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Commercial Real Estate

The Market That Doesn’t Quit: DFW’s Top Commercial Real Estate Stories of 2023

Dallas-Fort Worth is a bright light in commercial real estate, leading the nation in investment property sales, hotel development, office development, and more.
| |Project photos courtesy of companies
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Hunt Realty Investments selected architecture firm Hart Howerton to design plans for a $5 billion, mixed-use expansion of Reunion Tower.

Despite lingering questions about the national economy, interest rates, the normalization of hybrid working, and other challenges, North Texas continues to push forward. The region delivered strong performances across most commercial real estate sectors in 2023, and although the outlook for 2024 is not glowing, it remains positive.

DFW’s trajectory is supported by the underlying fundamental of job growth; according to a RealPage analysis of U.S. Bureau of Labor Statistics data, Dallas-Plano-Irving was the only market in the country to gain more than 100,000 jobs in 2023, coming in just over at 101,000. Jobs, of course, attract people, which, in turn, boosts multifamily, retail, and other real estate sectors.

According to Weitzman, North Texas ended 2023 with a retail occupancy rate of 92.5 percent—an all-time high, with grocery, discount clothing, and fitness categories leading the way. Looking ahead to 2024, Weitzman says the year will be the most active new construction market in a decade. Other sectors expected to perform especially well next year include data center, hospitality, multifamily, and investment property sales, especially toward the latter half of 2024. But before we look ahead, let’s look back at the top commercial real estate news of 2023.

The Tallest Tower in Uptown

In the early 1990s, the Miyama family bought 1909 Woodall Rodgers and an adjacent motor bank. Decades later, it became the most sought-after site in Uptown, as the last developable tract adjacent to Klyde Warren Park. The family wanted to make sure to find just the right use for the prized land and just the right development partners. They found what they were looking for last year in Pacific Elm Properties and KDC, which will join the family in developing Parkside, a 500,000-square-foot Class A office tower. At 30 stories, the building designed by Kohn Pederson Fox and Corgan will be the tallest in Uptown. It will be anchored by Bank of America, which has signed on to occupy more than 238,000 square feet.

Shifts in Apartment Supply and Demand

North Texas continues to lead the nation in apartment leasing, but it’s still not enough to fill the flurry of new multifamily projects opening across the region. A demand and supply imbalance may be cause for concern in the year ahead. Still, 2023 ended on a high note, with more than 3,000 units leased in the fourth quarter, according to research from RealPage. Strong job creation and population growth are giving developers confidence. New projects include The Vickery, a redevelopment in Fort Worth from Trademark Property Co. with 307 apartments and 14 townhomes; a 37-story, 375-unit tower on Pearl Street in the Dallas Arts District from Switzerland-based Empira Group; and The Galatyn, a $75 million, 20-story building from Streetlights Residential on Monticello Avenue. The high-end project will have 56 units that average 2,700 square feet in size.

A New Era for Reunion Tower

Dallas developers are known for being bold, innovative thinkers. And that certainly was the case when Ray Hunt and Hunt Realty Investments, along with John Scovell of Woodbine, built Reunion Tower in 1978. “The Ball” forever changed the Dallas skyline. This past April, Reunion Tower’s signature restaurant reopened as Crown Block—with more than 10,000 reservations on the books. Behind the scenes was James Beard Award nominee Elizabeth Blau, a Las Vegas restaurateur tapped by the Hunt family to take the restaurant into the future. Before the end of the year, Hunt Realty revealed even bigger news: plans for a $5 billion redevelopment of about 20 acres surrounding Reunion Tower. The mixed-use project could include as many as 3,000 apartments, a large hotel, 150,000 square feet of retail space, and up to 2 million square feet of office space. 

Insatiable Thirst for Data Centers

Brisk activity from artificial intelligence companies and large cloud service providers sparked unprecedented leasing activity in Dallas in 2023, according to data from CBRE. In the first half of the year alone, the region leased 110.6 megawatts of data center space—a nearly 500 percent increase compared to the same period in 2022. Vacancy fell from 6.9 percent to 4.1 percent. Dallas is already the second-largest data center market in the country and developers are doing their best to keep up. Among them is Skybox Datacenters, which is building a 1 million-square-foot data center in Lancaster with Bandera Ventures and Principal Asset Management. Google, DataBank, and QTS Realty also have new projects in the works.

