4Q 2019 DFW Office Market Brief

Market Brief... Dallas/Fort Worth

OFFICE

4Q19 Property Pictured Above: Crosspoint Atrium, 8131 Lyndon B Johnson Freeway | Dallas, Texas 75251

DFW OFFICE MARKET BRIEF 4Q 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

HOLDEN LUNSFORD

Partner/Managing Principal - Fort Worth Partner/Managing Principal - Dallas mcarthey@hlfortworth.com holdenlunsford@hldallas.com 817.710.1111 972.381.3218

JOHN DICKENSON

GEOFF SHELTON

DAVID CASON

Managing Principal - Dallas jdickenson@hldallas.com 972.421.1971

Managing Principal - Fort Worth gshelton@hlfortworth.com 817.710.1113

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

ELDORADO TOWERS

Eldorado Towers: 197,958 SF Class B two building office complex in the Stemmons Submarket.

4

MOXIEBRIDGE PORTFOLIO

NEW LISTING

CityView Corporate Center: 294,236 SF Class B three building complex in the Richardson/Plano Submarket.

Central Five Hundred: 237,626 SF Class A office building in the Richardson/Plano Submarket.

Midtown Office Center: 169,808 SF Class B two building complex in the LBJ Submarket.

5

NEW LISTING

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

6

3909 HULEN

2811 MCKINNEY

NEW LISTING

2811 McKinney: 96,734 SF Class B office building in the Uptown/Turtle Creek Submarket.

7

HLC DFW OFFICE OVERALL MARKET

VACANCY - OVERALL DFW

CONSTRUCTION - OVERALL DFW

18.70%

17.70%

10,000,000

20.00%

9,000,000

18.00% 17.7%

16.9%

8,000,000

16.00%

7,000,000

14.00%

6,000,000

12.00%

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% 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Direct Vacancy

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Sublet Vacancy

3Q 19

4Q 16

4Q 19

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Delivered Inventory

Total Vacancy

ABSORPTION - OVERALL DFW

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Under Construction

OVERVIEW - OVERALL DFW 20.0%

1,600,000

2,500,000

1,400,000

2,000,000

1,200,000

19.0%

1,000,000

1,500,000

800,000

18.0%

600,000

1,000,000

400,000

500,000

200,000

17.0%

0

0

(200,000) (400,000) 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

16.0%

4Q 19

(500,000) 4Q 16

Total Net Absorption

1Q 17

2Q 17

3Q 17

Absorption

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 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

115

13,201,872

1,842,956

1,945,397

14.7%

49,967

39,625

30,252

$30.05

Dallas CBD

84

29,107,708

6,802,189

7,358,847

25.3%

66,055

104,119

259,230

$26.51

East Dallas

204

8,506,080

1,415,448

1,428,115

16.8%

(26,519)

407,710

72,582

$26.61

Far North Dallas

486

52,708,606

10,235,639

11,116,745

21.1%

694,676

743,830

2,117,109

$29.09

Fort Worth CBD

60

9,713,443

1,531,320

1,585,578

16.3%

(59,832)

0

0

$27.53

Las Colinas

299

37,220,604

5,192,364

5,641,534

15.2%

2,104,712

1,621,766

1,121,228

$25.84

LBJ Freeway

169

21,565,118

4,678,861

4,765,330

22.1%

157,866

0

0

$22.28

Lewisville/Denton

176

7,985,592

1,223,714

1,231,994

15.4%

(222,207)

148,428

298,563

$23.45

Mid Cities

433

22,325,101

3,838,724

4,014,658

18.0%

192,241

121,440

201,127

$23.28

North Fort Worth

60

2,999,565

193,450

196,018

6.5%

202,511

260,000

112,800

$25.75

Northeast Fort Worth

54

3,660,488

626,958

626,958

17.1%

514,039

0

0

$22.99

Preston Center

50

4,741,738

549,894

587,587

12.4%

(54,027)

118,000

297,000

$40.27

Richardson/Plano

380

31,619,190

6,115,882

6,427,176

20.3%

114,267

25,000

740,007

$23.59

South Fort Worth

236

12,031,713

1,161,748

1,308,665

10.9%

(53,885)

50,441

104,747

$24.05

Southwest Dallas

91

4,131,603

602,444

605,025

14.6%

20,952

315,000

45,000

$21.63

Stemmons Freeway

125

13,415,669

3,139,472

3,139,472

23.4%

95,494

17,946

200,000

$17.54

Uptown/Turtle Creek

101

13,673,788

1,873,737

2,017,256

14.8%

337,673

355,860

656,774

$40.49

3,123

288,607,878

51,024,800

53,996,355

18.7%

4,133,983

4,329,165

6,256,419

$26.10

Totals

Source: CoStar 4Q 2019 Office Report

8

DALLAS CENTRALINTELLIGENCE BUSINESS DISTRICT SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

94,867

2,142

334,345

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

25.3%

25.6%

25.2%

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

$25.67

$24.95

259,230 Delivered SF Quoted Rates $25.61

VITAL STATS 28.0%

400,000

300,000

26.0%

200,000

100,000

24.0%

0

(100,000)

22.0%

(200,000) 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Absorption

3Q 18

4Q 18

1Q 19

Deliveries

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • Renaissance Tower, one of Dallas’ largest office buildings, has landed a new major tenant. California-based TripActions is taking 88K SF of space in the building. The company is a fast-growing corporate travel management firm. This new lease is one of the largest transactions for downtown Dallas in 2019 and will bring hundreds of new workers to the building.

