DFW OFFICE MARKET BRIEF 4Q 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 4Q 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
JOHN DICKENSON
JAMES ENGELS
MARSHALL MAYS
BRANDON AVEDIKIAN
DAN POND
DYLAN SHAPIRO
Market Director Dallas jengels@hldallas.com 972.280.8307
Market Associate Fort Worth mmays@hlfortworth.com 972.381.3201
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
Managing Principal Dallas jdickenson@hldallas.com 972.421.1971
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 4Q 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 4Q 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 4Q 2017
DFW OFFICE MARKET BRIEF 4Q 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 4Q 2017
NEW LISTINGS
4200 INTERNATIONAL
43,860 SF, Class B office building in the upper Tollway/West Plano Submarket. Owned by Cabrillo Four Square 4200.
DFW OFFICE MARKET BRIEF 4Q 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 4Q 2017
DFW OFFICE MARKET BRIEF 4Q 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 4Q 2017
9
SUBMARKET INTELLIGENCE
FACTS & FIGURES CONSTRUCTION - OVERALL DFW
VACANCY - OVERALL DFW 18.70%
20.00%
18.30%
9,000,000
18.00% 17.2%
17.4%
8,000,000
16.00% 7,000,000
14.00% 6,000,000
12.00%
5,000,000
10.00% 8.00%
4,000,000
6.00%
3,000,000
4.00% 1.30%
1.10%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Direct Vacancy
Q2 16
Q3 16
Q4 16
Q1 17
Sublet Vacancy
Q2 17
Q3 17
2,000,000
2.00%
1,000,000
0.00%
Q4 17
0
Total Vacancy
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
Q3 16
Q4 16
Delivered Inventory
Q1 17
Q2 17
Q3 17
Q4 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
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Q1 16
Q2 16
Q3 16
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
500,000
0
16.0%
Q4 14
Q1 15
Q2 15
Q3 15
Total Net Absorption
Q1 16
Q2 16
Absorption
Existing Inventory
Vacancy
# Bldgs.
Total RBA
Direct SF
Total SF
Vac. %
YTD Net Absorption
Central Expressway
108
12,798,400
1,523,752
1,584,703
12.4%
(117,216)
Dallas CBD
81
28,763,869
6,839,485
7,476,657
26.0%
(82,273)
East Dallas
184
7,456,135
783,228
799,876
10.7%
(70,259)
Far North Dallas
458
48,665,974
6,862,077
7,652,783
15.7%
Fort Worth CBD
55
8,641,536
1,047,659
1,087,393
12.6%
Market
Q4 15
Q3 16
Q4 16
Q1 17
Deliveries
YTD Deliveries
Q2 17
Q3 17
Q4 17
0
Vacancy
Under Const. SF
Quoted Rates
0
0
$27.24
92,237
424,425
$25.37
0
341,320
$26.49
1,682,703
2,206,053
1,751,746
$28.05
162,205
0
280,489
$26.75
Las Colinas
279
33,978,730
5,231,423
5,795,328
17.1%
363,167
1,027,992
1,935,500
$24.84
LBJ Freeway
168
20,983,045
4,491,184
4,743,130
22.6%
141,337
0
0
$22.39
Lewisville/Denton
157
7,597,049
1,122,499
1,276,612
16.8%
(561,528)
119,523
35,925
$21.68
Mid-Cities
422
21,751,661
4,730,258
4,814,074
22.1%
(248,987)
612,083
153,900
$22.05
North Fort Worth
55
2,875,757
376,326
433,681
15.1%
(193,461)
38,940
57,000
$20.25
Northeast Fort Worth
50
3,614,623
1,790,989
1,790,989
49.5%
67,776
0
0
$20.59
Preston Center
50
4,721,461
599,371
645,355
13.7%
4,271
171,583
119,000
$39.37
Richardson/Plano
358
27,977,739
5,464,788
5,815,804
20.8%
502,635
536,353
641,514
$24.52
South Fort Worth
207
10,778,768
1,023,401
1,090,301
10.1%
116,265
181,781
129,497
$23.71
Southwest Dallas
85
3,637,673
382,664
386,598
10.6%
129,297
72,028
0
$20.98
Stemmons Freeway
116
12,398,061
3,167,485
3,194,842
25.8%
170,297
63,000
0
$16.71
Uptown/Turtle Creek
93
11,850,304
1,251,892
1,511,924
12.8%
(270,968)
0
1,305,014
$38.28
2,926
268,490,785
46,688,481
50,100,050
18.7%
1,795,261
5,121,573
7,175,330
Totals
$25.26 Source: CoStar Property®
DFW OFFICE MARKET BRIEF 4Q 2017
11
SUBMARKET INTELLIGENCE
DALLAS CENTRAL BUSINESS DISTRICT
CURRENT EVENTS
