1Q 2020 DFW Office Market Brief

Market Brief... Dallas/Fort Worth

OFFICE

1Q2020 Property Pictured Above: One Ridgmar Centre, 6500 West Freeway | Fort Worth, Texas 76116

DFW OFFICE MARKET BRIEF 1Q 2020

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 Managing Partner - Leasing Services mcarthey@holtlunsford.com holdenlunsford@holtlunsford.com 817.710.1111 972.381.3218

JOHN DICKENSON

GEOFF SHELTON

DAVID CASON

Managing Principal - Dallas jdickenson@holtlunsford.com 972.421.1971

Managing Principal - Fort Worth gshelton@holtlunsford.com 817.710.1113

Vice President - Fort Worth dcason@holtlunsford.com 817.810.9137

JAMES ENGELS

DAN POND

MASON PRITCHER

JAKE NEAL

MARSHALL MAYS

Market Director - Dallas jengels@holtlunsford.com 972.280.8307

Market Director - Dallas dpond@holtlunsford.com 972.380.3641

Market Director - Dallas mpricher@holtlunsford.com 972.280.8320

Market Associate - Fort Worth jneal@holtlunsford.com 817.284.5555

Market Associate - Fort Worth mmays@holtlunsford.com 817.632.6150

ALAN ROSE

JACK BEARE

AARON DRAPER

Market Associate - Fort Worth arose@holtlunsford.com 817.632.6155

Market Analyst - Dallas jbeare@holtlunsford.com 972.265.0128

Market Analyst - Dallas adraper@holtlunsford.com 972.381.3219

3

NEW LISTING

THE WESTCHESTER

The Westchester: 42,077 SF Class B office building in the Preston Center 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

300 W ARBROOK

300 W Arbrook: 20,727 SF Class B Medical Office building in Arlington, Texas.

6

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

20.00%

19.0%

18.10%

10,000,000

18.00% 17.8%

17.3%

9,000,000

16.00%

8,000,000

14.00%

7,000,000

12.00%

1.2%

0.8% 1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Direct Vacancy

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Sublet Vacancy

4Q 19

6,000,000

10.00%

5,000,000

8.00%

4,000,000

6.00%

3,000,000

4.00%

2,000,000

2.00%

1,000,000

0.00%

0 1Q 17

1Q 20

2Q 17

3Q 17

Total Vacancy

4Q 17

1Q 18

2Q 18

3Q 18

Delivered Inventory

ABSORPTION - OVERALL DFW

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Under Construction

OVERVIEW - OVERALL DFW 20.0%

1,700,000

2,000,000

1,500,000

1,200,000

19.0% 1,000,000

700,000

18.0%

500,000

200,000

0 17.0%

(300,000)

(500,000)

(800,000) 1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

4Q 19

16.0%

1Q 20

(1,000,000) 1Q 17

Total Net Absorption

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

3Q 19

Deliveries

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 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

109

12,670,601

1,885,149

1,988,216

15.7%

(76,551)

0

30,252

$30.79

Dallas CBD

84

29,039,003

7,096,383

7,877,884

27.1%

(436,903)

0

259,230

$26.20

East Dallas

204

8,538,688

1,261,312

1,278,270

15.0%

201,504

0

834,893

$26.15

Far North Dallas

493

53,724,341

9,964,019

11,127,601

20.7%

341,135

255,000

2,524,893

$30.81

Fort Worth CBD

60

9,713,443

1,381,520

1,442,250

14.8%

143,328

0

0

$28.28

Las Colinas

300

37,482,174

6,280,721

6,556,507

17.5%

(680,818)

250,000

611,281

$26.48

LBJ Freeway

168

21,568,943

4,376,617

4,485,606

20.8%

253,772

0

0

$22.85

Lewisville/Denton

178

7,780,243

944,871

957,359

12.3%

46,694

38,066

316,027

$25.05

Mid Cities

435

22,473,158

3,865,434

4,043,900

18.0%

(13,957)

35,518

387,667

$24.07

North Fort Worth

63

3,111,145

204,983

208,649

6.7%

11,344

0

166,800

$26.11

Northeast Fort Worth

54

3,660,709

627,778

627,778

17.1%

(820)

0

0

$22.90

Preston Center

54

4,979,927

540,419

592,509

11.9%

58,722

0

297,000

$39.20

Richardson/Plano

382

31,912,640

6,074,887

6,334,449

19.8%

134,016

52,091

386,007

$24.21

South Fort Worth

241

12,156,040

1,237,264

1,395,048

11.5%

(8,820)

27,312

108,226

$24.23

Southwest Dallas

92

4,160,287

653,836

656,417

15.8%

(47,992)

0

45,000

$23.31

Stemmons Freeway

125

13,340,670

3,269,478

3,269,478

24.5%

(5,534)

0

0

$17.97

Uptown/Turtle Creek

101

13,775,915

1,993,963

2,160,663

15.7%

(186,592)