The firm is moving to Renaissance Tower from 717 Harwood.

The 56-story building contains 1.7M SF of space and is second in size to 72-story Bank of America Plaza. TripActions will be joining major tenants such as Neiman Marcus, Hilltop Securities, and Ernst & Young.

• Downtown’s 60-story office tower, Fountain Place, has completed its $50M renovations. The project was started more than two years ago and the building’s interior looks brand new. Goddard Investment Group undertook this renovation to revamp the building and make it more vibrant.

Yards of dark stone and low ceilings have been replaced with white marble and polished steel ceilings. The renovations include new and striking two-story illuminated glass panels lining the walls of the lobby and a brand-new second floor conference center. More construction is underway surrounding Fountain Place, including the Amli Apartment Tower under development, a new restaurant and retail center across from the fountains, and trees being planted outside the office building.

TOP LEASE TRANSACTIONS • TripActions has signed an 88K SF lease in Renaissance Tower.

• Zelle LLP has signed a 27K SF renewal and expansion in Bank of America Plaza.

• Medecision has signed a 25K SF lease in Ross Tower.

• Commerce Street Holdings has signed a 23K SF lease in Fountain Place.

• Burleson, Pate & Gibson has signed an 11K SF renewal in Founders Square.

NEW DEVELOPMENTS • 300 Pearl | 300 S Pearl Expressway – 199K SF • The Drever | 1401 Elm Street – 60,230 SF

LARGE EXISTING VACANCIES • • • • • • •

Fountain Place | 1445 Ross Avenue – 357,334 SF Bank of America Plaza | 901 Main Street – 314,729 SF Thanksgiving Tower | 1601 Elm Street – 246,027 SF 1700 Pacific | 1700 Pacific Avenue – 234,441 SF One Main | 1201 Main Street – 162,248 SF Comerica Bank Tower | 1717 Main Street – 153,745 SF Harwood Center | 1999 Bryan Street – 152,030 SF

• Masaveu Real Estate has acquired the 18-story KPMG Plaza.

Masaveu Real Estate is a family-owned investment group based in Oviedo, Spain and operates in eight countries. The 450K SF office building, located in the Arts District, has been on the market for the last few months and was expected to sell for almost $240M. Major tenants in the building include Hall Group, KPMG, UMB Bank, and Jackson Walker LLP. KPMG Plaza is the largest of several recent downtown building sales. Earlier this year 1900 Pearl sold for $180M and One AT&T Plaza sold for $96M.

9

CENTRAL INTELLIGENCE EXPRESSWAY SUBMARKET Absorption (5,733)

vs. Prev. Qtr (60,324) vs. Prev. Qtr

vs. 12 Mths Ago

14.7%

14.7%

14.9%

30,252 Delivered SF Quoted Rates $30.05

vs. Prev. Qtr

vs. 12 Mths Ago

-

39,625

vs. Prev. Qtr

vs. 12 Mths Ago

-

18,101

vs. Prev. Qtr

vs. 12 Mths Ago

$29.97

$28.99

200,000

16.0%

41,276

Vacancy U/C SF

VITAL STATS

vs. 12 Mths Ago

150,000

14.0%

100,000

12.0%

50,000

10.0%

0 (50,000)

8.0%

(100,000)

6.0%

(150,000)

4.0%

(200,000)

2.0%

(250,000) (300,000)

0.0% 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • The Energy Square office complex has almost completed its $50M renovations after 14 months of construction. The office towers combine for over 1.1M SF and were built more than 50 years ago. The owners of the complex, GlenStar Properties and USAA Real Estate, reworked the entire block by connecting the high-rises with a new entry drive, landscaped plaza areas, and new shared amenities. New amenities include a large tenant conference center, a 10K SF fitness center, rooftop patios, and multiple outdoor gathering spaces. Each building received a brand-new lobby with large seating areas, fireplaces, and bigscreen TV’s. The building park is currently 80% leased

• Central Expressway’s four (4) building office complex, Campbell Centre, has hit the market. The 873K SF office center is 83% leased to major tenants including Baylor Scott & White, Goranson Bain Ausley, Istation, and Venture X. The building’s current owner, Haberman & Haberman, has just completed renovating the complex. The renovations include a new tenant lounge, redesign of the existing stairs, floor and wall finishes, and the addition of a new grill and coffee bar.

• GlenStar Properties has acquired Central Expressway’s 20-story Premier Place. The tower is located just off of Central near Mockingbird and was built in 1985.

The 458K SF office tower is 93% leased to major tenants including Merrill Lynch, AmWins, Mill Creek Residential, and Goodnight Midstream. The building possesses amenities that include a pedestrian bridge connected to Mockingbird Station retail, a large fitness center, and a parking garage. GlenStar just recently completed renovations at Energy Square and it is believed that they will undergo upgrades at Premier Place as well.

10

TOP LEASE TRANSACTIONS • Lincoln Property Management has signed a 26K SF renewal in Ten 2 Ten.

• Corvel Healthcare Corporation has signed a 13.7K SF

HLC Deal

renewal in 10000 NCX.

• HUB International has signed a 10.6K SF renewal in

HLC Deal

10000 NCX.

• Brian C. Forsythe has signed a 1.7K SF lease in Mockingbird Station.

