DFW OFFICE MARKET BRIEF
3Q2017
DFW OFFICE MARKET BRIEF 3Q 2017
TABLE OF CONTENTS
1. DALLAS/FORT WORTH OFFICE TEAM AND SUBMARKETS
1 2 3
2. OVERALL DALLAS/FORT WORTH OFFICE MARKET A. Facts and Figures
2. SUBMARKET INTELLIGENCE A. Dallas Central Business District B. Central Expressway
C. D. E. F. G. H. I. J. K. L. M.
Far North Dallas Fort Worth Central Business District Las Colinas LBJ Mid Cities North Fort Worth Preston Center Richardson/Plano Southwest Fort Worth Stemmons Uptown/Turtle Creek
DFW OFFICE MARKET BRIEF 3Q 2017
1
HLC DALLAS/FORT WORTH
MATT CARTHEY
OFFICE PROFESSIONALS
Partner Fort Worth mcarthey@hlfortworth.com 817.710.1111
DAVID CASON
Vice President Fort Worth dcason@hlfortworth.com 817.810.9137
GEOFF SHELTON
HOLDEN LUNSFORD
JAMES ENGELS
MARSHALL MAYS
ANDREW SCUDDER
BRANDON AVEDIKIAN
DAN POND
DYLAN SHAPIRO
Market Associate Fort Worth mmays@hlfortworth.com 972.381.3201
Market Associate Dallas ascudder@hldallas.com 972.280.8320
Managing Principal Fort Worth gshelton@hlfortworth.com 817.710.1113
Market Associate Dallas bavedikian@hldallas.com 972.280.8302
Managing Principal Dallas holdenlunsford@hldallas.com 972.381.3218
Market Analyst Dallas dpond@hldallas.com 972.381.3218
Market Director Dallas jengels@hldallas.com 972.280.8307
Market Analyst Dallas dshapiro@hldallas.com 972.381.3219
HIGHLIGHTED SUBMARKETS LEWISVILLE/DENTON
FAR NORTH DALLAS RICHARDSON/ PLANO
LORI VUKOVICH Marketing Coordinator Dallas lvukovich@hldallas.com 972.381.3206
GISELA STERN-BALSLEY Marketing Coordinator Fort Worth gbalsley@hldallas.com 817.710.1110
NORTH FORT WORTH LBJ
LAS COLINAS
NORTHEAST FORT WORTH FORT WORTH CBD SOUTH FORT WORTH
MID-CITIES
PRESTON CENTER CENTRAL EXPRESSWAY STEMMONS FREEWAY UPTOWN/ TURTLE CREEK DALLAS CBD EAST DALLAS SOUTHWEST DALLAS
DFW OFFICE MARKET BRIEF 3Q 2017
3
NEW LISTINGS
THE BERKSHIRE AT PRESTON CENTER
188,920 SF, Class A office building in the Preston Center submarket. Owned by TA Realty.
4
DFW OFFICE MARKET BRIEF 3Q 2017
NEW LISTINGS
1701 NORTH COLLINS BOULEVARD
108,657 SF, Class B office building in the Richardson/Plano submarket. Owned by Centenario Realty.
DFW OFFICE MARKET BRIEF 3Q 2017
5
NEW LISTINGS
THE CROSSINGS I & II
529,128 SF, Class A two office building complex in the East LBJ Submarket. Owned by Goddard Investment Group.
6
DFW OFFICE MARKET BRIEF 3Q 2017
NEW LISTINGS
17440 N. DALLAS PARKWAY
53.657 SF, Class B office building in the Quorum Bent Tree submarket. Owned by The Gutow Company.
DFW OFFICE MARKET BRIEF 3Q 2017
7
NEW LISTINGS
ONE RIDGEMAR
177,199 SF Class A Office Building in the West-Southwest Fort Worth submarket. Owned by Frontier Equities.
8
DFW OFFICE MARKET BRIEF 3Q 2017
DFW OFFICE MARKET BRIEF 3Q 2017
8
NEW LISTINGS
LAKEVIEW CENTER I
101,429 SF Class B Office Building in the Las Colinas submarket. Owned by Seaboard Capital.
DFW OFFICE MARKET BRIEF 3Q 2017
9
SUBMARKET INTELLIGENCE
FACTS & FIGURES CONSTRUCTION - OVERALL DFW
VACANCY - OVERALL DFW 20.00%
18.40%
9,000,000
18.00% 17.2%
8,000,000
16.00% 7,000,000
14.00%
6,000,000
12.00% 10.00%
5,000,000
8.00%
4,000,000
6.00%
3,000,000
4.00% 1.10%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Direct Vacancy
Q1 16
Q2 16
Q3 16
Q4 16
Sublet Vacancy
Q1 17
Q2 17
2,000,000
2.00%
1,000,000
0.00%
Q3 17
0
Total Vacancy
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
Delivered Inventory
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
Under Construction
OVERVIEW - OVERALL DFW
ABSORPTION - OVERALL DFW
3,000,000
20.0%
2,500,000
2,500,000
2,000,000
19.0% 2,000,000
1,500,000
1,500,000
18.0% 1,000,000
1,000,000 17.0% 500,000
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
500,000
16.0%
0
Q3 14
Q4 14
Q1 15
Q2 15
Total Net Absorption
Q3 15
Q4 15
Q1 16
Absorption
Existing Inventory
Vacancy
Q3 16
Q4 16
Deliveries
Q2 17
Q3 17
0
Vacancy
Quoted Rates
0
0
$29.40
92,237
322,110
$25.21
0
324,820
$25.24
681,427
756,599
2,218,392
$28.22
125,552
0
280,489
$26.22
17.0%
416,195
1,024,761
805,500
$25.28
21.9%
264,485
0
0
$22.10
820,318
10.8%
(14,990)
97,026
17,100
$22.24
4,572,694
4,641,527
21.5%
(270,053)
488,065
239,649
$22.01
372,164
429,519
15.6%
(195,042)
38,940
57,000
$21.51
3,603,421
1,765,827
1,765,827
49.0%
92,938
0
0
$19.33
4,526,163
447,631
485,030
10.7%
(6,987)
0
290,583
$39.32
352
27,505,181
5,624,880
5,990,444
21.8%
232,662
433,216
457,291
$24.48
South Fort Worth
204
10,560,265
1,079,988
1,155,665
10.9%
30,767
181,781
113,497
$24.63
Southwest Dallas
82
3,291,392
383,478
386,584
11.7%
126,508
72,028
0
$18.45
Stemmons Freeway
116
12,539,547
3,149,204
3,218,999
25.7%
146,140
63,000
0
$16.66
Uptown/Turtle Creek
94
12,183,447
1,260,931
1,485,746
12.2%
(29,790)