0

1,198,414

$40.65

3,143

290,087,927

51,658,634

55,002,584

18.7%

(267,472)

657,987

7,165,690

$26.43

Totals

Source: CoStar 1Q 2020 Office Report

8

DALLAS CENTRALINTELLIGENCE BUSINESS DISTRICT SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(436,903)

16,383

(22,795)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

27.1%

25.6%

25.5%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

259,230

60,230

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$25.73

$24.72

259,230 Delivered SF Quoted Rates $26.20

VITAL STATS

28.0%

400,000 300,000 200,000

26.0%

100,000 0 (100,000)

24.0%

(200,000) (300,000) (400,000)

22.0%

(500,000) 1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

Absorption

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • Downtown Dallas’ biggest development project, a

$450M renovation of the First National Bank tower, is nearing completion before the end of 2020. Todd Interests has been working since last year on restoring the 1965 iconic 52-story office tower. The building has been vacant for more than a decade, but after the completion of the renovations the tower will house a 219-room Thompson Hotel, 324 luxury apartments, restaurants, retail, and offices. Along with the development of turning the building into a true mixeduse project, it has also been renamed as The National.

The building has been the largest vacant building in North Texas and is the last of the city’s great skyscrapers to be repurposed.

• Heitman Financial, a Chicago-based real estate

investment firm, has acquired downtown Dallas’ Saint Paul Place. The 22-story office tower was built in 1983, but more recently has completed renovations in 1Q 2017. The 273K SF building is currently 88% leased to major tenants including Metabank, Haas Petroleum Engineering, Hankinson LLP, and Crowe LLP. The building was refinanced with a $56.5M loan from Metropolitan Life Insurance. The sale of Saint Paul Place is the latest in a string of downtown high-rise transactions including KPMG Plaza and One AT&T Place.

TOP LEASE TRANSACTIONS • TripActions has signed an 88.3K SF lease in Renaissance Tower.

• Goldman Sachs has signed a 43K SF expansion in Trammell Crow Center.

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

• Schuler Shook has signed a 7.4K SF lease in Republic Center.

• Rouch Architects LLC has signed a 5.2K SF sublease in Fountain Place.

NEW DEVLOPMENTS • 300 Pearl | 300 S Pearl Expressway – 199K SF LARGE EXISTING VACANCIES • Fountain Place | 1445 Ross Avenue – 584,895 SF • Bank of America Plaza | 901 Main Street – 314,729 SF • Thanksgiving Tower | 1601 Elm Street – 246,821 SF • 1700 Pacific | 1700 Pacific Avenue – 234,441 SF • One Main | 1201 Main Street – 162,809 SF • Comerica Bank Tower | 1717 Main Street – 153,745 SF • Harwood Center | 1999 Bryan Street – 152,030 SF

9

CENTRAL INTELLIGENCE EXPRESSWAY SUBMARKET VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

18.0%

(76,551)

(11,702)

159,410

17.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

15.7%

16.7%

15.9%

15.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

14.0%

(50,000)

30,252

-

13.0%

(100,000)

vs. Prev. Qtr

vs. 12 Mths Ago

-

39,625

vs. Prev. Qtr

vs. 12 Mths Ago

$30.41

$28.69

30,252 Delivered SF Quoted Rates $30.79

200,000 150,000 100,000 50,000 0

(150,000)

12.0%

(200,000) 11.0%

(250,000)

10.0%

(300,000) 1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

Absorption

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • 6500 Greenville has been acquired by Lilium GVP LLC, a partnership based out of Addison. The seven-story, 114K SF office building was built in 1981. The building is located at Greenville Avenue and Northwest Highway just across the street from Campbell Centre. Pillar Commercial sold the building after owning it since 2016.

• ICM Asset Management, a Canadian-based firm, has acquired One Glen Lakes. The building is located at 8140 Walnut Hill just east of Central Expressway.

The 169K SF building was built in 1984 and is currently 68.5% leased. Major tenants in the building include Camelot Communications, Morning Star Tours, and Texas Health Resources. The new owners have plans to renovate the building’s common areas, entrances, and amenities, as well as upgrade the HVAC systems.

This purchase is ICM’s second recent Dallas-area acquisition after they invested in Campbell Creek Pavilion, a five-building office complex in Richardson.

10

TOP LEASE TRANSACTIONS • U.S. Secret Service has signed a 7.7K SF lease in 10000 HLC Deal

NCX.

• Texas Women’s Foundation has signed a 6K SF expansion in Campbell Centre.

• High-Speed-Railway Integration Corp. has signed a 5.5K SF lease in Cityplace Tower.

• Ruther & Reynolds has signed a 2.7K SF lease in 4131

HLC Deal

NCX.

