OFFICE Q2 2022 MARKET REPORT DALLAS/ FORT WORTH
P ro p er t y : 4131 NCX
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TABLE OF CONTENTS
04
DFW Office Submarket Coverage
05
DFW Office Market Experts
09
DFW Office Facts & Figures
10
Submarket Intelligence
DALLAS 5950 Berkshire Lane, Suite 900 Dallas, Texas 75225 T 972.241.8300 | F 972.241.7955
FORT WORTH 1200 Summit Avenue, Suite 300 Fort Worth, Texas 76102 T 817.710.1110 | F 817.810.9017
www.holtlunsford.com
04 Q2 2022 DFW OFFICE MARKET REPORT
DFW OFFICE
Submarket Coverage
OTHER SUBMARKETS
TUR
1 FORT WORTH CBD 2 NORTHEAST FORT WORTH 3 PRESTON CENTER 4 UPTOWN/TURTLE CREEK 5 DALLAS CBD 6 STEMMONS FREEWAY 7 LBJ PONDER 8 CENTRAL EXPRESSWAY
DENTON
FAR NORTH DALLAS
McKINNEY PRINCETON
ALLEN/MCKINNEY FRISCO
LEWISVILLE/DENTON
ALLEN
JUSTIN
THE COLONY
BOYD
LEWISVILLE
RICHARDSON/PLANO
NORTH FORT WORTH
PLANO
FLOWER MOUND
WYLIE
ROANOKE
HASLET
CARROLLTON GRAPEVINE
KELLER
COPPELL LAS COLINAS
ADDISON
RICHARDSON
SOUTHLAKE FARMERS BRANCH
DFW INTERNATIONAL AIRPORT
7
GARLAND
ROCKWALL ROWLETT
LAS COLINAS
8
COLLEYVILLE
3
SAGINAW DALLAS LOVE FIELD AIRPORT
BEDFORD EULESS FORT WORTH MEACHAM INTERNATIONAL AIPRORT
RICHLAND HILLS
HURST
WHITE SETTLEMENT
6
IRVING
2
EAST DALLAS
4
MID-CITIES
SUNNYVALE
5
1
DALLAS
MESQUITE
FORT WORTH
FORNEY
GRAND PRAIRIE ARLINGTON
DALLAS EXECUTIVE AIRPORT
BENBROOK DUNCANVILLE
HUTCHINS
CRANDALL
WEST-SOUTHWEST FORT WORTH
CEDAR HILL
DESOTO
LANCASTER
MANSFIELD
SOUTHWEST DALLAS
BURELSON
N
RED OAK
SOUTHEAST FORT WORTH MIDLOTHIAN
WAXAHACHIE
CLEBURNE ENNIS
Q2 2022 DFW OFFICE MARKET REPORT 05
DFW OFFICE
Market Experts
MATT CARTHEY
JOHN DICKENSON
TYLER HOWARTH
DAVID CASON
JAKE NEAL
Partner, Managing Principal Fort Worth mcarthey@holtlunsford.com 817.710.1111
Managing Principal Dallas jdickenson@holtlunsford.com 972.421.1971
Managing Principal Tenant Representation thowarth@holtlunsford.com 972.280.8302
Vice President Fort Worth dcason@holtlunsford.com 817.810.9137
Vice President Fort Worth jneal@holtlunsford.com 817.710.1112
VIC MEYER
HUNTER HEDRICK
QUINN HANFORD
OLIVIA BARNES
JOHN ARMES
Market Director Fort Worth vmeyer@holtlunsford.com 817.710.1113
Market Associate Dallas hhedrick@holtlunsford.com 972.421.1973
Market Associate Dallas qhanford@holtlunsford.com 972.265.0124
Market Associate Dallas obarnes@holtlunsford.com 972.265.0135
Market Analyst Dallas jarmes@holtlunsford.com 972.381.3210
JAMIE CLYDE
HARRISON DAVIS
PAUL HERNANDEZ
CAROLINE HIX
HUDSON SHEETS
Market Analyst Dallas jarmes@holtlunsford.com 972.381.3210
Market Analyst Dallas hdavis@holtlunsford.com 972.421.1974
Market Analyst Dallas phernandez@holtlunsford.com 972.380.3641
Market Analyst Dallas chix@holtlunsford.com 972.421.1961
Market Analyst Dallas hsheets@holtlunsford.com 972.421.1975
ABBY AULDS
CARTER SELLS
Market Analyst Dallas aaulds@holtlunsford.com 214.442.8935
Market Analyst Fort Worth csells@holtlunsford.com 817.632.6153
New Listing
LINCOLN LEGACY TWO A 130,371 RSF Class A Office Building located at the southeast corner of Dallas North Tollway and Tennyson Parkway adjacent to Legacy Town Center.
New Listing
CARPENTER CORPORATE CENTER A 225,000 SF Class A (2) building project along Hwy-114 in Irving.
New Listing
STONELAKE DESIGN DISTRICT Three, newly renovated properties with high-end office space in Dallas’ Design District.
Q2 2022 DFW OFFICE MARKET REPORT 09
Facts & Figures
DFW OFFICE
OVERALL DFW
OVERALL VACANCY
20.0%
4,000,000
20.0% 17.5%
18.0%
3,000,000
16.0%
14.6%
16.0%
16.1%
2,000,000
14.0%
13.9%
12.0%
12.0%
1,000,000
10.0% 0
8.0%
8.0% 6.0%
(1,000,000) 4.0%
4.0%
(2,000,000)
0.0%
1.4%
0.7%
2.0%
(3,000,000) Q2 19
Q3 19
Q4 19
Q1 20
Q2 20
Q3 20
ABSORPTION
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
0.0%
Q2 22
Q2 19
Q3 19
Q4 19
Q1 20
Q2 20
Q3 20
Q4 20
DIRECT
VACANCY
OVERALL ABSORBTION
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
SUBLET
Q2 22
TOTAL
OVERALL CONSTRUCTION 7,000,000
12,000,000
6,000,000
10,000,000
5,000,000 4,000,000
8,000,000
3,000,000 2,000,000
6,000,000
1,000,000
4,000,000
0 (1,000,000)
