the past few years are continuing in the office sector.
 
The survey consists of data obtained from Landlords and Leasing Agents for fifty
nine buildings in the Tyler market. These properties contain a total of 2,319,898
square feet. The data shows that in excess of twenty nine percent of the space is
vacant, with the total vacancy standing at 467,067 square feet. This is the largest
amount of vacant space ever recorded in the twenty years the survey has been
conducted.
 
The occupancy rate stands at 78.61%, down slightly from 79.8% in 2017. The
downtown sector has a occupancy rate of 74.5%, while buildings located in south
Tyler are occupied at a level of 82.7%.
 
On average, Landlords are quoting a lease rate of $15.86 per square foot per year.
This is up from the 2017 level, which was $14.42 per square foot.
 
In spite of the fact that the vacancy rate for office space remains high, the supply
continues to increase. The increase appears to primarily be the result of small
office buildings which have been built in the southern portions of Tyler by
developers. This is one trend contributing to the oversupply in the market.
Other trends include the fact that technology and automation have resulted in a
decrease in the amount of office space being utilized per employee. According to
a recent study by commercial real estate firm Avison Young, the typical office user
had an average of 225 square feet of workspace in 2010. Today that figure has
decreased to 151 square feet per person, and it is predicted that by 2020, the
average office space will be 120 square feet. This is not a good trend for office
landlords. Additionally, a new study by the World Economic Forum resulted in a
prediction that the share of workplace tasks performed by machines will increase
from the present rate of 29% to 52% by the year 2025. These trends will result in
a decreasing need for office space.
 
A look back at the 2008 office market survey reveals that there were two
buildings in Tyler which had more than 10,000 square feet of contiguous space
available. This year’s study shows that eight buildings have this much contiguous
space for lease. In 2008, the class A buildings boasted an occupancy rate of 93.8%.
Today this figure stands at 78.1%. The occupancy rate for downtown buildings
stood at 89.2% in 2008, versus 74.5% in 2018. The increase in the amount of
vacant space available in Tyler over this ten year period is 258,376 square feet.

Taylor Burns
Burns Commercial Properties