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Market News and Trends
Leasing activity continues to evidence tenant reluctance to execute long term office leases. Many companies are securing short term leases, while others are delaying decisions as late as possible. Some tenants are attempting to time the bottom of the market before securing longer term leases.
Competition for tenants of all sizes continues to escalate with astute landlords providing the necessary economic concessions to retain their existing tenants. Landlord and tenant dynamics have driven effective office rental rates down by an average of 12%.
On a positive note, D’Ann Petersen, a business economist with the Federal Reserve Bank of Dallas, reports that “our DFW office market remains much healthier than many other areas of the country and should be poised to improve when the economy does begin to turn around.” North Texas real estate economist Jeanette Rice agrees that “the office market in Dallas and, for that matter, all the others in Texas will not suffer to the same degree as in the last recession because we are not losing as many high-tech jobs.”
Corporate relocations are on the horizon and will help prompt the improvement of the local commercial real estate market. In a NAIOP meeting this month, Mayor Tom Leppert emphasized “Dallas will be a hot spot for corporate relocations during the next two years”.
Leases
• ABT Executive Suites, signed a 128-month renewal at Millennium Tower in Far North Dallas. The terms of the 27,042 SF lease were $25.18 +E with $14.00/SF in TI and 8 months free rent.
• Colliers International signed a 12-month, 16,998 SF renewal at Hampton Court in Uptown. The tenant will pay $24.56 +E effective on the renewal and will receive no TI and no free rent.
• Mutual of Omaha Bank, represented by Henry S Miller, signed a 14,152 SF new lease at the 5950 Sherry Lane in Preston Center. The Tenant signed a 128-month lease for $35.00 +E with $32.50/SF in TI and 8 months of free rent. |
• Esoft Solutions, represented by Jones Lang LaSalle, signed a new 65-month lease at Parkway Centre I in Far North Dallas for $16.73 +E. The 10,469 SF new deal received no TI and 5 months free rent.
• HomeTeam Pest Defense signed a 8,794 SF, 40-month lease at 3100 McKinnon in Uptown. The tenant will pay $20.00 +E effective, receive no TI and 4 months free rent.
• Curtis Group, represented by Cresa, signed a 8,345 SF renewal at 5000 Quorum in Far North Dallas. The tenant will pay $16.50 +E on the 63-month lease with no TI and 11 months half rent.
• Republic Title of Texas, Inc signed a 7,980 SF renewal at 3131 Turtle Creek in Uptown. The 60-month deal was $17.00 +E effective with no TI and no free rent.
• Information Builders, represented by PJD Corporate Realty, signed a 6,323 SF new lease at Lincoln Legacy One in Far North Dallas. Economics for the 67-month deal were $23.04 +E effective, $36.00/SF in TI and 7 months free rent.
• Cannon Business Solutions, represented by Jones Lang LaSalle, signed a 5,542 SF renewal at International Plaza III in Far North Dallas. Economics for the 64-month lease were $25.48 +E effective with $3.00/SF in TI and 3 months free rent.
• Energy Education signed a 4,300 SF expansion at 5950 Sherry Lane in Preston Center. Economics for the 66-month lease were $25.00 +E with $4.20/SF in TI.
• Banner Commercial signed a 3,134 SF new lease at Tollway Plaza I in Far North Dallas. Rumored economics for the 69-month lease were $24.00 +E effective with $23.00/SF in TI.
• NorAm Capital, represented by Duggan Realty, signed a 2,498 SF new lease at the Colonnade in Far North Dallas. The effective rental rate for the 66-month lease was $23.91 +E with $5.00/SF in TI and 6 months free rent.
Deals in Play
• Brad Selner and Josh White with Jones Lang LaSalle are in the market with Raytheon for 700,000 SF of office space in the North Central Expressway submarket. The prospect is currently looking at the old Blue Cross Blue Shield project or the EDS/HP Campus in Legacy. |
• Rick Hughes with Cushman & Wakefield is in the market with Jacobs Carter Burgess for 250,000 SF of space in Las Colinas. JCB needs to sublease some of their existing space before this deal begins to heat up.
• Project Steer (Lab Corp),represented by Grubb & Ellis, is in the market for 200,000 SF in the Stemmons submarket, where they are currently located.
• CBRE is in the market for 190,000 SF of office space. CBRE has a 90,000 SF corporate requirement for Far North Dallas and a 100,000 SF back office requirement for Uptown. Timing in January 2011.
• Hanson Aggregate, represented by Steve Thelen with Jones Lang LaSalle, is in the market for a 150,000 SF office requirement in Las Colinas. Timing on the deal is April 2014 with a $6 million buyout.
• Sky Chef, represented by Greg Langston with Cresa Partners, is in the market for a 100,000 SF requirement in Las Colinas.
• Project Penguin (Lifecare), represented by Art Green with Cresa Partners, is in the market for 40,000 SF of office space in Richardson. The prospect is an expansion out of California.
• Jim Vanderslice is in the market with an Undisclosed Oil and Gas Company for 35,000 SF of office space in Dallas.
Investment Activity
• Preston Sherry Plaza in Preston Center and Park Place on Turtle Creek are being marketed for sale by CB Richard Ellis on behalf of TIAA. Offers are anticipated to be submitted in early October.
• PCCP LLC, formerly Pacific Coast Capital Partners, acquires the 3-building 121 Lakepointe Crossing on State Highway 121. This building complex was part of the Opus West Corporations portfolio that went back to the lender earlier this summer. |