DEALS IN THE MARKET • Campbell Centre – an 873,378 SF class A four (4) building office complex • Meadow Park Tower – a 251,755 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 260K 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 – 90,265 SF • The Pyramids at Park Lane – 63,467 SF • 8750 N Central Expressway – 51,517 SF • Walnut Glen Tower – 43,209 SF • Three Energy Square – 38,567 SF • 4040 NCX – 38,555 SF

FAR NORTH DALLAS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

19,063

(280,156)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

21.1%

20.6%

20.6%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,088,297

1,393,738

255,790

2,117,109 Delivered SF 205,594 Quoted Rates $29.09

vs. Prev. Qtr

vs. 12 Mths Ago

35,942

16,485

vs. Prev. Qtr

vs. 12 Mths Ago

$29.33

$28.82

VITAL STATS

22.0%

1,000,000

21.0%

800,000

20.0% 600,000 19.0% 400,000

18.0% 17.0%

200,000

16.0% 0 15.0% (200,000)

14.0% 13.0%

(400,000) 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

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • Hudson Peters Commercial has acquired Bent Tree Tower II from Regent Properties. The 8-story building is 166K SF and was built in 1982. Regent has just completed a $4.7M renovation of the property that included, a new exterior color scheme, new entrances, updated lobby and common areas, as well as mechanical upgrades. The building is located just off the Tollway in between Trinity Mills and Keller Springs. Not only does the building’s central location have great highway visibility and accessibility but it also benefits from escalating rents in Frisco-Legacy and Preston Center.

• Despite WeWork’s recent struggles, they are continuing to grow in North Texas. The shared office firm now has 11 offices in the DallasFort Worth Area. The newest addition to WeWork’s portfolio is in the Lincoln Legacy office complex located at 6900 Dallas Parkway.

The more than 53K SF office is built to accommodate more than 900 workers. This is WeWork’s third Plano location, in addition to the Legacy West and Shops at Legacy locations. The co-working firm also has four other locations in Dallas, three in Fort Worth, and one in Irving. Dallas-Fort Worth is one of the country’s fastest growing shared office markets with more than 3M SF of space leased to coworking firms.

• Dallas architecture firm GFF is designing a new multi-purpose pavilion in Plano’s International Business Park for the Billingsley Company, who is developing the project. The new 9.3K SF pavilion will be strategically situated at the center of the new four (4) building development. The proposed office buildings range between 180K and 215K SF. The proposed pavilion will include shared amenities such as a fitness center, conference facilities, and food service. The Billingsley Company has been developing International Business Park since the 1990s and the 300-acre project currently has more than 1.4M SF of existing office space.

• Champion Partners has acquired Keurig Dr Pepper’s regional headquarters campus in Plano. The 262K SF campus located in the Legacy business park went up for sale earlier this year. The 3-story complex was built in 1998 and sits on Legacy Drive just east of the Tollway. Champion Partners bought the complex with a $52M loan from Square Mile Capital Management of New York. The office complex drew a lot of attention from investors interested in repositioning the offices for new major corporate tenants.

TOP LEASE TRANSACTIONS • Paragon Healthcare has signed a 67K SF lease in Apex (3033 W Bush Turnpike).

• WeWork has signed a 53K SF lease in Lincoln Legacy.

• NCR Corporation has signed a 52K SF renewal in Tennyson Office Center.

• Dallas Capital Bank has signed a 28K SF renewal in Centura Tower.

• Thyssen Krupp Elevator Corporation has signed a 25K SF lease in Hall Office Park.

• Fidelity Information Services has signed a 25K SF renewal in One Hanover Park.

• Samsung SDS has signed a 24K SF lease in Apex.

• Healthcare Highways has signed a 19K SF lease in Hall Park-T1.

• Alliant Insurance has signed an 18.4K SF lease in Tollway Plaza North.

HLC • Bellwether Enterprise has signed a 10.3K SF expansion in Tollway Deal Towers South.

• Stifel Financial has signed a 10K SF lease in Frisco Station – The Offices Two. HLC Deal • CAPPS has signed a 5.5K SF renewal in Tollway Towers.

HLC Deal • Advantage Claims Recovery has signed a 4.3K SF expansion and extension in the Atrium Professional Building.

HLC Deal • Evolv Consulting has signed a 2.9K SF lease in Liberty Plaza I.

DEALS IN THE MARKET • Tollway Towers – a 321,578 SF class B office building • 2700 Plano Parkway – a 250K SF class B office building • Tower at Frisco Square – a 175,184 SF class A office building

NEW DEVELOPMENTS • • • • •

5301 Headquarters – a 248,662 SF office building Headquarters II – a 220K SF office building International Business Park – a 179,675 SF office building Village 121 – a 126,448 SF office building Legacy West | Block H – a 105K SF office building

LARGE EXISTING VACANCIES • • • • • •

5400 Legacy Drive – 1,398,456 SF 6105 Tennyson Parkway – 342,064 SF International Plaza II – 386,383 SF The Campus at Legacy West – 370,625 SF 6400 Legacy Drive – 221,191 SF 4101 International – 205,750 SF

11

FORT WORTH CENTRAL BUSINESS DISTRICT SUBMARKET INTELLIGENCE VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

47,306

(11,884)

15,083

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

200,000

16.3%

16.8%

15.7%

15.0%

100,000

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

14.0%

0

-

-

13.0%

(100,000)

vs. Prev. Qtr

vs. 12 Mths Ago

Delivered SF Quoted Rates $27.53

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$27.77

$28.07

18.0%

400,000

17.0%

300,000

12.0%

(200,000)

11.0%

(300,000)

10.0%

(400,000) 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

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS The Fort Worth Chamber of Commerce is excited about the future of Downtown Fort Worth when it comes to residential growth but the commercial side isn’t as clear. The city’s long-term economic development plan relies heavily on attracting new corporate headquarters to Fort Worth with an aggressive goal of landing seven Fortune 1000 companies in the next five years.

