3Q 2019 DFW Office Market Brief

Market Brief... Dallas/Fort Worth

OFFICE

3Q19 Property Pictured Above: One West 7th - 2821 West 7th Street | Fort Worth, Texas 76107

DFW OFFICE MARKET BRIEF 3Q 2019

TABLE OF CONTENTS 1. DALLAS/FORT WORTH OFFICE TEAM AND SUBMARKETS

1 2 3

2. OVERALL DALLAS/FORT WORTH OFFICE MARKET

A. Facts and Figures

2. SUBMARKET INTELLIGENCE

A. Dallas Central Business District

B. Central Expressway C. Far North Dallas D. Fort Worth Central Business District E. Las Colinas F. LBJ G. Mid Cities H. North Fort Worth I. Preston Center J. Richardson/Plano K. Southwest Fort Worth L. Stemmons M. Uptown/Turtle Creek

1

DFW

HLC SUBMARKET COVERAGE

2

HLC DFW OFFICE MARKET EXPERTS

MATT CARTHEY

GEOFF SHELTON

HOLDEN LUNSFORD

JOHN DICKENSON

DAVID CASON

Partner/Managing Principal - Fort Worth mcarthey@hlfortworth.com 817.710.1111

Managing Principal - Fort Worth gshelton@hlfortworth.com 817.710.1113

Partner/Managing Principal - Dallas holdenlunsford@hldallas.com 972.381.3218

Managing Principal - Dallas jdickenson@hldallas.com 972.421.1971

Vice President - Fort Worth dcason@hlfortworth.com 817.810.9137

JAMES ENGELS

BRANDON AVEDIKIAN

JAKE NEAL

MARSHALL MAYS

DAN POND

Market Director - Dallas jengels@hldallas.com 972.280.8307

Market Director - Dallas bavedikian@hldallas.com 972.280.8302

Market Associate - Fort Worth jneal@hlfortworth.com 817.284.5555

Market Associate - Fort Worth mmays@hlfortworth.com 817.632.6150

Market Associate - Dallas dpond@hldallas.com 972.380.3641

MASON PRITCHER

ALAN ROSE

JACK BEARE

Market Associate - Dallas mpricher@hldallas.com 972.280.8320

Market Associate - Fort Worth arose@hlfortworth.com 817.632.6155

Market Analyst - Dallas jbeare@hldallas.com 972.265.0128

3

NEW LISTING

3660 REGENT

3660 Regent: 158,728 SF Class B office building in the DFW Freeport/Coppell Submarket.

4

NEW LISTING MCKINNEY CORPORATE CENTER II

McKinney Corporate Center II: 115,000 SF Class B New Development in the Allen/McKinney Submarket.

5

NEW LISTING

Main Place: 42,913 SF Class A office building in Fort Worth CBD.

6

3909 HULEN

2121 MIDWAY

NEW LISTING

2121 Midway: 86,393 SF Class B office building in the Quorum/Bent Tree Submarket.

7

HLC DFW OFFICE OVERALL MARKET

VACANCY - OVERALL DFW

CONSTRUCTION - OVERALL DFW

18.70% 17.60% 17.7%

16.8%

20.00%

10,000,000

18.00%

9,000,000

16.00%

8,000,000

14.00%

7,000,000

12.00%

6,000,000 5,000,000

10.00%

4,000,000

8.00%

3,000,000

6.00%

2,000,000

4.00% 1.00%

0.70%

1,000,000

2.00%

0

0.00% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

Direct Vacancy

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Sublet Vacancy

2Q 19

3Q 16

3Q 19

4Q 16

1Q 17

Total Vacancy

2Q 17

3Q 17

4Q 17

1Q 18

Delivered Inventory

ABSORPTION - OVERALL DFW

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Under Construction

OVERVIEW - OVERALL DFW 20.0%

1,600,000

2,000,000

1,400,000

1,500,000

1,200,000

19.0%

1,000,000

1,000,000

800,000 600,000

18.0%

400,000

500,000

200,000

17 .0%

0

0

(200,000) (400,000) 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

16.0%

3Q 19

(500,000) 3Q 16

Total Net Absorption

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

Market

Existing Inventory # Bldgs.

Total RBA

Vacancy Direct SF

Total SF

Vac. %

YTD Net Absorption

YTD Deliveries

Under Const. SF

Quoted Rates

Central Expressway

112

13,005,966

1,617,171

1,727,627

13.3%

58,417

38,848

0

$30.01

Dallas CBD

83

28,874,008

6,973,126

7,512,975

26.0%

(53,017)

104,119

60,230

$25.96

East Dallas

203

8,464,423

1,273,244

1,278,559

15.1%

12,901

294,820

185,472

$26.42

Far North Dallas

484

52,756,670

9,994,580

10,869,328

20.6%

630,213

774,157

1,787,060

$29.28

Fort Worth CBD

60

9,700,010

1,459,510

1,505,634

15.5%

(107,138)

0

0

$27.77

Las Colinas

296

35,696,456

5,768,524

6,218,584

17.4%

57,860

312,800

2,530,416

$26.51

LBJ Freeway

169

21,522,589

4,753,838

4,953,711

23.0%

3,572

0

0

$22.60

Lewisville/Denton

172

7,908,429

1,196,683

1,212,824

15.3%

(217,112)

131,553

300,066

$23.74

Mid-Cities

433

22,382,456

3,979,434

4,163,961

18.6%

40,887

92,440

350,909

$23.59

North Fort Worth

57

2,862,653

154,487

157,055

5.5%

174,274

200,000

100,720

$25.13

Northeast Fort Worth

53

3,645,122

632,364

632,364

17.3%

506,335

0

0

$23.11

Preston Center

50

4,757,671

457,760

492,236

10.3%

40,224

118,000

297,000

$42.10

Richardson/Plano

385

32,243,220

5,739,859

5,930,104

18.4%

906,458

243,000

686,207

$24.12

South Fort Worth

235

12,012,372

1,147,472

1,253,955

10.4%

(34,445)