Crescent Real Estate and Boston-based Long Wharf Capital LLC are partnering up to build a new 7-story building atop Corgan’s headquarters building in West End. The new 7-story building will be called The Luminary and will add about 80,000 SF of class A office space to the building. Development company KDC and Hoque Global have joined forces to propose an urban project that would bring approximately 8 million SF of office space to Dallas’ CBD. The project also includes an urban park, hotel, grocery store and a 78-floor skyscraper, which would be the tallest building in Dallas. Steve Van Amburgh, the KDC CEO, has acknowledged it could be a potential location for Amazon’s HQ2. Granite Properties is putting the final touches on their new downtown office building. Six03, the old West End Marketplace cookie factory, is a first-class office building in which the outside has been preserved, but the inside is entirely modern. Their first tenant, Blue Cross Blue Shield of Texas, has already moved in. Dallas-based Crow Holdings appointed Michael Levy to CEO, the real estate investment firm announced Thursday. Michael served at Morgan Stanley as COO, CFO and co-head of U.S. real estate investment banking prior to joining the Crow team. Michael will succeed Harlan Crow who served as CEO of the firm for 30 years. GCP Income Opportunities I LLC declared Downtown Dallas’ redevelopment of 1401 Elm Street high-rise in default and will try to force the sale of the property. The Texas lender provided $55 million toward the redevelopment and will now seek the disputed amount of debt to be refinanced or paid off. Drever Capital Management has been working to convert the vacant tower into retail, office and apartment space since 2015. Drever Capital Management has secured $66.7 million in financing for their redevelopment of First National Bank tower in downtown Dallas. This news comes after GCP Income Opportunities declared the development in default and attempted to force the sale of the property. New England-based Starwood Property Trust’s new funding will resume plans for the property that is expected to be delivered late next year.
Absorption
vs. Prev. Qtr
One of Dallas’ tallest and largest skyscrapers, The Renaissance Tower, has just received $118 million in new financing. The building, which was being marketed for sale earlier this year, has since been taken off the market due to the owners obtaining a new mortgage. Dallas-based AT&T held a ceremony to display new exterior lights that have been added to their Commerce & Akard Street headquarters. This new feature is apart of the $100 million renovation AT&T is undergoing to revamp their downtown location.
TOP LEASE TRANSACTIONS
• Alston & Bird LLP signed a 36.1K SF lease in Chase Tower. • American Institute of Architects signed a 13.7K SF lease in Republic Center. • Savills Studley signed an 8K SF lease in Chase Tower. • Intelligent Technology Solutions signed a 5.5K SF lease in Plaza of the Americas. • Stewart Weigand & Owens signed a 5.2K SF lease in Republic Center.
DEALS ON THE MARKET
• Oilwell Supply Building – a 65K square feet Class B office property
NEW DEVELOPMENTS
• 401 N Houston Street/The Luminary – 102,315 SF • 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 – 323,649 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
VITAL STATS
vs. 12 Mths Ago
(3,128)
(82,506)
(22,137)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
26.0%
26.0%
25.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
424,425
322,110
414,347
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$25.37
$25.21
$25.73
28.0%
400,000
200,000 26.0%
0
24.0% (200,000)
22.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(400,000)
Vacancy
Source: CoStar 2017 4Q Office Report
12
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS CyrusOne is breaking ground on one of the largest data center projects in the history of North Texas. The project, which is located on U.S. Highway 75 near Stacy Road is planned for three buildings with more than 1 million square feet.
TOP LEASE TRANSACTIONS • • • •
Chavez & Valko LLP signed a 13K SF lease in Search Plaza. CIM Group signed a 4.6K SF lease in Energy Square 2. Insurance Designers of Dallas signed a 3K SF lease in Rambler Park. Agility Insurance signed a 2.1K SF lease in 2929 N Central Expressway. • CosmeticGyn Center signed a 2.1K SF lease in Rambler Park.
