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Market News and Trends
Using data and analysis from the Brookings Institution, BusinessWeek.com ranked the nation's top 40 economies based on job growth, employment, economic growth, and home prices. Of the top 10 metropolitan economies, 5 were in Texas. Texas, the last state to enter recession, has been bolstered by its oil and gas industries. Texas also has many other things going for it, including affordable home prices and relatively low wages, which attracts corporations. Texas cities ranked in the survey were: San Antonio-1, Austin-2, Dallas/Fort Worth-5, Houston-9, and El Paso-10.
Several large leases closed in December which provided encouraging news for the Dallas market. The companies executing these leases have been in the market for several months and have now made long term, 10-year lease commitments. We are expecting additional comparable lease commitments in 2010 from tenants who have also been in the market for an extended period of time.
On the supply side, development activity in the office sector continues to lessen. Currently there is only 1 MSF under construction. This includes the 350,000 SF 17Seventeen McKinney which will deliver in April 2010 as well as Deloitte's 750,000 SF training campus in Westlake. This level of development is in clear contrast to prior cycles when several million square feet were under construction, significantly impacting future supply.
Leases
• Newco, LLC, represented by Nathan Lawrence with CBREI, signed a new, long term lease at Convergence in Lewisville for 171,160 SF.
• Time Warner Cable, represented by Peter Danna and Mike Cleary with CB Richard Ellis, signed a new, 10-year lease for 77,346 SF at 750 Canyon.
• ST Microelectronics, represented by Andrew Taguwa and Tom McCarthy with Jones Lang LaSalle, signed a new lease for 100,246 SF at 750 Canyon. ST Microelectronics' 10-year lease resulted in 750 Canyon securing the largest two Las Colinas transactions closed in the 4th Quarter of 2009.
• Having previously occupied sublease space at Centura Tower in Far North Dallas, People Answers signed a 67-month lease at Centura. Rumored economics of the 18,671 SF lease were $24.00 +E with $8.00/SF in TI and 7 months free rent. |
• Wells Fargo Advisors, represented by Newmark KF, signed an 84-month, 13,277 SF extension and 6,885 SF expansion at One Galleria in Far North Dallas. The tenant will pay $25.71 +E face rate, with $15.00/SF in TI on the extension and $25.00/SF in TI on the expansion. Tenant will also receive 4 months free rent.
• Mortgage Contracting Services signed a 10,880 SF expansion at 6504 International in Far North Dallas. The Tenant signed a 33-month lease for $18.41 + E effective with $15.00/SF in TI and 2 months free rent.
• Banowsky and Levine, PC signed a 68-month, 5,109 SF new lease at NCP III in the North Central Expressway submarket for $12.99 +E effective with $24.42/SF in TI and 7 months free rent.
• Peterson Beckner / Unamsco signed a new 5-year lease at Duke Bridges III in Far North Dallas. Rumored economics for the 4,784 SF deal were $17.73 + E effective with $32.00/SF in TI and 6 months free rent.
• Prudential Texas Properties signed a 4,418 SF lease at the Shops at Legacy North in Plano. The 66-month deal was $25.00 + E with $37.00/SF in TI and 6 months free rent.
• Comforce signed a 4,241 SF renewal at the Colonnade in Far North Dallas. Economics for the 41-month deal were $22.39 + E effective with turn-key TI and 5 months free rent.
• HLP Solutions signed a 4,065 SF new lease at Dominion Plaza in Far North Dallas. Economics for the 65-month lease were $16.00 + E effective with $10.00 in TI and 5 months free rent.
• Flash Photography signed a 3,967 SF new lease at Campbell Centre II in the North Central Expressway submarket. Economics for the 66-month lease were $18.04 + E effective with $17.00 in TI and 5 months free rent.
• David Criss signed a 3,445 SF expansion at Two Energy Square in the North Central Expressway submarket. Rumored economics for the 60-month lease were $19.25 F/S effective with $25.00/SF in TI and no free rent.
• Charla Aldous Law Firm signed a 3,437 SF expansion at Cedar Maple Plaza in Uptown. The effective rental rate for the 53-month lease was $22.87 + E effective with $19.00/SF in TI and 5 months free rent.
• House & Associates signed a 3,389 SF new lease at International Plaza III in Far North Dallas. The effective rental rate for the 69-month lease was $21.74 + E with $36.00 in TI and 9 months free rent.
Deals in Play
• BBVA Compass, represented by Larry Toon with Jones Lang LaSalle, is in the market for 200,000 SF. |
• Prudential Financial is rumored to be in the market for a 200,000 SF requirement.
• Project Epilogue (Conexis), represented by Randy Cooper with Cushman & Wakefield, is in the market for a 135,000 SF requirement in Las Colinas. This prospect is currently located in 161 Corporate Center and requires 6/1000 parking.
• Wells Fargo Call Center, represented by Grubb & Ellis, is in the market for 100,000 SF. The prospect is focused on areas west of Las Colinas.
• HD Vest (Wells Fargo), represented by Randy Cooper with Cushman & Wakefield, is in the market for 45,000 SF in Dallas.
• Holly Corp, represented by Mike Wyatt and Bill McClung with Cushman & Wakefield, is in the market for 35,000 SF of office space.
• Ranger Financial, an accounts receivables management firm headquartered in Richardson represented by Jones Lang LaSalle, is in the market for 35,000 SF of office space in Dallas.
• HR Smart, represented by Greg Whittington with Cresa Partners, is in the market for 25,000 SF of office space north on 75. HR Smart was founded in 1999 and headquartered in Richardson.
• L & B Financial Advisors, currently located at Northpark Central I and represented by Jeff Ellerman with CBRE, is in the market for 20,000 SF in Dallas.
• Andy Kampen with Banner Commercial is in the market with an Undisclosed Technology Company for 20,000 SF of office and datacenter space along the Dallas North Tollway between Belt Line and 121. Timing for this prospect is 2nd quarter 2010.
Investment Activity
• The investment sales market is showing signs of hope as Tektronix Communications and Oncor have recently purchased office buildings for owner-occupied use. TriGate Capital recently made a splash by acquiring three (3) Quorum buildings (The Landmark, Emerald Plaza and 14850 Quorum) and CAPSTAR has been awarded the leasing and management of this portfolio. Another CAPSTAR client, Westmount Realty Capital, just sold approximately four acres along Central Expressway for an expansion of the Forest Park Medical Center.
• The 1.58 MSF Lincoln Centre is being marketed by Gary Carr of CB Richard Ellis on behalf of TIAA. Offers are expected during the first two weeks of January. |
