Layoffs in the tech and financial sectors are making headlines nationally, but, as of yet, the Dallas-Fort Worth market continues to push on. So, too, does North Texas’ mighty commercial real estate engine. Flight to quality is driving most office decisions, as companies figure out the remote versus in-office work conundrum. The U.S. market surpassed 50 percent back in the office for the first time earlier this year, but DFW continues to pace the country, with about 65 percent of employees now back at their desks. Another hotspot is the industrial sector, which continues to see unprecedented levels of construction as more leasing activity, more spec development, and more jobs continue to make DFW a well-positioned and affordable logistics hub. Data center demand remains at all-time highs, too, with North Texas expected to be a leader in creating jobs of the future. Meanwhile, record low retail development is pushing occupancy rates to unprecedented highs of 94.4 percent. Read on as we recap some of the biggest real estate stories of the last year that continue to drive the region’s growth.
Explosive, Ongoing Growth of Frisco
Just when you think things can’t get any better—or bigger—in Frisco, more transformative projects and deals come along. By the end of 2022, word was circulating about an entertainment win for the far north Dallas suburb. And in early January, the city made it official, revealing that Universal Studios will be bringing a new amusement park to approximately 100 acres of land along the Dallas North Tollway at Panther Creek Parkway. Representatives from Universal Parks & Resorts say the project will include Universal-themed interactive experiences and a 300-room hotel. The park will sit within the 2,500-acre, $10 billion Fields development, which also includes PGA of America’s new headquarters (officially opened in August 2022) and a new $520 million Omni PGA Frisco Resort. The new venue from Omni, which also has another Frisco resort at The Star minutes down the road, will feature 500 guest rooms and suites, as well as 10 four-bedroom private ranch houses. Meantime, Frisco pioneer HALL Group has topped out on a new 16-story office tower, 224-key boutique hotel, and 19-story multifamily tower as part of its reimagining of its sprawling HALL Park. And the former Wade Park is getting a new life with a $3 billion multiuse development called The Mix.
Nation’s Top Property Sales Market
With an impressive $42.5 billion in 2022 deals, DFW led the United States in commercial property sales for a third straight year, according to real estate research firm MSCI. Multifamily led the way, but there were some notable office transactions, too. They include the newly renovated Trammell Crow Center, a 1.2 million-square-foot, 50-story Arts District icon that was acquired by Regent Properties for about $600 million. On the north side of Klyde Warren Park, Granite Properties upped the ante on its bet on Uptown, joining forces with Highwoods Properties to acquire Crescent Real Estate’s McKinney & Olive, paying a reported $700 per square foot or about $400 million. And in the West End of downtown, Harwood International added to its significant Dallas holdings by snagging The Luminary, a seven-story, 169,000-square-foot property completed in 2019.
A New Dallas Convention Center
The Kay Bailey Hutchison Convention Center Dallas will soon face a wrecking ball. In November, voters approved Proposition A, which called for a 2 percent increase to the city’s hotel occupancy tax. Those funds will help cover the estimated $3.5 billion price tag associated with the project, which will be transformative for downtown. Breaking ground in 2024 and with an expected completion date of the second quarter of 2028, current plans call for more than 2.5 million square feet of space. A rooftop deck park will be added by 2030. VisitDallas’ CEO Craig Davis says the project is crucial if Dallas wants to remain competitive in attracting more corporate meetings and annual events to the region.
The central business district is seeing a raft of office-to-residential conversions, led by pioneers Jonas Woods and Shawn Todd. Here are the details:
Santander Tower on Elm Street was given a $40 million spruce-up in 2017. Now, owner Woods Capital is teaming up with Mintwood Real Estate to convert 10 floors in the 50-story building to 228 multifamily units.
Jonas Woods is planning a similar repositioning at Bryan Tower, a 40-story, 1.1 million-square-foot office building at 2001 Bryan St. in Dallas. Woods acquired the 1970s-era property in February 2022.
A couple of blocks to the west on Bryan Street, Shawn Todd and his Todd Interests are converting the 49-story landmark Energy Plaza skyscraper to vertical mixed-use, with about 300 apartments.
Tripling down, an arm of Woods Capital acquired a stake in the 60-story Comerica Bank Tower in 2022 and is joining TriGate Property Partners to revamp up to 20 floors into multifamily space and a hotel.
Companies return to the office in new homes
Even as businesses grapple with finding the balance between remote and in-office working, North Texas landlords won big commitments from corporate tenants in 2022. Among the most impressive deals was a 15-year, more than 200,000-square-foot lease to Texas Capital Bank at 2000 McKinney. Nearby, another financial institution, Bank OZK, stepped up to take more than 110,000 square feet in Granite Properties’ new 23Springs, which at 26 stories, will be the largest office tower in Uptown. Two national retailers also made office-leasing news last year. Luxury goods seller Neiman Marcus confirmed its commitment to Dallas with an 84,860-square-foot lease at Cityplace Tower, securing $5 million in incentives from the city and committing to retain 1,100 jobs and create at least 300 more. And in Plano, JCPenney inked a deal to return to its longtime headquarters, leasing about 318,000 square feet at 6501 Legacy Drive, which was built in the early 1990s. The company sold and vacated the property during the pandemic as it worked through its bankruptcy.
Big Wins from Financial Services Firms
Over the years, North Texas has diversified its economy away from a dependence on oil and gas to develop strongholds in technology, professional services, aviation, and logistics. Significant moves by tenants last year put an exclamation point on the region’s growing dominance in financial services, too. In Uptown, Goldman Sachs signed a submarket-changing 980,000-square-foot lease to kick off Hunt Realty’s 3.8 million-square-foot, mixed-use North End development and house 5,000 employees. In Irving, KDC is working on an 844,000-square-foot build-to-suit for Wells Fargo, which is bringing 4,000 jobs to the city. And in Frisco, TIAA is targeting a 2024 completion for its new 500,000-square-foot campus at The Star, which will create 2,000 new jobs. As the traditional finance centers—New York, Chicago, Los Angeles, Boston, San Francisco, and Washington D.C.—lose jobs and DFW gains, it has led to some to now refer to our region as the “Wall Street of the South.”
Tenant Rep Moves
Industry vets reunite with former real estate teammates, and new leaders take the helm.
- Susan Arledge
- Greg Biggs
- Torrey Littlejohn
Newmark scored another big recruiting win when site selection standout Susan Arledge joined the firm in June. The move has her working again with former ESRP colleague Emmitt Smith.
In April, Greg Biggs joined former partners Randy Cooper, Craig Wilson, and Dan Harris at Stream Realty. Through the years, the brokers have negotiated some of DFW’s biggest deals.
And in February, JLL promoted Torrey Littlejohn to co-lead its busy office tenant rep group with Bret Hefton. Littlejohn was D CEO’s 2022 commercial real estate broker of the year.
Authors
Brandon J. Call
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