Demand for top-quality office space fueled a slew of costly building renovations in Downtown Dallas over the course of the past decade, a new report from CoStar says.
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In the past nine years, 432 DFW buildings with a total of 40.2M SF of space underwent renovations, with the majority of the activity — approximately 9.4M SF, or 28% of the dated inventory — occurring in Downtown Dallas.
"As the arms race for increased amenities and the flight to quality continues to escalate in Dallas-Fort Worth, creative owners and developers are reimagining once-forgotten and obsolete office spaces," CoStar Group Director of Market Analytics Paul Hendershot said in his latest research note.
About 35% of the current DFW office stock was built in the 1980s, CoStar says. Office renovation activity hit a peak in 2015 when 5.2M SF was renovated throughout the year, Hendershot wrote. But as more office tenants demand high-quality spaces in today's landlocked environment, refurbishment activity is expected to continue to climb.
Downtown Dallas office projects serve as a bellwether for the type of solutions architects and owners are using on their older inventory.
Hendershot points to the 60-story Fountain Place Downtown, built in 1986, as one example of a massive building overhaul. He notes Goddard Investments spent $70M redeveloping the property after buying it in 2014. Before it was finalized, the group added a 10-story parking garage and retail space, updated the lobby and restored the center's outside fountains.
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The Trammell Crow Center also received a facelift with JP Morgan Asset Management finalizing a $135M renovation on the Downtown skyscraper, complete with a parking garage and retail amenities.
The redo paid off with ORIX USA signing a deal this year to lease 100K SF inside the renovated building. Common Desk also set up shop inside Trammell Crow Center, placing a 51K SF coworking facility on the premises, Hendershot said.
The 42-floor CityPlace Tower — owned by Highland Capital Management affiliate NexPoint Advisors — is the latest Downtown building to get a creative facelift.
The building's owner announced plans to move an InterContinental Hotels & Resorts-branded hotel into the office tower's ground floors, anchoring it as a luxury amenity.
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