Q2 2022 DFW Office Market Report

OFFICE Q2 2022 MARKET REPORT DALLAS/ FORT WORTH

P ro p er t y : 4131 NCX

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TABLE OF CONTENTS

04

DFW Office Submarket Coverage

05

DFW Office Market Experts

09

DFW Office Facts & Figures

10

Submarket Intelligence

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

04 Q2 2022 DFW OFFICE MARKET REPORT

DFW OFFICE

Submarket Coverage

OTHER SUBMARKETS

TUR

1 FORT WORTH CBD 2 NORTHEAST FORT WORTH 3 PRESTON CENTER 4 UPTOWN/TURTLE CREEK 5 DALLAS CBD 6 STEMMONS FREEWAY 7 LBJ PONDER 8 CENTRAL EXPRESSWAY

DENTON

FAR NORTH DALLAS

McKINNEY PRINCETON

ALLEN/MCKINNEY FRISCO

LEWISVILLE/DENTON

ALLEN

JUSTIN

THE COLONY

BOYD

LEWISVILLE

RICHARDSON/PLANO

NORTH FORT WORTH

PLANO

FLOWER MOUND

WYLIE

ROANOKE

HASLET

CARROLLTON GRAPEVINE

KELLER

COPPELL LAS COLINAS

ADDISON

RICHARDSON

SOUTHLAKE FARMERS BRANCH

DFW INTERNATIONAL AIRPORT

7

GARLAND

ROCKWALL ROWLETT

LAS COLINAS

8

COLLEYVILLE

3

SAGINAW DALLAS LOVE FIELD AIRPORT

BEDFORD EULESS FORT WORTH MEACHAM INTERNATIONAL AIPRORT

RICHLAND HILLS

HURST

WHITE SETTLEMENT

6

IRVING

2

EAST DALLAS

4

MID-CITIES

SUNNYVALE

5

1

DALLAS

MESQUITE

FORT WORTH

FORNEY

GRAND PRAIRIE ARLINGTON

DALLAS EXECUTIVE AIRPORT

BENBROOK DUNCANVILLE

HUTCHINS

CRANDALL

WEST-SOUTHWEST FORT WORTH

CEDAR HILL

DESOTO

LANCASTER

MANSFIELD

SOUTHWEST DALLAS

BURELSON

N

RED OAK

SOUTHEAST FORT WORTH MIDLOTHIAN

WAXAHACHIE

CLEBURNE ENNIS

Q2 2022 DFW OFFICE MARKET REPORT 05

DFW OFFICE

Market Experts

MATT CARTHEY

JOHN DICKENSON

TYLER HOWARTH

DAVID CASON

JAKE NEAL

Partner, Managing Principal Fort Worth mcarthey@holtlunsford.com 817.710.1111

Managing Principal Dallas jdickenson@holtlunsford.com 972.421.1971

Managing Principal Tenant Representation thowarth@holtlunsford.com 972.280.8302

Vice President Fort Worth dcason@holtlunsford.com 817.810.9137

Vice President Fort Worth jneal@holtlunsford.com 817.710.1112

VIC MEYER

HUNTER HEDRICK

QUINN HANFORD

OLIVIA BARNES

JOHN ARMES

Market Director Fort Worth vmeyer@holtlunsford.com 817.710.1113

Market Associate Dallas hhedrick@holtlunsford.com 972.421.1973

Market Associate Dallas qhanford@holtlunsford.com 972.265.0124

Market Associate Dallas obarnes@holtlunsford.com 972.265.0135

Market Analyst Dallas jarmes@holtlunsford.com 972.381.3210

JAMIE CLYDE

HARRISON DAVIS

PAUL HERNANDEZ

CAROLINE HIX

HUDSON SHEETS

Market Analyst Dallas jarmes@holtlunsford.com 972.381.3210

Market Analyst Dallas hdavis@holtlunsford.com 972.421.1974

Market Analyst Dallas phernandez@holtlunsford.com 972.380.3641

Market Analyst Dallas chix@holtlunsford.com 972.421.1961

Market Analyst Dallas hsheets@holtlunsford.com 972.421.1975

ABBY AULDS

CARTER SELLS

Market Analyst Dallas aaulds@holtlunsford.com 214.442.8935

Market Analyst Fort Worth csells@holtlunsford.com 817.632.6153

New Listing

LINCOLN LEGACY TWO A 130,371 RSF Class A Office Building located at the southeast corner of Dallas North Tollway and Tennyson Parkway adjacent to Legacy Town Center.

New Listing

CARPENTER CORPORATE CENTER A 225,000 SF Class A (2) building project along Hwy-114 in Irving.

New Listing

STONELAKE DESIGN DISTRICT Three, newly renovated properties with high-end office space in Dallas’ Design District.