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 Cityplace Tower/2711 N Haskell Avenue – 44,742 SF Three Energy Square/6688 N Central Expressway – 38,714 SF
The Office at Park Lane
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(91,675)
10,507
22,137
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
12.4%
11.7%
11.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
VITAL STATS 400,000
20.0%
350,000 300,000 15.0%
250,000 200,000 150,000
10.0%
-
-
-
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$27.24
$29.40
$26.55
100,000 50,000 0
5.0%
(50,000) (100,000) 0.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(150,000)
Vacancy
Source: CoStar 2017 4Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
13
SUBMARKET INTELLIGENCE CURRENT EVENTS
Alkami Technology announced it is doubling down on its headquarters at Granite Park Three Tower in West Plano. The software company will expand into two new floors bringing its total occupancy to about 90,000 SF. WatchGuard Video, an Allen based manufacturer of law enforcement video systems is close to ending construction on their new corporate campus. The campus is being built to accommodate about 500 employees. The $46 Million office building will total upwards of 200,000 SF. DerbySoft Inc., a Shanghai-based software firm, is relocating their North American headquarters from Frisco to 14800 Landmark Boulevard in Dallas. The signed lease is for 6,760 SF to accommodate the firm’s growth and to be an optimal location for its employees. More than 2,000 employees have moved into JPMorgan Chase’s new campus in Plano. The 1 million-square-foot office complex will house more than 6,500 employees when complete. Chase is using an open environment concept in which most desks are undesignated for their employees. Newman Real Estate, Shula Netzer Real Estate, and Koa Partners have received approval to start a mixed used project on the 80-acre Railhead development on the west side of the Dallas North Tollway. The site is located near Frisco’s Wakeland High School. Part of the mixed-use development will include a 250,000 SF, 10-story office building. The mixeduse development will also consist of a hotel and multiple retail options. Liberty Mutual’s new Plano Legacy West corporate campus is complete and will open its doors to thousands of employees at the start of January. After two years, the $325 million development is amongst FedEx, JP Morgan Chase and Toyota to open a campus in Legacy West. CEO David Long confirmed the campus will house up to 5,000 employees in the next few years. Work has recently halted altogether on the $2 billion Wade Park Project on the Dallas North Tollway. The 175-acre complex in Frisco is slated to have a Whole Foods Market grocery store, retail space, an entertainment venue, high-rise office, a hotel, and residential buildings. The project, which was delayed from the start, is in major jeopardy after many of the construction companies and suppliers went unpaid. The mixed-use development was supposed to open in 2018. One of the nation’s largest mortgage firms is consolidating their employees into a new tower in Granite Park. Fannie Mae is moving about 1,000 employees into the new 10-story, 330K SF office building. Fannie Mae is only the latest big-name firm to make the move to Plano, as Toyota, FedEx, Liberty Mutual, and JP Morgan Chase already office in the area. Common Desk, a shared office company, is expanding again. They have leased up all of their current space in Granite Park, and are taking on another 1,500 SF. Common Desk will also be offering new business suites
Absorption
vs. Prev. Qtr
FAR NORTH DALLAS as well as more amenities for their clients. During the last few years, coworking companies have leased more than 1 million SF of office space in the Dallas-Fort Worth area.
TOP LEASE TRANSACTIONS
• Advanced Infusion Solutions signed a 53.3K SF lease in Gramercy Center South. • Goodman Networks, Inc. signed a 52.9K SF renewal in Hall Park. • Alkami Technology signed a 45K SF expansion in Granite Park Three. • Cyxtera signed a 30.9K SF lease in Addison Circle One. • T-Mobile signed a 27K SF expansion in Duke Bridges II. • Executive Workspace signed a 16K SF lease in Park Ventura Office Park. • Pape-Dawson Engineers signed an 11.9K SF lease in Lincoln Legacy Two. • Coldwell Banker Residential Brokerage signed a 10K SF lease in Hall Office Park.
DEALS ON THE MARKET • • • • •
Legacy Business Park – a 200,000 SF Class B office building Bent Tree Tower II – a 166,023 Class B office building Alpha Tower – a 161,630 SF Class B office building 2121 Midway Road – a 86,393 SF Class B office building 15505 Wright Brothers Drive – a 82,100 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 – 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 – 80,000 SF Class B Office building by Primera Co • Alliance Boulevard & Preston Road – 47,992 SF Class A Office Medical building in the Baylor Hospital Campus
LARGE EXISTING VACANCIES • • • • •
The Campus at Legacy/5320 Legacy Drive – 373,739 SF The Campus at Legacy West/6501 Legacy Drive – 370,625 SF Frisco Station/6160 Warren Parkway – 232,176 SF The Princeton/14651 N Dallas Parkway – 231,487 SF 4101 International Parkway – 205,230 SF
VITAL STATS
vs. 12 Mths Ago
287,747
329,244
156,508
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.7%
15.2%
15.2%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,751,746
2,377,425
3,174,829
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
641,990
-
40,000
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$28.05
$28.30
$27.07
17.0%
1,000,000
800,000
16.0%
600,000
400,000
15.0%
200,000
0
14.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(200,000)
Vacancy
Source: CoStar 2017 4Q Office Report
14
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
FORT WORTH CENTRAL BUSINESS DISTRICT Frost Tower
CURRENT EVENTS
A tract of land off Ninth and Commerce street was purchased by Southern Land Co. The Nashville-based developer plans to build a 32-story apartment tower on the site. The project would be the first high rise built exclusively for residences in downtown Fort Worth. The property was formerly owned by XTO and used as a parking lot. Though the project is still working through the approvals phase, current plans indicate that it will include a floor of underground parking, nearly 6,000 SF at street level for shops and restaurants, an amenities floor and additional parking floors. The apartments will start on the 8th floor. The entire project will be between 250,000 and 280,000 SF. Currently, 1,035 hotel rooms are under construction or in the pipeline for downtown. Included are: a 180-room Aloft hotel at One City Place; a 162-room Hilton Garden Inn on Jones Street behind Mt. Gilead Church; a 114-room Fairfield Inn & Suites on Commerce Street across from the Convention Center; a 245-room Hampton Inn & Suites on Commerce Street across from the Convention Center; a 165-room Marriot Autograph in the Sinclair Building on Fifth Street; and a planned 169-room AC hotel on the parking lot adjacent to the Kress Building. Frost Tower is nearing completion with the building’s two largest Tenants planning to move into the Building at the end of the First Quarter 2018. The property still markets five full floor availabilities with the majority of a sixth still available. Remaining space for lease totals 136,110 SF.