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.

“As many as 80 companies are in talks with the Fort Worth Chamber of Commerce about moving or expanding in Fort Worth,” said Chris Strayer, senior vice president of business attraction. “About 40% of those would need office space and downtown has been a target.

But finding large offices available downtown can be challenging”

DEALS IN THE MARKET

There are vacancies in many of the commercial buildings, but they often aren’t contiguous. If a company needs two or more floors of space, the options are limited. Strayer was cautious about saying that because that would mean that Fort Worth needs to build a new office tower.

LARGE EXISTING VACANCIES

“Putting in a new tower is a lot of money, so we have to be cognizant of that,” Strayer said. “Do we have the market? If you ask me, I say yes, but I’m a development guy so I’m optimistic.”

Transportation has been an important topic among the City of Fort Worth, especially in the case of navigating downtown. Parking and the costs associated with it have been one of the biggest hindrances in attracting tenants to Downtown Fort Worth. All this growth downtown will likely lead to more congestion of the city’s central freeways. To prevent that, Chad Edwards, transportation officer for the city, said people may have to re-imagine how they get to work. Additional buses and another rail line are possibilities but the city is looking at other options too. Smart cars linked to the traffic light system will help better time lights. Self-driving cars are already being tested in the Metroplex along with Uber’s air taxis at AllianceTexas.

“I think everything is on the table,” Edwards said. “I think we have to be very flexible with how we view transit of the future.”

12

• 1500 Houston Street – a 42,400 SF class B office building • 904 & 1100 Macon Street – a 41,244 SF two (2) building office complex

• • • • • •

Bank of America Tower - a 124,604 class A vacancy 777 Main – a 80,765 SF class A vacancy Frost Tower - a 68,808 SF class A vacancy Burnett Plaza – a 54,179 SF class A vacancy First on 7th - a 21,583 SF class B vacancy Oil & Gas/Star-Telegram Building – a 15,768 SF class B vacancy

LAS COLINAS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

1,772,839

126,318

50,131

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

15.2%

16.8%

17.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,121,228 Delivered SF 1,375,366 Quoted Rates $25.84

VITAL STATS

vs. 12 Mths Ago

2,531,594

2,336,318

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$26.40

$25.44

17.5%

2,000,000

17.0% 1,500,000 16.5% 16.0%

1,000,000

15.5% 500,000

15.0% 14.5%

0 14.0% 13.5%

(500,000) 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

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • Arlington-based Type Six Development recently received plan approval from Irving’s City Council for a new high-rise project on 5.3 acres at the corner of North o’Connor and Las Colinas Boulevard. Working with the property owner, an affiliate of Dallas’ State Bank of Texas, Type Six Development currently plans to deliver a 10-story, 248-room hotel, a 9-story 225-room hotel, and a 4-story office building with a parking garage. Construction at this prominent corner, flanked by The Music Factory, WaterStreet, and the Irving Convention Center, could start as early as 2Q 2020.

• After selling the initial phase of its Hidden Ridge development, Verizon Corporation is moving forward with plans to build out the next phase. Approved plans from Irving’s planning and zoning commission include six more office, retail and garage buildings on an 8.5-acre site at Hidden Ridge and Green Park drives. The new buildings will include more than 490K SF of office space along with 30K SF of retail.

TOP LEASE TRANSACTIONS • BNSF has signed a 49,472 SF lease in 3200 Olympus Boulevard.

• MedPace has signed a 47,338 SF lease in Cottonwood Office Center.

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

• Informa Exhibitions U.S. has signed a 23,354 SF lease in The Urban Towers.

• Teknion Data Solutions has signed a 17,119 SF lease in the Urban Towers.

• DAWG, Inc. has signed a 11,491 SF lease in 4200 W Royal Lane.

HLC Deal

DEALS IN THE MARKET • 600 E Las Colinas Boulevard – a 512,269 SF class A office building • 2901 Kinwest Parkway – a 185,148 SF class B office building • The Westpoint I – a 150,019 SF class B office building • Fairway Hills | 104 & 106 Decker Court – a 105,556 SF class B two (2) building office complex • Riverside Commons | Building 1 – a 100,661 SF class A office building • The Overlook – a 95,510 SF class B office building • 2100 Valley View Lane – a 61,567 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 • • • • • •

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

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 Royal Ridge III - 123,740 SF Cottonwood Office Center – 118,480 SF 6031 Connection Drive – 109,478 SF 8616 Freeport Parkway – 105,778 SF Park West 2 – 103,649 SF

13

LBJ SUBMARKET INTELLIGENCE Absorption 210,290 Vacancy

vs. Prev. Qtr 17,213 vs. Prev. Qtr

VITAL STATS

vs. 12 Mths Ago (228,887) vs. 12 Mths Ago

23.5%

22.1%

23.1%

23.0%

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

$22.58

$22.48

Delivered SF Quoted Rates $22.28

300,000

23.0%

200,000

100,000

0 21.5% (100,000)

21.0%

(200,000)

20.5%

(300,000)

20.0% 4Q 16

1Q 17

2Q 17

3Q 17

Absorption

4Q 17

1Q 18

2Q 18

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • The high-rise Lincoln Centre complex at LBJ and the Tollway has plans for a major renovation. TIAA has filed permits for more than $8M in upgrades for the highprofile office project. A representative for the property has said it is too early to discuss the details of the renovations, but Lincoln Centre would be joining many other 1980s-era office projects in North Texas that are being upgraded. The office complex has more than 1.6M SF of space and is located on a 33-acre site just across from the Galleria. The complex last underwent a $10M renovation in 2004 before TIAA took over ownership in 2005. TIAA acquired the 500-room Hilton Dallas Lincoln Centre Hotel and they also have plans to add a fourth office tower in addition to the other major renovations.