Q2 2022 DFW OFFICE MARKET REPORT 09

Facts & Figures

DFW OFFICE

OVERALL DFW

OVERALL VACANCY

20.0%

4,000,000

20.0% 17.5%

18.0%

3,000,000

16.0%

14.6%

16.0%

16.1%

2,000,000

14.0%

13.9%

12.0%

12.0%

1,000,000

10.0% 0

8.0%

8.0% 6.0%

(1,000,000) 4.0%

4.0%

(2,000,000)

0.0%

1.4%

0.7%

2.0%

(3,000,000) Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q3 20

ABSORPTION

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

0.0%

Q2 22

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q3 20

Q4 20

DIRECT

VACANCY

OVERALL ABSORBTION

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

SUBLET

Q2 22

TOTAL

OVERALL CONSTRUCTION 7,000,000

12,000,000

6,000,000

10,000,000

5,000,000 4,000,000

8,000,000

3,000,000 2,000,000

6,000,000

1,000,000

4,000,000

0 (1,000,000)

2,000,000

(2,000,000) (3,000,000) Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

Q3 20

Q4 20

TOTAL NET

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

DELIVERED

LEASING ACTIVITY

EXISTING INVENTORY SUBMARKET

0

Q2 22

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

UNDER CONSTRUCTION

VACANCY

# BLDGS.

TOTAL RBA

DIRECT SF

TOTAL SF

VAC. %

YTD NET ABSORPTION

YTD DELIVERIES

Dallas CBD

148

35,029,340

8,712,877

9,375,117

26.8%

(485,203)

254,902

386,323

993,723

Central Expressway

251

14,689,878

2,502,301

2,673,823

18.2%

(214,363)

2,218

77,189

757,424

Far North Dallas

1,315

72,857,231

14,123,486

15,462,498

21.2%

1,218,376

1,615,768

0

5,150,221

Fort Worth CBD

121

11,258,761

1,539,761

1,596,142

14.2%

66,321

0

615,062

246,289

Las Colinas

500

44,415,851

7,738,332

8,928,424

20.1%

72,759

330,000

0

2,591,659

LBJ Freeway

259

22,887,450

5,220,070

5,715,340

25.0%

(363,090)

107,000

0

1,449,064

2,931

47,435,429

6,038,538

6,269,019

13.2%

1,910,458

1,528,332

0

1,879,419

North Fort Worth

812

8,373,285

506,025

728,191

8.7%

(185,860)

83,736

0

208,333

Preston Center

176

7,327,466

657,725

679,408

9.3%

301,942

297,000

1,447,052

470,189

Richardson/Plano

839

34,932,185

5,506,965

6,093,333

17.4%

125,638

61,192

0

1,773,963

SW Fort Worth

1,181

17,464,759

1,863,383

1,985,447

11.4%

(135,419)

63,261

186,000

900,969

Stemmons

308

15,761,513

3,228,622

3,361,087

21.3%

161,060

0

109,500

422,479

Uptown/Turtle Creek

301

17,515,624

2,699,574

2,955,940

16.9%

389,007

656,453

0

1,521,862

9,142

349,948,772

60,337,659

65,823,769

18.8%

2,861,626

4,999,862

2,821,126

18,365,594

Mid-Cities

TOTALS

UNDER YTD LEASING CONSTRUCTION SF ACTIVITY

SOURCE: COSTAR Q2 2022 OFFICE REPORT

10 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

DALLAS CBD CURRENT EVENTS Dallas City Council has voted to give New York-based Goldman Sachs over $18 million in economic incentives to bring 5,000 jobs to the city. The Goldman Sachs employees will have an average base salary of at least $90,000. Its new office campus will be a part of Hunt Realty’s 11-acre North End development.

Dallas-based Todd Interests is converting Energy Plaza in Downtown Dallas to apartments and offices.

The landmark 1.3M SF building is one of several downtown office buildings being converted into a combination of residences and business space.

Todd Interests acquires and develops all traditional types of real estate across the country and focuses on assets that are non-institutional in their present condition with some level of financial and functional disparity.

Renaissance Tower, a 56-story, 1.73M SF office building in Downtown Dallas, has been sold to San Antonio-based GrayStreet Partners.

Renaissance Tower is currently less than 60% leased and GrayStreet plans to reimagine the building to serve more than just office users.

Renaissance Tower is the third downtown Dallas skyscraper to recently trade. GrayStreet Partners focuses on identifying high quality, under-performing assets where there are opportunities to re-develop, re-position, or re-price the assets.

The firm’s portfolio totals over 3M SF and includes office, retail, mixed-use, urban land, and parking assets.

Ross Tower has secured four law firm leases accounting for nearly 60K SF. The 45-story, 1.1M SF building located at 500 N Akard Street is owned by HPI, Dallas-based Bandera Ventures, and Second City Real Estate. The building underwent renovations in 2018 which include a modernized lobby, a coffee shop on the ground level, and a new porte-cochere for a revitalized front entrance. Earlier this month, accounting firm Grant Thornton announced it will also be relocating its Dallas office to Ross Tower taking down more than 24K SF.

VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(345,376)

(58,813)

10,055

30.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

25.0%

26.8%

25.8%

24.9%

20.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

15.0%

-

-

254,902

10.0%

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$28.29

$28.35

$27.09

TOP LEASE TRANSACTIONS

300,000 200,000 100,000 0 (100,000) (200,000) (300,000) (400,000) (500,000)

5.0%

(600,000) 0.0%

(700,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES

• Godwin Bowman PC has signed a 24.6K SF lease in Ross Tower.

• Fountain Place | 1445 Ross Avenue – 585,395 SF

• Calloquy has signed a 10.5K SF lease in The Luminary.