2,000,000
(2,000,000) (3,000,000) Q2 19
Q3 19
Q4 19
Q1 20
Q2 20
Q3 20
Q4 20
TOTAL NET
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 19
Q3 19
Q4 19
Q1 20
Q2 20
DELIVERED
LEASING ACTIVITY
EXISTING INVENTORY SUBMARKET
0
Q2 22
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
Q1 22
Q2 22
UNDER CONSTRUCTION
VACANCY
# BLDGS.
TOTAL RBA
DIRECT SF
TOTAL SF
VAC. %
YTD NET ABSORPTION
YTD DELIVERIES
Dallas CBD
148
35,029,340
8,712,877
9,375,117
26.8%
(485,203)
254,902
386,323
993,723
Central Expressway
251
14,689,878
2,502,301
2,673,823
18.2%
(214,363)
2,218
77,189
757,424
Far North Dallas
1,315
72,857,231
14,123,486
15,462,498
21.2%
1,218,376
1,615,768
0
5,150,221
Fort Worth CBD
121
11,258,761
1,539,761
1,596,142
14.2%
66,321
0
615,062
246,289
Las Colinas
500
44,415,851
7,738,332
8,928,424
20.1%
72,759
330,000
0
2,591,659
LBJ Freeway
259
22,887,450
5,220,070
5,715,340
25.0%
(363,090)
107,000
0
1,449,064
2,931
47,435,429
6,038,538
6,269,019
13.2%
1,910,458
1,528,332
0
1,879,419
North Fort Worth
812
8,373,285
506,025
728,191
8.7%
(185,860)
83,736
0
208,333
Preston Center
176
7,327,466
657,725
679,408
9.3%
301,942
297,000
1,447,052
470,189
Richardson/Plano
839
34,932,185
5,506,965
6,093,333
17.4%
125,638
61,192
0
1,773,963
SW Fort Worth
1,181
17,464,759
1,863,383
1,985,447
11.4%
(135,419)
63,261
186,000
900,969
Stemmons
308
15,761,513
3,228,622
3,361,087
21.3%
161,060
0
109,500
422,479
Uptown/Turtle Creek
301
17,515,624
2,699,574
2,955,940
16.9%
389,007
656,453
0
1,521,862
9,142
349,948,772
60,337,659
65,823,769
18.8%
2,861,626
4,999,862
2,821,126
18,365,594
Mid-Cities
TOTALS
UNDER YTD LEASING CONSTRUCTION SF ACTIVITY
SOURCE: COSTAR Q2 2022 OFFICE REPORT
10 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
DALLAS CBD CURRENT EVENTS Dallas City Council has voted to give New York-based Goldman Sachs over $18 million in economic incentives to bring 5,000 jobs to the city. The Goldman Sachs employees will have an average base salary of at least $90,000. Its new office campus will be a part of Hunt Realty’s 11-acre North End development. Dallas-based Todd Interests is converting Energy Plaza in Downtown Dallas to apartments and offices. The landmark 1.3M SF building is one of several downtown office buildings being converted into a combination of residences and business space. Todd Interests acquires and develops all traditional types of real estate across the country and focuses on assets that are non-institutional in their present condition with some level of financial and functional disparity. Renaissance Tower, a 56-story, 1.73M SF office building in Downtown Dallas, has been sold to San Antonio-based GrayStreet Partners. Renaissance Tower is currently less than 60% leased and GrayStreet plans to reimagine the building to serve more than just office users. Renaissance Tower is the third downtown Dallas skyscraper to recently trade. GrayStreet Partners focuses on identifying high quality, under-performing assets where there are opportunities to re-develop, re-position, or re-price the assets. The firm’s portfolio totals over 3M SF and includes office, retail, mixed-use, urban land, and parking assets. Ross Tower has secured four law firm leases accounting for nearly 60K SF. The 45-story, 1.1M SF building located at 500 N Akard Street is owned by HPI, Dallas-based Bandera Ventures, and Second City Real Estate. The building underwent renovations in 2018 which include a modernized lobby, a coffee shop on the ground level, and a new porte-cochere for a revitalized front entrance. Earlier this month, accounting firm Grant Thornton announced it will also be relocating its Dallas office to Ross Tower taking down more than 24K SF.
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(345,376)
(58,813)
10,055
30.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
25.0%
26.8%
25.8%
24.9%
20.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
15.0%
-
-
254,902
10.0%
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$28.29
$28.35
$27.09
TOP LEASE TRANSACTIONS
300,000 200,000 100,000 0 (100,000) (200,000) (300,000) (400,000) (500,000)
5.0%
(600,000) 0.0%
(700,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES
• Godwin Bowman PC has signed a 24.6K SF lease in Ross Tower.
• Fountain Place | 1445 Ross Avenue – 585,395 SF
• Calloquy has signed a 10.5K SF lease in The Luminary.
• Renaissance Tower | 1201 Elm Street – 534,390 SF
DEALS IN THE MARKET • Plaza of the Americas – a 1,146,524 SF two (2) building office complex with Newmark • The Stack – a 300K SF building with Eastdil Secured • The Luminary – a 104,119 SF building with Cushman & Wakefield
NEW DEVELOPMENTS • Field Street District, Future Phase | 1100 McKinney Avenue – a 722K SF class A office district (proposed) • Field Street Tower | 2012 North Field Street – a 534K SF class A office tower (proposed) • 555 South Pearl | 555 South Pearl Expressway – a 486K SF Class B office tower (proposed) • Two Arts Plaza | 1900 Routh Street – a 283K SF class A office tower (proposed)
• Santander Tower | 1601 Elm Street – 324,411 SF • Bank of America Plaza | 901 Main Street – 314,729 SF • Two Arts Plaza | 1900 Routh Street – 283,153 SF • 1700 Pacific | 1700 Pacific Avenue – 270,822 SF • Bryan Tower | 2001 Bryan Street – 224,916 SF • Chase Tower | 2200 Ross Avenue – 193,102 SF • Harwood Center | 1999 Bryan Street – 187,728 SF • 300 South Pearl Expressway – 183,754 SF • Comerica Bank Tower | 1717 Main Street – 148,025 SF • 2100 Ross Avenue – 136,335 SF • Hilltop Securities Tower | 717 N Harwood Street – 113,187 SF • 1301 Young Street – 107,463 SF
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 11
CENTRAL EXPRESSWAY CURRENT EVENTS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(22,699)
(160,359)
(206,294)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
18.2%
18.1%
17.6%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
2,218
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
30,000
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$34.78
$34.41
$31.97
TOP LEASE TRANSACTIONS • Local & Western of Texas has signed a 3.5K SF renewal in 5445 La Sierra.