0
1,305,014
$37.98
2,893
265,981,309
45,862,992
48,860,264
18.4%
1,301,963
3,247,653
6,431,445
# Bldgs.
Total RBA
Direct SF
Total SF
Vac. %
Central Expressway
106
12,829,416
1,519,274
1,544,651
12.0%
(78,764)
Dallas CBD
81
28,780,932
7,038,974
7,523,333
26.1%
(128,949)
East Dallas
183
7,575,709
767,042
783,690
10.3%
(90,136)
Far North Dallas
452
47,512,521
6,575,115
7,189,171
15.1%
Fort Worth CBD
55
8,550,232
1,084,312
1,124,046
13.1%
Las Colinas
276
33,664,148
5,202,590
5,731,350
LBJ Freeway
168
20,966,164
4,316,833
4,584,364
Lewisville/Denton
159
7,593,772
702,055
Mid-Cities
414
21,550,806
North Fort Worth
52
2,748,193
Northeast Fort Worth
50
Preston Center
49
Richardson/Plano
Totals
YTD Deliveries
Q1 17
Under Const. SF
Market
YTD Net Absorption
Q2 16
$25.26 Source: CoStar Property®
DFW OFFICE MARKET BRIEF 3Q 2017
11
SUBMARKET INTELLIGENCE
DALLAS CENTRAL BUSINESS DISTRICT
CURRENT EVENTS An investor who has been heavily active in Dallas over the years, has purchased another large property south of the central business district. Mike Hoque acquired about 15 acres on Corinth Street at Cesar Chavez Boulevard for redevelopment. The redevelopment plan for the land will involve mix use. New York-based shared office provider, Serendipity Lab Coworking signed a 29,000 SF lease in the KPMG Plaza tower on Ross Avenue. Craig Hall, who developed the building, has invested in Serendipity Lap Coworking as a shareholder. Dallas’ city plan commission has given approval for a mixed-use building that would be constructed on Harwood Street next door to the former Dallas Public Library building. Centurion American Development Group states that the building will have multifamily and offices used in conjunction with a parking garage.
DEALS ON THE MARKET
• Renaissance Tower – a 1.7M square feet Class A office property • Oilwell Supply Building – a 65K square feet Class B office property
NEW DEVELOPMENTS
• 1900 N Pearl Street/1900 Pearl – 261,400 SF with Lincoln Property Company • 140 Elm Street/The Drever – 60,710 SF
LARGE EXISTING VACANCIES • • • • •
Thanksgiving Tower/1601 Elm Street – 376,547 SF Bank of America Plaza/901 Main Street – 351,324 SF Fountain Place/1445 Ross Avenue – 295,898 SF 1700 Pacific/1700 Pacific Avenue – 236,493 SF 1700 Pacific/1700 Pacific Avenue – 206,909 SF
Renaissance Tower
JLL has recently released a report drawing attention to the occupancy differences between the towers in downtown and Uptown Dallas. Uptown’s major office projects average more than 94 percent leased, while downtown’s big towers are just over 70 percent rented.
TOP LEASE TRANSACTIONS
• Clearview Renewables signed a 28.6K SF lease at 901 Main Street. • Calise Partners signed a 14K SF lease in Energy Plaza. • Skiermont Derby signed a 14K SF lease in Thanksgiving Tower. • Cozen O’Connor signed a 12.2K SF lease in Comerica Bank Tower. • KPMG LLP signed an 11.4K SF expansion in KMPG at Hall Arts. • Johnston Pratt PLLC signed a 10K SF lease in Comerica Bank Tower. • Francis & Totusek LLP signed a 5.5K SF lease at 500 N Akard Street. • Intelligent Technology Solutions, Inc. signed a 5.5K SF lease at 600 N Pearl Street. • Stripes Agency signed a 4K SF lease in Harwood Center.
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
(132,310)
117,039
(18,193)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
26.1%
25.7%
25.4%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
322,110
322,110
414,347
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
92,237
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$25.21
$25.31
$25.50
28.0%
600,000
400,000
26.0%
200,000
0
24.0%
(200,000)
(400,000)
22.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(600,000)
Vacancy
Source: CoStar 2017 3Q Office Report
12
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
CENTRAL EXPRESSWAY
CURRENT EVENTS
Cityplace Tower
Owner Northwood Investors and commercial property firm Cushman & Wakefield are teaming up to build an office tower at the corner of Park Lane and U.S. 75. The proposed tower would be eleven floors tall and 340K square feet. If constructed, the office tower will be one of the biggest developments in the U.S. in the last 75 years.
TOP LEASE TRANSACTIONS • • • •
OpenDoor Labs signed an 11.5K SF lease at Mockingbird Station. MD Buyline signed a 5.5K SF lease at 2711 N Haskell Avenue. Vista Property Co. signed a 3.2K SF lease at 8350 N Central Expressway. Seven Hills Society signed a 2.6K SF lease at 11300 N Central Expressway.