• Renaissance Tower | 1201 Elm Street – 534,390 SF

DEALS IN THE MARKET • Plaza of the Americas – a 1,146,524 SF two (2) building office complex with Newmark • The Stack – a 300K SF building with Eastdil Secured • The Luminary – a 104,119 SF building with Cushman & Wakefield

NEW DEVELOPMENTS • Field Street District, Future Phase | 1100 McKinney Avenue – a 722K SF class A office district (proposed) • Field Street Tower | 2012 North Field Street – a 534K SF class A office tower (proposed) • 555 South Pearl | 555 South Pearl Expressway – a 486K SF Class B office tower (proposed) • Two Arts Plaza | 1900 Routh Street – a 283K SF class A office tower (proposed)

• Santander Tower | 1601 Elm Street – 324,411 SF • Bank of America Plaza | 901 Main Street – 314,729 SF • Two Arts Plaza | 1900 Routh Street – 283,153 SF • 1700 Pacific | 1700 Pacific Avenue – 270,822 SF • Bryan Tower | 2001 Bryan Street – 224,916 SF • Chase Tower | 2200 Ross Avenue – 193,102 SF • Harwood Center | 1999 Bryan Street – 187,728 SF • 300 South Pearl Expressway – 183,754 SF • Comerica Bank Tower | 1717 Main Street – 148,025 SF • 2100 Ross Avenue – 136,335 SF • Hilltop Securities Tower | 717 N Harwood Street – 113,187 SF • 1301 Young Street – 107,463 SF

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 11

CENTRAL EXPRESSWAY CURRENT EVENTS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(22,699)

(160,359)

(206,294)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

18.2%

18.1%

17.6%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

2,218

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

30,000

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$34.78

$34.41

$31.97

TOP LEASE TRANSACTIONS • Local & Western of Texas has signed a 3.5K SF renewal in 5445 La Sierra.

HLC DEAL

NEW DEVELOPMENTS • The Central – a 500K SF class A office tower (proposed) • Energy Square 4 – a 400K SF class A office tower (proposed) • The Shops at Park Lane (8010 Park Ln) – a 352K SF class A office tower (proposed) • The Tower at Preston Hollow Village – a 260K SF class A office tower (proposed)

VITAL STATS 20.0%

100,000 50,000

16.0%

0 12.0%

(50,000) (100,000)

8.0%

(150,000) 4.0%

(200,000)

0.0%

(250,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES • 8080 NCX – 100K SF • Cityplace Tower – 94K SF • Walnut Glen Tower – 87K SF

Fenway Capital Advisors (FCA), the new owner of North Dallas’ Campbell Centre Towers (renamed The Gild), is planning major renovations to the standout gold buildings. Planned upgrades include eating and lounging areas inside the building, a linear landscaped park that connects the towers, and a promenade for outdoor seating and food trucks. The buildings were about 80% leased before they were purchased by FCA. Landmark retailer Nieman Marcus may receive over $5 million in incentives from the City of Dallas if it keeps its headquarters in Dallas and retains a minimum of 1,100 full-time jobs in the city by the end of 2023. Nieman Marcus is expected to move its headquarters to CityPlace Tower and would also be required to keep its flagship store downtown.

CityPlace Tower, owned by Dallas-based NexPoint Advisors, is undergoing renovations to be partially converted to a five-star intercontinental hotel, introduce concourse-level food and retail offerings, and add a new fitness center.

12 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

FAR NORTH DALLAS CURRENT EVENTS The Dallas-Fort Worth area is one of the top markets in the country for office building sales so far in 2022. Some of the largest DFW office sales so far in 2022 include the more than $660 million acquisition of the Trammell Crow Center in downtown Dallas; the purchase of the 40-story Bryan Tower downtown; and the $114 million acquisition of the Spectrum Center offices in Addison. The surge in North Texas office building purchases comes as employees are returning to the office after working at home during the pandemic.

New office leasing in North Texas is the best it has been since 2019.

The first-quarter recovery in net office leasing follows big declines in DFW office demand the past two years. Leasing began to rebound in the final months of 2021 and is picking up so far this year. Strong leasing at three new Dallas office buildings, The Stack in Deep Ellum, The Link in Uptown, and Weir’s Plaza near Highland Park, helped boost first-quarter office numbers.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

407,019

(72,112)

161,033

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

21.2%

21.5%

21.2%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

2,191,907

1,994,389

1,677,344

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

231,622

131,638

578,626

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$34.06

$33.83

$32.30

TOP LEASE TRANSACTIONS • CarOffer has signed a 34.9K SF lease in Addison Circle.

• Velvet Taco has signed a 10.6K SF lease in The Commons.