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

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

NEW DEVELOPMENTS • 5217 McKinney – a 32,900 SF class A office building LARGE EXISTING VACANCIES • Eighty-Eighty Central – 101,019 SF • Two Energy Square – 98,600 SF • Cityplace Tower – 90,265 SF • The Pyramids at Park Lane – 59,070 SF • 8750 N Central Expressway – 51,517 SF • Walnut Glen Tower – 43,209 SF • The Exall – 39,209 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

137,867

638,444

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

20.7%

21.0%

20.2%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,226,433

1,706,189

vs. Prev. Qtr

vs. 12 Mths Ago

206,594

486,894

vs. Prev. Qtr

vs. 12 Mths Ago

$29.37

$29.30

341,135

2,524,893 Delivered SF 255,000 Quoted Rates $30.81

VITAL STATS

22.0%

1,000,000 800,000

21.0% 600,000 400,000

20.0%

200,000 19.0%

0 (200,000)

18.0% (400,000) 17.0%

(600,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • Cawley Partners has acquired Rent-A-Center’s corporate headquarters building in the Legacy Business Park. The 169K SF office complex is located on Headquarters Drive, east of the North Dallas Tollway. The three-story building was built in 2007 and includes amenities such as a fitness center, an employee dining area, a lounge, and an outdoor courtyard. The sale of the 17-acre campus also includes four acres of developable land. Rent-A-Center plans to lease back about half of the building for the next 10 years following the sale.

• VanTrust Real Estate is prepared to start construction of The Offices Three at Frisco Station. The 210K SF speculative office building is set to become the third office building constructed in the $1.8B Frisco Station mixed-use development. The building is set to begin construction at the end of April 2020 and it is estimated that it will be completed late 2021. Dallas architect, HKS, will design the office project and Manhattan Construction will be the general contractor. The new building will include amenities such as a fitness center, conference center, and tenant lounge.

• SHB Development Co. is in the process of building a new office project called Bent Tree at the Parkway. The 48K SF two-story building is expected to deliver in April. The building is located off the North Dallas Tollway just south of Knoll Trail Drive. The building’s location and anticipated contemporary buildout will attract a variety of tenants looking for brand new office space in the desirable Quorum Bent Tree market.

• Dallas Cowboys owner, Jerry Jones, is almost set to begin construction on the next office building in the Star development in Frisco. The plan is to build an 11-story tower, containing roughly 327K SF of office space.

The building and an adjoining six-story, 1,200-car parking garage will be built on the west side of the North Dallas Tollway next to the new Twelve Cowboys Way apartment tower. This new tower will be the third office building in the Star project designed by Dallas architect HKS. Blue Star Land is still waiting for approval from the city of Frisco before construction can begin.

TOP LEASE TRANSACTIONS • Reata Pharmaceuticals has signed a 122K SF sublease in The Campus at Legacy I. • Addus HomeCare has signed a 75K SF lease in Offices Two at Frisco Station.

• Appen Inc. has signed a 50K SF lease in APEX. • Splunk, Inc. has signed a 28K SF expansion in Gateway at Legacy.

• Taylor Morrison Home Corp. has signed a 25.9K SF lease in Stonebrook Business Park.

• Oceans Healthcare LLC has signed a 15.1K SF sublease in The Campus at Legacy.

• All My Sons Moving Co. has signed a 15K SF lease in Chenault Court.

• Ameriprise Financial has signed a 15K SF renewal in Gateway at Legacy.

• Tanium has signed a 13K SF lease in Spectrum Center.

• Omnisys has signed a 13K SF lease in Tollway Plaza North.

• DoctorLogic has signed a 12K SF sublease in Tollway North Office Park.

HLC Deal • EvanTell, Inc. has signed a 3.6K SF lease in 17110 N Dallas Pky. HLC • DocShop Pro, LLC has signed a 3.1K SF lease in Preston Grove.

Deal HLC • Ray Levy PhD PC & Associates has signed a 2.8K SF lease in 17110 N Deal Dallas Pky. HLC • Eagle Retirement has signed a 2.6K SF renewal in Tollway Towers Deal East.

HLC • Savannah Developers has signed a 1.8K SF renewal in Tollway Towers.

Deal HLC • Ascend Commercial Real Estate has signed a 1.4K SF lease in Liberty Deal Plaza I.