71,724

126,682

$24.40

Southwest Dallas

89

3,788,041

346,697

349,278

9.2%

(11,451)

0

360,000

$22.46

Stemmons Freeway

122

13,354,504

3,208,518

3,210,868

24.0%

13,822

0

17,946

$17.80

Uptown/Turtle Creek

101

13,560,471

1,970,960

2,120,292

15.6%

144,637

265,860

747,538

$40.31

3,104

286,535,061

50,674,227

53,589,355

18.7%

2,166,437

2,647,321

7,550,246

$26.43

Totals

Source: CoStar 3Q 2019 Office Report

8

DALLAS CENTRALINTELLIGENCE BUSINESS DISTRICT SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

2,108

(52,900)

103,261

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

26.0%

26.0%

26.7%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

60,230

164,349

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$25.16

$24.99

60,230 Delivered SF Quoted Rates $25.96

VITAL STATS

28.0%

400,000

300,000

200,000

26.0%

100,000

0

24.0%

(100,000)

(200,000)

22.0% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Bank of America Plaza is expected to be acquired by Stream Realty Partners. The 72-story office tower is Dallas’ tallest skyscraper and is about 1.85M SF. It is anticipated that with this purchase, the building built in 1985 will be revamped and turned into a mixed-use project that includes a hotel.

• KPMG Plaza will likely be purchased by Masaveu Real Estate who is based in Spain. This 18-story office building is just under 460K SF and is more than 95% leased.

• Todd Interests and JPMorgan Asset Management acquired the former Masonic Temple on Harwood Street.

This 80-year-old temple is being renovated to become a 46K SF office space. They have pitched the proposed office space to technology and creative companies.

The new building will be 3-stories tall and will include a mezzanine. This is one of more than a dozen buildings being developed in the East Quarter.

• ORIX USA, a subsidiary of Toyko-based ORIX Corporation, confirmed its relocation for their corporate headquarters from Comerica Bank Tower to Trammell Crow Center. Trammell Crow Center is one of Dallas’ tallest towers and is approximately 1.15M SF. The building just completed a $135M renovation. ORIX’s relocation to the building will fill the gap that PwC left when they moved to Park District. After ORIX moves into their new 100K SF office space the building will be almost 85% leased.

TOP LEASE TRANSACTIONS • Orix Corporation has signed a 100K SF lease in Trammell Crow Center.

• Akerman has signed a 30K SF lease in Trammell Crow Center.

• Cowles & Thompson has signed a 27K SF renewal in Bank of America Plaza.

• Republic Property Group has signed a 12K SF lease in 400 S Record.

• Populous Architecture has signed a 5.3K SF lease in One Arts Plaza.

• Neighborhood Goods Inc. has signed a 5.1K SF lease in Chase Tower.

DEALS IN THE MARKET No current deals in the market. However, one is coming to the market: • Renaissance Tower – a 1,729,294 SF class A office building

NEW DEVELOPMENTS • 140 Elm Street/The Drever – 60,230 SF LARGE EXISTING VACANCIES • Fountain Place – 583,895 SF • Bank of America Plaza – 314,729 SF • Thanksgiving Tower – 236,251 SF • 1700 Pacific – 234,441 SF • One Main – 162,248 SF • Harwood Center – 152,030 SF • Comerica Bank Tower – 153,745 SF

9

CENTRAL INTELLIGENCE EXPRESSWAY SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

(59,824)

(49,058)

(125,421)

14.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

12.0%

13.3%

12.8%

13.7%

10.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

56,949

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$29.73

$29.04

Delivered SF Quoted Rates $30.01

VITAL STATS

200,000 150,000 100,000 50,000 0 (50,000)

8.0%

(100,000)

6.0%

(150,000)

4.0%

(200,000) 2.0%

(250,000) (300,000)

0.0% 3Q 16

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Healthcare Trust of America (HTA) has plans to build a new class A medical office building at the former Forest Park medical center campus. The project is estimated to cost $55M. The building will be approximately 107K SF of medical office space and construction is scheduled to launch 4Q. Along with constructing a new office building, HTA is also planning to build a parking garage for the new development. HTA expects to have lease commitments of at least 73% prior to the start of the project’s construction, which begins this year and is expected to end in 2021.

• NexPoint Advisors, an affiliate of Highland Capital Management, announced that they will be moving an InterContinental Hotel & Resort to Cityplace Tower located at 2711 N Haskell. Ownership believes that having a luxury hotel within the building will further separate this iconic building from the rest of the Uptown and Downtown competition. The hotel is scheduled to open in 2022 and will include a restaurant, bar, lounge, and terrace overlooking Dallas. Cityplace Tower is leased by Avison Young and is managed by NexBank Realty Advisors.

TOP LEASE TRANSACTIONS • GDS Link has signed a 9K SF renewal in Mockingbird Station.

• Triton Networks LLC has signed a 6.5K SF lease in North Central Plaza I. • Property & Casualty Management has signed a 4.4K SF lease in 10000 NCX. • Energy Management Company has signed a 2.8K SF lease in Premier Place.

• VRL Eurofins has signed a 2.1K SF lease in La Sierra Office Building.

• 2M Health Watch has signed a 1.7K SF lease in Forest Central I.

HLC Deal

HLC Deal

HLC Deal

10

DEALS IN THE MARKET • Meadow Park Tower – a 251,755 SF class B office building

• 4040 NCX – a 148,864 SF class B office building • One Glen Lakes – a 149,618 SF class A office building • 3001 Knox – a 70,770 SF class B office building NEW DEVELOPMENTS No new developments are currently under construction.