DEALS IN THE MARKET • The Campus at Legacy | 5320 Legacy – a 394,405 SF two (2) building office complex with Newmark • The Princeton – a 377,821 SF office building with Colliers

NEW DEVELOPMENTS • The Link at Fields Frisco | Legacy Drive & PGA Parkway – a 2M SF class A office complex (proposed) • The Offices at The Gate | 4205 Dallas Parkway – a 1M SF class A office complex (proposed) • Tate + Toll | SEC of Warren Parkway & Dallas N Tollway – a 500K SF class A office building (proposed)

VITAL STATS 25.0%

1,250,000

20.0%

750,000

15.0%

250,000

10.0%

(250,000)

5.0%

(750,000)

0.0%

(1,250,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

• 6200 Legacy Drive – a 402K SF class A office building (proposed) • Legacy Union Three | Legacy Circle – a 328K SF class A office building (proposed) • 6301 Headquarters | 6301 Headquarters Drive – a 304K SF class A office building (proposed) • The Star | Phase IV | 17 Cowboys Way – a 299K SF class A office building • Platinum Tower | 6899 Dallas Parkway – a 275K SF class A office building (proposed) • International Business | 6275 W Plano Parkway – a 240K SF class A office building • Fourteen555 – South Building | 14545 North Dallas Parkway – a 239K SF class A office building (proposed) • Plaza at Legacy II | 5465 Legacy Drive – a 200K SF class A office building (proposed)

LARGE EXISTING VACANCIES

• Destination Drive A – a 500K SF class A office building (proposed)

• 5400 Legacy Drive – 1,587,458 SF

• The Tower at Hall Park | 6605 Warren Parkway – a 496K SF class A office building

• The Campus at Legacy – 382,487 SF

• CALWest – 1,071,344 SF • 6100 Reata Pharmaceuticals – 327K SF

• Legacy West Office Tower | SEC Windrose Avenue – a 450K SF class A office building (proposed)

• Legacy Commons – 296,433 SF

• Granite Park Six | 5525 Granite Parkway – a 422K SF class A office building

• 6400 Legacy Drive – 227,577 SF

• Two Legacy West | 7950 Legacy Drive – a 414K SF class A office building (proposed) • Ryan Tower | 8101 Windrose Avenue – a 409K SF class A office building

• 5600 Headquarters Drive – 251,478 SF • 4101 International Parkway – 207,750 SF • The Apex 1 at Legacy – 206,420 SF • The Princeton – 152,445 SF

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 13

FORT WORTH CBD CURRENT EVENTS

VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

115,608

148,201

(47,186)

21.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

18.0%

15.2%

16.2%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

12.0%

-

-

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$28.07

$28.20

$27.64

TOP LEASE TRANSACTIONS

150,000 100,000

14.2%

15.0%

-

200,000

50,000 0 (50,000)

9.0%

(100,000)

6.0%

(150,000) 3.0%

(200,000)

0.0%

(250,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

DELIVERIES

Q3 21

Q4 21

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES

• Merrill Lynch has signed a 21,913 SF lease at 201 Main Street.

• 801 Cherry Street – 237,850 SF class A vacancy

• An undisclosed tenant has signed a 16K SF lease at 201 Main Street.

• 115 West 7th Street – a 186,684 SF class B vacancy

• Manhard Consulting has signed a 6,205 SF lease at 505 Pecan Street.

• 777 Main Street – a 173,603 SF class A vacancy

HLC DEAL

DEALS IN THE MARKET • 115 West 7th Street – a 300,347 SF class B office building (under contract) • 307 West 7th Street – a 283,618 SF class B office building • 500 W 3rd Street – a 234,039 SF class B office building • 1500 Houston Street – a 42,400 SF class C office building (under contract)

• 307 W 7th Street – a 117,714 SF class B vacancy • Bank of America Tower | 301 Commerce Street – a 111,714 SF class A office building • 210 E 7th Street – a 82,226 SF class B vacancy

The Texas A&M University System is one step closer to growing its footprint in Fort Worth.

The system’s board of regents on Thursday added two buildings to its capital plan for a new education and research campus proposed in downtown Fort Worth, one of the fastest-growing cities in the country. The board must add the projects to the construction plan before moving forward with design and ultimately construction. The board agreed to spend $85 million on a law and education building which A&M officials expect to start building next year. Another $85 million was approved for a research and innovation center, which is scheduled to be built in 2024.

With the shroud of the pandemic lifting, downtown Fort Worth is regaining vibrancy with new construction projects, workers returning to offices and activities and events ramping up.

“There are a lot of really good things happening in downtown Fort Worth,” said Andy Taft, president of Downtown Fort Worth Inc. One of the most noticeable changes is the amount of construction underway on projects that have been in the pipeline for a while but were slowed or stalled during the pandemic. Downtown Fort Worth Inc.’s website shows there are currently 28 projects planned or under construction downtown, including high-profile developments such as expansion of the Fort Worth Convention Center and a major expansion of the Texas A&M University System’s law school facilities. Also underway or on the drawing board are 13 residential developments that will add long-anticipated high-rise living opportunities to downtown. Among the residential projects already underway is Deco 969 at 969 Commerce Street, a 27-story high-rise, multifamily development that will offer 302 luxury apartments and penthouses.

The downtown area is expected to have 6,656 residential units in 2023, up from 5,395 in 2020, according to new research from Downtown Fort Worth Inc.

14 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

LAS COLINAS CURRENT EVENTS The first-ever office building in Las Colinas has changed hands. The building was originally the regional office for Allstate Insurance, but most recently housed operations for Vistra. Dallas’ Rosewood Property Co. bought the building and the adjoining vacant property which have already been demolished for a new development.

Further plans for the mixed-use project will be unveiled as the development process continues.