DEALS IN THE MARKET • Spectrum Center – a 613,858 SF class A office building • Stanford Corporate Center – a 333,023 SF class A two (2) building office complex • 2700 Plano Parkway – a 250,000 SF class B office building • Tower at Frisco Square – a 175,184 SF class A office building

NEW DEVELOPMENTS • • • • • •

Hall of Fame Lane – a 350K SF office building NWC Dallas Parkway & Cowboys Way – a 300K SF office building 5301 Headquarters – a 248,662 SF office building 5844 John Hickman Parkway – a 210,429 SF office building 6201 W Plano Parkway – a 171,334 SF office building 8261 Belleview Drive – a 126,448 SF office building

LARGE EXISTING VACANCIES • • • • • •

5400 Legacy Drive – 373,040 SF The Campus at Legacy West – 370,625 SF 6400 Legacy Drive – 232,619 SF International Plaza II – 231,783 SF Legacy Town Center – 220K SF 4101 International – 205,750 SF

11

FORT WORTH CENTRAL BUSINESS DISTRICT SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

143,328

36,923

(104,771)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.0%

14.8%

16.3%

17.1%

15.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

14.0%

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$27.96

$28.36

Delivered SF Quoted Rates $28.28

VITAL STATS

18.0%

200,000 150,000

17.0%

100,000 50,000 0 (50,000) (100,000)

13.0%

(150,000) 12.0%

(200,000)

11.0%

(250,000)

10.0%

(300,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS Ahead of a long-time proposal to expand the Fort Worth Convention Center by 2026, and thanks to strong market fundamentals over the last five years, a JLL Snapshot reports that more than 500K SF of former office space is contributing to downtown Fort Worth hotel growth. The 16-story, 252-room AC Hotel, scheduled to deliver in 2020, will be the largest new construction hotel in downtown since the 614-room Omni Hotel opened in 2009. Over the following decade, 729 more rooms have been delivered and approximately the same number of rooms are currently under construction.

Development hasn’t only been limited to new construction as over 500K SF of former office space will have been converted for hospitality projects by 2021 across four properties, three of which are listed on the National Register of Historic Places.

Sundance Square is arguably the city’s most pedestrian-friendly, vibrant and photogenic place — a celebration of Fort Worth’s urban core. But these days, with city and county emergency declarations in place because of the coronavirus, the thriving, 35-square-block section on the north end of downtown Fort Worth resembles a ghost town. The office buildings that serve as workplaces during weekdays are mostly vacant. The clothing shops and music venues are shuttered. The residential buildings are occupied but eerily quiet. So far, none of the restaurant or retail tenants has announced any plans to close up for good — only for as long as the COVID-19 crisis requires.

Mike Micallef, president of the well-known Reata restaurant, is optimistic that pedestrians will once again be soaking up sunshine and sitting next to Sundance Square’s water fountains by summertime.

“I’m not a doctor so I don’t know how long we’re going to have to ‘social distance’ but we’re hoping things will be back to normal by June 1st,” Micallef said in an email.

12

TOP LEASE TRANSACTIONS • Blaise & Hightower LLP has signed a 13K SF lease in The Carnegie.

• Regent Construction group has signed a 5K lease in 1107 E 1st Street.

• Wick Phillips has signed a 3,022 SF lease in Two City Place.

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

LARGE EXISTING VACANCIES • • • • • •

Bank of America Tower – a 124,604 class A vacancy Frost Tower – a 124,604 SF class A vacancy 777 Main – a 80,765 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

vs. 12 Mths Ago

(680,818)

1,759,856

326,318

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

17.5%

15.1%

16.6%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

861,281

2,229,971

vs. Prev. Qtr

vs. 12 Mths Ago

1,410,366

246,400

vs. Prev. Qtr

vs. 12 Mths Ago

$25.89

$25.60

611,281 Delivered SF 250,000 Quoted Rates $26.48

VITAL STATS

18.0%

2,000,000

1,500,000 17.0% 1,000,000

16.0%

500,000

0 15.0% (500,000)

14.0%

(1,000,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • Irving-based 7-Eleven is testing a fully automated, cashierless concept in Irving. For the time being only select popular products will be sold on site including over-the-counter drugs, beverages, and groceries by the AI-style programming that knows how to distinguish individual patrons and their purchases from others in the shop. 7-Eleven also recently announced that it will hire as many as 20K workers to help meet the rising demand from customers during the coronavirus pandemic.

• Ark Group, the developer of Toyota Music Factory, has announced that it would like to increase the amount of office space at the development. Opened in 2018, the initial phase delivered more than 200K SF of retail and restaurant space and a 100K SF office building that was pre-leased to Ethos Group prior to delivery.

NEW DEVELOPMENTS • • • •

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

TOP LEASE TRANSACTIONS • EYM Group has signed a 14,057 SF lease in 450 E John Carpenter Freeway.

• Accessory Boston has signed a 8,141 SF lease in 5260 Valley View Lane.

• TechGlobe, Inc. has signed a 7,500 SF lease in 9901 E Valley Ranch Parkway.