However, four have been proposed: • Four Energy Square – a 400K SF class A build-to-suit • 8010 Park Lane – a 352K SF class A office building • The Tower at Preston Hollow Village – a 250K SF class A office building • Bookmark Center – a 30,252 SF class B office building

LARGE EXISTING VACANCIES • Two Energy Square – 98,600 SF • Cityplace Tower – 95,408 SF • The Pyramids at Park Lane – 63,467 SF • 8750 N Central Expressway – 51,517 SF • 4040 NCX – 43,237 SF • Three Energy Square – 38,567 SF

FAR NORTH DALLAS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(196,859)

667,687

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

20.6%

20.5%

20.1%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,300,454

1,099,322

vs. Prev. Qtr

vs. 12 Mths Ago

15,400

357,830

vs. Prev. Qtr

vs. 12 Mths Ago

$29.01

$28.70

137,250

1,787,060 Delivered SF 271,863 Quoted Rates $29.28

VITAL STATS

20.0%

1,000,000 800,000

19.0%

600,000

18.0%

400,000 17 .0% 200,000 16.0% 0 15.0%

(200,000)

14.0%

(400,000) (600,000)

13.0% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS

• Granite properties has plans to develop Granite Park Six which will be an eighteen-story 415K SF office tower. This project is set to be the tallest building in Plano’s Granite Park located off State Highway 121. The mixed-use office park already possesses 2M SF of class A office space, a 299-room Hilton, and 150K SF of retail space. The building’s construction is slated to begin next year and will include a two-story lobby, a ground level café, a customer lounge, coffee service, a bar, and a golf simulator. Granite Properties has chosen BOKA Powell and HKS Architects to help conceptualize and build this new luxury office building.

• MetLife Core Property Fund has purchased the Offices One at Frisco Station. The seven-story building is 230K SF and was developed by a partnership between VanTrust Real Estate, Hillwood, and the Rudman Partnership. The building opened its doors in 1Q 2018 and is almost fully leased to tenants including Fiserv, Brierley+Partners, Equinix, and Kimley Horn. This building is part of the first phase of the $1.8B Frisco Station development. The development surrounds the Dallas Cowboys’ Star complex and is being built out as a new 240-acre mixed use project.

• Equus Capital Partners has purchased Legacy Place I and II on Tennyson Parkway just east of the Dallas North Tollway. The two buildings are nearly 300K SF and were built in 1998 and 1999.

The office campus is almost 90% leased and Equus has plans to undergo major upgrades and renovations of the properties.

This improvement project will be part of a multi-million dollar repositioning program to revamp lobbies, expand the fitness center, and create a new outdoor patio space and tenant lounge.

• Quality Custom Distribution, the California-based food service company, is moving its headquarters to Frisco. They are relocating from Irvine, California to the Hall Park office complex. They are a major food supplier for restaurant chains including Chick-Fil-A, Chipotle, and Starbucks. Along with the move, the company has also stated that they will be consolidating their finance, accounting, customer service, and purchasing operations. They believe that this move will allow them to be more centralized, enabling them to grow their distribution business and solidify their position as a major player in the food industry. They plan to relocate personnel from California but have plans to hire a local workforce in Frisco. The current plan is to have the headquarters up and running in January 2020.

TOP LEASE TRANSACTIONS

• WeWork has signed a 53.5K SF lease in Legacy Town Center II. • Systemware Inc. has signed a 48K SF expansion in The Colonnade.

• Critical Start has signed a 33K SF lease in Tennyson Office Center.

• Venture X has signed a 30.7K SF lease in The Realm at Castle Hills.

• Razzoo’s Inc has signed a 6.3K SF lease in Greenhill Towers.

• Pacific Builders has signed a 5.5K SF lease in One Legacy West.

• Avizion has signed a 5.1K SF lease in Tollway Towers.

• Sequel Youth & Family Services has signed a 4.1K SF lease in Liberty Plaza.

• Charity, Advertising & Marketing Partners has signed a 3.2K SF lease in Northwood Tower at Midtown.

• Ward, Asel & Associates has signed a 3K SF renewal in Prestonwood Creek.

HLC Deal HLC Deal HLC Deal

HLC Deal

DEALS IN THE MARKET

• Centura Tower – a 412,248 SF class A office building • 2700 Plano Parkway – a 250K SF class B office building • Toll Hill Office Park – a 248,075 SF class B two (2) building office complex • Bent Tree II – a 166,023 SF class B office building • Atrium at Bent Tree – a 114,333 SF class B office building

NEW DEVELOPMENTS

• The Offices Two at Frisco Station – a 221,158 SF office building • Headquarters II – a 220K SF office building • HQ53 – a 200,000 SF office building • International Business Park – a 171,334 SF office building • Village 121 – a 126,448 SF office building • Block H (Legacy West) – a 105K SF office building

LARGE EXISTING VACANCIES • • • • • • •

5400 Legacy Drive – 1,587,456 SF 6105 Tennyson Parkway – 393,064 SF International Plaza II – 386,383 SF The Campus at Legacy West – 370,625 SF 6400 Legacy Drive – 221,672 SF 4101 International – 205,750 SF Tollway Office Center II – 160K SF 11

FORT WORTH CENTRAL BUSINESS DISTRICT SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(11,884)

9,794

(153,735)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

15.5%

15.4%

14.6%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$27.92

$28.99

Delivered SF Quoted Rates $27.77

VITAL STATS

16.0%

350,000 300,000 250,000 200,000

14.0%

150,000 100,000 50,000 0

12.0%

(50,000) (100,000) (150,000) 10.0%

3Q 16

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

(200,000)

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • A California-based coworking company has opened for business with its first Texas location in Fort Worth’s Central Business District. CommonGrounds Workplace leased 25,621 SF of space below XTO’s multi-story parking garage at 702 Houston Street.