Dallas Developer Billingsley Co. is seeking approval for a proposed 335K SF office building in Cypress Waters where they recently completed another 10-story building. More than 16K people work in Cypress Waters, a 1,000acre master-planned waterfront development with office, multifamily, and retail.

The Urban Towers in the Las Colinas Urban Center has landed Taiwan-based TXOne Networks as a tenant. TXOne Networks is a global cybersecurity firm and its move into Las Colinas establishes their U.S. headquarters. TXOne networks also has offices in Taipei, Tokyo, and the Netherlands. The Urban Towers complex is owned by New York-based Angelo, Gordon & Co. and Parallel Capital Partners.

Builders FirstSource is moving its headquarters from Bryan Tower in Downtown Dallas to 6031 Connection Drive in Las Colinas.

6031 Connection Drive is owned

by Atlanta-based Piedmont Office Realty Trust which is one of the nation’s largest publiclytraded owners of Class A office properties. Piedmont owns eight office assets in the DFW Metroplex.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(253,943)

114,355

(405,861)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

20.1%

19.5%

20.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

1,349,146

1,529,146

966,877

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

180,000

150,000

111,805

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$27.70

$27.20

$27.21

TOP LEASE TRANSACTIONS • AMN Healthcare Services has signed a 90K SF lease in Cypress Waters Office Park at 8840 Cypress Waters Boulevard.

• Ascent Solutions has signed a 33K SF lease in Cypress Waters Office Park at 2999 Olympus Boulevard.

• Pei Wei has signed a 10.7K SF lease in Westway One.

VITAL STATS 25.0%

2,000,000 1,500,000

20.0%

1,000,000 15.0%

500,000 0

10.0%

(500,000) 5.0%

(1,000,000)

0.0%

(1,500,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

• 9650 Locke Street – a 279K SF class A office building (proposed) • 9100 Olympus Boulevard | Building D – a 250K SF class A office park (proposed) • Royal Tower – a 220K SF class A office building (proposed) • NWC I 635 & I 35 – a 200K SF class A office building (proposed)

• Martin Powers has signed a 5.5K SF lease in The Embassy.

• Las Colinas Corporate Center III – a 200K SF class A office building (proposed)

• Care Continuity has signed a 4.9K SF lease in MacArthur Plaza.

LARGE EXISTING VACANCIES

• Texas Mercy Headache & Pain has signed a 1.9K SF lease in Corporate Plaza I.

HLC DEAL

• 6000 Connection – 292K SF • 8900 Freeport Parkway – 268K SF • One MacArthur Ridge – 250K SF

DEALS IN THE MARKET

• Regent Commons – 215K SF

• Fuller Ridge I & II – a 285,656 SF class B office campus

• Intellicenter Dallas – 201K SF

• One Panorama Center – a 208,450 SF building with Colliers

• Browning Place III – 171K SF

• Two Colinas Crossing – a 181,072 SF class A office building

• Freepoint 9 Office Center – 153K SF

• Horizon Way Business Park – 181K SF • Williams Square West – 162K SF • Las Colinas Commons – 151K SF

NEW DEVELOPMENTS

• 6031 Connection Drive – 139K SF

• Project Blue Star – a 1.8M SF class A office park (proposed)

• Las Colinas Corporate Center I – 137K SF

• Freeport Commons – a 1.2M SF class A office park (proposed)

• 450 N Freeport Parkway – 128K SF

• 750 W John Carpenter Freeway | Phase II – a 330K SF class A office building (proposed) • 3300 Olympus – a 300K SF class A office building

• 8840 Cypress Waters Boulevard – 108K SF • 3660 Regent Boulevard – 103K SF

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 15

LBJ CURRENT EVENTS

VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(68,477)

41,106

(239,283)

30.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

25.0%

25.0%

24.7%

23.3%

20.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

15.0%

20,000

20,000

119,000

10.0%

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$25.41

$25.55

$23.99

TOP LEASE TRANSACTIONS • DECA Dental Group has signed a 18.7K SF lease in Park Central 7.

• Uvalle Law Firm has signed a 14.9K SF sublease in Galleria One.

HLC DEAL

• CR Capital, LLC has signed a 3.9K SF lease in Midtown Office Center.

HLC DEAL

• BlackLit has signed a 2.5K SF lease in Midway Urban Village.

HLC DEAL

DEALS IN THE MARKET • Lincoln Centre – a 1,610,273 SF class A office complex • Park Central 7, 8, & 9 – a 845,919 SF class A office complex

300,000 225,000 150,000 75,000 0 (75,000) (150,000) (225,000)

5.0%

(300,000)

0.0%

(375,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

VACANCY

LARGE EXISTING VACANCIES • Park Central 8 – 225,924 SF • 7171 Forest Lane – 180K SF • Three Galleria Tower – 133,888 SF • 5525 LBJ – 120K SF • One Lincoln Centre – 100,501 SF • Pinnacle Tower – 98,412 SF • Northpoint Plaza II – 92,694 SF • Lakeside Square – 72,824 SF • The Hightower – 66,609 SF • Banner Place North – 64,674 SF • Lake Highlands Tower – 56,650 SF • The Crossings II – 57,586 SF • One Galleria Tower – 57,567 SF

NEW DEVELOPMENTS • Park Heritage – 1.15M SF (proposed) • Four Lincoln Centre – 400K SF (proposed) • Park Tower at Dallas Midtown – 376,870 SF (proposed) • The Inwood at Alpha West – 330K SF (proposed)

Q2 22

Element Towers, located on Dallas’ LBJ Freeway, has been sold to California-based Stanton Road Capital. Tenants include Clubcorp, SCA promotions, and Joeris General Contractors. The buildings are roughly 70% leased and have over 670K SF of combined space.