TOP LEASE TRANSACTIONS
• First American Payment Systems, L.P. – 63,326 SF Renewal & 12,863 SF Expansion at Two City Place • CBRE – 4,532 SF Lease at 301 Commerce Street • Litchfield Cavo – 4,441 SF Lease at Two City Place • PowerSecure, Inc. – 4,222 SF Lease at 600 Texas
DEALS ON THE MARKET
• Oil & Gas/Star-Telegram – 439,802 SF Class B Office Complex COMING 1Q 2018 • 714 Main Street – 185,000 SF Class B Tower • Bob R. Simpson Building – 102,000 SF Class B Tower • WT Waggoner Building – 120,000 SF Class B Tower Absorption
vs. Prev. Qtr
NEW DEVELOPMENTS
• Frost Tower – 280,489 SF Class AA Office Tower
LARGE EXISTING VACANCIES • • • • • •
777 Main – 143,141 SF Direct Vacancy 777 Main – 113,328 SF Sublease Available Burnett Plaza – 140,214 SF Direct Vacancy Oil & Gas/Star-Telegram – 145,614 SF Direct Vacancy 301 Commerce – 222,722 SF Direct Vacancy Frost Tower – 136,110 SF Direct Vacancy
VITAL STATS
vs. 12 Mths Ago
36,653
(2,549)
(10,702)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
12.6%
13.0%
14.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
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
$26.75
$26.22
$25.46
16.0% 60,000 40,000 14.0%
20,000 0 (20,000)
12.0% (40,000) (60,000) 10.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(80,000)
Vacancy
Source: CoStar 2017 4Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
15
SUBMARKET INTELLIGENCE
CURRENT EVENTS According to an analysis by the Wall Street Journal, the Dallas/ Fort Worth area is best fit for Amazon’s second headquarters. Over a dozen North Texas cities submitted potential sites for the headquarters, two of them in Irving – the former Texas Stadium site and a site in the Las Colinas Urban Center. The article states that the Dallas/Fort Worth region beats out 11 other metro areas across the country, placing above Boston and Washington, D.C. as the best overall. Each city was ranked by six factors based on Amazon’s proposal criteria: Tech labor force, fiscal health, cost of living, college population, culture fit and state tax rank. Irving has been named the 40th safest city in the United States by Wallet Hub. Wallet Hub’s analysts compared 182 cities – including the 150 most populated U.S. cities, across three dimensions: Home & Community Safety; Financial Safety; and Natural-Disaster Risk. Irving-based developer JPI is developing a 387-unit rental home project east of the Irving convention center near Irving’s new Toyota Music Factory entertainment and retail center. The project has been named the Jefferson Promenade Apartments and is adjacent to a commuter rail station. The 4-story apartment project will include a fitness center and will have some 2-level units. O’brien Architect designed the project.
TOP LEASE TRANSACTIONS • • • •
LAS COLINAS NEW DEVELOPMENTS
• A 250,000 SF Class A office building is under construction in Cypress Waters Office Park. The building is set to deliver February 2018 and will house Signet Jewelers. • Two other 250,000 SF Class A office buildings are under construction in Cypress Waters Office Park. Both buildings are being built on a spec basis with one set to deliver April 2018 and the other March 2019. • The Music Factory 100,000 SF Class A office building is nearing completion in the Urban Center. The building is set to deliver January 2018 and 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 June 2018. • A 1,125,000 SF Class A office campus is under construction in Hidden Ridge. The project is slated for delivery in Q3 2019 and will house Pioneer Resources.
LARGE EXISTING VACANCIES • • • • • • •
1925 W John Carpenter – 405,432 SF 1915 Hurd – 322,590 SF Browning Place I – 124,648 SF Park West 2 – 160,537 SF MacArthur Center I – 83,947 SF 122 West John Carpenter – 76,656 SF Riverside Commons – 75,048 SF
Gartner, Inc. signed a 152,086 SF lease at 6011 Connection Drive. Audatex signed a 27,517 SF sublease at One Panorama Center. Pabst signed a 12,648 SF lease at Riverside Commons. Guidon Energy signed a 22,360 SF lease at 545 E John Carpenter.