• A top official with the Texas Department of Transportation reported on Wednesday the construction of the White Settlement Road bridge that has plagued business owners in the area for nearly five years. It is scheduled to be complete at the end of 2020. The bridges are part of the Panther Island project which is being developed through a partnership between the city, Tarrant County, the Tarrant Regional Water District, and its subsidiary, the Trinity River Vision Authority.

• Construction continues on the Hemphill-Lamar Connector project. The Connector, a $53M tunnel under Interstate 30 with rail lines providing another downtown route, is scheduled to open in 2020.

• Trinity Metro, Fort Worth’s transportation agency, has launched its electric bus service called The Dash. The bus will operate from downtown Fort Worth to the city’s cultural district along the 7th Street corridor, with stops at Sundance Square, Montgomery Plaza, Crockett Row, UNT Health Science Center, Amon Carter Museum of American Art, Kimbell Art Museum, and Modern Art Museum of Fort Worth. It will also include a stop at the new Dickies Arena.

12

TOP LEASE TRANSACTIONS • Civitas Senior Healthcare has signed a 24,753 SF lease in 777 Main.

• Blaise & Hightower has signed a 17,683 SF renewal and expansion in The Carnegie.

• Holthouse, Carlin & Van Trigt has signed a 10,526 SF lease in Bank of America Tower.

DEALS IN THE MARKET • Oil & Gas/Star Telegram – a 439,802 SF class B office building • 904 & 1100 Macon Street – a 41,244 SF two (2) building office portfolio

LARGE EXISTING VACANCIES • • • • •

777 Main – a 305,155 SF direct vacancy Burnett Plaza – a 155,047 SF direct vacancy Bank of America Tower – a 153,923 SF direct vacancy Oil & Gas/Star Telegram – a 124,315 SF direct vacancy First on 7th – a 81,578 SF direct vacancy

LAS COLINAS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

123,279

(374,325)

(40,065)

18.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

17.4%

17.8%

17.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,449,610

1,937,800

vs. Prev. Qtr

vs. 12 Mths Ago

66,400

250,000

vs. Prev. Qtr

vs. 12 Mths Ago

$26.19

$25.32

2,530,416 Delivered SF Quoted Rates $26.51

VITAL STATS

20.0%

600,000

400,000

14.0%

200,000

12.0% 10.0%

0

8.0% (200,000)

6.0% 4.0%

(400,000)

2.0% 0.0%

(600,000) 3Q 16

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Pioneer Natural Resources plans to move into its new 1.2M SF office campus this fall. The project’s developer, KDC, started on the first phase of the $1 billion Hidden Ridge development in 2017. Designed by architects Duda Paine and HKS, the project includes a daycare, wellness center, food hall, and seven-story parking garage. Pioneer will start relocating employees from its existing offices in the Williams Square complex in October.

• Irving Golf Club’s newly renovated 18-hole golf course recently reopened after a nearly five-year renovation. The city hired Colligan Golf Design to transform the previous flat landscape to be more similar to courses seen on the coastlines in Scotland, England, and Ireland. The course also features a new renovated kitchen and clubhouse, along with a new driving range and practice putting greens.

TOP LEASE TRANSACTIONS • Caris Life Sciences has signed a 114,500 SF lease in 3600 W Royal Lane.

• Gartner, Inc. has signed a 54,920 SF expansion in 6031 Connection Drive.

• MedPace has signed a 47,338 SF lease in 2100-2120 W Walnut Hill Lane.

• Long Term Care Group has signed a 31,782 SF lease in 7880 Bent Branch Drive.

• Medical City has signed a 25K SF lease in 3100 Olympus Boulevard.

• Nexstar Media Group has signed a 22,060 SF lease in 545 E John Carpenter Freeway.

• Akili has signed a 20,700 SF lease in 901 W Walnut Hill Lane.

DEALS IN THE MARKET • 600 E Las Colinas – a 512,269 SF class A office building • 8701-8711 Freeport Parkway – a 255,375 SF class B office building • 2901 Kinwest Parkway – a 185,148 SF class B office building • The Westpoint I – a 150,019 SF class B office building • Riverside Commons Building 1 – a 100,661 SF class A office building • The Overlook – a 95,510 SF class B office building • Gateway Plaza – a 78,840 SF class B office building • 450 E John Carpenter Freeway – a 58,276 SF class B office building • 1329 W Walnut Hill Lane – a 54,018 SF class B office building

NEW DEVELOPMENTS • • • • • • •

777 Hidden Ridge – a 1,125,000 SF class A office building The USCIS Building – a 259,947 SF class A office building 3200 Olympus Boulevard – a 250K SF class A office building 3401 Olympus Boulevard – a 200K SF class A office building 3501 Olympus Boulevard – a 200K SF class A office building 3489 State Highway 121 – 150K SF class A office building 1801 Wittington Place – a 103K SF class B office building

HLC Deal

LARGE EXISTING VACANCIES • • • • • • • • • •

1925 W John Carpenter Freeway – 403,150 SF Williams Square West – 390,534 SF 6000 Connection – 293,890 SF 1801 Valley View Lane – 208,593 SF 1555 W Walnut Hill Lane – 151,736 SF Park West 2 – 139,045 SF Cottonwood Office Center – 118,480 SF Greenway Tower – 112,166 SF 6031 Connection Drive – 111,737 SF 8616 Freeport Parkway – 105,778 SF

13

LBJ SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

54,504

(17,775)

(49,961)

23.5%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

23.0%

23.0%

23.3%

22.0%

22.5%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

22.0%

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$22.44

$22.49

Delivered SF Quoted Rates $22.60

VITAL STATS

24.0%

300,000

200,000

100,000

0

21.5%

(100,000)

21.0% (200,000)

20.5% 20.0%

3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

Deliveries

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

(300,000)

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • One of Dallas’ largest suburban office tower complexes hit the market this past quarter. The Galleria Towers, a three (3) building office complex, is more than 1.4M SF. The three buildings were built in 1982, 1985, and 1991 respectively. Currently the combined buildings are 90% leased and include major tenants such as Amazon, Ryan LLC, and Ansira. This building complex possesses an irreplaceable location at the junction of LBJ and the Dallas North Tollway, right next to the unrivaled mixeduse integration of the 1.5M SF Galleria Dallas Mall and a 448-room luxury Westin Hotel.