DEALS ON THE MARKET
• 10100 N Central Expressway – a 94,294 SF Class B office property
NEW DEVELOPMENTS
No developments are currently under construction at this time. However, three have been proposed: • Four Energy Square – 400,000 SF Built to Suit • 8010 Park Lane – 352,000 SF Office (Community Center) Building • Office Tower in The Glen at Preston Hollow – 250,000 SF Class A Office Building
LARGE EXISTING VACANCIES • • • • •
Cityplace Tower/2711 N Haskell Avenue – 123,128 SF The Office at Park Lane/8020 Park Lane – 119,060 SF 6060 at The Crossing/6080 N Central Expressway – 45,817 SF Mockingbird Station/5307 E Mockingbird Lane – 34,371 SF Three Energy Square/6688 N Central Expressway – 32,412 SF
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(42,816)
9,295
14,100
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
12.0%
11.7%
11.6%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$29.40
$26.86
$26.34
VITAL STATS 20.0%
400,000
18.0%
350,000
16.0%
300,000
14.0%
250,000
12.0%
200,000
10.0%
150,000
8.0%
100,000
6.0%
50,000
4.0%
0
2.0%
(50,000)
0.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(100,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
13
SUBMARKET INTELLIGENCE CURRENT EVENTS San Antonio-based insurer and financial services firm USAA is expanding its high-tech campus located east of the Dallas North Tollway on Legacy Drive. USAA has filed plans with the city for an additional 4-story building with more than 150,000 square feet, to be constructed adjacent to the existing offices. Toyota’s new $1billion corporate campus, which also includes relocation costs, is officially open for business at Legacy West in Plano. The move is part of a larger strategy by Toyota North America to invest $10 billion in Toyota’s U.S. manufacturing in the next five years. Billingsley Co. refinanced seven office buildings in International Business Park. The more than $110 million loan was secured by HFF, and will be used to refinance the existing debt and stabilize the property. HFF arranged the three-year loan with Ares Commercial Real Estate Corp. NTT Data Corp., which recently moved their U.S. headquarters to Plano’s Legacy West Development, is already looking to expand. They are in the market for a big block of office space in the J.C. Penney Campus. NTT Data Corp. is looking for about 250,000 SF in the Penney campus. JP Morgan Chase & Co. will move about 6,000 employees into Plano’s Legacy West sometime in the next month. JP Morgan Chase has completed a 20-year power purchase agreement with a subsidiary of NRG Energy Inc. to power the campus. Specifically, the agreement is to support a 100-megawatt wind farm in Erath County, Texas. This wind farm will provide 75 percent of JP Morgan Chase’s energy consumption in Texas. Digility Inc., is relocating its corporate office to the Addison Circle development on the Dallas North Tollway. The British high-tech firm currently has about 50 employees in a 9,900-square foot office space. RealPage Inc. has purchased a company called On-site, which is a leasing platform for property managers and renters. This is their fourth acquisition of the year, and the deal is said to be valued at $250 million. Dubai-based Invest Group Overseas is searching for strategic development partners to build office, hotel, and retail projects. They have hired a real estate brokerage firm to find developers willing to buy 11 sites in the $700 million project called The Gate. The Gate is located in Frisco’s highly touted $5 Billion Mile.
FAR NORTH DALLAS TOP LEASE TRANSACTIONS • • • • • • • • • • •
NTT Data signed a 232.7K SF lease in The Campus at Legacy West. Alkami Technology signed a 53.2K SF lease in Granite Park Three. Smith Anglin Financial, LLC signed a 22.3K SF lease in Signature Exchange. Rover Petroleum signed a 20K SF lease in Dominion Plaza. Alorica, Inc. signed a 17.6K SF lease in Legacy Business Park. Colony Northstar Advisors signed a 17K SF lease in Galleria North Tower II. WNC Insurance Services Inc. signed a 15.6K SF lease in 14110 North Dallas Parkway. Josh DeShong Real Estate & Pratt, Ayock & Associates signed a 15.1K SF lease in 5050 Quorum. TEKsystems, Inc. signed a 12.3K SF lease in Park Center. Bridger Logistics signed a 12K SF lease in International Business Park. Palm Harbor Homes Inc. signed an 11K SF lease in The Spectrum.
DEALS ON THE MARKET • • • • •
Forum I, II, & III – a 203,099 SF Class B office property portfolio Legacy Business Park – a 200,000 SF Class B office building Lone Star Building/14460 Qorvo Drive – a 139,291 SF Class A office building 13725 Montford Drive – a 70,061 SF Class B office building 16803 N Dallas Parkway – a 62,598 SF Class B office building
NEW DEVELOPMENTS • • • • •
Hall Park – T2 – 300,000 SF spec under construction with Hall Group Wade Park – 266,136 SF spec under construction Fourteen555 North Building – a 240,000 SF office building by Cawley The Offices One – 228,857 SF spec under construction with VanTrust Children’s Health Specialty Center 2 Plano – 200,000 SF Class A Office Medical Building by McCarthy Building Cos. Inc. • Legacy West – 93,199 SF Class A Office Building under construction with the Karahan Companies • Plano Towne Square Place – an 80,000 SF Class B Office building by Primera Co • Alliance Boulevard & Preston Road – a 47,992 SF Class A Office Medical building in the Baylor Hospital Campus
LARGE EXISTING VACANCIES • • • • •
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
297,898
229,215
(46,039)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.1%
15.7%
15.3%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,218,392
1,950,797
1,819,475
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
76,200
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$28.22
$27.58
$26.81
The Campus at Legacy West/6501 Legacy Drive – 370,625 SF The Princeton/14651 N Dallas Parkway – 231,487 SF 4101 International Parkway – 205,230 SF Tollway Office Center II/3905 N Dallas Parkway – 160,000 SF Crossmark Building/5100 Legacy Drive – 149,392 SF
VITAL STATS 17.0%
1,000,000
800,000
16.0%
600,000
400,000
15.0%
200,000
0
14.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
14
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
FORT WORTH CENTRAL BUSINESS DISTRICT XTO - Petroleum Building
CURRENT EVENTS After being under construction for the past two years, v ertical construction has been completed for Frost Tower. Frost Bank will occupy over 73,000 square feet of the building’s 278,000 square feet of office space. The building will include a Sky Lobby Café with a beverage bar and terrace when it is completed in the First Quarter of 2018. Though Exxon Mobil has plans to relocate the bulk of XTO Energy’s Fort Worth operation to a campus near Houston, the real estate they occupied is already in high demand. XTO has already lined up buyers for the first two buildings they released to the market, 801 Grove Street and 600 E Exchange Avenue. XTO plans to sell four other buildings however has not specified the timeline for taking those buildings to market. The Marriott Fairfield Inn & Suites is set to open across from the Fort Worth Convention Center. The 114-room hotel is the first of seven new hotels planning to be opened in downtown Fort Worth and is the product of heavy renovations of the former Park Central hotel at 1010 Houston Street. The seven projects all together will add approximately 1,035 rooms to the downtown inventory.
