Is AT&T's Exit The Blow That Kills The Downtown Dallas Office Market?

AT&T’s impending exit from Downtown Dallas will leave a major hole in the city’s central business district and more than 1M SF of vacant office space in Whitacre Tower. But with Dallas-Fort Worth’s rise to one of the most important commercial real estate markets in the country and the Y’all Street-fueled momentum the region’s office market has experienced over the last year, conventional wisdom says there should soon be companies lining up to fill that vacancy.

However, the signs indicate that won’t be the case. 

“We all need to accept that the downtown part of the CBD is never going to be an office CBD ever again,” Rosewood Property Co. President Rick Perdue said during Bisnow's DFW Executive Market Kickoff 2026 event Thursday.

Like many downtown buildings, Whitacre Tower was designed for a single user, so leasing it to multiple tenants won’t be easy, according to Walter Bialas, an industry veteran who is head of research at Goodwin Advisors. Many of the big users moving to DFW that could fill it are focused on Uptown and the northern suburbs, which are driving the region’s office momentum. Plus, brokers say downtown has faced issues with crime and homelessness in recent years that have caused many companies to steer clear of the submarket.  

Whitacre Tower is adjacent to the AT&T Discovery District, but its future is also up in the air. The district fosters walkability and offers amenities such as a large media wall, outdoor event space and The Exchange Food Hall, which are attractive to office tenants. 

AT&T spent $100M in 2021 to open the high-tech plaza. The company declined Bisnow’s request for comment on the district’s future.

The telecommunications giant doesn’t plan to leave the building owned by Pacific Elm Properties and Dundon Capital Partners until the second half of 2028, and its lease reportedly runs through 2030. Pacific Elm also declined Bisnow’s request for comment on the future of Whitacre Tower and the AT&T Discovery District. 

Office Demand

The DFW office market completed four straight quarters of positive absorption in 2025 to post its best year-end performance in the metric since 2019, according to Cushman & Wakefield’s latest office report. Last year was also the region’s strongest year for leasing activity since 2022. 

However, vacancy rates in the Dallas CBD have risen considerably since 2019. That increase came despite the area’s inventory decreasing from 28M SF at the end of 2019 to 26M SF in the fourth quarter of last year. 

The Dallas CBD ended 2025 with a vacancy rate of 34.1%, driven by nearly 9M SF of office space going unused. At the end of 2019, the CBD sported a 27.5% vacancy rate with 7M SF of empty offices. 

Cushman & Wakefield Senior Research Manager Andrew Matheny said the elevated vacancy rate can be traced to the CBD being overbuilt during the 1980s.

“The CBDs always had that super high vacancy rate,” Matheny said. 

Leaving Downtown

AT&T isn't the first large office user to ditch its downtown space. 

Bank of America spent close to 20 years in downtown before announcing plans to move to the Parkside Uptown skyscraper in 2023. Bank of America’s new digs are near the 800K SF office campus Goldman Sachs is building on the other side of Dallas' Klyde Warren Park.

That nearly $500M hub for the financial giant will relocate Goldman Sachs employees from downtown, Irving and Richardson.

Investment management company Invesco and global accounting and consulting firm Deloitte also made the jump from downtown to Uptown.  

AT&T’s new corporate campus will be at 5400 Legacy Drive in Plano. A rezoning request for the company's new campus will be heard by the Plano Planning and Zoning Commission early next month. 

The 54-acre site is currently zoned for life sciences, as DFW developer NexPoint had previously announced plans to build 4M SF of labs and manufacturing space there.

Impact Of The Exit

A Boston Consulting Group study commissioned by Downtown Dallas Inc. last year found that AT&T’s exit could cost the area $2.7B in overall value. The study estimated that city property values could decrease by 30%, resulting in a $62M loss in annual property tax revenue.

Dallas Mayor Eric L. Johnson said AT&T’s desire for a “horizontal, suburban-style campus” instead of the skyscraper it has called home since 2018 sealed Whitacre Tower’s fate. But he believes the move will open a door for Dallas to explore new possibilities. 

“Dallas is a city of opportunity for workers, families, and businesses of all sizes,” Johnson said in a statement. “In recent years, we have worked together to cut violent crime, homelessness, property tax rates, and bureaucratic red tape.”

The Downtown Dallas Inc.-commissioned study also predicted public safety in the downtown area could prove to be the tipping point for AT&T’s future in the area. 

City officials unveiled a plan last May to add more police, decrease homelessness and target hot spots for crime in an effort to revitalize the CBD amid declining property values. 

But the city’s work hasn’t made enough of an impact to entice companies to the area, according to Dallas investor and Charter Holdings CEO Ray Washburne. 

“Downtown ain't coming back for office, and I wish we had city leaders who look in the mirror and understand that no tenant wants to come,” Washburne said during Bisnow's market kickoff event Thursday.

More Challenges

AT&T’s relocation announcement didn’t surprise Sunwest Real Estate Group Managing Principal Marc Grossfeld, as he called downtown a “challenging” submarket for office space. 

As Dallas’ northern suburbs have experienced population and housing booms, the commute to downtown Dallas has also become a major barrier to recruiting and retaining the best talent, he said.  

“That's the reality of what is driving office decisions right now,” Grossfeld said. 

The global telecommunications titan required all office employees to return in person five days a week at the beginning of last year, and the new Plano location is expected to offer a shorter commute for a majority of its employees, an AT&T spokesperson said, citing the company’s internal data.

With the 47-year-old Dallas City Hall facing a deferred maintenance bill that could reach close to $350M, city officials could swoop in to fill Whitacre Tower and take over the adjacent Discovery District, Grossfeld said. 

“What a great opportunity to repurpose that building for the city,” Grossfeld said.

Outside of that possibility, the single-user design of Whitacre Tower complicates its marketing, De La Vega Development founder and CEO Artemio De La Vega said.

Leasing out the space piecemeal becomes difficult because a 100K SF user placed in the middle of the building cuts off contiguous space for potential bigger tenants. The city needs a plan to save the downtown office market, and he said officials should lean on the region's existing expertise to create it. 

“It's going to take an effort,” De La Vega said of filling Whitacre Tower. “But the good news is we have some of the best developers in the world in Dallas, so harnessing that talent and identifying those individuals that could get the job done, in my opinion, would be Step 1.”