DEALS ON THE MARKET • • • •
Greenway Tower – 192,000 SF Class B Office Center Tower 122 West – 220,000 SF Class A Urban Center Building 8650 Freeport – 100,000 SF Class B Freeport Building 1300 Rochelle – 205,000 SF Class B Urban Center Building/33 Acre Redevelopment. Cypress Waters Office Park
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(36,259)
124,023
Vacancy
vs. Prev. Qtr
17.1%
16.9%
U/C SF
vs. Prev. Qtr
VITAL STATS
93,902
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)
15.6% vs. 12 Mths Ago
1,935,500
1,955,500
1,453,992
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
20,000
141,219
215,000
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$24.84
$25.20
$23.84
14.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(200,000)
Vacancy
Source: CoStar 2017 4Q Office Report
16
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
LBJ • Law Firm Aaron A, Herbert P.C. signed a 6.3K SF expansion at 8300 LBJ Freeway.
CURRENT EVENTS San Francisco-based, Bank of the West, announced it will be opening its first location in Texas and is signing a lease at Galleria One Tower. The CEO credited Dallas’ strong economy and vibrant communities for making the move. Bank of the West provides a wide-range of commercial banking services to individuals and institutional clients. Arizona College plans to open its first North Texas outpost campus at 8330 LBJ Freeway in Dallas. The campus will be approximately 24,065 SF of office space that will accommodate the schools fast-growing health science and nursing programs. This will be Arizona College’s third outpost campus in the country. Dallas property investment fund, Reserve Capital Partners has purchased the 240,000-square-foot Hidden Grove office campus near Forest Lane. John Alvarado of CBRE brokered the sale. The $9 million makeover of Pinnacle Tower has been completed. The major upgrades included the addition of exterior LED lighting, a large fitness center, a new tenant lounge and upgraded restaurant facilities. Pinnacle Tower was purchased by Encore Enterprises and New York Life Insurance in 2016.
DEALS ON THE MARKET
• Toll Hill Office Park – a 258,502 SF class B office building • The Centre – a 227,096 SF Class B office building • 13342 Midway Road– a 105,000 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 @ Dallas Midtown – 376,870 SF
LARGE EXISTING VACANCIES • • • •
7171 Forest Lane – 162,138 SF Pinnacle Tower/5005 LBJ Freeway – 121,875 SF 5525 Lyndon B Johnson Freeway – 111,092 SF LBJ Tower/8390 Lyndon B Johnson Freeway – 110,615 SF
5525 Lyndon B Johnson Freeway
TOP LEASE TRANSACTIONS
• Pacific Union Financial signed a 132K SF expansion in Browning Place I. • Government SDA signed a 47.6K SF lease in One Valley View Place. • Cantrell McCulloch signed a 9.9K SF lease in The Towers at Park Central 7. • York Risk Services Group signed an 8.7K SF lease at The Crossings II in Dallas. • Fidelity National Financial signed a 7.4K SF lease at Three Lincoln Centre in Dallas.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(53,766)
176,666
Vacancy
vs. Prev. Qtr
22.6% U/C SF
22.3% vs. Prev. Qtr
VITAL STATS
272,454
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)
23.3% vs. 12 Mths Ago
-
-
-
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$22.39
$22.10
$21.20
14.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(200,000)
Vacancy
Source: CoStar 2017 4Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
17
SUBMARKET INTELLIGENCE
CURRENT EVENTS Arlington leaders broke ground on the new luxury hotel, Live! By Loews. The $150 million hotel will be the first United States location for Loews and the first luxury hotel in Arlington. Expected to open in 2019, the 14-story hotel will have 302 guest rooms, including 26 suites, with floor-to-ceiling windows giving wide views of Arlington’s entertainment district. The hotel “will be the first of its kind in the country, providing guests an unprecedented upscale experience that blends sports and entertainment with firstclass hospitality and superior amenities,” the Rangers and Texas Live! Developer Cordish Cos. said in a statement. Grayson Allen jewelers in Southlake has officially changed its name to The Gatehouse Fine Jewelers. Along with a new management structure and an elevated mission, the company has added new part owners in Matt an Lisa Rose and Jackie and Delisa Read. Longtime owners Keary and Patty Turner had been looking for strategic partners to help advance the store’s benevolent impact within the community. Since opening the jewelry store in 2004, the Turners have supported The Gatehouse community in Grapevine. Founded by Lisa Rose, The Gatehouse is a nonprofit living community for women and children who are seeking help from domestic violence, poverty and other crisis situations. The new ownership group has agreed to donate 50 percent of its profits to The Gatehouse. Matt and Lisa Rose are also developing over 35,000 square feet of commercial office and industrial property adjacent to the Gatehouse of which all profits will go directly to support The Gatehouse.
Absorption
vs. Prev. Qtr
MID CITIES TOP LEASE TRANSACTIONS
• Riverwalk Financial signed a 24,006 SF lease at Corporate Centre at The Crossing. • Unite Tech signed a 4,230 SF lease at 3301 W Airport Freeway. • ACCC Insurance signed a 4,229 SF renewal at 3301 W Airport Freeway.