Leading the Country in Investment Sales

Most investors know, a good deal when they see it. And in 2023, they were snapping up commercial real estate properties in Dallas. According to MSCI Inc., Dallas was the country’s No. 1 investment property sales market in 2023—for a third straight year—despite a drop-off in sales volume. All told, about $19 billion in assets changed ownership last year, with multifamily industrial properties getting the most attention. One of the biggest office deals of the year was CityLine, a 2.2 million-mixed-use campus in Richardson sold to former Phoenix Suns owner Robert Sarver by Mirae Asset Global Investments and Transwestern Investment Group. The deal was brokered by Newmark, which also put together another significant transaction: the sale of Plaza of the Americas at Pearl and San Jacinto Streets in Dallas.

New Leaders Take the Helm

Paul Romanowski

Paul Romanowski was named president and CEO of Arlington-based D.R. Horton in September. He succeeds David Auld, who now serves as executive vice chair of the nation’s largest homebuilder. 

Will Hendrickson

Thirty-two years after founding Granite Properties in 1991, Michael Dardick announced he would shift to an executive chairman role and hand the CEO reins to longtime colleague Will Hendrickson.

Doug Jones

Doug Jones was just 35 when he became head of Dallas operations at Cushman & Wakefield in April 2021. After a dustup with the firm, the hotly pursued exec took a job leading Texas Office Services at Stream Realty. 

Kevin Kessinger

Trademark Property Co. Founder and CEO Terry Montesi shored up his executive team with the November hiring of Kevin Kessinger as president and COO. He previously was an executive VP at ShopCore Properties. 

It’s All About the Experience

DFW’s retail market is seeing a boom in experiential concepts. Last year, Cosm, designed by HKS, broke ground on its immersive entertainment venue which will show concerts, sporting events, and more on its planetarium-type, 87-foot immersive LED screen. Next door, Tiger Woods kicked off PopStroke, an 80,000-square-foot mini golf and bar venue. A stone’s throw away, on the heels of Major League Cricket launching in DFW, Sixes Social Cricket debuted. In Deep Ellum, Zach Shor broke ground on GoodSurf, a concept that will serve Pan-American cuisine and drinks. In Westworth Village, Bryson DeChambeau announced plans to enter the fray with his newly formed UnderPar Life. The company’s plan is to build Topgolf-like structures on golf courses. Its first venue is slated for delivery in 2025 on Hawks Creek Golf Course in Fort Worth.  

Sands Corp. Comes to Dallas

Dallas is the home base for Trammell Crow Co., Lincoln Property Co., and other big-name developers. So, it’s always news when a huge player comes to town. That’s what happened in 2023 when Sands Corp. entered the market. Along with buying the Dallas Mavericks, the Las Vegas-based company acquired a high-profile tract in the Design District and more than 200 acres off State Highway 114 in Irving. Sands Corp. is a world leader in developing and operating massive gaming and entertainment resorts around the globe. Its Venetian Macau, for example, has 2,905 suites, 1.375 million square feet of meeting space, and 1.65 million square feet of gaming space. What plans does Sands Corp. have for Dallas? We’ll have to wait and see.

Plenty of Rooms for Everyone

North Texas developers aren’t shy about kicking off new projects, and that’s certainly true in hospitality. Lodging Econometrics calls Dallas a “powerhouse,” as the region leads the nation with a record-breaking 193 hotels under construction, adding up to nearly 22,300 rooms. The region also leads in projects scheduled to get underway in the next 12 months and those in the early planning stages of the hotel construction pipeline. Among the most high-profile properties in the works is the $750 million Four Seasons Hotel and Residences being developed by Carpenter & Co. at 3001 Turtle Creek Blvd. in Dallas. Designed by Pelli Clarke & Partners in collaboration with Dallas-based HKS and SWA, the 35-story tower will hold 240 hotel rooms and nearly 120 residences, along with robust amenities. It’s slated to open in 2027.  

Author

Christine Perez

Christine Perez

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Christine is the editor of D CEO magazine and its online platforms. She’s a national award-winning business journalist who has…

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