TOP LEASE TRANSACTIONS
• UMB Bank – 19,000 SF Lease at 777 Main • TEP Barnett – 20,752 SF Sublease at 777 Main
LARGE EXISTING VACANCIES
DEALS ON THE MARKET
• Oil & Gas/Star-Telegram – 439,802 SF Class B Office Complex • Petroleum Building & Garage – 93,824 SF Class B Office Tower
NEW DEVELOPMENTS
• Frost Tower – 640 Taylor – 280,489 SF Class AA Office Tower
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(2,549)
101,881
(44,370)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
13.1%
13.1%
14.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
• • • • •
777 Main – 147,073 SF Direct Vacancy 777 Main – 113,328 SF Sublease Available Burnett Plaza – 140,214 SF Direct Vacancy Oil & Gas/Star-Telegram – 147,013 SF Direct Vacancy 301 Commerce – 126,574 SF Direct Vacancy
VITAL STATS 18.0%
120,000 100,000 80,000
280,489
280,489
280,489
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$26.22
$26.15
$25.17
16.0% 60,000 40,000 14.0%
20,000 0 (20,000)
12.0% (40,000) (60,000) 10.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(80,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
15
SUBMARKET INTELLIGENCE
CURRENT EVENTS Japan-based printer and equipment firm, OKI Data, has announced that it will move its Americas Headquarters to Las Colinas after opening a small regional office last year. They plan to relocate from New Jersey to 8505 Freeport by the end of the year. Oculus Health has finalized its move from Portsmouth, New Hampshire to space at Las Colinas Corporate Center II at State Highways 114 and 161. Microsoft was under lease for the space but subleased it and transferred the existing furniture to Oculus. They have immediately located 80 people to the new space and plan to expand that number to 200 by the end of 2018. This new Irving office is the consolidation of three other locations. Construction is now underway on a new Texas-style hotel next to Irving’s soon-to-be built $113 million convention center hotel. The Valencia Group will call the new hotel the Valencia Texican Court Hotel and will feature concepts similar to the old motor court hotels of the 1950s. The design is said to be very similar to the group’s Lone Star Court Austin Hotel at The Domain. Toyota has purchased the naming rights to Irving’s newest music venue, now adopting the name Toyota Music Factory. The venue hosted its first concert with ZZ Top on September 9th. Freshii and Thirsty Lion Gastropub & Grill are set to open by the end of October.
TOP LEASE TRANSACTIONS
• Cognizant signed a 48,277 SF lease at 5001 Statesman Drive. • Regus signed a 31,006 SF renewal at The Urban Towers. • Pei Wei signed a 16,269 SF lease at Las Colinas Highlands.
LAS COLINAS NEW DEVELOPMENTS
• A 250,000 square foot Class A office building is under construction in Cypress Waters Office Park. The building will house Signet Jewelers. • The Music Factory 100,000 SF Class A office building is under construction in the Urban Center. The building is set to deliver Q1 2018. The building is fully leased to The Ethos Group. • Royal 10 Office Center is a 114,500 SF Class B office building under construction in Freeport. The building is set to deliver Q3 2018.
LARGE EXISTING VACANCIES • • • • • • • • • • •
1925 W John Carpenter – 405,432 SF 1915 Hurd – 322,590 SF Browning Place I – 172,344 SF Park West 2 – 165,408 SF 121 Corporate Center – 126,596 SF Connection Park I – 105,176 SF Two Colinas Crossing – 97,757 SF MacArthur Center I – 83,947 SF 122 West John Carpenter – 76,656 SF Riverside Commons – 75,048 SF Cottonwood Court – 73,400 SF
Toyota Music Factory
DEALS ON THE MARKET
• 1925 W John Carpenter Freeway – 405,432 SF Class A Office Building. • 6001 Campus Circle Drive – 136,000 SF Class B Office Building • Commerce Park – 179, 049 SF Class B Office and Flex Business Park. • 1159 Cottonwood Lane – 73,400 SF Class B Office Building. • 1304 W Walnut Hill Lane – 42,868 SF Class B Office Building.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
151,540
(121,101)
Vacancy
vs. Prev. Qtr
17.0%
17.1%
U/C SF
vs. Prev. Qtr
VITAL STATS
169,630
18.0%
600,000
vs. 12 Mths Ago
17.5%
500,000
17.0%
400,000
16.5%
300,000
16.0%
200,000
15.5%
100,000
15.0%
0
14.5%
(100,000)
15.4% vs. 12 Mths Ago
805,500
832,219
1,339,761
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
141,219
339,359
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$25.28
$25.08
$23.40
14.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
16
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS Major physician and health care-staffing firm The Delta Co., is relocating from Farmers Branch to the Cypress Waters development on LBJ Freeway. Their new 38,000 SF headquarters will overlook North Lake.
