Big D’s Hottest Office Submarket is…
Everywhere. Eight out of nine Dallas submarkets have seen significant rental rate growth. Companies are relocating from the ‘burbs to the CBD and there’s more construction, well, all over the place.
JLL research gurus Walt Bialas and Steve Triolet tell us that through the first half of the year, all the submarkets except Stemmons Freeway (sorry you were stood up for prom, I-35), have had an average rate increase of 6.5% in the past year. Dallas is seeing strong demand from both corporate relos like Toyota and expansions like Santander and Tenet Healthcare. Both Santander and Silverleaf Resorts moved to the CBD from the Stemmons Freeway market. Santander noted they made the move with expansion in mind (it’s going into Thanksgiving Tower and Silverleaf is going to the Renaissance Tower).
The construction pipeline is heating up, too, with 4.3M SF underway with several additional projects expected to break ground later this year, the duo tells us. The highest concentrations are in Las Colinas, Far North Dallas, and Richardson/Plano, but most submarkets have at least one or two significant projects in the works. Just yesterday, Encore Office (a subsidiary of Encore Enterprises) and Wolverine Interests announced that Gearbox Software signed on as lead tenant of its new 166k SF office building (opening in '15) across from Toyota Stadium on Main Street and near the Dallas North Tollway in Frisco. Gearbox is relocating its HQ from Plano. (Duke Nukem will be coming with them.) Steve tells us that Texas is leading the economic recovery, office market recovery, demand and absorption levels, and seeing some of the highest development totals across the US, as well.