TOP LEASE TRANSACTIONS • Neurology Consultants of Dallas has signed a 39K SF lease in LBJ Tower.

• Flour has signed a 30K SF lease in Northcreek Place II. • FPT Operating Co. has signed a 28K SF lease in 4 Park Central.

• Prospera Financial Services has signed a 14.8K SF lease in The Crossings.

• Operator has signed a 7.2K SF lease in Heritage Two. • Charles Bennet Law PLLC has signed a 7K SF lease in Banner Place.

• Oden Hughes LLC has signed a 6K SF lease in Toll Hill Office Park.

• Cicero Group has signed a 4.6K SF lease in The Crossings.

• Finical has signed a 4.3K SF lease in The Crossings.

• Focus Fulfillment has signed a 4.2K SF lease in The Crossings.

HLC Deal

HLC Deal

HLC Deal

HLC Deal HLC Deal

14

DEALS IN THE MARKET • Galleria Towers – a 1,418,800 SF class A three (3) building complex

• Two Forest Plaza – a 196,215 SF class A office building NEW DEVELOPMENTS No new developments are currently under construction.

However, four have been proposed:

• Park Heritage – 1,150,000 SF • Four Lincoln Centre – 400K SF • Park Tower at Dallas Midtown – 376,870 SF • The Inwood at Alpha West – 300K SF LARGE EXISTING VACANCIES • 5525 Lyndon B Johnson Freeway – 111,092 SF • Pinnacle Tower – 98,412 SF • Midtown Office Center – 97,452 SF • LBJ Tower – 78,950 SF • The Crossings II (5501) – 75,099 SF • Lakeside Square – 73,308 SF • Crosspoint Atrium – 67,826 SF • Banner Place – 64,674 SF • One Valley View Place – 62,957 SF

MIDINTELLIGENCE CITIES SUBMARKET VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

26.0%

(127,292)

22,317

93,747

25.0%

200,000

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

24.0%

150,000

18.7%

23.0%

100,000

22.0%

50,000

21.0%

0

20.0%

(50,000)

19.0%

(100,000)

18.0%

(150,000)

18.6% U/C SF 350,909 Delivered SF 32,440 Quoted Rates $23.59

17.9% vs. Prev. Qtr

vs. 12 Mths Ago

288,699

269,919

vs. Prev. Qtr

vs. 12 Mths Ago

60,000

20,240

vs. Prev. Qtr

vs. 12 Mths Ago

$22.47

$22.06

250,000

17 .0%

(200,000) 3Q 16

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

Deliveries

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Arlington was selected as the future site for the National Medal of Honor Museum. After a yearlong nationwide search, the Board of Directors selected this location and construction will open to the public in 2024. The museum is planned to be built near Arlington’s Globe Life Park and is named after the Medal of Honor. The Medal of Honor is the nation’s highest and most prestigious military honor. More than 3,500 military service members have been awarded the National Medal of Honor.

• Live by Loews!, the $150M flagship Live! Hotel, opened its doors in September. The hotel has 300 rooms with a rooftop terrace, restaurants, and infinity pool. It also incorporates a 35K SF expansion of the city’s convention center facilities.

TOP LEASE TRANSACTIONS • Lockheed Martin has signed a 175,536 SF lease in 4501 New York Avenue with Starwood Capital Group.

• American Defense Systems has signed a 12,756 SF

DEALS IN THE MARKET • 4501 New York Avenue – a 175,527 SF class B office building with Starwood Capital Group • Copeland Tower – a 126,628 SF class A office building with Aque Investment Group and Stadium Place – an 84,327 SF class B office building with Aque Investment group • 8555 Airport Freeway – a 125,436 SF class B office building with Zerby Interests • 350 Westpark Way – a 58,319 SF class B office building with Kahawai LLC • 1112 E Copeland Road – a 56,848 SF class B office building with Koc One Arlington LLC

LARGE EXISTING VACANCIES • 4200 Buckingham – 58,090 SF • 300 Six Flags Drive – 51,540 SF • 8555 Airport Freeway – 47,277 SF • Airport Centre I – 46,052 SF • DFW Business Center South Tower – 37,246 SF • Brookhollow Riverside – 31,322 SF

lease in 8701 Bedford Euless Road with 777 S Building Investment, LLC. • Wheeler Advertising, Inc. has signed a 7,247 SF lease in 624 Six Flags Drive with Albany Road Real Estate Partners.

15

NORTH FORT WORTH SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

148,995

73,392

11,658

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

5.5%

10.7%

6.7%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

100,720

283,920

vs. Prev. Qtr

vs. 12 Mths Ago

100,720 Delivered SF Quoted Rates $25.13

200,000

-

vs. Prev. Qtr

vs. 12 Mths Ago

$24.40

$25.20

VITAL STATS

20.0%

250,000

200,000 16.0% 150,000 12.0%

100,000

50,000

8.0%

0 4.0% (50,000) (100,000)

0.0% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • A Texas-based apartment builder, Presidium, has broken ground on a major rental community near the AllianceTexas development in North Fort Worth. The developers hope to feed off the success of the Alliance Town Center mixed-use project. “Corporate relocations and expansions are driving the demand for high-end multifamily communities in North Fort Worth,” John Griggs, co-founder and co-CEO of Presidium, said in a statement. “Residents will enjoy a modern, technologically advanced living experience at Revelstoke, which was designed with a contemporary architectural approach to create a luxurious lifestyle for residents.”