TOP LEASE TRANSACTIONS
• US Oncology signed a 21K SF renewal in Three Forest Plaza. • Health Texas Provider Network signed an 18K SF lease in Gateway Tower. • Monitronics International signed a 17K SF renewal in One Valley View Place. • Girling Community Care signed an 8.8K SF lease at Crosspoint Atrium in Dallas. • York Risk Services Group signed an 8.7K SF lease at The Crossings II in Dallas. • Fidelity National Financial 7.4K SF lease at Three Lincoln Centre in Dallas. • Law Firm Aaron A, Herbert P.C. signed a 6.3K SF expansion at 8300 LBJ Freeway. • 501 OPS signed a 3.1K SF lease at Branch Park.
LBJ LARGE EXISTING VACANCIES • • • • • •
Pinnacle Tower/5005 LBJ Freeway – 234,700 SF 7171 Forest Ln – 162,138 SF LBJ Tower/8390 Lyndon B Johnson Freeway – 144,828 SF Three Galleria Tower/13155 Noel Rd – 133,170 SF 5525 Lyndon B Johnson Freeway – 111,092 SF LBJ Tower/8390 Lyndon B Johnson Freeway – 110,615 SF
Pinnacle Tower
DEALS ON THE MARKET
• Lakeside Square – a 404,324 SF Class A office building. • Northcreek Place II & Wells Fargo Tower – a 311,875 SF 3 office property portfolio. • 13111 N Central Expressway – a 122,949 SF Class B office building. • Brinker International Company Campus – a 108,000 SF Class B office building.
NEW DEVELOPMENTS
No developments are currently under construction at this time. However, two have been proposed: • Four Lincoln Centre – 400,000 SF • Park Tower at Dallas Midtown – 376,870 SF
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
246,048
15,188
Vacancy
vs. Prev. Qtr
21.9% U/C SF
23.0% vs. Prev. Qtr
VITAL STATS
44,790
18.0%
600,000
vs. 12 Mths Ago
17.5%
500,000
17.0%
400,000
16.5%
300,000
16.0%
200,000
15.5%
100,000
15.0%
0
14.5%
(100,000)
24.4% vs. 12 Mths Ago
-
-
-
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$22.10
$21.85
$21.13
14.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
17
SUBMARKET INTELLIGENCE
CURRENT EVENTS The Trade Group, one of Inc. 5,000’s fastest growing companies, has announced that it will relocate its North Texas global headquarters to Grapevine from Carrolton. The company is one of the nation’s leading trade show exhibit and event companies and has outgrown the 120,000 square feet that it currently occupies in two separate facilities in Carrolton. The City of Grapevine has awarded the company over $1M in incentives to help build the proposed 170,000 square foot facility near Grapevine Mills Mall. The new facility will house roughly 130 office and production staff under one roof with plans in place to add over 90 employees over the next five years. The Texas Rangers hosted a ground-breaking ceremony for the construction of the new Globe Life Field in Arlington. Current plans call for the completion of the ballpark in time for the start of the 2020 season. HKS is still finalizing the design of the park but has announced that one recent tweak is to have the retractable roof open west to east to cover the infield first. Many of the existing ballpark retractable roofs cover the outfield first.
MID CITIES TOP LEASE TRANSACTIONS
• CapTel Service Specialists signed a 45,740 SF lease for the 3rd and 4th floors at Centrepoint IV. • Texas Health Resources signed a 20,828 SF expansion for the 7th floor at 500 E Border Street.
DEALS ON THE MARKET
• Gramercy Center – 55,000 SF Class B Office Building • Centreport Office Center I & II – 133,246 SF Class B Office Complex • Arlington Downs Centre – 26,228 SF Class B Office Building • Northstar One – 24,050 SF Class B Office Building • The Oaks - 40,000 SF Class C Office Building • Richland Centre – 38,251 SF Class B Office Building • The Offices at Green Oaks – 35,692 SF Class B Office Building • Copeland Tower – 126,602 SF Class B Office Building • Stadium Place – 84,216 SF Class B Office Building
LARGE EXISTING VACANCIES • • • • • •
4200 Buckingham – 129,740 SF DFW Towers North & South – 107,727 SF State National Center – 73,671 SF Airport Centre I – 60,388 SF 15100 FAA Boulevard – 60,037 SF 3400 William D. Tate Avenue – 58,110 SF
Texas Live & New Ballpark
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
(37,238)
(157,007)
75,286
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
21.5%
20.9%
18.3%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
239,649
339,489
528,065
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
129,840
200,000
92,418
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$22.01
$2.00
$21.55
26.0%
250,000
25.0%
200,000 150,000
24.0%
100,000
23.0%
50,000 22.0% 0 21.0%
(50,000)
20.0%
(100,000)
19.0% 18.0%
(150,000)
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
18
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS Hillwood has announced that it will team up with T5 Data Centers and IPI Data Center Partners to build a 350 to 400-acre data center campus at Alliance Texas. With approximately eight different sites identified surrounding the existing Facebook Data Center, this new team will market these sites to data center companies as well as corporations. The new proposed development sites could accommodate more than 5 million square feet of data center space, doubling the existing Data Center capacity in the DFW area. The Offices at Kimball Park building was delivered in August. The 115,000 square foot Class A office project, developed by Jeff Medici, opened with over 55% of its space already leased. Tenants include Executive Medicine, Independence Title, Liberty Mutual, Medici Development Partners and Keller Williams Realty DFW. The building boasts an extravagant twostory lobby along with covered parking and programmable 40-inch display panels outside each office.