Stanton Road Capital currently owns and operates a commercial property portfolio in excess of 5M SF. Major renovations at Lincoln Centre took more than a year but are paying off with higher occupancy rates. The three office towers had not been upgraded since they were built in 1980.

Recent renovations include an expansive tenant lounge, conference facilities, food services, retail, and an outdoor area for company events. The upgrades have brought new tenants including Slalom Consulting, Anderson Tax, and Bridge Tower which brings occupancy above 80%.

The Meridian office building at 2711 LBJ Freeway in Farmers Branch has been sold to a group of local and out-of-state investors.

The building was sold to investors including Hudson International Group of New York and Dallas’ Maitland Management. The Meridian was built in 1980 with nearly 250K SF of office space and the building is valued for taxes at more than $16 million.

The Farmers Branch building sale adds to a growing list of transactions with Dallas-Fort Worth office properties.

16 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

MID-CITIES CURRENT EVENTS Arlington City Council approved a $15 million grant for the likely new owner of Lincoln Square, a nearly 40-year-old shopping center.

The vote and sale are the latest developments for a shopping center city officials say has declined over the last 20 years. Trademark Property Company CEO Terry Montesi says his company would like to turn the brown-brick shopping center into a better offering of retail, office space and mid-rise apartments. Lincoln Square’s location along Interstate 30 would make the shopping center a powerful regional gateway, he says.

“This is a great piece of real estate that just hasn’t evolved,” Montesi said. “We’ll figure out what needs and wants to be here and, with y’all’s help, direction, and partnership, we think we can do something very special.”

The 30-year agreement requires that Trademark invest at least $150 million into the property in the next six years and collaborate with locals and leaders on redevelopment plans. The company is on the hook for $9 million in grant funding if it fails to meet the agreement requirements. The city drew $14.75 million grant from its Innovative Venture Capital Fund.

Home prices in North Texas and throughout the country have increased significantly in recent months as demand for housing has increased. Dallas’s real estate market is also following this trend.

The active listings for residential homes in the Dallas real estate market increased significantly.

The number of active listings in the Dallas-Fort Worth-Arlington metropolitan region increased by 16.91% while new listings increased by 17.72%, according to the Texas Real Estate Research Center.

Buyers looking to buy a home in the DFW region later this year might find solace in these statistics.

Although the current market is far from “normal” or balanced, let’s be upfront about that fact. In Dallas, it’s still a seller’s market because of the lack of inventory. Even so, buyers should find it a little less difficult in the future thanks to these new developments. Over the next several months, expect the pace of home price rise to decrease. Many big metro regions are already beginning to show signs of this.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

231,688

463,976

214,006

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

13.2%

13.1%

14.6%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

328,724

586,974

1,479,534

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

350,310

404,862

87,590

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$25.10

$25.08

$25.03

TOP LEASE TRANSACTIONS

VITAL STATS 16.0%

2,000,000

1,500,000

12.0%

1,000,000 8.0% 500,000 4.0%

0

0.0%

(500,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

DELIVERIES

Q4 21

Q1 22

Q2 22

VACANCY

NEW DEVELOPMENTS

• Charles Schwab has signed a 52K SF lease at 2050 Roanoke Road.

• 601 State Street – a 143,524 SF class A office building

• An undisclosed Tenant has signed a 15K SF lease at 1301 Solana Boulevard.

• 2170 East Lamar Boulevard – a 61,500 SF class A medical building

• An undisclosed Tenant has signed a 12,177 SF lease at 1521 N Cooper Street.

• 2101 Westpark Court – a 60K SF class A medical office building

• Bufford Suites has signed a 10,038 SF lease at 2225 Avenue J.

DEALS IN THE MARKET • 8555 Airport Freeway – a 127,584 SF class B building • 2505 N State Highway 360 – a 119,424 SF class A building • 500 S Nolen Drive – a 199,075 SF class B building • 2225 E Randol Mill Road – a 87,411 SF class B building • 4001 Airport Freeway – a 85,900 SF class A office building

• 6500 Colleyville Boulevard – a 42,192 SF class B office building

LARGE EXISTING VACANCIES • 4333 Amon Carter Boulevard – a 730,806 SF class A medical building • 4255 Amon Carter Boulevard – a 547,384 SF class A medical building • 2200 W Airfield Drive – a 424,998 SF class B vacancy • 3120 Sabre Drive – a 208,841 SF class A Vacancy • 1900 W KirkwoodBoulevard – a 175,114 SF class A vacancy

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 17

NORTH FORT WORTH CURRENT EVENTS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

31,101

(31,101)

82,104

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

8.7%

8.7%

5.5%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

377,138

268,085

133,966

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

36,104

22,807

65,951

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$28.30

$28.33

$27.03

TOP LEASE TRANSACTIONS • An undisclosed tenant has signed a 23,671 SF lease in 5637 N Tarrant Parkway.