HLC DEAL
NEW DEVELOPMENTS • The Central – a 500K SF class A office tower (proposed) • Energy Square 4 – a 400K SF class A office tower (proposed) • The Shops at Park Lane (8010 Park Ln) – a 352K SF class A office tower (proposed) • The Tower at Preston Hollow Village – a 260K SF class A office tower (proposed)
VITAL STATS 20.0%
100,000 50,000
16.0%
0 12.0%
(50,000) (100,000)
8.0%
(150,000) 4.0%
(200,000)
0.0%
(250,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES • 8080 NCX – 100K SF • Cityplace Tower – 94K SF • Walnut Glen Tower – 87K SF
Fenway Capital Advisors (FCA), the new owner of North Dallas’ Campbell Centre Towers (renamed The Gild), is planning major renovations to the standout gold buildings. Planned upgrades include eating and lounging areas inside the building, a linear landscaped park that connects the towers, and a promenade for outdoor seating and food trucks. The buildings were about 80% leased before they were purchased by FCA. Landmark retailer Nieman Marcus may receive over $5 million in incentives from the City of Dallas if it keeps its headquarters in Dallas and retains a minimum of 1,100 full-time jobs in the city by the end of 2023. Nieman Marcus is expected to move its headquarters to CityPlace Tower and would also be required to keep its flagship store downtown. CityPlace Tower, owned by Dallas-based NexPoint Advisors, is undergoing renovations to be partially converted to a five-star intercontinental hotel, introduce concourse-level food and retail offerings, and add a new fitness center.
12 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
FAR NORTH DALLAS CURRENT EVENTS The Dallas-Fort Worth area is one of the top markets in the country for office building sales so far in 2022. Some of the largest DFW office sales so far in 2022 include the more than $660 million acquisition of the Trammell Crow Center in downtown Dallas; the purchase of the 40-story Bryan Tower downtown; and the $114 million acquisition of the Spectrum Center offices in Addison. The surge in North Texas office building purchases comes as employees are returning to the office after working at home during the pandemic. New office leasing in North Texas is the best it has been since 2019. The first-quarter recovery in net office leasing follows big declines in DFW office demand the past two years. Leasing began to rebound in the final months of 2021 and is picking up so far this year. Strong leasing at three new Dallas office buildings, The Stack in Deep Ellum, The Link in Uptown, and Weir’s Plaza near Highland Park, helped boost first-quarter office numbers.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
407,019
(72,112)
161,033
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
21.2%
21.5%
21.2%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
2,191,907
1,994,389
1,677,344
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
231,622
131,638
578,626
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$34.06
$33.83
$32.30
TOP LEASE TRANSACTIONS • CarOffer has signed a 34.9K SF lease in Addison Circle. • Velvet Taco has signed a 10.6K SF lease in The Commons.
DEALS IN THE MARKET • The Campus at Legacy | 5320 Legacy – a 394,405 SF two (2) building office complex with Newmark • The Princeton – a 377,821 SF office building with Colliers
NEW DEVELOPMENTS • The Link at Fields Frisco | Legacy Drive & PGA Parkway – a 2M SF class A office complex (proposed) • The Offices at The Gate | 4205 Dallas Parkway – a 1M SF class A office complex (proposed) • Tate + Toll | SEC of Warren Parkway & Dallas N Tollway – a 500K SF class A office building (proposed)
VITAL STATS 25.0%
1,250,000
20.0%
750,000
15.0%
250,000
10.0%
(250,000)
5.0%
(750,000)
0.0%
(1,250,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
• 6200 Legacy Drive – a 402K SF class A office building (proposed) • Legacy Union Three | Legacy Circle – a 328K SF class A office building (proposed) • 6301 Headquarters | 6301 Headquarters Drive – a 304K SF class A office building (proposed) • The Star | Phase IV | 17 Cowboys Way – a 299K SF class A office building • Platinum Tower | 6899 Dallas Parkway – a 275K SF class A office building (proposed) • International Business | 6275 W Plano Parkway – a 240K SF class A office building • Fourteen555 – South Building | 14545 North Dallas Parkway – a 239K SF class A office building (proposed) • Plaza at Legacy II | 5465 Legacy Drive – a 200K SF class A office building (proposed)
LARGE EXISTING VACANCIES
• Destination Drive A – a 500K SF class A office building (proposed)
• 5400 Legacy Drive – 1,587,458 SF
• The Tower at Hall Park | 6605 Warren Parkway – a 496K SF class A office building
• The Campus at Legacy – 382,487 SF
• CALWest – 1,071,344 SF • 6100 Reata Pharmaceuticals – 327K SF
• Legacy West Office Tower | SEC Windrose Avenue – a 450K SF class A office building (proposed)
• Legacy Commons – 296,433 SF
• Granite Park Six | 5525 Granite Parkway – a 422K SF class A office building
• 6400 Legacy Drive – 227,577 SF
• Two Legacy West | 7950 Legacy Drive – a 414K SF class A office building (proposed) • Ryan Tower | 8101 Windrose Avenue – a 409K SF class A office building
• 5600 Headquarters Drive – 251,478 SF • 4101 International Parkway – 207,750 SF • The Apex 1 at Legacy – 206,420 SF • The Princeton – 152,445 SF
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 13
FORT WORTH CBD CURRENT EVENTS
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
115,608
148,201
(47,186)
21.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
18.0%
15.2%
16.2%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
12.0%
-
-
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$28.07
$28.20
$27.64
TOP LEASE TRANSACTIONS
150,000 100,000
14.2%
15.0%
-
200,000
50,000 0 (50,000)
9.0%
(100,000)
6.0%
(150,000) 3.0%
(200,000)
0.0%
(250,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
DELIVERIES
Q3 21
Q4 21
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES
• Merrill Lynch has signed a 21,913 SF lease at 201 Main Street.
• 801 Cherry Street – 237,850 SF class A vacancy
• An undisclosed tenant has signed a 16K SF lease at 201 Main Street.
• 115 West 7th Street – a 186,684 SF class B vacancy
• Manhard Consulting has signed a 6,205 SF lease at 505 Pecan Street.