NORTH FORT WORTH TOP LEASE TRANSACTIONS
• Spaces signed a 23,243 SF lease at Granite Place at Southlake Town Square.
DEALS ON THE MARKET
• 534 N Main Street – 33,000 SF Class C Office Building • 5501 Alliance Gateway Freeway – 214,434 SF Class A Office Building • 2800 Meacham Boulevard – 39,381 SF Class B Office Building • 4775 North Freeway – 21,417 SF Class B Office Building
NEW DEVELOPMENTS
• TD Ameritrade Regional Office Campus, Westlake – 355,000 SF Class A office complex.
LARGE EXISTING VACANCIES • • • • • • • •
Solana, Westlake – 1,074,049 SF across 9 Buildings 5555 N Beach Street – 561,119 SF 5401 N Beach Street – 457,628 SF 2601 Meacham Blvd – 268,290 SF 5501 Alliance Gateway Freeway – 214,434 SF Sublease Granite Place I – 134,473 SF Heritage Commons II – 91,598 SF Sublease The Offices at Kimball Park – 49,000 SF
Cedar Ridge Office Park
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(216,171)
7,110
109,504
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.6%
7.3%
8.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
57,000
47,000
23,940
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
15,000
-
56,539
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$21.51
$20.64
$15.70
VITAL STATS 16.0%
500,000 400,000
12.0%
300,000 200,000
8.0%
100,000 0
4.0%
(100,000) (200,000)
0.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(300,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
19
SUBMARKET INTELLIGENCE
CURRENT EVENTS TA Realty has purchased the 16-story Berkshire tower on the Dallas North Tollway in Preston Center. Holt Lunsford Commercial, who will be moving their headquarters to the Berkshire, has been hired to take over leasing and management. Real estate firm Lionstone Investments, has been acquired by New England-based Columbia Threadneedle Investments of Boston. Lionstone, which was founded in 2001, manages $6 billion in assets including 8333 Douglas Tower in Preston Center. The terms of the deal were not disclosed.
PRESTON CENTER • 8333 Douglas at Douglas Center/8333 Douglas Avenue – 24,866 SF • 8343 Douglas at Douglas Center/8343 Douglas Avenue – 20,843 SF • Sterling Plaza/5949 Sherry Lane – 20,177 SF • Preston Sherry Plaza/8201 Preston – 19,101 SF • Bluffview Towers East/3890 Northwest Highway – 18,719 SF The Berkshire
3100 Monticello, a 9-story 180,000 SF office building, in Highland Park was recently purchased by Prescott Realty Group. The building is over 80% leased and was sold by Westdale Asset Management for an undisclosed price.
TOP LEASE TRANSACTIONS • • • • •
HLC Deal
Bank of the Ozarks signed a 33K SF lease in 8300 Douglas. Holt Lunsford Commercial signed a 26K SF lease at The Berkshire. Executive Workspace.com signed a 13K SF lease in 8300 Douglas. NRT Texas signed a 5.4K SF lease at 5950 Sherry Lane. CMI signed a 1.4K SF lease at 8100 Lomo Alto Drive.
DEALS ON THE MARKET
• 10056 Marsh Lane – 34,380 SF Class B Office Building.
NEW DEVELOPMENTS
• 5960 Berkshire, Terraces at Douglas Center – 171,583 SF building with Houston-based Lionstone Investments Inc. and Dallas-based PegasusAblon. • 6517 Hillcrest Avenue, Park Plaza – 119,000 SF Class A office building.
LARGE EXISTING VACANCIES Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
7,340
1,829
54,800
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
10.7%
10.9%
10.5%
VITAL STATS 250,000
12.0%
200,000
11.0%
150,000 10.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
290,583
171,583
171,583
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$39.32
$36.64
$34.97
100,000 9.0% 50,000 8.0% 0 7.0%
6.0%
(50,000)
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(100,000)
Vacancy
Source: CoStar 2017 3Q Office Report
20
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS Property Reserve Inc., a real estate and investment arm of the Church of Jesus Christ Of Latter-Day Saints, has purchased the Raytheon Headquarters at 1717 E CityLine Drive. KDC marketed the three building, 500,000 SF office complex for sale. Entrada Partners has acquired six offices and one industrial project in North Texas. The acquisitions total more than 508,000 square feet and are located in Irving, Dallas, Richardson, and Farmers Branch. • Counterpoint at Las Colinas at 8101 and 8113 Ridgepoint Drive • Sterling Tech Center at 7801, 7803 and 7805 Mesquite Bend Drive in Coppell • Dallas Tech Center at 10005, 100015, 10025 and 10105 W. Technology Boulevard in Dallas • Westwood Business Park III at 1805 Royal Lane in Dallas • International Corporate Park II at 401, 403, 405, 407 and 409 International Boulevard in Richardson • Valwood XII at 13701 Hutton Drive in Farmers Branch Houston-based Transwestern is ramping up its operations with a new investment fund. Their new president Charles Hazen believes that foreign capital will continue to pour into DFW’s strong and stable market. Last year, Transwestern Investment Group lead the partnership that bought the State Farm Insurance campus for $825 million. NetScout Systems Inc., is breaking ground on their new office campus in Watters Creek. The One Bethany is 145,000 square feet and will house close to 500 employees. KDC has been selected to run the development of Independent Bank Group’s $52 million headquarters near State Highway 121 in McKinney. The first phase of the 400,000-square foot development will be constructed in the Craig Ranch development. The City of Allen executives put together two possible sites to pitch for the new Amazon headquarters. One of the sites is the proposed 135-acre campus called The Strand, at State Highway 121 and Alma Road. The second proposed project is Howard Hughes’ 328-acre development at North Central Expressway and the State Highway 121.