• United Way has signed a 18,331 SF lease at 201 N Rupert Street.

• Robert Wyatt Contracting has signed a 13K SF lease at 3575 Lone Star Circle.

DEALS IN THE MARKET • 201 North Rupert Street – a 35,097 SF class B office building • 8224 White Settlement Road – a 27,716 SF class B office building • 5637 North Tarrant Parkway – a 23,671 SF class B office building • 742 N Jim Wright Freeway – a 11K SF class C industrial live/work unit

NEW DEVELOPMENTS • 9810 Hillwood Parkway – a 135K SF class A office building • Golden Triangle and Alta Vista Road – a 57K SF class B office building • 126000 Willow Springs Road – a 54K SF class A office building • 1242 FM 407 Road – a 10,157 SF class B office building

VITAL STATS 10.0%

250,000 200,000

8.0%

150,000 100,000

6.0%

50,000 0

4.0%

(50,000) (100,000)

2.0%

(150,000) (200,000)

0.0%

(250,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

DELIVERIES

Q3 21

Q4 21

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES • 13650 Heritage Parkway – 164,333 SF Class A vacancy • 13601 Heritage Parkway – 68,399 SF Class A vacancy • 14600 Heritage Parkway - 50K SF class B vacancy (sublease) • 14601 North Freeway – 50K SF Class B vacancy • 4700 Alliance Gateway Freeway – 47,644 SF

Fort Worth government, real estate, and others involved in Panther Island will gather this summer to consider development plans for the area. Officials say they want to revisit existing plans in case they need updating or tweaking.

“Look at the office market,” Michael Bennett, CEO of Bennett Partners Architecture, said. “Since the pandemic, many concepts about the office market have changed as work has changed.

They might not make any changes, but it’s things like that we should consider as we move forward.”

The $1.17 billion flood control project which received major federal funding in January, will have a big economic impact on the city, opening up development or re-development of about 800 acres of property just north of downtown Fort Worth. After a January announcement that Fort Worth’s Panther Island redevelopment project has received $403 million in long-awaited federal funding, Fort Worth Mayor Mattie Parker said the area will be a differentiating factor for the city.

“To be able to develop and double the size of downtown in one of the fastest-growing cities in the country,” Parker said. “I can’t think of another city that can say that right now with that amount of land that’s going to become available.”

Casey Tounget, associate in Transwestern’s Fort Worth office, which has some property listings in the project area, said the development opportunity near downtown “gives Fort Worth an unrivaled opportunity not found in any other major U.S. city.” The largest landowner of land in the Panther Island area is the Tarrant Regional Water District, the coordinator of the Panther Island project. The water district owns over 225 acres, most of that acquired for the bridges, bypass channel and the canals planned for the development, according to the district.

DFW new home sales jumped last month and so did new home prices.

The one less-than-rosy data point for builders was pending new home sales which fell statewide and in North Texas, potentially signaling a slowdown ahead.

In far north Fort Worth, pasture land and rolling hills will be transformed into a new development. Fort Worth city council members signed off on a large new development that will build 1,914 homes near Eagle Mountain Lake.

The Rio Claro development will be located southeast of the intersection of Morris Dido Newark Road and Bonds Ranch Road. It will sit near the proposed Eagle Mountain High School.

Developer PMB Capital Investments is also developing Veale Ranch in southwest Fort Worth, among other developments. Matt Mildren, a partner at PMB Capital Investments, told WFAA the new development in far north Fort Worth will have public parks, open spaces, amenities, fishing ponds and a connected trail system.

18 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

PRESTON CENTER CURRENT EVENTS A mixed-use development in Dallas’ Knox Henderson neighborhood has received approval from the city. Trammell Crow Co. is working with Austin tech billionaire Michael Dell on the Knox Street project which will include luxury residential units, a boutique hotel, retail, offices, and a park. Construction is expected to begin in the second half of 2022 and be fully delivered in early 2025.

VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

150,259

63,619

(34,988)

14.0%

300,000

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

12.0%

250,000

10.0%

9.3%

11.3%

10.4%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

329,066

329,066

626,066

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$40.75

$40.40

$42.64

COMING TO MARKET • Weir’s Plaza – a 250K SF Class A office building

TOP LEASE TRANSACTIONS • RPM Living has signed a 16.4K SF lease in Preston Commons.

• Edge Realty has signed an 11.5K SF renewal in The Berkshire.

HLC DEAL

200,000 150,000

8.0%

100,000 6.0%

50,000

4.0%

0

2.0%

(50,000)

0.0%

(100,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

DELIVERIES

Q4 21

Q1 22

Q2 22

VACANCY

NEW DEVELOPMENTS • 8111 Douglas – a 318K SF class A office building

LARGE EXISTING VACANCIES • Bluffview Towers | West – 56,954 SF

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 19

RICHARDSON/PLANO/ALLEN/MCKINNEY CURRENT EVENTS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(65,026)

104,573

78,979

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

17.4%

17.4%

17.8%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

260,200

267,392

53,000

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

7,192

54,000

8,100

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$23.75

$23.64

$23.72

TOP LEASE TRANSACTIONS

VITAL STATS 19.0%

300,000 150,000

18.0%

0 17.0% (150,000) 16.0% (300,000) 15.0%

(450,000)

14.0%

(600,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

NEW DEVELOPMENTS

• J.C. Penny has signed a 280K SF lease at 6501 Legacy Drive.

