Dallas CBD Will Re-Attract Office Tenants As Population Explodes, Downtown Experts Say
Population increases over the course of the next decade will put Dallas' Central Business District back on the map as this "people explosion" forces the revitalization of Downtown Dallas, experts said while speaking at a webinar hosted by Transwestern and Downtown Dallas Inc.
"There will be 900,000 jobs added in the region over the next 10 years," Transwestern Research Manager Andrew Matheny said during the webinar. "If you look at just office-using industries, and then look at what that might do for office demand, you come up with a figure of something like 50M SF in additional office demand that could come into the market over the next 10 years."
Some of this demand will propel new construction, but new builds will be unable to keep up, forcing a revitalization of existing office assets, particularly trophy products from decades ago, Matheny said.
"We are not building nearly enough to be able to accommodate all of that new construction over the next 10 years, so that's what creates the demand that will help us grow back into some of these landmark properties in Downtown," he said.
Even in the midst of a pandemic, DFW remains one of the more resilient office markets nationally. Control-access keycard swipes monitored by building data and systems firm Kastle Systems show roughly 43% of DFW office workers returned to work by May 19, compared to the top-10 city national average of 28.1%. Kastle Systems collects this data by monitoring buildings nationwide using its keycard access systems.
Downtown Dallas Inc. CEO Kourtny Garrett said her organization never thought it would see Downtown's 135,000-person workforce reduced to only 5% to 15% of that during the pandemic. The good news is very few of these missing workers resulted in a true loss in leases, she said.
Going forward, Garrett expects more adaptive reuse projects to arrive in Downtown Dallas as older office stock is converted into other modern-day uses.