RICHARDSON/PLANO TOP LEASE TRANSACTIONS • Keller Williams signed a 20K SF extension in Custer Court. • L&S Mechanical signed a 19.1K SF lease in Corporate Place of Richardson. • Pediatrix Medical Group Inc. signed a 19K SF expansion in 3001 President GBT. • PriceTrace signed a 14K SF lease in Eastside Centre. • Crosby signed a 12.1K SF lease at Tower 2600 in Richardson. HLC • Murray and Mensch signed a 3.6K SF lease in Summit Park. Deal • Dickey Family Dentistry signed a 3K SF lease in The Atrium at 1333 McDermott.
DEALS ON THE MARKET • Keller Williams signed a 20K SF extension in Custer Court. • L&S Mechanical signed a 19.1K SF lease in Corporate Place of Richardson. • Pediatrix Medical Group Inc. signed a 19K SF expansion in 3001 President GBT. • PriceTrace signed a 14K SF lease in Eastside Centre. • Crosby signed a 12.1K SF lease at Tower 2600 in Richardson. • Dickey Family Dentistry signed a 3K SF lease in The Atrium at 1333 McDermott.
NEW DEVELOPMENTS • 3400 CityLine – a 300,000 SF spec owned by Transwestern • One Bethany at Watters Creek – a 120,976 SF spec by Kaizen Development Partners • Raintree Circle & W Exchange – a 48,000 SF Class B office building • 2 Greenside – a 48,441 SF Class A office building owned by Blue Island Capital
LARGE EXISTING VACANCIES • • • • • •
601 Data Drive – 433,452 SF 2400 N Glenville Drive – 364,965 SF 3400 N Central Expressway – 300,000 SF 465 Independence Parkway – 251,347 SF 6620 Chase Oaks Boulevard – 212,019 SF Campbell Glenn II/1125 E Campbell Road – 205,820 SF
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
317,888
99,051
913,977
23.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
22.0%
21.8%
22.1%
19.7%
21.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
20.0%
457,291
732,291
698,792
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
300,000
80,546
317,507
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$24.48
$24.10
$23.32
2,000,000
1,500,000
1,000,000
500,000 19.0% 0 18.0% (500,000)
17.0%
16.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(1,000,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
21
SUBMARKET INTELLIGENCE
SOUTHWEST FORT WORTH
CURRENT EVENTS Simon, in partnership with Cassco Development Co., announced the opening of The Shops at Clearfork, a 500,000-square-foot, open-air luxury shopping, dining, entertainment and mixed-use - including office - destination situated in the heart of Fort Worth. With two office buildings totaling 120,000 square feet located directly above ground-floor retail, The Shops at Clearfork is becoming a dynamic hub for business in Fort Worth. WeWork, the largest co-working company in the world, is expected to open its first Fort Worth location in The Offices at Clearfork before the end of the year. Additional tenants including CH4 Energy, CERIS, Merrill Lynch and Mustang Energy will soon join The Miles Foundation and Frost Bank in the Class-A office setting. Dickies Arena, the new 14,000-seat multipurpose arena, is 17% of the way through its construction. Scheduled to open in the fall of 2019, the arena is being built by a public-private partnership with Event Facilities Fort Worth, a non-profit headed by Ed Bass. The arena will become the new home of the Stock Show and Rodeo in 2020 and will eventually begin to host a variety of events including concerts and sporting events. Though there will be much more construction to be completed, the superstructure of the arena is projected to be topped out in December.
DEALS ON THE MARKET
• 3509 Hulen – 21,500 SF Class B Garden Office • 3301 West Freeway – 16,750 SF Class B Garden office
NEW DEVELOPMENTS
• Worthington National Bank @ Edwards Ranch - 13,100 SF Class A Office Building
LARGE EXISTING VACANCIES
• Wilcox Plaza – 118,925 SF Direct Vacancy • Offices @ Clearfork – 5128 Apache Plume – 33,066 SF Direct Vacancy • First Cash Plaza – 33,378 SF Direct Vacancy • 5600 Clearfork Main Street – 19,192 SF Direct Vacancy • 5049 Edwards Ranch Road – 18,664 SF Direct Vacancy • 5128 Apache Plume Road – 33,066 SF Direct Vacancy
One Ridgmar
TOP LEASE TRANSACTIONS • • • • • HLC Deal •
WeWork – 47,714 SF New Lease @ Clearfork Clearfork Wealth Management – 5,960 SF New Lease @ Clearfork Steward Title – 4,220 SF New Lease @ Clearfork Superior Silica Sands – 18,000 SF New Lease @ Clearfork Vista Bank – 6,119 SF New Lease Summit Office Park CH4 Energy – 8,308 SF New Lease at 5128 Apache Plume Road
TOP SALE TRANSACTIONS
• 111 Boland – 40,000 SF Class A Office Building • One Ridgmar – 177,199 SF
HLC Deal
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
24,659
(40,219)
41,649
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
10.9%
11.2%
9.3%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
113,497
98,497
181,781
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
170,892
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$24.63
$24.51
$23.93
VITAL STATS 28.5%
200,000
28.0%
150,000 100,000
27.5%
50,000
27.0%
0
26.5%
(50,000) 26.0%
(100,000)
25.5%
(150,000)
25.0%
(200,000)
24.5% 24.0%
(250,000)
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(300,000)
Vacancy
Source: CoStar 2017 3Q Office Report
22
DFW OFFICE MARKET BRIEF 3Q 2017
SUBMARKET INTELLIGENCE
STEMMONS
CURRENT EVENTS Partners are looking to rebrand Graystone Centre and Triwest Plaza as one big corporate campus called Elements Tower. The restorations should be completed in about a month. The Element Towers are located west of the Galleria between the Dallas North Tollway and Stemmons Freeway. Stanton Road Capital has recently purchased the 634K SF Trinity Towers. The towers were sold for roughly $115 PSF.