• Dallas’ Staubach Capital and Irving-based developer Realty Capital are teaming up to build an office campus north of Downtown Fort Worth in Flower Mound. The Lakeside International Office Center will have two (2) buildings with nearly 130K SF of space on Lakeside Parkway near International Parkway. The largest of the projects will be a four-story, 120K SF office building.

Flower Mound has seen a direct benefit from the several corporate relocations that North Fort Worth has recently seen. “Flower Mound has established itself as an attractive area for new residents and businesses, with a growing number of shops, restaurants, entertainment and residential options in the Lakeside mixed-use community,” Jeff Staubach, founding partner of Staubach Capital, said in a statement. “Lakeside International Office Center will be the first of its kind in this part of the Metroplex, providing a premium office experience with top-of-class amenities.”

16

TOP LEASE TRANSACTIONS • An undisclosed tenant has signed a 25K SF lease in 3575 Lone Star Circle.

• Arlington Cancer Center has signed a 7,680 SF lease int 2800 E Highway 114.

• CIS Group has signed a 7,560 SF lease in 8260 Precinct Line Road.

DEALS IN THE MARKET • 5501 Alliance Gateway Freeway – a 215,125 SF class A office building

• 7001 Boulevard 26 – a 100,442 SF class B office building

• 4000 Fossil Creek Boulevard – a 24,389 SF class B office building

NEW DEVELOPMENTS • 10865 Texas Health Trail – a 60K SF class A office building set to deliver December 2019

• 1700 N White Chapel Boulevard – a 28K SF class B office building set to deliver June 2020 • 320 S Oak Street – a 20K SF class B office building set to deliver December 2019

LARGE EXISTING VACANCIES • The Terrace at Solana – 1,379,781 SF • 2601 Meacham Boulevard – 216,082 SF • 5555 N Beach Street – 163,283 SF • 5501 Alliance Gateway Freeway – 161,336 SF

PRESTON CENTER SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

123,271

(4,217)

79,581

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

10.3%

10.7%

11.4%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

297,000 Delivered SF 118,000 Quoted Rates $42.10

118,000

118,000

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$38.27

$37.21

VITAL STATS

14.0%

150,000

100,000 12.0%

50,000 10.0% 0

8.0% (50,000)

(100,000)

6.0% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

Deliveries

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Vacancy Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Weir’s Plaza, Dallas’ newest development, is being built on the site of the landmark Weir’s Furniture store at Knox and Travis streets on the edge of Highland Park. Legal firm Kirkland & Ellis is taking 65K SF of office space in the tower which officially started construction mid-July.

The 12-story building will have underground parking and retail space, including a new Weir’s Furniture store, on the lower floors. Kirkland & Ellis will occupy the top three floors of the new tower.

TOP LEASE TRANSACTIONS • WeWork has signed a 71.6K SF lease in Weir’s Plaza.

• Kirkland & Ellis has signed a 65K SF lease in Weir’s Plaza.

• Pony Oil has signed a 12K SF lease in 3100 Monticello.

• Edge Natural Resources has signed a 9.9K SF renewal

HLC Deal

and expansion in The Berkshire.

• Site Selection Group has signed an 8.6K SF lease in

DEALS IN THE MARKET • Douglas Center – a 580,340 SF class A three (3) building office complex

NEW DEVELOPMENTS • Weir’s Plaza – a 297K SF class A office building LARGE EXISTING VACANCIES • The Terraces at Douglas Center – 25,067 SF • 8343 Douglas Center – 21,337 SF • Sterling Plaza – 20,339 SF • 8333 Douglas – 20,046 SF • Preston Commons East Tower – 19,943 SF • Preston Commons West Tower – 19,433 SF • Bluffview Towers East – 18,719 SF • 5950 Sherry Lane – 18,481 SF • Sherry Lane Place – 15,700 SF • Highland Park Place – 15,427 SF

The Douglas.

• Stockdale Investment Group has signed a 6.6K SF lease in The Berkshire.

HLC Deal

17

RICHARDSON/PLANO/ALLEN/MCKINNEY SUBMARKET INTELLIGENCE VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

23.0%

437,394

177,020

(251,231)

22.0%

800,000

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

18.4%

19.7%

20.0%

U/C SF 686,207 Delivered SF Quoted Rates $24.12

vs. Prev. Qtr

vs. 12 Mths Ago

338,207

243,000

vs. Prev. Qtr

vs. 12 Mths Ago

190,000

90,938

vs. Prev. Qtr

vs. 12 Mths Ago

$24.37

$24.34

1,000,000

21.0%

600,000

20.0%

400,000

19.0%

200,000

18.0%

0

17 .0%

(200,000)

16.0%

(400,000) 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Buchanan Street and CarVal Investors sold the Richardson Office Center, located at 3001 and 3101 George Bush Turnpike, to Pillar Commercial. Pillar Commercial utilized the Bank of Texas to finance their acquisition in a funding deal arranged

by CBRE. The two (2) building office center has a combined 240K SF and was built in the late 1990’s. This is Pillar’s second recent purchase in the Richardson area as they had previously acquired the 121K SF Telecom Parkway office building earlier this year.

• California based West Coast University (WCU) is moving its campus from Dallas to the 2323 North Central building in Richardson. The 3-story office building, owned by KDC, was built in 1985 and is 136K SF. The building used to be the offices for watch and accessory firm Fossil as well as Citicorp. The university plans to put its Texas nursing and health care school in the new office campus. Currently, WCU occupies 60K SF at 8435 N. Stemmons Freeway near Love Field. They believe that this move is a long-term investment so they can build the best campus for their Dallas students.