HLC Deal
DEALS ON THE MARKET • • • • • • • •
Copeland Tower – 126,602 SF Class B Office Building Stadium Place – 84,216 SF Class B Office Building Centreport Office Center I & II – 133,246 SF Class B Office Complex Gramercy Center – 55,000 SF Class B Office Building Arlington Downs Centre – 26,228 SF Class B Office Building Northstar One – 24,050 SF Class B Office Building Pinnacle Point – 21,500 SF Class B Office Building 14401 Statler Boulevard – 35,040 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 15100 FAA Boulevard – 60,037 SF Grapevine III – 58,110 SF Airport Centre I – 46,052 SF
Corporate Centre at The Crossing
VITAL STATS
vs. 12 Mths Ago
17,383
(36,217)
(1,072)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
22.1%
21.8%
18.7%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
153,900
259,518
520,714
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
124,018
129,840
34,500
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$22.05
$22.01
$21.57
26.0%
300,000 250,000
25.0%
200,000 24.0% 150,000 23.0%
100,000
22.0%
50,000 0
21.0%
(50,000) 20.0% (100,000) 19.0% 18.0%
(150,000)
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(200,000)
Vacancy
Source: CoStar 2017 4Q Office Report
18
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS The new TD Ameritrade Regional Financial Center in Southlake has officially opened its doors. Joining many other businesses along Texas State Highway 114, the Nebraska based firm is working to consolidate its financial services, technology, and operations staff from the company’s Fort Worth location to the new Southlake location. The first wave welcomes 1,000 new employees to the 300,000 SF Southlake campus that has capacity for 2,000. Hillwood has secured a lease for a 200,000 SF built to suite facility in the 18,000 acre Alliance Texas development for Mercedes-Benz Financial Services. Construction is slated to start in early 2018 with a projected completion date of early 2019. The project will help retain over 900 direct and indirect jobs in Fort Worth for the company that has maintained a strong presence in the city since 2007. Oldham Goodwin Group LLC announced that it has broken ground on the 6-story, 170 room SpringHill Suites by Marriott at 2315 North Main Street in the Stockyards. Construction is expected to take seventeen months with a completion date targeted for summer of 2019. The all-suite hotel will have over 9,600 square feet of indoor and outdoor pre-function space, an event courtyard, business center, conference and banquet space, fitness center and outdoor pool. The top level of the hotel will feature premium suites and a rooftop bar overlooking downtown and the Panther Island project.
NORTH FORT WORTH 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 5751 Kroger Drive – 71,021 SF Class B Office building.
NEW DEVELOPMENTS
• 108 Countryview Drive – 30,000 SF Class B office building set to deliver December 2018. • Charles Schwab Corporate Campus – 500,000 SF Class A office building set to deliver May 2019.
LARGE EXISTING VACANCIES • • • • • • • •
Solana, Westlake – 1,321,717 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 – 161,000 SF Granite Place I – 83,388 SF Heritage Commons II – 91,598 SF Sublease Alliance CC 5 – 93,764 SF
TOP LEASE TRANSACTIONS
• Mercedes Benz Financial Services signed a 200,000 SF build-to-suit lease at Alliance Texas. • Charles Schwab - 59,500 SF Sublease at the Heritage Commons II • Drone Global Network signed a 5,940 SF lease at 2588 E Long Avenue. Stockyards Spring Hill Suites by Marriott
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
511
(53,171)
32,404
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.1%
15.1%
7.1%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
57,000
57,000
23,940
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
15,000
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$20.25
$20.00
$15.20
500,000
16.0%
400,000 12.0%
300,000
200,000 8.0% 100,000
0
4.0%
(100,000)
0.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(200,000)
Vacancy
Source: CoStar 2017 3Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
19
SUBMARKET INTELLIGENCE
CURRENT EVENTS JLL announced this week that long-time executive and central region president Jeff Staubach will be leaving the firm to partner with Columbus Realty Partners to start Staubach Capital. This new venture will focus on real estate investments among multiple service lines. Staubach had been with the firm since 2008. In order to strengthen its U.S. real estate capabilities, Boston-based Columbia Threadneedle Investments has purchased Lionstone Partners, Ltd. Lionstone has properties throughout the region, but more than 1 million SF of their inventory lies in the Preston Center submarket. The deal was expected to close by year end 2017.
PRESTON CENTER TOP LEASE TRANSACTIONS
• Executive Workspace signed a 12.9K SF lease in 8300 Douglas at Preston Center. • Robert W Baird & Co. signed a 7.5k SF lease in 8333 Douglas. • LST signed a 3.8K SF lease in 4514 Travis Walk. • Springling Therapy signed a 3K SF lease in 8100 Lomo Alto Drive. • Hello Fresh signed a 1.9K SF lease in 4515 Travis Walk.