• 777 Main Street – a 173,603 SF class A vacancy
HLC DEAL
DEALS IN THE MARKET • 115 West 7th Street – a 300,347 SF class B office building (under contract) • 307 West 7th Street – a 283,618 SF class B office building • 500 W 3rd Street – a 234,039 SF class B office building • 1500 Houston Street – a 42,400 SF class C office building (under contract)
• 307 W 7th Street – a 117,714 SF class B vacancy • Bank of America Tower | 301 Commerce Street – a 111,714 SF class A office building • 210 E 7th Street – a 82,226 SF class B vacancy
The Texas A&M University System is one step closer to growing its footprint in Fort Worth. The system’s board of regents on Thursday added two buildings to its capital plan for a new education and research campus proposed in downtown Fort Worth, one of the fastest-growing cities in the country. The board must add the projects to the construction plan before moving forward with design and ultimately construction. The board agreed to spend $85 million on a law and education building which A&M officials expect to start building next year. Another $85 million was approved for a research and innovation center, which is scheduled to be built in 2024. With the shroud of the pandemic lifting, downtown Fort Worth is regaining vibrancy with new construction projects, workers returning to offices and activities and events ramping up. “There are a lot of really good things happening in downtown Fort Worth,” said Andy Taft, president of Downtown Fort Worth Inc. One of the most noticeable changes is the amount of construction underway on projects that have been in the pipeline for a while but were slowed or stalled during the pandemic. Downtown Fort Worth Inc.’s website shows there are currently 28 projects planned or under construction downtown, including high-profile developments such as expansion of the Fort Worth Convention Center and a major expansion of the Texas A&M University System’s law school facilities. Also underway or on the drawing board are 13 residential developments that will add long-anticipated high-rise living opportunities to downtown. Among the residential projects already underway is Deco 969 at 969 Commerce Street, a 27-story high-rise, multifamily development that will offer 302 luxury apartments and penthouses. The downtown area is expected to have 6,656 residential units in 2023, up from 5,395 in 2020, according to new research from Downtown Fort Worth Inc.
14 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
LAS COLINAS CURRENT EVENTS The first-ever office building in Las Colinas has changed hands. The building was originally the regional office for Allstate Insurance, but most recently housed operations for Vistra. Dallas’ Rosewood Property Co. bought the building and the adjoining vacant property which have already been demolished for a new development. Further plans for the mixed-use project will be unveiled as the development process continues. Dallas Developer Billingsley Co. is seeking approval for a proposed 335K SF office building in Cypress Waters where they recently completed another 10-story building. More than 16K people work in Cypress Waters, a 1,000acre master-planned waterfront development with office, multifamily, and retail. The Urban Towers in the Las Colinas Urban Center has landed Taiwan-based TXOne Networks as a tenant. TXOne Networks is a global cybersecurity firm and its move into Las Colinas establishes their U.S. headquarters. TXOne networks also has offices in Taipei, Tokyo, and the Netherlands. The Urban Towers complex is owned by New York-based Angelo, Gordon & Co. and Parallel Capital Partners. Builders FirstSource is moving its headquarters from Bryan Tower in Downtown Dallas to 6031 Connection Drive in Las Colinas. 6031 Connection Drive is owned by Atlanta-based Piedmont Office Realty Trust which is one of the nation’s largest publiclytraded owners of Class A office properties. Piedmont owns eight office assets in the DFW Metroplex.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(253,943)
114,355
(405,861)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
20.1%
19.5%
20.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
1,349,146
1,529,146
966,877
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
180,000
150,000
111,805
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$27.70
$27.20
$27.21
TOP LEASE TRANSACTIONS • AMN Healthcare Services has signed a 90K SF lease in Cypress Waters Office Park at 8840 Cypress Waters Boulevard. • Ascent Solutions has signed a 33K SF lease in Cypress Waters Office Park at 2999 Olympus Boulevard. • Pei Wei has signed a 10.7K SF lease in Westway One.
VITAL STATS 25.0%
2,000,000 1,500,000
20.0%
1,000,000 15.0%
500,000 0
10.0%
(500,000) 5.0%
(1,000,000)
0.0%
(1,500,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
• 9650 Locke Street – a 279K SF class A office building (proposed) • 9100 Olympus Boulevard | Building D – a 250K SF class A office park (proposed) • Royal Tower – a 220K SF class A office building (proposed) • NWC I 635 & I 35 – a 200K SF class A office building (proposed)
• Martin Powers has signed a 5.5K SF lease in The Embassy.
• Las Colinas Corporate Center III – a 200K SF class A office building (proposed)
• Care Continuity has signed a 4.9K SF lease in MacArthur Plaza.
LARGE EXISTING VACANCIES
• Texas Mercy Headache & Pain has signed a 1.9K SF lease in Corporate Plaza I.
HLC DEAL
• 6000 Connection – 292K SF • 8900 Freeport Parkway – 268K SF • One MacArthur Ridge – 250K SF
DEALS IN THE MARKET
• Regent Commons – 215K SF
• Fuller Ridge I & II – a 285,656 SF class B office campus
• Intellicenter Dallas – 201K SF
• One Panorama Center – a 208,450 SF building with Colliers
• Browning Place III – 171K SF
• Two Colinas Crossing – a 181,072 SF class A office building
• Freepoint 9 Office Center – 153K SF
• Horizon Way Business Park – 181K SF • Williams Square West – 162K SF • Las Colinas Commons – 151K SF
NEW DEVELOPMENTS
• 6031 Connection Drive – 139K SF
• Project Blue Star – a 1.8M SF class A office park (proposed)
• Las Colinas Corporate Center I – 137K SF
• Freeport Commons – a 1.2M SF class A office park (proposed)
• 450 N Freeport Parkway – 128K SF
• 750 W John Carpenter Freeway | Phase II – a 330K SF class A office building (proposed) • 3300 Olympus – a 300K SF class A office building
• 8840 Cypress Waters Boulevard – 108K SF • 3660 Regent Boulevard – 103K SF
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 15
LBJ CURRENT EVENTS
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(68,477)
41,106
(239,283)
30.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
25.0%
25.0%
24.7%
23.3%
20.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
15.0%
20,000
20,000
119,000
10.0%
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$25.41
$25.55
$23.99
TOP LEASE TRANSACTIONS • DECA Dental Group has signed a 18.7K SF lease in Park Central 7. • Uvalle Law Firm has signed a 14.9K SF sublease in Galleria One.