TOP LEASE TRANSACTIONS • Borden Company Partners LLC has signed a 22K SF lease in Lake Highlands Tower.

• Lochner Lochner has signed a 5.6K SF lease in Park Central 7.

• Subrosmart has signed a 4.8K SF lease in Park Central 7.

• Dragonfly Curb Side Dental has signed a 4.3K lease in Two Metro Square.

• ATCAP Partners has signed a 4K SF renewal in CBS Tower.

• Muscular Dystrophy Association has signed a 3.7K SF renewal in Crosspoint Atrium.

• Manchester Living has signed a 3.5K SF lease in Banner Place North.

• Position One Mortgage has signed a 3.4K SF lease in Merit Tower.

• We Buy Homes in USA LLC has signed a 1.9K SF expansion in Crossings II.

HLC Deal

HLC Deal

14

DEALS IN THE MARKET • Galleria Towers – a 1,418,800 SF class A three (3) building office complex • 4851 LBJ – a 191,281 SF class A office building

NEW DEVELOPMENTS No new developments are currently under construction.

However, four have been proposed:

• Park Heritage – 1.15M SF • Four Lincoln Centre – 400K SF • Park Tower at Dallas Midtown – 376,870 SF • The Inwood at Alpha West – 300K SF LARGE EXISTING VACANCIES • Crosspoint Atrium – 124,798 SF • 5525 Lyndon B Johnson Freeway – 111,092 SF • Pinnacle Tower – 98,412 SF • Lake Highlands Tower – 77,449 SF • LBJ Tower – 76,447 SF • The Crossings II (5501) – 75,099 SF • Lakeside Square – 73,308 SF • One Valley View Place – 62,957 SF

MIDINTELLIGENCE CITIES SUBMARKET Absorption

vs. Prev. Qtr

85,854

(22,767)

109,756

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

18.0%

18.3%

U/C SF

vs. Prev. Qtr

201,127 Delivered SF 25,000 Quoted Rates $23.28

VITAL STATS

vs. 12 Mths Ago 26.0%

250,000

25.0%

200,000

24.0%

150,000

18.3%

23.0%

100,000

vs. 12 Mths Ago

22.0%

50,000

21.0%

0

204,127

153,449

vs. Prev. Qtr

vs. 12 Mths Ago

96,440

56,470

vs. Prev. Qtr

vs. 12 Mths Ago

$23.54

$22.20

20.0%

(50,000)

19.0%

(100,000)

18.0%

(150,000)

17.0%

(200,000) 4Q 16

1Q 17

2Q 17

3Q 17

Absorption

4Q 17

1Q 18

2Q 18

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • In early December the City of Arlington council approved a planned $810M expansion of the Entertainment District.

This expansion will include a new hotel, new convention center, corporate office headquarters, and mixed-use residential building.

• The components of the expansion will consist of a $550M, 888-room Loews Arlington Hotel with 1,500 parking spaces. The hotel will be connected to a new Arlington Convention Center, which will offer 216K SF of meeting and outdoor function space; a mixed-use residential building with 280 units and 100K SF of retail, entertainment and Spark coworking, and incubator space, which will help grow and support small businesses; a planned 200K SF corporate office headquarters in the Arlington Entertainment District; and an additional public garage with 1,900 parking spaces.

• Dury Plaza Hotel is under construction in Arlington. The 9-story 268 room Drury Plaza Hotel is located at the intersection of Center Street and Interstate 30. The hotel will feature an indoor/ outdoor pool and spa, and top floor meeting rooms with views of AT&T Stadium and Globe Life Field.

TOP LEASE TRANSACTIONS • MRO has signed a 20,319 SF lease in 689 Airport Freeway with DFL Properties.

• U.S. Customs and Border Protection has signed a 14,063 SF lease in 150 Westpark Way with Rooker.

• Ascensus has signed a 4,676 SF lease at 700 Highlander with WindStar Properties.

HLC Deal

DEALS IN THE MARKET • Copeland Tower – a 126,628 SF class A office building with Aque Investment Group • 8555 Airport Freeway – a 125,436 SF class B office building with Zerby interests • 1351 E Bardin Road – a 115,490 SF class B office building with Hauck Holdings, LTD • Stadium Place – a 84,327 SF class B office building with Aque Investment group • 3301 Airport Freeway – a 70,949 SF class B office building with SkyWalker Property Partners, Inc.