TOP LEASE TRANSACTIONS • Cloud Communications has signed a 107K SF lease in Legacy Central.

• Electronic Transaction Consultants Corporation has signed a 32K SF lease in 1600 N Collins Boulevard.

• WorkSuites has signed a 20K SF lease in Allen Place.

• National Warranty has signed a 15K SF lease in 3001 E Plano Parkway.

• CipherLabs USA has signed a 13K SF lease in Jupiter Business Park.

• Othon, Inc. has signed a 5.8K SF lease in One Lake Park.

• PHA Consulting Engineers has signed a 5.3K SF lease in Corporate Place of Richardson.

• Doyle & Associates has signed a 5K SF lease at Palisades II. • Noblis Rehabilitation Partners LLC has signed a 3.6K SF lease in Allen Place.

• Strategic Construction has signed a 3.3K SF lease in The Tower Lakeside campus.

18

DEALS IN THE MARKET • Lakeside Campus – an 813,298 SF class A two (2) building office complex • 7920 Belt Line – a 185,372 SF class B office building

NEW DEVELOPMENTS • Legacy Central 5 at Chase Oaks Boulevard – 300K SF • One Bethany West – 200K SF

LARGE EXISTING VACANCIES • • • • • • • •

601 Data – 433,435 SF Legacy Central 2 – 310K SF 465 Independence Parkway – 251,347 SF Creekview Corporate Center II – 209,600 SF Campbell Glenn II – 205,816 SF Wilcox Center – 186,244 SF Turnpike Commons – 176,831 SF Lookout Park I – 156,219 SF

SOUTHWESTINTELLIGENCE FORT WORTH SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(27,152)

27,920

102,191

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

10.4%

10.1%

8.7%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

104,365

129,794

vs. Prev. Qtr

vs. 12 Mths Ago

126,682 Delivered SF 21,283 Quoted Rates $24.40

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$24.32

$23.69

VITAL STATS

12.0%

200,000

150,000

11.0%

100,000 10.0% 50,000 9.0% 0 8.0%

(50,000)

(100,000)

7.0% 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

Absorption

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

Vacancy Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Clearfork West’s last chunk of land has been handed off

to Fort Worth surgeon, Dr. Nathan Lesley. According to a press release, a $7.9M two-story office building is in the works with the entire second floor planned to be used for Dr. Lesley’s practice. That will leave 10K SF available on the first floor. Dr. Lesley has partnered with Gary Walker of SkyWalker Property Partners on the project. This will leave Cassco, the Edwards family’s development arm since 1954, with 850 acres left to develop. That includes 270 acres earmarked for Clearfork on the northern bank of the Trinity River and 320 for Riverhills on the southern side.

• Burns

& McDonnell, a 100% employee-owned engineering, architecture, and construction firm, has expanded its office space in Fort Worth and Dallas to accommodate its growing team. The firm has grown 20% locally this year and plans to create another 50 new jobs in Fort Worth, as well as 40 new jobs in Dallas, by 2021. Burns & McDonnell moved from the nineteenth floor to a larger space on the seventh floor in the Pier 1 Imports Building Southwest of Downtown Fort Worth. The move will increase its lease from 22,414 SF to 26,507 SF, creating additional space to accommodate nearly 150 employees. Burns & McDonnell plan to continue hiring engineers, architects, and construction professionals to support energy, power, aviation, federal, and municipal clients.

• Transwestern Investment Group has sold a seven-

story office building in Fort Worth. The University of North Texas System in Denton purchased the 122,828 SF property. The class A office building at 550 Bailey Avenue was home to Bombay Co., a home furnishings company. The company shuttered in 2008, eventually relaunching, but moved out of the building. The building then underwent a major renovation from 2008 to 2009 and now features a three-story lobby with glass, stone and bamboo accents, covered parking, and renovated common spaces and elevators.

TOP LEASE TRANSACTIONS • Burns & McDonnell has signed a 26,507 SF lease in 101 Pier 1 Place.

• Compass Real Estate has signed a 6,258 SF lease in 5049 Edwards Ranch Road.

• Baylor Family Medicine has signed a 5K SF lease in 6420 Altamesa Boulevard.

DEALS IN THE MARKET • 1212 Lancaster Avenue – a 89,632 SF class B office building

• 401-403 S Jim Wright Freeway – a 43,463 SF class B office building

• 108 South Freeway – a 35,302 SF class B office complex building

NEW DEVELOPMENTS • 5668 Edwards Ranch – a 27,312 SF class A office building set to deliver December 2019

• 464 Bailey Avenue – a 22K SF class A office building set to deliver October 2020 • 451 South Main Street – a 15,500 SF class B office building set to deliver December 2019

LARGE EXISTING VACANCIES • Pier 1 Imports Building – 160,042 SF class A sublease vacancy • One Ridgmar Centre – 45,513 SF class A vacancy • Western Place I – 22,226 SF class B vacancy • Summit Office Park – 15,637 SF class B vacancy

19

STEMMONS SUBMARKET INTELLIGENCE VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

27.5%

(30,362)

22,022

(86,029)

27.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

26.5%

24.0%

23.8%

24.9%

26.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

25.5%

200,000

17,946

-

25.0%

100,000

17,946 Delivered SF Quoted Rates $17.80

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$17.13

$16.90

500,000

400,000 300,000

24.5%

0

24.0% (100,000)

23.5% 23.0%

(200,000) 3Q 16

4Q 16

1Q 17

2Q 17

Absorption

3Q 17

4Q 17

1Q 18

2Q 18

Deliveries

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Vacancy Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • The 1600 Viceroy office building hit the market this past quarter. The 214K SF class A building overlooks the exclusive Brook Hollow Golf Club and is 100% leased with major tenants including Freeman and VNA Texas.