HLC DEAL
• CR Capital, LLC has signed a 3.9K SF lease in Midtown Office Center.
HLC DEAL
• BlackLit has signed a 2.5K SF lease in Midway Urban Village.
HLC DEAL
DEALS IN THE MARKET • Lincoln Centre – a 1,610,273 SF class A office complex • Park Central 7, 8, & 9 – a 845,919 SF class A office complex
300,000 225,000 150,000 75,000 0 (75,000) (150,000) (225,000)
5.0%
(300,000)
0.0%
(375,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
VACANCY
LARGE EXISTING VACANCIES • Park Central 8 – 225,924 SF • 7171 Forest Lane – 180K SF • Three Galleria Tower – 133,888 SF • 5525 LBJ – 120K SF • One Lincoln Centre – 100,501 SF • Pinnacle Tower – 98,412 SF • Northpoint Plaza II – 92,694 SF • Lakeside Square – 72,824 SF • The Hightower – 66,609 SF • Banner Place North – 64,674 SF • Lake Highlands Tower – 56,650 SF • The Crossings II – 57,586 SF • One Galleria Tower – 57,567 SF
NEW DEVELOPMENTS • Park Heritage – 1.15M SF (proposed) • Four Lincoln Centre – 400K SF (proposed) • Park Tower at Dallas Midtown – 376,870 SF (proposed) • The Inwood at Alpha West – 330K SF (proposed)
Q2 22
Element Towers, located on Dallas’ LBJ Freeway, has been sold to California-based Stanton Road Capital. Tenants include Clubcorp, SCA promotions, and Joeris General Contractors. The buildings are roughly 70% leased and have over 670K SF of combined space. Stanton Road Capital currently owns and operates a commercial property portfolio in excess of 5M SF. Major renovations at Lincoln Centre took more than a year but are paying off with higher occupancy rates. The three office towers had not been upgraded since they were built in 1980. Recent renovations include an expansive tenant lounge, conference facilities, food services, retail, and an outdoor area for company events. The upgrades have brought new tenants including Slalom Consulting, Anderson Tax, and Bridge Tower which brings occupancy above 80%. The Meridian office building at 2711 LBJ Freeway in Farmers Branch has been sold to a group of local and out-of-state investors. The building was sold to investors including Hudson International Group of New York and Dallas’ Maitland Management. The Meridian was built in 1980 with nearly 250K SF of office space and the building is valued for taxes at more than $16 million. The Farmers Branch building sale adds to a growing list of transactions with Dallas-Fort Worth office properties.
16 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
MID-CITIES CURRENT EVENTS Arlington City Council approved a $15 million grant for the likely new owner of Lincoln Square, a nearly 40-year-old shopping center. The vote and sale are the latest developments for a shopping center city officials say has declined over the last 20 years. Trademark Property Company CEO Terry Montesi says his company would like to turn the brown-brick shopping center into a better offering of retail, office space and mid-rise apartments. Lincoln Square’s location along Interstate 30 would make the shopping center a powerful regional gateway, he says. “This is a great piece of real estate that just hasn’t evolved,” Montesi said. “We’ll figure out what needs and wants to be here and, with y’all’s help, direction, and partnership, we think we can do something very special.” The 30-year agreement requires that Trademark invest at least $150 million into the property in the next six years and collaborate with locals and leaders on redevelopment plans. The company is on the hook for $9 million in grant funding if it fails to meet the agreement requirements. The city drew $14.75 million grant from its Innovative Venture Capital Fund. Home prices in North Texas and throughout the country have increased significantly in recent months as demand for housing has increased. Dallas’s real estate market is also following this trend. The active listings for residential homes in the Dallas real estate market increased significantly. The number of active listings in the Dallas-Fort Worth-Arlington metropolitan region increased by 16.91% while new listings increased by 17.72%, according to the Texas Real Estate Research Center. Buyers looking to buy a home in the DFW region later this year might find solace in these statistics. Although the current market is far from “normal” or balanced, let’s be upfront about that fact. In Dallas, it’s still a seller’s market because of the lack of inventory. Even so, buyers should find it a little less difficult in the future thanks to these new developments. Over the next several months, expect the pace of home price rise to decrease. Many big metro regions are already beginning to show signs of this.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
231,688
463,976
214,006
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
13.2%
13.1%
14.6%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
328,724
586,974
1,479,534
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
350,310
404,862
87,590
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$25.10
$25.08
$25.03
TOP LEASE TRANSACTIONS
VITAL STATS 16.0%
2,000,000
1,500,000
12.0%
1,000,000 8.0% 500,000 4.0%
0
0.0%
(500,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
DELIVERIES
Q4 21
Q1 22
Q2 22
VACANCY
NEW DEVELOPMENTS
• Charles Schwab has signed a 52K SF lease at 2050 Roanoke Road.
• 601 State Street – a 143,524 SF class A office building
• An undisclosed Tenant has signed a 15K SF lease at 1301 Solana Boulevard.
• 2170 East Lamar Boulevard – a 61,500 SF class A medical building
• An undisclosed Tenant has signed a 12,177 SF lease at 1521 N Cooper Street.
• 2101 Westpark Court – a 60K SF class A medical office building
• Bufford Suites has signed a 10,038 SF lease at 2225 Avenue J.
DEALS IN THE MARKET • 8555 Airport Freeway – a 127,584 SF class B building • 2505 N State Highway 360 – a 119,424 SF class A building • 500 S Nolen Drive – a 199,075 SF class B building • 2225 E Randol Mill Road – a 87,411 SF class B building • 4001 Airport Freeway – a 85,900 SF class A office building
• 6500 Colleyville Boulevard – a 42,192 SF class B office building
LARGE EXISTING VACANCIES • 4333 Amon Carter Boulevard – a 730,806 SF class A medical building • 4255 Amon Carter Boulevard – a 547,384 SF class A medical building • 2200 W Airfield Drive – a 424,998 SF class B vacancy • 3120 Sabre Drive – a 208,841 SF class A Vacancy • 1900 W KirkwoodBoulevard – a 175,114 SF class A vacancy
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 17
NORTH FORT WORTH CURRENT EVENTS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
31,101
(31,101)
82,104
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
8.7%
8.7%
5.5%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
377,138
268,085
133,966
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
36,104
22,807
65,951
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$28.30
$28.33
$27.03
TOP LEASE TRANSACTIONS • An undisclosed tenant has signed a 23,671 SF lease in 5637 N Tarrant Parkway. • United Way has signed a 18,331 SF lease at 201 N Rupert Street. • Robert Wyatt Contracting has signed a 13K SF lease at 3575 Lone Star Circle.