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 • Brookhollow Riverside – 39K SF • DFW Business Center South Tower – 37,246 SF

15

NORTH FORT WORTH SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

27,881

149,551

38,610

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

6.5%

5.6%

5.1%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

96,800

276,800

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$25.13

$25.55

112,800 Delivered SF 60,000 Quoted Rates $25.75

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% 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Absorption

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • With increasing concerns about the handling of its flourishing growth, the Fort Worth City Council denied a developer’s request to build more homes north of Loop 820, siding with a vocal group of residents who say traffic has become unmanageable in the city’s northern suburbs. The developer, Hanover Property Company, wanted to change the zoning to allow more homes on smaller lots along with an apartment complex on roughly 325 acres at Bonds Ranch and Willow Springs roads. The change would also have eliminated possible commercial development. The traffic problems have been a big hindrance for improving office occupancy in the North Fort Worth submarket. Though city staff recommended the plan and the zoning commission quickly approved the measure in December, the council unanimously denied the change to a thunderous round of applause and a standing ovation from a nearly standing roomonly crowd.

• Financial goliath, Charles Schwab’s plan to move its headquarters from California is a big win for the DallasFort Worth area. It’s an even bigger win for the Circle T Ranch, a development in Westlake, Texas, a suburb in North Fort Worth. That’s where Schwab is already building its more than 1M SF office campus that will eventually house its corporate offices plus thousands of workers for the company after it acquires competitor TD Ameritrade. To put things in perspective, in 1998, Fidelity Investments bought part of the ranch to build a regional office center for thousands of workers that has now grown to 1M SF. In 2008, accounting giant Deloitte bought land at Circle T for its huge university campus which trains thousands of employees. With Schwab’s headquarters headed to the Tarrant County ranch, Circle T’s position as a financial employment center is likely to grow.

16

TOP LEASE TRANSACTIONS • Verizon has signed a 30,933 SF lease in 1301 Solana Boulevard.

• Charis Behavioral Health signed a 11,616 SF lease in 250 W Southlake Boulevard.

• Wells Fargo Advisors has signed a 8,146 SF lease in 550 Reserve Street.

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 • 4701 Boat Club Road – a 31K SF class B office building, set to deliver July 2020

• 1700 N White Chapel Boulevard – a 28K SF class B office building, set to deliver June 2020

LARGE EXISTING VACANCIES • 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

(94,051)

123,371

92,479

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

12.4%

10.4%

9.5%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

297,000

118,000

vs. Prev. Qtr

vs. 12 Mths Ago

118,000

-

vs. Prev. Qtr

vs. 12 Mths Ago

$42.10

$37.78

297,000 Delivered SF Quoted Rates $40.27

VITAL STATS

14.0%

150,000

100,000 12.0% 50,000

0

10.0%

(50,000) 8.0% (100,000)

6.0%

(150,000) 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • Central Market has decided to significantly expand its regional office in North Texas in order to better serve its growing online grocery delivery service. This office expansion comes months after the firm announced it would expand its online grocery delivery business line by adding more than 100 ZIP codes to its service area.

In order to better service the 173 ZIP codes that the grocer delivers to, Central Market has signed an 18.7K SF extension as well as a new 18.7K SF expansion in Bluffview Towers. The 196.4K SF two (2) building complex is 66.9% leased and is currently being marketed for sale.

• KBS REIT has plans to renovate Preston Commons. The three (3) building office complex located on Preston Road is almost 430K SF and is one of the largest in Dallas’ popular Preston Center submarket. The complex is approximately 80% leased with major tenants including JPMorgan, Wells Fargo, and BB&T. The buildings were last renovated in 2010 and again in 2013 when KBS took over ownership. KBS is now planning to spend more than $10M to give the office complex an even bigger renovation, inside and out. Each building’s lobby will be receiving a new conference center in addition to the lobby renovations. However, the biggest change will be the exterior of the buildings, as ownership wants to create a new park-like experience where the two exiting courtyards are today. The outdoor renovations will also include two outdoor conference centers, a kitchen area, as well as adding recreational turf that will be intended to be used for exercise classes.

TOP LEASE TRANSACTIONS • Central Market has signed a 37.4K SF extension and expansion in Bluffview Towers.

• Verdad Resources Holdings, LLC has signed a 10.7K SF lease in 5950 Sherry.

• Libby Sparks has signed a 5.2K SF renewal and

HLC Deal

expansion in The Berkshire.

• Dr. Lyssy has signed a 1.4K SF lease in The Berkshire.

• Americana Partners has signed a 1.4K SF lease in 5950

HLC Deal

Sherry.

• Silverside has signed a 1.1K SF lease in 5944 Luther.

DEALS IN THE MARKET • Bluffview Towers – a 196,356 SF class A two (2) 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 • Sterling Plaza – 20,339 SF • 8333 Douglas – 20,046 SF • Preston Commons East Tower – 19,943 SF • Preston Commons West Tower – 19,704 SF • Highland Park West – 18,997 SF • 5950 Sherry Lane – 18,481 SF • Bluffview Towers West– 18,203 SF • Sherry Lane Place – 15,700 SF • Highland Park Place – 15,427 SF

17

RICHARDSON/PLANO/ALLEN/MCKINNEY SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(531,260)

341,991

(205,720)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

20.3%

18.6%

20.6%

U/C SF 740,007 Delivered SF Quoted Rates $23.59

vs. Prev. Qtr

vs. 12 Mths Ago

692,007

25,000

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$24.02

$24.76

VITAL STATS

23.0%

600,000

22.0%

400,000

21.0%

200,000

20.0% 0 19.0% (200,000)

18.0%

(400,000)

17.0%

(600,000)

16.0% 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

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • The Galatyn Commons of Richardson just landed a new $155M financing loan from RBC. The office park is comprised of four (4) buildings that were built between 1997 and 2000, and combine to total just under 800K SF of space. Spear Street Capital has owned the buildings since 2014 and recently spent $45M to renovate the buildings, adding additional parking, a conference center, and an outdoor plaza with entertainment areas. The properties are fully leased to tenants including Steward Healthcare, Goldman Sachs, Raytheon, and Bank of America. Earlier this year, ownership took the buildings to market but they did not proceed with a deal.