The building is located in a rapidly evolving and growing neighborhood that includes both the 390-acre Dallas Medical District Complex and Dallas Love Field Airport.

Currently, the rates at the building are 34% below market rents of $14NNN and 81% of the leases are expiring over the next two (2) years. It is believed that with the building’s location, low rents, and lease expirations there is an exceptional investment opportunity in the Stemmons marketplace.

TOP LEASE TRANSACTIONS • Luxury Events on the Lake has signed an 11.2K SF lease in 2152 W Northwest Highway.

• Kraft & Associates has signed a 6.9K SF lease in Trinity Towers.

• JamBox National has signed a 3K SF lease in 921 N Riverfront.

20

DEALS IN THE MARKET • Mockingbird Towers – a 448,377 SF class A two (2) building office complex

• 1600 Viceroy – a 214,341 SF class A office building NEW DEVELOPMENTS No new developments are currently under construction.

However, three have been proposed: • 2345 Mockingbird Lane/West Love – 1M SF • The Design District Tower – 243,100 SF • 141 Glass Street – 65K SF

LARGE EXISTING VACANCIES • Pegasus Place/The Tower – 518,656 SF • 1430 & 1440 Empire Central Drive – 320K SF • The Connection at 8600 – 200K SF • 9999 Technology Boulevard W – 150,272 SF • Comerica Service Center – 142,600 SF • 8777 N Stemmons Freeway – Tower II – 98,474 SF • Ricchi Towers/South – 90,626 SF • 7800 Ricchi Tower – 82,492 SF • Trinity Towers – 79,028 SF • 3000 Pegasus Park Drive Building 2 – 67,558 SF • Infomart Freeway – 65,888 SF

SUBMARKETUPTOWN INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

20.0%

244,716

(94,751)

105,041

18.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

15.6%

17.3%

15.2%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

321,098

686,548

vs. Prev. Qtr

vs. 12 Mths Ago

-

130,000

vs. Prev. Qtr

vs. 12 Mths Ago

$39.96

$39.49

747,538 Delivered SF 231,098 Quoted Rates $40.31

VITAL STATS

600,000

400,000

14.0%

200,000

12.0% 10.0%

0

8.0% (200,000)

6.0% 4.0%

(400,000)

2.0% 0.0%

(600,000) 3Q 16

4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

Vacancy

Source: CoStar 3Q 2019 Office Report

CURRENT EVENTS • Construction for the 15-story, 365K SF Victory Commons building started this quarter. Hillwood has teamed up with USAA to develop this project at the northwest corner of Victory Park. The lot has been used as a surface lot for the American Airlines Center. Construction is expected to be complete mid-2021.

• Uptown’s first mixed-use development, The Quadrangle, has plans for redevelopment. The property, which was purchased by Stream Realty Partners earlier this year, will be adding a 12-story office building and additional retail space. Originally built in 1966, the 4-acre project has not seen significant redevelopment since the mid1980s when the 130K SF office building was added. The new 335K SF office building, designed by Omniplan, will replace an existing section of retail space on Howell Street.

They expect construction to begin middle of 2020 and be complete by 2022.

• Developer Harwood International has purchased Citymark on the Katy Trail located at 3100 McKinnon Street in Uptown. The 11-story building, built in 1985, sits on 3.7 acres of land at the south entrance of the Dallas North Tollway and has a four-level parking garage. The building is 226K SF and is 75% leased with tenants including Balfour Beatty, Bradford Commercial, The Real Estate Council, and Lucid Energy.

• Broad Street Real Estate Credit Partners III, an investment fund managed by Goldman Sachs’ merchant banking division, secured a $128.3M construction loan for The Link at Uptown. The Link project is a proposed 25-story 300K SF luxury office building located at 2601 Olive Street in the heart of Dallas’ competitive Uptown market. Kaizen Development Partners demolished an aging building at the beginning of the summer and after securing the construction loan, they will begin development on The Link. Kaizen Development Partners has roughly 500K SF of new office space under construction between The Link at Uptown and One Bethany East at Watters Creek in Allen.

TOP LEASE TRANSACTIONS • Reed Smith Law Firm has signed a 49K SF lease in Harwood No. 10.

• Bluebeam Inc. has signed a 20K SF lease in One McKinney.

• Kimball Furniture has signed a 6K SF lease in The Union.

• ISC Group Inc has signed a 5.9K SF renewal in 3500 Oak Lawn.

• PrimeLending has signed a 4.1K SF renewal in 3500 Oak Lawn.

HLC Deal

HLC Deal

DEALS IN THE MARKET • The Union – a 505,688 SF class A office building • One and Two Oak Lawn – a 122,645 SF class B office complex

NEW DEVELOPMENTS • 2601 Victory Avenue – a 352,203 SF office building with Hillwood • The Link – a 292,805 SF office building with Kaizen

LARGE EXISTING VACANCIES • • • • • • •

2501 Cedar Spring – 110,415 SF Rosewood Court – 84,038 SF Harwood No. 10 – 78,907 SF 2100 McKinney – 68,047 SF The Centrum – 64,950 SF PwC Tower – 58,289 SF One McKinney Plaza – 50,180 SF

21

DALLAS

5950 Berkshire Lane Suite 900 Dallas, Texas 75225 T 972.241.8300 F 972.241.7955

FORT WORTH

1200 Summit Avenue Suite 300 Fort Worth, Texas 76102 T 817.710.1110 F 817.810.9017

www.holtlunsford.com

HOUSTON

11451 Katy Freeway Suite 300 Houston, Texas 77079 T 713.850.8500 F 713.850.8550