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Market News and Trends
According to the Brookings Institution, Dallas was one of the top U.S. Metropolitan areas to experience a shift in commerce to the suburbs between 1998 and 2006. 67% of Dallas jobs were located more than 10 miles from downtown. Since 2006, over 40 firms have relocated (Tenet Healthcare, Capital One, AT&T, and TM Advertising to name a few) back to the CBD bringing over 6,500 jobs to the submarket.
CoStar reported that Dallas had a positive net absorption of 950,000 SF in the 1st Quarter of 2009. The overall vacancy rate for Dallas remained constant at 24%.
Year-to-date CoStar reports 1.8 million SF of office space under construction. Of the 1.8 million SF that has yet to come on line, 32% of the available space has been preleased prior to delivery.
Dallas / Fort Worth commercial property foreclosures are up 14% since April of 2008 according to a new report from the Foreclosure Listing Service, Inc. The office building category had the largest increase in postings at 129% since 2008. The majority of the office building postings are Class C.
Leases
• La Quinta, represented by Cushman & Wakefield, signed a 10-year, 60,000 SF renewal at MacArthur Ridge II in Las Colinas. The tenant will pay $20.50 +E and receive $20.00/SF in TI with 12 months free rent. The TI may also be used toward rent providing an additional year of rent abatement.
• Interstate Batteries signed a 60-month lease at the Commons of Las Colinas for $24.50 +E. The 27,938 SF new deal received $8.00/SF in TI.
• Etan Industries, represented by Jones Lang LaSalle, signed a renewal for 28,857 SF at One Galleria Tower in Far North Dallas for 5 years. Economics were $27.00 +E effective, $12.00/SF in TI and $285,714 in rent credit.
• RealPage signed a 28,205 SF, 86-month expansion at 4000 International in Far North Dallas. The tenant will pay $19.00 +E effective and receive $20.00/SF in TI with 6 months free rent. RealPage now occupies the entire building.
• Capital One signed a 10-year lease at the Plaza of the Americas in the Dallas CBD for $18.80 +E effective. The 23,840 SF lease had $36.00/SF in TI.
• Baylor Healthcare signed 23,434 SF expansion at Bryan Tower in the Dallas CBD. Economics for the 11-year deal were $14.70 +E effective, $34.50/SF in TI and 8 months free rent. |
• Shannon Gracey Law Firm signed a new lease for 20,768 SF at Bank of America Plaza in the Dallas CBD. The 11-year deal was $19.00 +E effective with $50.00/SF in TI and 12 months free rent.
• Krage & Jambey renewed 13,075 SF at 2100 Ross in the Dallas CBD. The 130-month deal was $18.35 +E effective with $10.00/SF in TI.
• Stewart Title renewed 9,400 SF of office space at Comerica Bank Tower in the Dallas CBD. Economics for the 5-year lease were $24.00 +E with $41.00/SF in TI and 5 months of free rent.
• DalPat signed a 7,300 SF renewal at One Lincoln Center in Far North Dallas. Rumored economics for the 49-month lease were $24.80 +E effective with $6.00/SF in TI.
• Morgan Lewis signed a 7,111 SF expansion at Comerica Bank Tower in the Dallas CBD. The effective rental rate for the 84-month lease was $22.80 +E with $8.00/SF in TI and 3 months free rent.
• JMP Services signed a 5,095 SF renewal at Preston Plaza in Far North Dallas. The effective rental rate for the 54-month lease was $18.40 +E with $2.00/SF in TI and 3 months free rent.
• Lone Star Lenders signed a 4,089 SF new lease at Parkway Tower in Far North Dallas. The effective rental rate for the 40-month lease was $17.75 +E with $13.93/SF in TI and 4 months free rent.
Deals in Play
• Project Downstream, represented by Phil Puckett of CB Richard Ellis, is in the market to purchase an office building for approximately 300,000 SF for a corporate relocation. They are also considering St. Louis and Florida.
• Phil Puckett and Jeff Ellerman with CB Richard Ellis will soon be in the market for 225,000 SF for the consolidated new home of CB Richard Ellis. RFP's will be going to the market in one month.
• Winstead, represented by Phil Puckett with CB Richard Ellis, is in the market for 140,000 SF in the Dallas CBD and Uptown submarkets. Winstead is currently located in Renaissance Tower with a 2012 expiration. RFP's to be distributed June 2009.
• Project Epilogue (Connexis), represented by Randy Cooper and Steve Wentz with Cushman & Wakefield, is in the market for 135,000 SF of office space in Las Colinas.
• Project Trinity, represented by Mike Wyatt with Cushman & Wakefield, is soliciting RFP responses in Richardson for 130,000 SF.
• Pfizer is in the market for 100,000 SF in Las Colinas. The tenant is represented by CB Richard Ellis.
• Riis Christensen with Transwestern is in the market with an Undisclosed Company for 85,000 SF of office space in Far North Dallas. The tenant has a 5 per 1,000 parking requirement. |
• Sam Weatherby with Jones Lang LaSalle is in the market with ACS for 60,000 SF of call center space. The building must be able to support 6 per 1,000 parking.
• Terri Quinn with Cresa Partners is in the market with an Undisclosed Travel Technology Company looking for 30,000 - 60,000 SF in Far North Dallas.
• Regis HQ, represented by Baron Aldrine of CB Richard Ellis, is active in Far North Dallas for 25,000 SF of office space. Regis HQ is currently located in Galleria Towers.
• Telecheck, represented by Conrad Petersen with TY Commercial, is looking for 25,000 SF of call center space in Las Colinas.
• Harlan Davis with CB Richard Ellis is in the market with an Undisclosed Software Company for 20,000 - 30,000 SF in Far North Dallas. The tenant requires 5 per 1,000 parking for this 1st Quarter 2010 move.
• Brad Mason with Jackson Cooksey is in the market with an Undisclosed Company for 22,000 SF of office space in Far North Dallas.
• Strayer University, represented by Cushman & Wakefield, is in the market for 16,000 SF of office space on the Upper Tollway, Las Colinas or the Dallas CBD.
Investment Activity
• CB Richard Ellis Investors sold the 504,732 SF Providence Towers in Far North Dallas to KBS Realty Advisors for $122 per SF totaling approximately $61.5 million. The 12-story, Class A office building was constructed in 1986 and renovated in 2006. The building was approximately 87% leased at the time of the sale.
• The Van Tuyl Group recently purchased the 44,000 SF Royal Ridge Tech building at 8333 Royal Ridge Parkway. The company will turn the call center space into a regional corporate office for about 35 employees and a training center that will be used by 3,000 - 5,000 employees per year.
• US Treuhand, the German equity investors of Victory Park, are taking over ownership from Hillwood. Although Hillwood will lose about $100 million in the new agreement, they will still be in charge of the management for the retail and office project. US Treuhand started providing equity for the project in 2006 and have invested over $185 mllion so far.
Development Activity
• The $750 million Park Lane project across from NorthPark Center is nearing completion and will open in phases, eventually being completed in 2010. Several retail stores have already opened and several more are scheduled to open this month. The project consists of 700,000 SF retail / 750,000 SF office space. |
