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Market News and Trends
Second quarter office activity has increased. The consensus among Dallas commercial real estate professionals is that many tenants are more active in the office market after having previously placed their office relocations on hold.
Leasing activity for 3,500 SF suites and smaller continues to grow as a result of tenants downsizing from larger offices. In response to this trend, property owners are increasingly developing spec suites.
A new report from Sheshunoff and Co Investment Banking claims that Texas banks are outperforming the national banks with their profitability. Despite most Texas banks remaining well-capitalized, reports suggest that Texas still has at least two more quarters of overall soft economic conditions.
Leases
• Publicis closed its lease in Legacy and will be relocating out of Centura Tower by the end of 2009. The terms of the deal are not yet disclosed.
• Texas Lending signed a 60-month, 76,000 SF expansion at 4100 Alpha in Far North Dallas. The tenant will pay $14.00 F/S effective and receive $20.00/SF in TI with no free rent.
• Ace USA, represented by Brad Selner with Jones Lang LaSalle, signed a 120-month lease at Las Colinas Towers for $19.00 +E. The 41,477 SF new deal received $40.00/SF in TI.
• Ambit Energy, represented by Cushman & Wakefield, signed a 39,000 SF sublease at 600 Data Drive in Richardson/Plano for 27 months. Economics were $6.00 NNN effective for the plug and play space.
• Kiewit Construction signed a 37,000 SF, 36-month plug and play sublease at 7651 Esters in Las Colinas. The tenant will pay $12.70 +E effective and receive $10.00/SF in TI.
• HQ Global Resources, represented by CB Richard Ellis, signed a 25,901 SF relocation and 24,697 SF extension at Colonnade III in Far North Dallas. The tenant will pay $21.52 +E on the 24-month relocation with 3 months free rent. Economics for the 102-month extension were $23.47 +E with $20.00/SF in TI and 18 months free rent. |
• Mass Electric signed a new 20,000 SF lease at Regent Center II in Las Colinas. Economics for the 63-month deal were $16.30 +E effective, $37.00/SF in TI and 9 months free rent.
• Unificare signed a 13,714 SF renewal at 2010 Valley View in Las Colinas. The 72-month deal was $15.00 F/S effective with $5.75/SF in TI and 6 months free rent.
• Capstead Mortgage signed a 9,474 SF lease at One Lincoln Park in the North Central Expressway submarket. The 126-month renewal was $26.95 +E effective with no TI and 6 months free rent.
• BMC Capital signed a new lease for 9,087 SF of office space at 3100 Monticello in Preston Center. Economics for the 39-month lease were $21.90 +E with no TI and 3 months free rent.
• BE Aerospace signed a 7,684 SF lease at MacArthur Ridge II in Las Colinas. Rumored economics for the 90-month lease were $21.50 +E effective with $10.00/SF in TI and 6 months free rent.
• NAK signed a 6,900 SF lease at Corporate Point in Lewisville. The effective rental rate for the 62-month lease was $18.75 +E with $13.00/SF in TI.
• Frost Bank signed a 5,300 SF expansion at Preston Sherry Plaza in Preston Center. The effective rental rate for the 123-month lease was $34.50 +E with $10.00/SF in TI.
Deals in Play
• Energy Future Holdings is entering the market for 100,000 SF in Far North Dallas. Jon McNeil with Jones Lang LaSalle is the broker.
• Rexel, represented by Mike Quint with Jackson Cooksey, is narrowing their search to 5 buildings in Far North Dallas. RFP's will go out the first week of July 2009.
• McAfee, represented by Seth Weinstein with Newmark KF, is in the market for 40,000 - 50,000 SF.
• CB Richard Ellis is in the market for a 225,000 SF consolidation in Uptown or the Dallas CBD. Timing on the deal is mid-year 2010.
• Samsung, represented by Pat O'Keefe with CB Richard Ellis, is gathering information for a 200,000 SF office space requirement in Las Colinas.
• Winstead PC, represented by Phil Puckett with CB Richard Ellis, is in the market for 140,000 SF in the Dallas CBD or Uptown. The tenant is currently located in Renaissance Tower and RFP's were scheduled to go out this month. |
• Interstate Batteries, currently located in Park Central along the North Central Expressway with a July 2010 expiration date, is in the market for 130,000 SF. The tenant is represented by John Amend.
• Cushman & Wakefield is in the market for 25,000 SF of office space in Preston Center for their corporate office relocation.
• Allstate Insurance, represented by William Callahan with CB Richard Ellis, is active in Las Colinas for 60,000 SF of office space.
• Travis Wolff, represented by Mike Quint with Jackson Cooksey, has narrowed their search to 4 options; 2 are along the North Central Expressway and the other 2 are in Far North Dallas along the Dallas North Tollway.
• Universal Technical Institute, a school for auto mechanics represented by Josh White with Jones Lang LaSalle, is in the market for 85,000 SF in Las Colinas. This tenant is looking to occupy thier own building.
Investment Activity
• Best and final offers are due for Heritage Square, a 354,000 SF office complex at the corner of the Dallas North Tollway and LBJ Freeway. John Alvarado with Jones Lang LaSalle is representing the seller.
Development Activity
• 3000 Skyline, a 700,000 SF telecommunications facility in Mesquite, is about to get a multimillion dollar makeover. Previously occupied by Western Electric, CAPSTAR Commercial Real Estate Services and the Cambay Group are redeveloping it into one of the most heavily powered data centers for multi-tenant users in the country. This 90-acre site has its own substation that will have 5 times the power usage capabilities of the new Cowboys Stadium.
• Addison Circle Two, a 197,000 SF building in Far North Dallas developed by Opus West Corp, declared bankruptcy because of a compilation of liens on the property totaling over $4 million. The credit crunch and slowing demand for office space have left Opus unable to secure permanent financing to replace the short-term construction loan on the Addison project.
• The Dallas Convention Center hotel announced that an early opening in late 2011 or early 2012 is possible. The Dallas City Council's Economic Development Committee anticipates completion of the bond offering this summer followed by 28 months of construction. |