DEALS IN THE MARKET • 201 North Rupert Street – a 35,097 SF class B office building • 8224 White Settlement Road – a 27,716 SF class B office building • 5637 North Tarrant Parkway – a 23,671 SF class B office building • 742 N Jim Wright Freeway – a 11K SF class C industrial live/work unit
NEW DEVELOPMENTS • 9810 Hillwood Parkway – a 135K SF class A office building • Golden Triangle and Alta Vista Road – a 57K SF class B office building • 126000 Willow Springs Road – a 54K SF class A office building • 1242 FM 407 Road – a 10,157 SF class B office building
VITAL STATS 10.0%
250,000 200,000
8.0%
150,000 100,000
6.0%
50,000 0
4.0%
(50,000) (100,000)
2.0%
(150,000) (200,000)
0.0%
(250,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
DELIVERIES
Q3 21
Q4 21
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES • 13650 Heritage Parkway – 164,333 SF Class A vacancy • 13601 Heritage Parkway – 68,399 SF Class A vacancy • 14600 Heritage Parkway - 50K SF class B vacancy (sublease) • 14601 North Freeway – 50K SF Class B vacancy • 4700 Alliance Gateway Freeway – 47,644 SF
Fort Worth government, real estate, and others involved in Panther Island will gather this summer to consider development plans for the area. Officials say they want to revisit existing plans in case they need updating or tweaking. “Look at the office market,” Michael Bennett, CEO of Bennett Partners Architecture, said. “Since the pandemic, many concepts about the office market have changed as work has changed. They might not make any changes, but it’s things like that we should consider as we move forward.” The $1.17 billion flood control project which received major federal funding in January, will have a big economic impact on the city, opening up development or re-development of about 800 acres of property just north of downtown Fort Worth. After a January announcement that Fort Worth’s Panther Island redevelopment project has received $403 million in long-awaited federal funding, Fort Worth Mayor Mattie Parker said the area will be a differentiating factor for the city. “To be able to develop and double the size of downtown in one of the fastest-growing cities in the country,” Parker said. “I can’t think of another city that can say that right now with that amount of land that’s going to become available.” Casey Tounget, associate in Transwestern’s Fort Worth office, which has some property listings in the project area, said the development opportunity near downtown “gives Fort Worth an unrivaled opportunity not found in any other major U.S. city.” The largest landowner of land in the Panther Island area is the Tarrant Regional Water District, the coordinator of the Panther Island project. The water district owns over 225 acres, most of that acquired for the bridges, bypass channel and the canals planned for the development, according to the district. DFW new home sales jumped last month and so did new home prices. The one less-than-rosy data point for builders was pending new home sales which fell statewide and in North Texas, potentially signaling a slowdown ahead. In far north Fort Worth, pasture land and rolling hills will be transformed into a new development. Fort Worth city council members signed off on a large new development that will build 1,914 homes near Eagle Mountain Lake. The Rio Claro development will be located southeast of the intersection of Morris Dido Newark Road and Bonds Ranch Road. It will sit near the proposed Eagle Mountain High School. Developer PMB Capital Investments is also developing Veale Ranch in southwest Fort Worth, among other developments. Matt Mildren, a partner at PMB Capital Investments, told WFAA the new development in far north Fort Worth will have public parks, open spaces, amenities, fishing ponds and a connected trail system.
18 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
PRESTON CENTER CURRENT EVENTS A mixed-use development in Dallas’ Knox Henderson neighborhood has received approval from the city. Trammell Crow Co. is working with Austin tech billionaire Michael Dell on the Knox Street project which will include luxury residential units, a boutique hotel, retail, offices, and a park. Construction is expected to begin in the second half of 2022 and be fully delivered in early 2025.
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
150,259
63,619
(34,988)
14.0%
300,000
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
12.0%
250,000
10.0%
9.3%
11.3%
10.4%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
329,066
329,066
626,066
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$40.75
$40.40
$42.64
COMING TO MARKET • Weir’s Plaza – a 250K SF Class A office building
TOP LEASE TRANSACTIONS • RPM Living has signed a 16.4K SF lease in Preston Commons. • Edge Realty has signed an 11.5K SF renewal in The Berkshire.
HLC DEAL
200,000 150,000
8.0%
100,000 6.0%
50,000
4.0%
0
2.0%
(50,000)
0.0%
(100,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
DELIVERIES
Q4 21
Q1 22
Q2 22
VACANCY
NEW DEVELOPMENTS • 8111 Douglas – a 318K SF class A office building
LARGE EXISTING VACANCIES • Bluffview Towers | West – 56,954 SF
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 19
RICHARDSON/PLANO/ALLEN/MCKINNEY CURRENT EVENTS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(65,026)
104,573
78,979
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
17.4%
17.4%
17.8%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
260,200
267,392
53,000
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
7,192
54,000
8,100
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$23.75
$23.64
$23.72
TOP LEASE TRANSACTIONS
VITAL STATS 19.0%
300,000 150,000
18.0%
0 17.0% (150,000) 16.0% (300,000) 15.0%
(450,000)
14.0%
(600,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
NEW DEVELOPMENTS
• J.C. Penny has signed a 280K SF lease at 6501 Legacy Drive.
• Heritage Creekside Towers – a 1.2M SF class A office park (proposed)
• Texas Health and Human Services has signed a 14.1K SF lease at 1059 S Sherman Street.
• Palisades Central | 2426 N Central Expressway – a 1M SF class A office complex (proposed)
• KW International has signed a 12.5K SF extension and expansion in Central Five Hundred.
• Beacon Square – a 800K SF class A office building (proposed)
HLC DEAL
• Bankers Life has signed a 5.7K SF renewal in Custer Court.
HLC DEAL
• McAlexander Sound, Inc. has signed a 5.7K SF extension in Woodcreek Plaza.
HLC DEAL
• North American Venture Capital has signed a 3.9K SF lease in Woodcreek Plaza.