DEALS ON THE MARKET
• 10056 Marsh Lane – 34,380 SF Class B Office Building
NEW DEVELOPMENTS
• 6517 Hillcrest Avenue, Park Plaza – 119,000 SF Class A office building. • 3219 Knox Street, Weir’s Plaza – proposed 298,000 SF Class A office building with Geyer Morris Company
LARGE EXISTING VACANCIES • • • • •
The Terraces at Douglas Center/5960 Berkshire Lane– 154,357 SF Highland Park Place/4514 Cole Avenue – 26,084 SF 8333 Douglas at Douglas Center/8333 Douglas Avenue – 24,866 SF 8343 Douglas at Douglas Center/8343 Douglas Avenue – 20,843 SF Preston Sherry Plaza/8201 Preston – 19,101 SF
6517 Hillcrest Avenue, Park Plaza
Absorption
vs. Prev. Qtr
11,258
7,340
(2,434)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
13.7%
10.7%
10.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
119,000
290,583
171,583
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
171,583
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$39.37
$39.32
VITAL STATS
vs. 12 Mths Ago
$35.39
250,000
14.0%
200,000 12.0%
150,000
100,000 10.0% 50,000
0
8.0%
(50,000)
6.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(100,000)
Vacancy
Source: CoStar 2017 4Q Office Report
20
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS Rosewood Property Co. and Patrinely Group are teaming up to construct a 12-story office tower in Rosewood’s $1 billion Heritage Creekside development. Rosewood’s Heritage Creekside development is located at Bush Turnkpike and Custer Road. The 12-story office tower is only the first phase of potentially 2.5 million square feet of office space.
TOP LEASE TRANSACTIONS • • • • •
Boss Fight Entertainment signed a 13K SF lease in One Bethany. Anritsu signed a 13K SF lease in 450 Century Parkway. TPX Inc. signed a 12.9K SF lease in 740 E Campbell Road. Moss & Associates signed a 10.4K SF lease in 6950 TPC Drive. TranStar National Title signed a 6.3K SF lease in 2301 W Plano Parkway.
RICHARDSON/PLANO NEW DEVELOPMENTS • 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
LARGE EXISTING VACANCIES • • • • • •
601 Data Drive – 433,452 SF 3400 N Central Expressway – 300,000 SF 2400 N Glenville Drive – 258,539 SF 465 Independence Parkway – 251,347 SF 6620 Chase Oaks Boulevard – 212,019 SF Campbell Glenn II/1125 E Campbell Road – 205,820 SF
DEALS ON THE MARKET • • • • •
Greenway Plaza II – a 152,969 SF Class A office building. 1651 N Collins Boulevard – a 74,595 SF Class B office building. Lotus Office Center – a 71,752 SF Class B office building. 1600 N Redbud Boulevard – a 63,552 SF Class B office building. 2100 N Greenville Drive – a 43,417 SF Class B office building. Greenway Plaza II
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
388,596
199,182
(339,559)
23.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
22.0%
20.8%
21.8%
21.2%
21.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
20.0%
641,514
766,651
769,683
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
125,137
300,000
163,726
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$24.52
$24.45
$23.62
2,000,000
1,500,000
1,000,000
500,000 19.0% 0 18.0% (500,000)
17.0%
16.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16 Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(1,000,000)
Vacancy
Source: CoStar 2017 4Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
21
SUBMARKET INTELLIGENCE
SOUTHWEST FORT WORTH
CURRENT EVENTS The new Dickies Arena is set for completion in November 2019, in time to host events for the 2020 Fort Worth Stock Show & Rodeo. The project includes a 6-level parking garage with 2,200 spaces. The arena will not only serve the Stock Show & Rodeo but will also host concerts, sporting events and community events year-round. Events already scheduled include the NCAA Men’s Basketball First and Second Round games in 2022 and the NCAA Women’s Gymnastics Championships from 2020 to 2022. The arena will have flexible seating arrangements ranging from 9,300 for horse shows and rodeos up to 14,000 for concerts. Commercial space at The Shops of Clearfork continues to be absorbed at a rapid pace. Joining other large office tenants in the development, Lhoist North America and Smith & Nephew, WeWork has opened the doors of its 47,000 SF location at 5049 Edwards Ranch Road. The new location will have the ability to accommodate 850 members who will have options ranging from non-exclusive desks to private offices. The development has also been a major draw for retailers. The project boasted forty-four shops open for business in the holidays and plans for that number to jump to fifty-three by the end of the first quarter of 2018.