HLC Deal

DEALS IN THE MARKET • 600 E Las Colinas Boulevard – a 512,269 SF class A office building • The Overlook – a 95,510 SF class B office building • 450 E John Carpenter Freeway – a 58,276 SF class B office building

13

LBJ SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

253,772

197,268

(12,754)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

23.0%

20.8%

22.0%

23.4%

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

$22.75

$23.17

Delivered SF Quoted Rates $22.85

VITAL STATS

24.0%

300,000

23.5%

200,000

100,000

0

21.5%

(100,000)

21.0% (200,000)

20.5% 20.0%

(300,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS

• OrbVest US Inc., an investment firm based in Atlanta, has acquired Two Forest Plaza. The 196K SF building is 78% leased with major tenants including New York Life Insurance as well as the headquarters for the La Madeleine restaurant chain. The building was built in 1981 and is located on Merit Drive near Forest Lane and North Central Expressway. OrbVest US Inc. has operations worldwide and specializes in medical office buildings. This specialization is what drew them to Two Forest Plaza as the building is located next to Medical City’s North Dallas campus and is in an area that is seeing significant growth in medical facilities.

• Piedmont Office Realty has acquired Galleria Towers Building Park for approximately $400M. The three-building complex is located at the junction of LBJ and the North Dallas Tollway and combines to almost 1.47M SF of office space. The former owner, CBRE Global Investments, had owned the complex since 2015 and spent roughly $25M on renovations. The three office towers are 88% leased with major tenants including Amazon, Ryan LLC, Ansira Partners, KimleyHorn, and Hospital Corporation of America. The purchase also includes a two-acre building site at Noel and Alpha Roads. The sale of Galleria Towers is the largest property purchase so far in 2020 for the Dallas-Fort Worth market.

• Mohr Capital has recently acquired 4851 LBJ Freeway. The 12-story building is located at the intersection of the North Dallas Tollway and LBJ Freeway. This is the second recent sale at this high-traffic intersection following Piedmont Office Realty’s acquisition of Galleria Towers Building Park. The building was built in 1985 and contains 191K SF of office space. The building is 94% leased to major tenants including The Associated Press, Sulphur River Exploration, NAI Robert Lynn, and Contender Energy.

• JMC Holdings has recently completed its $10M renovation of Lakeside Square. The ownership group acquired the 18-story building at the end of 2018 and, afterward, launched a multi-million-dollar renovation of the office project. The building, built in 1985, is situated near the intersection of LBJ Freeway and North Central Expressway. The building renovations included a lobby redesign, tenant lounge, café & coffee bar, conference facility expansion, fitness center refurbishing, and overall building mechanical system upgrades.

TOP LEASE TRANSACTIONS

• RGN-Dallas IC LLC has signed a 60K SF renewal in Two Lincoln Center.

• FPT Operating Co. has signed a 27.7K SF lease in 4 Park Central.

• Amazon has signed a 20K SF expansion in Two Galleria Tower.

• Integrative Emergency Services has signed an 18.4K SF lease in Heritage One & Two.

14

• Cholla Petroleum has signed an 11.8K SF lease in Three Forest Plaza.

• Wealth Partners Alliance has signed a 5.6K SF lease in Twelve240.

• Cushman & Wakefield’s Leasing Office has signed a 5.3K SF lease in Three Lincoln Centre.

• Cedar Health Research has signed a 5K SF lease in Three Forest Plaza.

• Green Oaks Hospital Subsidiary has signed a 4.1K SF lease in Three Forest Plaza.

HLC • Ranger Business Solutions has signed a 2.5K SF lease in Crosspoint Deal Atrium.

HLC • Ogueri & Associates has signed a 2.1K SF lease in North Central Deal Plaza I.

DEALS IN THE MARKET • • • •

The Centre – a 226,698 SF class B office building 2727 LBJ – a 191,900 SF class B office building 5525 LBJ – a 111,092 SF class B office building Office Alpha – a 101,977 SF class B 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 Pinnacle Tower – 98,412 SF Lake Highlands Tower – 78,867 SF LBJ Tower – 76,447 SF The Crossings II (5501) – 75,099 SF Midtown Office Center – 73,089 SF One Valley View Place – 62,957 SF

MIDINTELLIGENCE CITIES SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(13,957)

112,500

150,271

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

20.0%

18.0%

17.8%

17.5%

19.5%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

19.0%

291,127

252,449

vs. Prev. Qtr

vs. 12 Mths Ago

25,000

-

vs. Prev. Qtr

vs. 12 Mths Ago

$23.50

$22.24

387,667 Delivered SF 35,518 Quoted Rates $24.07

VITAL STATS

21.0%

250,000 200,000

20.5%

150,000 100,000 50,000 0

18.5%

(50,000)

18.0%

(100,000)

17.5%

(150,000)

17.0%

(200,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS The City of Arlington has broken ground on the $550M, 888room Loews Arlington Hotel. 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, 100K SF of retail, entertainment and Spark coworking, and an 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.

TOP LEASE TRANSACTIONS • Six Flags Entertainment Corporation has signed a 40,842 SF lease in 1000 Ballpark Way with Arlington Sports Facilities Development Inc. • Universal North America has signed a 10,247 SF lease in 4300 Centreway Place with American Healthcare Investors.

• PPMG of Texas has signed a 4,084 SF lease in Cedar Ridge Office Park with Varklan LLC.