HLC DEAL
• Ginn Corporation has signed a 3.6K SF lease in CityView Corporate Center.
HLC DEAL
• Datacom Design Group has signed a 1.9K SF renewal in Promenade Tower.
HLC DEAL
• ITRemedy has signed a 1.9K SF lease in Woodcreek Plaza.
• The Campus at CityLine – a 600K SF class A office complex (proposed) • 3661 North Plano – a 533K SF class A office building (proposed) • 3661 North Plano – a 508K SF class A office building (proposed) • Legacy Central 5 – a 300K SF class A office building (proposed) • One Heritage Creekside – a 250K SF class A office building (proposed) • Assembly Park – a 120K SF class a office park
HLC DEAL
• Joblogic-X Corporation has signed a 1.8K SF renewal in CityView Corporate Center.
HLC DEAL
LARGE EXISTING VACANCIES • 601 Data – 423K SF • Galatyn Commons – 215K SF
• White Hydrangea LLC signed a 1.6K SF lease in Central Five Hundred.
• 2200 George Bush – 177K SF
• Boisbrun Hoffman, PLLC. has signed a 1.4K SF lease in CityView Corporate Center.
• Lookout Park I – 156K SF
HLC DEAL
HLC DEAL
• Monoware Studios, LLC has signed a 1.2K SF lease in Central Five Hundred.
HLC DEAL
• Jeremy Scholl has signed a 1.2K SF lease in CityView Corporate Center.
HLC DEAL
DEALS IN THE MARKET • 3400 CityLine – a 313K SF class A office building
• Richardson Commons – 156K SF • 17787 Waterview Parkway – 143K SF • 3400 CityLine – 142K SF • Cardinal Park 8 – 142K SF • Waterview 190 South – 116K SF • Lakeside Centre II – 115K SF • Lookout Park II – 106K SF • Creekview II – 106K SF • The Tower Lakeside Campus – 104K SF • Legacy Central I – 104K SF • 1600 W Plano Parkway – 103K SF • Creekview I – 101K SF
The 3400 CityLine office building In Richardson’s Telecom Corridor is being marketed for sale. The more than 300K SF office campus is in Richardson’s mixed-use $1.5 billion CityLine district on the south side of President George Bush Turnpike at Highway 75. The fivestory office project was developed by UBS Asset Management and Transwestern Development Co. BOKA Powell designed the project which includes a fitness center, a yoga garden and a parking garage with space for more than 1,000 cars. The building is more than 77% leased to tenants including DXC Technology, Generational Equity and McCarthy Cos. Dallas-based JP Realty Partners, in partnership with Liberty Bankers Insurance, has purchased the Fossil Group’s office campus in Richardson’s telecom corridor from California investor The Swig Co. The campus is over 535K SF with more than nine acres of vacant land. JP Realty Partners has execution experience of over 800 properties in the US, Mexico and Canada.
20 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
SOUTHWEST FORT WORTH CURRENT EVENTS A new development in West Fort Worth could bring 5,000 new homes and take 15 years to complete. The development, which will also include 1,000 acres of prime commercial property, is moving closer to getting off the ground. The project is just south of the Walsh Ranch development and includes the 3,790-acre historic Veale Ranch. Dallas-based PMB Capital Investments purchased the land last August. The ranch property is located east of the company’s Ventana development, an 1,800-home community. The Veale Ranch property is in both Tarrant and Parker counties and is in both the Aledo and Fort Worth school districts. It is about 12 miles west of downtown Fort Worth. The homes in PMB’s nearby Ventana project range from about $400K to over $800K, Baird said. The Veale Ranch homes will probably start around $350K, but because of some of the larger lot sizes and topography could reach from $800K to as much as $1 million at the high end, he said. PMB’s Baird said close to 1,000 acres of the former ranch is expected to be available for commercial development in the Veale Ranch project, most of that just south of Interstate 20 and along a Union Pacific rail line. The Walsh Ranch project, under development, also has about 2,800 acres designated for office and industrial development just north of the rail line. Transwestern Real Estate Services (TRS) announces FTW Investment Group, LLC has purchased 3880 Hulen, a six-story, 70K SF office building in Fort Worth. Transwestern’s Kyle Poulson and Gibson Duwe facilitated the transaction on behalf of the seller. Casey Tounget and Theron Bryant, also of Transwestern, represented the buyer. The sale price was not disclosed. Located south of Arlington Heights, the building has proximity to the Fort Worth Zoo, Texas Christian University and Colonial Country Club. Veritex Community Bank is the anchor tenant at 3880 Hulen. The new owner will also occupy space in the building and is planning property updates.
VITAL STATS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(61,264)
(123,502)
(927)
12.0%
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
10.0%
11.4%
11.0%
10.6%
8.0%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
6.0%
140,604
129,051
93,056
4.0%
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
29,664
-
4,500
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$26.38
$25.87
$25.56
TOP LEASE TRANSACTIONS
250,000 200,000 150,000 100,000 50,000 0 (50,000) (100,000)
2.0%
(150,000)
0.0%
(200,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
DELIVERIES
Q3 21
Q4 21
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES
• Elevate Credit has signed a 73,984 SF renewal at Overton Centre.
• 6100 Western Place – 104,296 SF class B vacancy
• Privia Health has signed a 22,037 SF lease in Western Place.
• 405 West Loop 820 – a 101,043 SF class B vacancy
• Underwood Law has signed a 8,741 SF lease at 600 Bailey.