TOP LEASE TRANSACTIONS
• Bank of America – 11,068 SF New Lease @ Clearfork • Pegasus – 9,678 SF New Lease @ One West 7th • Cardinal Health – 9,838 SF New Lease @ First Cash Plaza HLC Deal • Bank of Tyler – 6,626 SF New Lease @ 2929 W 5th Street HLC Deal
DEALS ON THE MARKET
• 3509 Hulen – 26,919 SF Class B Garden Office complex • 3301 West Freeway – 16,750 SF Class B Garden office
LARGE EXISTING VACANCIES • • • • • • • •
Wilcox Plaza – 118,925 SF Direct Vacancy First Cash Plaza – 23,540 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 – 21,998 SF Direct Vacancy First Command Plaza – 24,190 SF Direct Vacancy 1200 Summit – 22,255 SF Direct Vacancy Pier 1 Imports Building – 75,944 SF Sublease
One West 7th
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
60,808
25,859
(41,949)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
10.1%
10.7%
9.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
129,497
129,497
204,667
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$23.71
$24.70
$24.09
12.0%
200,000
150,000
11.0%
100,000 10.0% 50,000 9.0% 0 8.0%
7.0%
(50,000)
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(100,000)
Vacancy
Source: CoStar 2017 4Q Office Report
22
DFW OFFICE MARKET BRIEF 4Q 2017
SUBMARKET INTELLIGENCE
CURRENT EVENTS Infomart Data Centers is considering a $1 billion sale. Their Dallas location at 1950 N Stemmons Freeway is considered to be one of the company’s most important locations. The potential acquisition of Infomart illustrates the continued interest in the data center market.
TOP LEASE TRANSACTIONS
• Pathways Youth and Family Services signed a 3.3K SF lease in Regal Garden Office Center • Shamieh Law signed a 1.5K SF lease in 1111 Tower • Real Life Solutions in 1.2K SF lease in 1111 Tower
DEALS ON THE MARKET
• Optima Business Park – a 197,958 SF Class B office complex (Under Contract)
STEMMONS • 4800 Harry Hines Boulevard – a 97,636 SF Class B office building (Under Contract) • Feizy Center – a 89,000 SF Class C office building • Inwood Bank Building – a 68,186 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, two 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 Freeway – 117,822 SF Ricchi Towers South Tower/8585 N Stemmons Freeway – 89,584 SF
Optima Business Park
Absorption
vs. Prev. Qtr
VITAL STATS
vs. 12 Mths Ago
24,157
55,557
168,806
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
25.8%
26.0%
26.8%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
63,000
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$16.71
$16.66
$15.59
29.0%
200,000
28.5%
150,000
28.0%
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%
(250,000)
24.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(300,000)
Vacancy
Source: CoStar 2017 4Q Office Report
DFW OFFICE MARKET BRIEF 4Q 2017
23
SUBMARKET INTELLIGENCE
UPTOWN/TURTLE CREEK PWC Tower
CURRENT EVENTS A new trend of law firms relocating from downtown Dallas to Uptown is happening right before our eyes. Uptown and the north side of the CBD offer a live-work-play environment that has become very attractive to law firms. Law firms now occupy more than 1.6 million square feet of office space in the Uptown market. On average, these companies relocating to Uptown, are cutting their space footprint by 30%. Dallas-Fort Worth is the 7th ranked market for law firms in the US. Earlier this quarter, HBK Capital Management announced they will be relocating their Dallas headquarters to The Union from the Crescent. The newest uptown development will open its doors in the fall of 2018 and is now more than 50% leased. The international investment firm will be joining Akin Gump, Primoris Services Corp. and Weaver. It should come as no surprise that the Dallas district just north of downtown has the most expensive office street in North Texas. With office rents of more than $62 per square foot, the cost of doing business on McKinney Avenue is more than double the local average. Even with these high prices, only 9 percent of offices are vacant along McKinney Avenue.
TOP LEASE TRANSACTIONS • • • •
ISNetworld signed a 68K SF renewal in One McKinney Plaza. Calyx Technology signed a 34.4K SF lease in 3500 Maple. Savoya signed a 15.3K SF renewal in Advancial Tower. WhiteStar Asset Management signed a 5.6K SF lease in The Crescent. • CBT signed a 3K SF lease in Lee Park Towers.
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 Street, No. 10 – 231,098 SF office building with Harwood International.
• New Rolex Building – 130,000 SF Build to Suit for Rolex Watch Service Corporation • Victory Center – a proposed 455,526 SF office building with Hines • 2525 Knight Street – a 31,483 SF office building with JT Phillip company
NEW DEVELOPMENTS
No new developments are currently under construction at this time.
LARGE EXISTING VACANCIES • • • • •
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
vs. Prev. Qtr
vs. 12 Mths Ago
(26,178)
(206,106)
188,827
16.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
15.0%
12.8%
14.1%
12.1%
14.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,305,014
1,305,014
1,273,530
Delivered SF
vs. Prev. Qtr
Vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$38.28
$37.98
$37.97
800,000 700,000 600,000 500,000 400,000 300,000
13.0%
200,000 100,000
12.0%
0 (100,000)
11.0%
(200,000) 10.0%
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Absorption
Q1 16
Q2 16
Q3 16
Deliveries
Q4 16
Q1 17
Q2 17
Q3 17
Q4 17
(300,000)
Vacancy
Source: CoStar 2017 3Q Office Report
24
DFW OFFICE MARKET BRIEF 4Q 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