The Dallas office of JLL recently announced who would replace Brooke Armstrong, who left in September to become CBRE’s new president of advisory services. And it is a team: Torrey Littlejohn and Bret Hefton were named co-leads of the role in January. The duo has worked together on a number of office deals together and will oversee JLL’s Dallas office tenant representation division.
Hefton joined JLL in 2019 and has been a top-performing broker. in the region, being named to D CEO‘s Power Broker list seven times. Littlejohn, meanwhile, has been with JLL since 2005 and was part of some big-name office deals last year. She is a finalist for D CEO‘s 2022 Commercial Real Estate Awards Broker of the Year.
They spoke with D CEO about the outlook for DFW’s office market in 2022, how work-from-home is affecting leasing, and how the corporate relocation pipeline. is affecting office demand in DFW.
D CEO: To start, I just have to ask about the office market. I looked it up and about 40% of DFW employees are back in the office. How do you think work-from-home is affecting activity in the market?
Littlejohn: “To an extent, I think work-from-home is delaying some office activity. People are waiting on some decisions because they aren’t exactly sure how they’re going to use office space. I think a lot of people are evaluating how much office space they’ll be using and people are playing with the hybrid work-from-home models to try to understand if that is productive as a long-term solution or strategy…. A lot of what we’re doing right now is counseling clients so that they can be in a position to make really informed decisions about their real estate needs moving forward.
“But I do think, you know, when we’re talking about companies that are coming into Dallas, we are still seeing a lot activity. There are a number of companies that are touring Dallas and want to move here. So, the expansion and relocation conversations, I don’t think have been as delayed.”
D CEO: Speaking of relocations, ExxonMobil just announced it was leaving Las Colinas for Houston. Can you talk about that? Companies leaving here is not something that we get to discuss very often.
Littlejohn: “I do think that that will be a unique opportunity because it is such a large amount of land. It’ll be interesting to see how all that unfolds. But Las Colinas and Irving have definitely seen a resurgence recently. It’s on the radar of a lot of companies because of its location and access to a strong labor pool. There could be a silver lining to all of this and there’s certainly an opportunity for a large company to come in and plant their flag in Irving, Texas.”
D CEO: What are you seeing right now in the market in terms of new office development? When do you think we can expect spec office building to be back?
Hefton: “We’re already seeing some new office developments break ground. Granite VI is a good example. They decided to hold off and, you know, COVID postponed a lot of development about 18 months or so, but here in the last 90 days they’ve broken ground. The level of demand in the Legacy submarket has really driven them to go ahead and break ground and move forward. I think we’ll see a lot more projects like that this year because of demand from relocations. Exxon, for example, is an exception to the rule when they’re moving out of DFW. It’s largely due to, in my opinion, their consolidation and huge presence in The Woodlands down in Houston.
“In terms of other spec development, Hillwood’s space is leasing up. The Link at Uptown is signing leases. We’re seeing some momentum. And in our business, our clients are really looking to find quality spaces. There’s a flight to quality. So, some of these new buildings are really going to benefit from that. And fortunately for the new buildings, you know, many buildings didn’t get started during the pandemic. So, they are sitting there with a ripe opportunity to benefit.”
Littlejohn: “You know, I think there is going to be about a two-year period where you’re really not going to have a lot of new options because the ones that are on the ground right now will be full and the ones that are starting to construct won’t be ready yet. For those who are in the market right now, it’s a it’s a great opportunity to go into some really neat buildings.”
D CEO: There have been some pretty high-profile subleases hitting the market recently. I think of Reata Pharmaceuticals’ 327,000 square feet and Liberty Mutual’s 300,000 square feet in its building, both up in Plano. How does that affect the market?
Littlejohn: “The Reata space is interesting because it is a shell space that has to be built out. That’s a different tenant than who would be looking at plug-and-play subleases. But, as Bret mentioned, there’s still a flight to quality. That’s still an amazing building. Legacy is a great location. It’s a great option for a different type of tenant, somebody that’s not looking to get in next month, but maybe, you know, six to nine months from now.”
Hefton: “To that flight to quality point: we’ve seen a lot of Class B space come available on the market. And so, unfortunately, I think some of the class B sublease space might sit there for a while. Class B has probably been impacted the most by subleases. But when you look at Class A, that’s still in high demand in most submarkets.”
D CEO: Finally, we always like to spotlight some of the personal sides of business. So, unbuttoning a little bit here, what is one fun fact that people wouldn’t know about you?
Littlejohn: “That I can operate a power jack and a forklift.”
Hefton: “That’s pretty good. You know, I’ve got four kids so you can find me on the playing field coaching my kids on a regular basis.”
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