• 6000 Western Place – a 86,099 SF class B vacancy
HLC DEAL
DEALS IN THE MARKET • 101 South Jim Wright Freeway – a 55K SF class B office building • 108 South Freeway – a 41,427 SF class C office building • 111 Boland Street – a 40,080 SF class A office building
NEW DEVELOPMENTS • The Van Zandt – 111,228 SF class A office building set to deliver December 2023 • 1320 Hemphill Street – a 48,594 SF class A office building set to deliver December 2022 • Triune Centre – a 30K SF class A office building set to deliver December 2022
• One Ridgmar Center – a 75,769 SF class A vacancy
SUBMARKET INTELLIGENCE
Q2 2022 DFW OFFICE MARKET REPORT 21
STEMMONS CURRENT EVENTS
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
(47,297)
178,348
51,549
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
21.3%
21.0%
22.3%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
289,048
-
-
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$19.63
$20.31
$20.39
NEW DEVELOPMENTS • West Love | 1345 Mockingbird Lane – a 600K SF class A office building (proposed) • West Love | 2345 Mockingbird Lane – a 250K SF class A office building (proposed) • The Design District Tower – a 243,100 SF class A office building (proposed) • 2122 West Mockingbird Lane – a 158K SF class A office building • 2221 West Mockingbird Lane – a 150K SF class A office building (proposed) • River Edge | 161 Riveredge Drive – a 143,260 SF class A office building • 1333 Oak Lawn Avenue – a 122,788 SF class A office building • 1400 West Mockingbird Lane – a 66,504 SF class A office building (proposed) • 111 Glass Street – a 30K SF class B office building (proposed)
VITAL STATS 24.0%
200,000 150,000
22.0%
100,000 50,000
20.0%
0 (50,000)
18.0%
(100,000) (150,000)
16.0%
(200,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
LARGE EXISTING VACANCIES • Pegasus Park – 152,071 SF • Comerica Service Center – 145K SF • The Connection at 8600 – 101,530 SF • 8777 North Stemmons – 76,968 SF • 1300 W Mockingbird Lane – 55K SF
Dallas-based TXRE Properties purchased 1701 E. Lamar Boulevard, an 80K SF, twostory building in Arlington, from The Rainer Cos. TXRE properties is an investment, brokerage and property management company that has a service capacity of over 4.4M SF throughout Dallas, Fort Worth and Arlington.
22 Q2 2022 DFW OFFICE MARKET REPORT
SUBMARKET INTELLIGENCE
UPTOWN CURRENT EVENTS The Crescent has recently added several financial firms as tenants. New York-based Atalaya Capital Management LP has leased 4,497 SF for a new operation. The private investment advisory firm provides debt for real estate and corporate clients. Dallas-based alternate investment firm Maraboyina Capital is taking 1,474 SF of office space. Maraboyina Capital specializes in film, television, and media technology investments. Dallas’ Stonegate Capital Partners Inc. has also leased 1,960 SF. Additionally, The Crescent has had significant lease renewals from JP Morgan Chase, Paragon Associates, and UBS. With Uptown Dallas’ office buildings renting up ahead of schedule and at higher than expected prices, developers are hustling to get new projects started. Lincoln Property Commercial intends to start construction next year on its project at Cedar Springs Road and Fairmount Street. The 2500 Cedar Springs development would be one of the largest in the area between McKinney Avenue and Turtle Creek. The planned office building will be twenty floors with around 525K SF of space. The development’s two residential towers will be along Routh Street facing the Quadrangle shopping center and the office building will face Fairmount. California-based financial firm Houlihan Lokey has taken the top three floors of the Link at Uptown. The company will take more than 74K SF of space in the building, joining PMG Worldwide and Shearman & Sterling as major tenants in the 25-story highrise. The building is a project of Dallas-based Kaizen Development Partners and opened its doors earlier this year. One of Dallas’ biggest development projects just got the go-ahead from the city’s planning commission. Dallas-developer Trammell Crow Co. is working in partnership with Austin billionaire Michael Dell’s family investment firm to build the four-acre high-rise project on Knox Street east of Highland Park. The project includes luxury residential units, a boutique hotel, retail, offices, and a new park. A six-story office building with ground-floor retail would face Knox. The New York office of Australia-based Woods Bagot, New York-based Kohn Pederson Fox, and Dallas’ HKS are designing the development.
Absorption
vs. Prev. Qtr
vs. 12 Mths Ago
120,851
6,320
(180,575)
Vacancy
vs. Prev. Qtr
vs. 12 Mths Ago
16.9%
18.1%
16.8%
U/C SF
vs. Prev. Qtr
vs. 12 Mths Ago
833,691
833,691
1,150,982
Delivered SF
vs. Prev. Qtr
vs. 12 Mths Ago
-
-
-
Quoted Rates
vs. Prev. Qtr
vs. 12 Mths Ago
$42.52
$40.80
$41.71
TOP LEASE TRANSACTIONS • Bank OZK has signed a 110K SF lease in 23Springs. • O’Melveny & Myers has signed a 75K SF lease at Harwood No. 14 Tower. • Kilgore & Kilgore has signed a 10.5K SF lease at 3141 Hood Street.
HLC DEAL
• R.J. Reynolds has signed a 10.4K SF lease at 17Seventeen McKinney • Grand Caliber has signed a 7.5K SF lease in 2811 McKinney.
HLC DEAL
DEALS IN THE MARKET • McKinney & Olive – a 536K SF building with JLL
NEW DEVELOPMENTS • 2401 McKinney – a 673K SF office building (proposed) • Parkside Uptown | 1919 Woodall Rodgers Freeway – a 450K office building (proposed) • 23Springs | 2323 Cedar Springs Road – a 623K SF office building (proposed) • Harwood XII – a 542K SF office building (proposed) • Victory Center | 2371 Victory Avenue – a 466K SF office building (proposed)
VITAL STATS 20.0%
700,000 600,000
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%
(300,000) Q2 19
Q3 19
Q4 19
Q1 20
ABSORPTION
Q2 20
Q3 20
Q4 20
Q1 21
Q2 21
Q3 21
Q4 21
DELIVERIES
Q1 22
Q2 22
VACANCY
• Harwood No. 14 – a 360K SF office building • The Quad | 2699 Howell Street – a 340K SF office building • 2850 Lemmon – a 180K SF office building (proposed) • Maple Terrace | 3001 Maple Avenue – a 135K SF office building • McKinney & Lemmon – a 82K SF office building (proposed)
LARGE EXISTING VACANCIES • Parkside Tower – 111,728 SF • 2501 Cedar Springs – 110,415 SF • The Centrum – 108,021 SF • The Link at Uptown – 74,805 SF • The Crescent Building 300 – 67,808 SF • 2401 Cedar Springs – 57,118 SF
DALLAS 5950 Berkshire Lane, Suite 900 Dallas, Texas 75225 T 972.241.8300 | F 972.241.7955
FORT WORTH 1200 Summit Avenue, Suite 300 Fort Worth, Texas 76102 T 817.710.1110 | F 817.810.9017
www.holtlunsford.com
HOUSTON 11451 Katy Freeway, Suite 300 Houston, Texas 77079 T 713.850.8500 | F 713.850.8550