• SRS Distribution, one of the country’s largest and fastestgrowing residential roofing distributors, is moving its corporate headquarters to 7440 SH 121 in McKinney. The proposed builtto-suit office building will be 100K SF and KDC, the building’s developer, expects the project to be delivered in spring 2020.

The project is located within Hub 121, a 22-acre mixed-use development, and costs approximately $16M. Plans for SRS’s building include indoor and outdoor amenities, a conference center, and employee meeting spaces.

• Artha Capital, a Mexico City-based private equity firm, has acquired the four (4) building 2400 N Glenville office complex.

The complex completed renovations in 2018 which included new lobby areas, tenant lounges, conference centers, and other amenities. The campus is located in Richardson’s Telecom Corridor just east of Central Expressway. The 389K SF center is 98.8% leased with major tenants such as Infosys, Berry Appleman and Leiden LLP, and CalAmp. MetLife Real Estate Lending provided more than $60M in debt for this acquisition.

• Cope Equities plans to build a new 10-story office building in Allen. The new tower is part of a development that Cope Equities calls the Gateway Allen at Twin Creeks. Dallas architect Omniplan has designed the proposed high-rise, which will be just south of the Craig Ranch Development in McKinney.

The plans for the office tower include two levels of retail and amenity space, five floors of office, and four levels of residential space on top.

18

TOP LEASE TRANSACTIONS • WorkSuites has signed a 20K SF lease in Allen Place I. • TATA America International Corporation has signed a 17.1K SF lease in Legacy Central 3.

• Safety-Kleen Systems has signed a 16K SF lease in Central Park I. • DFG Energy has signed an 8.1K SF lease in 1301 Arapaho.

• EZURS.com Inc. has signed a 5.2K SF lease in Palisades II. • Pura Vida Contracting has signed a 3.3K SF lease in Campbell Forum.

• Stewart Title has signed a 2.5K SF lease in The Shire at CityLine.

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 – 423,123 SF 465 Independence Parkway – 251,347 SF Waterview 190 – 230,987 SF Creekview Corporate Center II – 209,600 SF Campbell Glenn II – 205,816 SF 2200 George Bush – 176,831 SF Lookout Park I – 156,219 SF Legacy Central 2 – 155K SF

SOUTHWESTINTELLIGENCE FORT WORTH SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(38,821)

(7,884)

(86,514)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

10.9%

10.6%

9.7%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

104,747

111,794

vs. Prev. Qtr

vs. 12 Mths Ago

-

17,000

vs. Prev. Qtr

vs. 12 Mths Ago

$24.40

$23.43

104,747 Delivered SF Quoted Rates $24.05

VITAL STATS 12.0%

150,000

11.0%

100,000

10.0%

50,000

9.0%

0

8.0%

(50,000)

(100,000)

7.0% 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

Vacancy Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • A new redevelopment project is on the way to WestSouthwest Fort Worth. 464 Bailey Avenue is the largest office project in the area since the 130K SF Regions Bank Building was constructed in 2016. Originally, 464 Bailey was designed by Fort Worth architect Preston Geren and built by Byrne Construction in 1954. There will be a big emphasis placed on keeping with the midcentury aesthetic and original building materials with a blend of the old and new. In addition to upgrades and renovations including onsite shower facilities and a second-floor terrace, the property will also undergo significant expansion, nearly doubling the footprint from 12K SF to 22K SF of office space. New developments in the West 7th/Cultural District area include two hotels, a 117-room all-suite extended-stay hotel already under construction and a proposed 250-room dual-branded Hyatt hotel along West 7th Street. As of 3Q 2019, class A office space in the West/Southwest Fort Worth submarket had only 5.1% vacancy, the lowest in Tarrant County and the Dallas-Fort Worth metro.

• The sale of Fort Worth’s historic Farrington Field has placed the surrounding Cultural District at a tipping point and district leaders say it’s time for the diverse interests west of downtown to rethink the locale’s future.

The Fort Worth school district plans to sell most, if not all, of the 32-acre site at the southeast corner of Lancaster Avenue and University Drive. Though a piece of it could be used for the district headquarters, the field itself will be redeveloped, possibly as a business or tech hub. It is at the edge of the Cultural District and offers one of the largest opportunties to develop a contiguous piece of land in the city’s core.

TOP LEASE TRANSACTIONS • PDA Corporation has signed a 22,414 SF lease in 101 Pier 1 Place.

• Abeo has signed a 17,849 SF expansion and extension in

HLC Deal

Overton Centre.

• Goosehead Insurance has signed a 9K SF lease in the Offices at Clearfork.