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

11,344

31,423

(58,225)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

6.7%

7.1%

7.6%

U/C SF 166,800 Delivered SF Quoted Rates $26.11

vs. Prev. Qtr

vs. 12 Mths Ago

83,800

276,800

vs. Prev. Qtr

vs. 12 Mths Ago

60,000

-

vs. Prev. Qtr

vs. 12 Mths Ago

$24.78

$24.79

VITAL STATS

12.0%

250,000

11.0%

200,000

10.0%

150,000

9.0%

100,000

8.0%

50,000

7.0%

0

6.0%

(50,000)

5.0%

(100,000) 1Q 17

2Q 17

3Q 17

4Q 17

1Q 18

2Q 18

3Q 18

Absorption

4Q 18

1Q 19

2Q 19

3Q 19

Deliveries

4Q 19

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS As Charles Schwab’s planned grand opening of it’s new campus in Westlake was postponed, developers are hopeful that projects can continue moving along as scheduled.

Executives with developers of some of the area’s biggest projects, Hillwood and Hines, say they have not experienced a slow down yet.

“This pandemic is obviously a fluid situation and things are changing rapidly,” Schwab spokesman, Peter Greenley, said in an email. “While we have not experienced any related construction delays and our contractor has implemented protocols to adhere to CDC guidelines, we continue to diligently monitor the current situation.”

Officials with the Associated General Contractors of America say they are surveying their construction industry members to begin measuring the impact of coronavirus on ongoing projects. Stephen E. Sandherr, CEO, said the industry is taking steps to prevent the spread of the virus.

Westlake, a suburb in North Fort Worth, is being recognized as one of the hottest luxury real estate markets in the nation. Known for winning the corporate relocation of Charles Schwab, Westlake looks to continue attracting large corporate relocations. Westlake boasts plenty of developable land, a fantastic housing market, and a great school district making it a solid champion for Fort Worth.

Fidelity Investments and Deloitte University also have offices there. Roughly 6K people will be employed at the Westlake office once the second phase of construction is done.

Westlake Mayor Laura Wheat described the town as “an oasis in an ever expanding urban landscape.” Roughly 50% of the town is undeveloped and town leaders have been focused on high-quality developments like Vaquero, the more than 500-acre high-end neighborhood surrounding a luxury golf course. Not far away, Quail Hollow will have around 90 16

luxury home sites. The developer could have planned upwards of 150 lots but chose more acreage, allowing home design to pay close attention to the natural surroundings.

“Design standards like that set the town apart,” Wheat said.

“Our book is not yet written. We get to look around and pick and choose what we want to be. We keep a keen eye to quality.”

TOP LEASE TRANSACTIONS • Consumer Benefits Group has signed a 7,188 SF lease in 5650 N Riverside Drive.

• D Lance has signed a 7,188 SF lease in 5650 N Riverside Drive.

• Peter’s Hope Ministry has signed a 3,120 SF lease in 425 South Hampshire Street.

DEALS IN THE MARKET • 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 • 12550 Willow Springs Road – a 54K SF class B office building set to deliver November 2020

• 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

58,722

(97,891)

(73,889)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

11.9%

13.1%

11.7%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

297,000

118,000

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$39.95

$37.74

297,000 Delivered SF Quoted Rates $39.20

VITAL STATS

15.0%

150,000

100,000

14.0%

50,000 13.0% 0 12.0% (50,000) 11.0%

(100,000)

10.0%

(150,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS KBS REIT has plans to renovate Preston Commons. The threebuilding office complex located on Preston Road is almost 430K SF and is one of the largest buildings 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 interior and exterior renovation. Each building’s lobby will receive a new conference center in addition to the lobby renovations. However, the biggest change will be the buildings’ exterior as ownership wants to create a new park-like experience where the two existing courtyards are today. The outdoor renovations will also include two outdoor conference centers, a kitchen area, and the addition of recreational turf intended to be used for exercise classes.

NEW DEVELOPMENTS • Weir’s Plaza – a 297K SF class A office building LARGE EXISTING VACANCIES • 8343 Douglas at Douglas Center – 21,337 SF • Preston Commons East Tower – 19,943 SF • Preston Commons West Tower – 19,704 SF • Bluffview Towers West – 18,203 SF

TOP LEASE TRANSACTIONS • Regus has signed a 15K SF renewal in Sherry Lane Place.

• Maguire Oil Company has signed a 4.6K SF renewal in The Berkshire.

• ICC Texas has signed a 4.4K SF lease in 5950 Sherry.

• Arkoma has signed a 2.7K SF renewal in The Berkshire.

• Cap Financial has signed a 2.6K SF lease in 5950 Sherry.

• TDA Wellness has signed a 1.4K SF lease in The Berkshire.