TOP LEASE TRANSACTIONS
• PetData Inc signed a 10.9K SF lease at Ricchi Towers. • National Veterans Outreach Program has signed a 3.4K SF lease at 8700 N Stemmons Freeway. • Taylor Smith Consulting LLC has signed a 2.7K SF lease at Ricchi Towers
DEALS ON THE MARKET • • • • • •
Brookriver Executive Center – a 285,312 SF office complex Optima Business Park – a 197,958 SF Class B office complex 4800 Harry Hines Boulevard – a 97,636 SF Class B office building Feizy Center – a 89,000 class C office building One Cockerell Plaza – a 78,791 SF Class B office building One Empire Place – a 31,230 SF Class B office building
NEW DEVELOPMENTS
No new developments are currently under construction at this time, however, a few have been proposed: • The Design District Tower – 243,100 SF • West Love – 200,000 SF
LARGE EXISTING VACANCIES • • • • •
Pegasus Place - The Tower/3000 Pegasus Park Drive – 518,656 SF The Connection at 8600/8600 Harry Hines Boulevard – 200,000 SF Comerica Service Center/1508 W Mockingbird Lane – 142,600 SF Infomart/1950 N Stemmons Fwy – 117,822 SF Ricchi Towers South Tower/8585 N Stemmons Freeway – 89,584 SF
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
55,557
83,138
17,096
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
25.7%
26.1%
28.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
63,000
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
Pegasus Place
VITAL STATS 28.5%
200,000
28.0%
150,000 100,000
27.5%
50,000
27.0%
0
26.5%
(50,000) 26.0%
(100,000)
25.5%
(150,000)
25.0%
-
63,000
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$16.66
$16.61
$15.72
(200,000)
24.5% 24.0%
(250,000)
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(300,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 3Q 2017
23
SUBMARKET INTELLIGENCE
UPTOWN/TURTLE CREEK
CURRENT EVENTS
Turtle Creek Tower
Construction has started on a new office project in Dallas’ Oak Lawn neighborhood. The 4-story building is being built just a block away from the Old Parkland campus at Fairmont and Knight streets. The 31,483 SF office development will open in about a year on the east side of the Dallas North Tollway. JT Philp Co. and Frist Preston HT started construction on a four-story, 31K SF office building at the corner of Knight and Fairmont Street in Dallas. The building will be called Parkland Knight, and Peloton Commercial Real Estate will be leasing the vacancies. Two real estate companies created by MQ Development have been quietly buying multiple blocks in Dallas’ Oak Lawn neighborhood. The land being assembled, is said to be for a mixed-use project. The purchase of these Oak Lawn properties is said to be one of the largest assemblies of properties in years. Dallas-based petroleum refiner, HollyFrontier Corp. has announced its plan to expand their headquarters at 2828 N Harwood in Uptown Dallas. HollyFrontier, a fortune 500 company, will soon occupy four floors totaling to 90,000 SF of office space. A group led by Hillwood’s Ross Perot Jr. is heading up a Victory Park proposal site for the new Amazon Headquarters. Hillwood is partnering with Hunt Realty Investments, Hines, Karns, Cousins, Provident Realty Advisors, and Estein USA. Many believe that downtown Dallas and its surrounding areas have an advantage over the suburbs.
TOP LEASE TRANSACTIONS
• HollyFrontier Corporation signed a 22.3K SF lease in 2828 N Harwood Street • RREAF Holdings signed a 16K SF lease in Miyama Parkside • Avison Young signed a 13.5K SF lease in Parkview at 1920 Mckinney • Deutsche Bank Securities Inc. signed a 9.4K SF renwal in The Crescent Office Towers
• • • •
DEALS ON THE MARKET
• Turtle Creek Tower – 142,974 SF Class A office building. • Quadrangle Office Tower – 128,905 SF Class A office building.
NEW DEVELOPMENTS
• PWC Tower – 494,300 SF office building with Trammel Crow Company. • The Union – 418,132 SF office building with RED Development, LLC. • 2850 N Harwood St, No. 10 – 231,098 SF office building with Harwood International. • New Rolex Building – 130,000 SF Build to Suit for Rolex Watch Service Corp. • 2525 Knight St – a 31,483 SF Class B office building
LARGE EXISTING VACANCIES • • • • •
vs. Prev. Qtr
vs. 12 Mths Ago
8,894
10,066
214,293
16.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.0%
12.2%
12.3%
13.5%
14.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,305,014
1,305,014
1,273,530
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
678,486
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$37.98
$37.37
$38.56
2501 Cedar Springs Road – 109,404 SF 3800 Maple/3800 Maple Avenue – 71,074 SF One McKinney Plaza/3232 McKinney Avenue – 59,299 SF The Centrum/3102 Oak Lawn Avenue – 57,000 SF Victory Plaza West/3090 Olive Street – 51,945 SF
VITAL STATS
Absorption
Delivered SF
Texture Staffing signed a 3.9K SF lease in The Centrum BM Harris signed a 3.9K SF lease in The Crescent Office Towers Intelis Capital signed a 3.7K SF lease in 2021 McKinney Avenue First Texas Homes Inc. signed a 1.9K SF lease in The Crescent Office Towers
800,000 700,000 600,000 500,000 400,000
13.0%
300,000 200,000
12.0%
100,000 0
11.0%
(100,000) 10.0%
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
Absorption
Q4 15
Q1 16
Q2 16
Deliveries
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
24
DFW OFFICE MARKET BRIEF 3Q 2017
DALLAS
5055 Keller Springs Road Suite 300 Addison, Texas 75001 T 972.241.8300 F 972.241.7955
FORT WORTH
300 Throckmorton Street Suite 550 Fort Worth, Texas 76102 T 817.710.1110 F 817.810.9017
HOUSTON
11757 Katy Freeway Suite 250 Houston, Texas 77079 T 713.850.8500 F 713.850.8550