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

• 3150 McCart Avenue – a 46,292 SF class C office building

• 401-403 S Jim Wright Freeway – a 43,463 SF class B office 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 – a 186,549 SF class A sublease vacancy

• One Ridgmar Centre – a 45,513 SF class A vacancy • Western Place I – a 22,226 SF class B vacancy • Summit Office Park – a 15,637 SF class B vacancy

19

STEMMONS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

37,586

4,398

39,945

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

23.4%

23.7%

24.4%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

200,000 Delivered SF Quoted Rates $17.54

17,946

-

vs. Prev. Qtr

vs. 12 Mths Ago

$17.81

$16.93

VITAL STATS

26.0%

500,000 400,000

25.5%

300,000

25.0%

200,000 24.5% 100,000 24.0%

0

23.5%

(100,000)

23.0%

(200,000) 4Q 16

1Q 17

2Q 17

3Q 17

Absorption

4Q 17

1Q 18

2Q 18

3Q 18

Deliveries

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy

Source: CoStar 4Q 2019 Office Report

CURRENT EVENTS • The Ricchi Group has acquired the former Mary Kay HLC Deal

Headquarters at 8777 N Stemmons Freeway. The 200K SF gold glass two (2) building office complex is now known as Eldorado Towers. The two buildings are eight and five stories tall, and were built in 1976 and 1985. The building’s new owner, Leobardo Trevino, has plans to not only renovate the office complex but also to commemorate Mary Kay. The redevelopment will include adding a gym, a tenant lounge, and redoing the property inside and out.

In order to commemorate Mary Kay, ownership is going to permanently block off her old parking spot with pink paint and a sign with a photo of the car she used to drive.

The Ricchi Group bought the buildings with a $5.7M loan.

The firm specializes in acquiring and repositioning older office buildings. Holt Lunsford Commercial has been chosen as the primary leasing company for the property.

TOP LEASE TRANSACTIONS • AllianceRX Walgreens+PRIME has signed a 95K SF lease in The Connection at 8600.

• Nielsen has signed a 24.5K SF lease in Trinity Towers.

• ADKN Enterprise, LLC. has signed a 4.2K SF lease in

HLC Deal

8737 King George.

• State of Texas has signed a 2.4K SF lease in the Comerica Bank Building.

• Two Maids & A Mop of Dallas has signed a 2.3K SF

HLC Deal

lease in 8737 King George.

20

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

However, two have been proposed:

• 2345 Mockingbird Lane/West Love – 1.1M SF • The Design District Tower – 243,100 SF LARGE EXISTING VACANCIES • Pegasus Place/The Tower – 518,656 SF • 1430 & 1440 Empire Central Drive – 320K SF • 9999 Technology Boulevard W – 150,272 SF • Comerica Service Center – 142,600 SF • The Connection at 8600 – 101,530 SF • Eldorado Towers – Tower II – 98,474 SF • Ricchi Towers/South – 90,626 SF • 7800 Ricchi Tower – 69,588 SF • 3000 Pegasus Park Drive | Building 2 – 67,558 SF • Infomart Freeway – 65,888 SF

SUBMARKETUPTOWN INTELLIGENCE VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

97,973

334,716

159,837

20.0%

400,000

18.0%

300,000

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

14.8%

15.5%

16.6%

U/C SF 656,774 Delivered SF Quoted Rates $40.49

vs. Prev. Qtr

vs. 12 Mths Ago

656,774

355,860

vs. Prev. Qtr

vs. 12 Mths Ago

321,098

-

vs. Prev. Qtr

vs. 12 Mths Ago

$40.31

16.0%

200,000

14.0%

100,000

12.0%

0

10.0% (100,000)

8.0%

(200,000)

6.0%

(300,000)

4.0%

$39.33

2.0%

(400,000)

0.0%

(500,000) 4Q 16

1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Absorption

CURRENT EVENTS • Harwood International has plans to build a new 42-story tower at Caroline and Field street just north of downtown.

The new building will be called Harwood No. 12 and is anticipated to be more than 550K SF of office space. The building currently has an estimated cost of over $100M and will include 15 levels of parking, 20 stories of office space, as well as ground floor retail and restaurants.

There are also plans to create a rooftop restaurant as well. The new skyscraper will be the tallest building in the Uptown area and is being designed by Harwood Design Factory. Harwood International is adding this project to its current construction of an 18-block mixeduse development called Harwood District, as well as finishing up its latest 22-story high-rise called Harwood No. 10.

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

4Q 19

Vacancy Source: CoStar 4Q 2019 Office Report

DEALS IN THE MARKET • The Union – a 505,688 SF class A office building

NEW DEVELOPMENTS • 2601 Victory Avenue – a 364,733 SF office building with Hillwood • The Link – a 292,041 SF office building with Kaizen

LARGE EXISTING VACANCIES • • • • • •

2501 Cedar Springs – 110,415 SF Rosewood Court – 84,038 SF 2100 McKinney – 68,047 SF The Centrum – 64,950 SF 2121 Pearl – 58,289 SF One McKinney Plaza – 50,180 SF

TOP LEASE TRANSACTIONS • DCB|RE has signed a 19.7K SF lease in 2825 Oak Lawn.

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

• Rockefeller Capital Management has signed an 8.1K SF in the Crescent.

• Security National Bank has signed a 4.1K SF lease in The Union.

• Worldwide Express has signed a 3.7K SF lease in Two Turtle Creek.

• MD Progressive Care has signed a 2.2K SF lease in 3500 Oak Lawn.

• Richardson Spine & Sports has signed a 2.1K SF renewal in 3500 Oak Lawn.

• Hotel Brokers of America has signed a 1.5K SF lease in Uptown Tower.

• Lancer Investments has signed a 1.5K SF lease in 3131 McKinney.

• Ronald Trego PhD has signed a 1.3K SF lease in 3500 Oak Lawn.

HLC Deal

HLC Deal

HLC Deal

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