HLC Deal

HLC Deal

HLC Deal

17

RICHARDSON/PLANO/ALLEN/MCKINNEY SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

134,016

(515,803)

309,570

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

19.8% U/C SF 386,007 Delivered SF 52,091 Quoted Rates $24.21

20.1%

19.5%

vs. Prev. Qtr

vs. 12 Mths Ago

389,421

198,414

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$23.77

$24.58

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% 16.0%

(600,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • Cope Equities plans to build a new ten-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.

TOP LEASE TRANSACTIONS • InfoVision Inc. has signed a 22K SF lease in Eastside Atrium.

• Aurora Labs Limited has signed a 4K SF lease in Tech Center on Greenville III. • 3E Management LLC has signed a 2.8K SF lease in Palisades II. • Cross Resource Group has signed a 2.5K SF lease in Office Campus at Allen.

DEALS IN THE MARKET • 7920 Belt Line – a 185,372 SF class B office building • 2703 Telecom – a 121,420 SF class B office building

18

NEW DEVELOPMENTS No new developments are currently under construction. However, four have been proposed: • CityLine – 2M SF • 7 CityLine – 417K SF • Legacy Central 5 – 300K SF • One Heritage Creekside – 250K SF

LARGE EXISTING VACANCIES • • • • • • •

601 Data – 423,123 SF 465 Independence Parkway – 251,347 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 – 150K SF

SOUTHWESTINTELLIGENCE FORT WORTH SUBMARKET Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(8,820)

(52,091)

(37,639)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

11.5%

11.2%

10.3%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

135,538

83,900

vs. Prev. Qtr

vs. 12 Mths Ago

-

50,441

vs. Prev. Qtr

vs. 12 Mths Ago

$23.85

$23.90

108,226 Delivered SF 27,312 Quoted Rates $24.23

VITAL STATS

12.0%

120,000 100,000 80,000

11.0%

60,000 40,000

10.0%

20,000 0 9.0%

(20,000) (40,000)

8.0%

(60,000) (80,000)

7.0%

(100,000) 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

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS A new-concept office building is on the way to Fort Worth’s West-Southwest office submarket. The 30K SF class A office building looks to serve as a case study for fully automated parking. If successful, this will provide a new wave of opportunities for land sites that were previously viewed as too small to provide adequate parking. The six-story Triune Centre building is planned to be built southwest of downtown near the intersection of Interstate 30, Montgomery Street and Chisholm Trail Parkway. According to the building’s developers, Cornerstone Projects Group and Trident Structures, the 30K SF project’s fully automated, robotic, palleted vehicle handling system will offer a valet-style parking service. This concept is not something necessarily new to the U.S. but still is not nearly as common as it is in Europe and Asia’s metropolitan cities.

The huge Walsh community west of Fort Worth, Lake Park, is adding a new phase of construction. The residential addition will include a neighborhood of 388 homes and a large green space and lake. Houses in the new Walsh phase will be priced from the $260Ks to more than $800K and will be constructed by builders Britton Homes, David Weekly Homes, Drees Homes, Highland Homes, Perry Homes, Toll Brothers, and Village Homes.

“Homebuyers will appreciate the high-quality designs from builders in Lake Park,” Seth Carpenter, vice president of development at Republic Property Group, said in a statement.

“In this phase we focused on delivering products for families at all stages of life. Today, homebuyers can find a product at a desirable price point that matches their lifestyle while accessing the world-class amenities and award-winning school district that set the community apart.”

TOP LEASE TRANSACTIONS • Northwestern Mutual has signed a 15,637 SF lease in HLC Deal

Summit Office Park.

• Higginbotham has signed a 7,481 SF lease in Summit

HLC Deal

HLC Deal

Office Park.

• Naaman Howell has signed a 6,048 SF lease in Summit Office Park.

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

• 200 Bailey Avenue – a 43,463 SF class B office building NEW DEVELOPMENTS • 464 Bailey Avenue – a 22K SF class A office building set to deliver October 2020

• 5612 Edwards Ranch – a 20,200 SF class B office building set to deliver April 2020

• 451 South Main Street – a 15,235 SF class B office building set to deliver May 2020

LARGE EXISTING VACANCIES • Pier 1 Imports Building – a 186,549 SF class A sublease vacancy

• One Ridgmar Centre – a 56,225 SF class A vacancy • Western Place I – a 22,226 SF class B vacancy

Started in 2015, the 7,200-acre Walsh development is planned to include more than 15K homes and is expected to ultimately have a value of $6B. 19

STEMMONS SUBMARKET INTELLIGENCE Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(5,534)

(73,008)

(35,549)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

24.5%

24.5%

24.2%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

17,946

vs. Prev. Qtr

vs. 12 Mths Ago

Delivered SF Quoted Rates $17.97

-

-

vs. Prev. Qtr

vs. 12 Mths Ago

$17.74

$16.89

VITAL STATS 26.0%

500,000

25.5%

400,000 300,000

25.0%

200,000 24.5% 100,000 24.0% 0 23.5%

(100,000)

23.0%

(200,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

Deliveries

1Q 19

2Q 19

3Q 19

4Q 19

1Q 20

Vacancy

Source: CoStar 1Q 2020 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 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, as well as 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 $5.7 million loan and the firm specializes in acquiring and repositioning older office buildings. Holt Lunsford Commercial has been chosen as the primary leasing company for the property.

