Downtown does business spaces better than any other big city. With so much to offer including a diverse set of architecture, unmatched development capacity, and tons of square footage for rent, there’s no reason to look anywhere else for incredible leasing opportunities.
Recent transactions have placed large office structures under new ownership signaling change on the horizon.
Downtown is the historic commercial center of the region, with one of the largest densities of commercial space available anywhere. Large leases and positive net absorption have signaled a return to the office and a renewed interest in our submarket.
In the year’s final quarter, the Downtown submarket closed with 27 deals for 422,544 square feet. CoStar reports an average gross asking rent of $38.94 per square foot. Larger deals include the relocation of Galderma to Trammell Crow Center at 2001 Ross Avenue and Lerma to the Luminary building on Houston Street at Ross Avenue.
Office leasing in Downtown was active in 2021 with 126 reported deals for 1.1 million square feet. CoStar shows the average lease at 8,979 square feet and the average gross asking rent of $32.09 per square foot.
Active leasing throughout the core continues to be a positive signal for long-term recovery Downtown.
Q4 continued a positive trend for office leasing in Downtown Dallas. CBRE reported 64,752 square feet of positive net absorption, making Downtown the third most active submarket in the region.
It’s the kind of location that will accommodate our future growth, infuse energy into our culture and yield great work on behalf of our clients.
It’s an opportunity for us to have a big urban building and presence in a world-class facility.
Last year started with more cautious employers. Now, we see companies looking to the future, eyeing new Downtown projects – as well as the large, contiguous opportunities currently available in Class A structures. Among these projects is Todd Interests’ 300 Pearl in the East Quarter, offering over 224,000 square feet of Class A office space in a mixed-use development perched on top of several ground floor retailers and restaurants. This location is a short walk from the Dallas Farmers Market and overlooks the future Harwood Park.
Subletting breached 10 million square feet in DFW in the fourth quarter, settling at 10.3 million square feet (roughly 14% of total available space).
Downtown is currently listing 1.1 million square feet on the sublet market, or roughly 12.2% of total available space. Class A rents remain stable in our submarket at $28.70 per square foot.
Downtown core market asking rents average $26.91 per square foot for all property classes. CoStar continues to see modest rent growth throughout the new year.
Large leases came through for Downtown in 2021.
The Downtown submarket enjoyed a lot of press in 2021 about multiple large leases, new building deliveries, building sales, and a dazzling list of new tenants.
The FDIC and JPMorgan Chase both elected to stay Downtown with leases signed at Plaza of the Americas and The Hunt Building respectively. Headlines were also made when Galderma chose Trammell Crow Center for their U.S. headquarters and Integrity Marketing Group announced that they are relocating from the suburbs to Fountain Place. Therabody placed a second headquarters in the East Quarter in 2021 while creative firms Lerma and Imaginuity found new homes in the Luminary and One Main Place.
These large leases and more are signaling a more complete return to the office in 2022, especially given the unique amenities offered in Downtown to boost in-person interaction, company culture, professional growth, and innovation. CBRE reported that nationally over 85% of companies have adopted some sort of hybrid work model and the best performing buildings are those that invested in quality spaces which accommodate collaboration and experience.