• Mockingbird Towers, located at Stemmons and Mockingbird, has sold to Boston-based Albany Road Real Estate Partners. Caddo Holdings sold the two buildings, which are almost 450K SF and are each twelve stories.

Mockingbird Towers are 78% leased, and major tenants include Covance Clinical Research, YKK Corporation, and JetSuite. Albany Road owns other office assets in the Metroplex, including the Centerpoint Office Complex in Arlington, and Hillcrest Tower in East LBJ.

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, three have been proposed: • 2345 Mockingbird Lane/West Love – 1.1M SF • The Design District Tower – 243,100 SF • 2122 W Mockingbird Lane – 158K 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

SUBMARKETUPTOWN INTELLIGENCE VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(186,592)

123,263

(26,499)

16.0%

300,000

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

14.0%

200,000

15.7%

14.3%

16.6%

12.0%

100,000

vs. 12 Mths Ago

10.0%

0

U/C SF 1,198,414 Delivered SF Quoted Rates $40.65

vs. Prev. Qtr 656,774

602,589

vs. Prev. Qtr

vs. 12 Mths Ago

-

34,762

vs. Prev. Qtr

vs. 12 Mths Ago

$40.46

$39.14

18.0%

400,000

8.0%

(100,000)

6.0%

(200,000)

4.0%

(300,000)

2.0%

(400,000)

0.0%

(500,000) 1Q 17

2Q 17

3Q 17

4Q 17

Absorption

1Q 18

2Q 18

3Q 18

4Q 18

1Q 19

2Q 19

Deliveries

3Q 19

4Q 19

1Q 20

Vacancy Source: CoStar 1Q 2020 Office Report

CURRENT EVENTS • Dallas-based developer KDC has plans for a new project that, once complete, will be the tallest office building in the Uptown market. KDC has teamed up with investor group Miyama USA Texas to build a 30-story tower that will be located on Woodall Rogers just overlooking Klyde Warren Park. The 450K SF highrise will be the first phase of the half-block redevelopment.

Plans for the tower include landscaped upper-floor terraces, a wall of greenery facing the park, retail space for either a restaurant or grocery store, as well as parking for almost 1,000 cars. The second phase of the development plans to double the project to a total of 900K SF of office space. Phase one should commence later this year and is estimated to take 24 to 28 months to build.

• Western Securities, a Canadian-based firm, has acquired Hall Street at the Centrum. The 14-story office building is 115K SF and 95.3% leased. Tenants in the building include Moroch Holdings, MAPP Construction, and Alerian. The building was built in 1982 and recently completed renovations in 2018.

• The Union, Uptown’s most successful new development, has been acquired by KB Asset Management (Korean Investor).

The 21-story office tower was constructed in 2019 and includes more than 85K SF of retail space anchored by a Tom Thumb Grocery Store. The property traded for an estimated price of $370M. Goldman Sachs Bank provided a $222M loan to finance the acquisition. The office building is 94% leased and major tenants include Salesforces, Akin Gump Law Firm, and Weaver Accounting. Retail amenities in the sale included the Tom Thumb grocery store, The Henry, North Italia, and TacoLingo.

• Stream Realty Partners acquired Uptown’s landmark Quadrangle retail and office center in 2019 and announced plans for a major renovation. The four-acre mixed-use development project has been renamed “The Quad”. The project’s renovations include the construction of a brand new 12-story office tower and new retail spaces on the two-block property at Howell and Routh. The new office tower is being designed by Omniplan and will be approximately 335K SF. Amenities for the office building will include the top floor “Quad Club”, tenant lounge, conference center, and terrace

overlooking downtown Dallas and Uptown. Stream is also building five retail bungalows with 15K SF of space for food service and restaurant tenants at the corner of the existing shopping center. Construction on the entire mixed-use project is set to start this summer and completion is estimated around late 2022.

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

• RREAF has signed a 7.2K SF renewal in Miyama Parkside.

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

• FH Paschen has signed a 2.5K SF lease in Miyama Parkside.

DEALS IN THE MARKET • 2626 Cole – 120,599 SF class B office building

NEW DEVELOPMENTS • Harwood XII – a 541,640 SF office building • 2601 Victory Avenue – a 364,733 SF office building • The Link – a 292,041 SF office building

LARGE EXISTING VACANCIES • • • • • •

2401 Cedar Springs – 198,925 SF 2501 Cedar Springs – 110,415 SF The Centrum – 95,049 SF 2100 McKinney – 53,978 SF 2000 McKinney – 51,006 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