• Heritage Creekside Towers – a 1.2M SF class A office park (proposed)

• Texas Health and Human Services has signed a 14.1K SF lease at 1059 S Sherman Street.

• Palisades Central | 2426 N Central Expressway – a 1M SF class A office complex (proposed)

• KW International has signed a 12.5K SF extension and expansion in Central Five Hundred.

• Beacon Square – a 800K SF class A office building (proposed)

HLC DEAL

• Bankers Life has signed a 5.7K SF renewal in Custer Court.

HLC DEAL

• McAlexander Sound, Inc. has signed a 5.7K SF extension in Woodcreek Plaza.

HLC DEAL

• North American Venture Capital has signed a 3.9K SF lease in Woodcreek Plaza.

HLC DEAL

• Ginn Corporation has signed a 3.6K SF lease in CityView Corporate Center.

HLC DEAL

• Datacom Design Group has signed a 1.9K SF renewal in Promenade Tower.

HLC DEAL

• ITRemedy has signed a 1.9K SF lease in Woodcreek Plaza.

• The Campus at CityLine – a 600K SF class A office complex (proposed) • 3661 North Plano – a 533K SF class A office building (proposed) • 3661 North Plano – a 508K SF class A office building (proposed) • Legacy Central 5 – a 300K SF class A office building (proposed) • One Heritage Creekside – a 250K SF class A office building (proposed) • Assembly Park – a 120K SF class a office park

HLC DEAL

• Joblogic-X Corporation has signed a 1.8K SF renewal in CityView Corporate Center.

HLC DEAL

LARGE EXISTING VACANCIES • 601 Data – 423K SF • Galatyn Commons – 215K SF

• White Hydrangea LLC signed a 1.6K SF lease in Central Five Hundred.

• 2200 George Bush – 177K SF

• Boisbrun Hoffman, PLLC. has signed a 1.4K SF lease in CityView Corporate Center.

• Lookout Park I – 156K SF

HLC DEAL

HLC DEAL

• Monoware Studios, LLC has signed a 1.2K SF lease in Central Five Hundred.

HLC DEAL

• Jeremy Scholl has signed a 1.2K SF lease in CityView Corporate Center.

HLC DEAL

DEALS IN THE MARKET • 3400 CityLine – a 313K SF class A office building

• Richardson Commons – 156K SF • 17787 Waterview Parkway – 143K SF • 3400 CityLine – 142K SF • Cardinal Park 8 – 142K SF • Waterview 190 South – 116K SF • Lakeside Centre II – 115K SF • Lookout Park II – 106K SF • Creekview II – 106K SF • The Tower Lakeside Campus – 104K SF • Legacy Central I – 104K SF • 1600 W Plano Parkway – 103K SF • Creekview I – 101K SF

The 3400 CityLine office building In Richardson’s Telecom Corridor is being marketed for sale. The more than 300K SF office campus is in Richardson’s mixed-use $1.5 billion CityLine district on the south side of President George Bush Turnpike at Highway 75. The fivestory office project was developed

by UBS Asset Management and Transwestern Development Co. BOKA Powell designed the project which includes a fitness center, a yoga garden and a parking garage with space for more than 1,000 cars. The building is more than 77% leased to tenants including DXC Technology, Generational Equity and McCarthy Cos. Dallas-based JP Realty Partners, in partnership with Liberty Bankers Insurance, has purchased the Fossil Group’s office campus in Richardson’s telecom corridor from California investor The Swig Co. The campus is over 535K SF with more than nine acres of vacant land. JP Realty Partners has execution experience of over 800 properties in the US, Mexico and Canada.

20 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

SOUTHWEST FORT WORTH CURRENT EVENTS A new development in West Fort Worth could bring 5,000 new homes and take 15 years to complete. The development, which will also include 1,000 acres of prime commercial property, is moving closer to getting off the ground. The project is just south of the Walsh Ranch development and includes the 3,790-acre historic Veale Ranch. Dallas-based PMB Capital Investments purchased the land last August. The ranch property is located east of the company’s Ventana development, an 1,800-home community. The Veale Ranch property is in both Tarrant and Parker counties and is in both the Aledo and Fort Worth school districts. It is about 12 miles west of downtown Fort Worth. The homes in PMB’s nearby Ventana project range from about $400K to over $800K, Baird said. The Veale Ranch homes will probably start around $350K, but because of some of the larger lot sizes and topography could reach from $800K to as much as $1 million at the high end, he said. PMB’s Baird said close to 1,000 acres of the former ranch is expected to be available for commercial development in the Veale Ranch project, most of that just south of Interstate 20 and along a Union Pacific rail line. The Walsh Ranch project, under development, also has about 2,800 acres designated for office and industrial development just north of the rail line.

Transwestern Real Estate Services (TRS) announces FTW Investment Group, LLC has purchased 3880 Hulen, a six-story, 70K SF office building in Fort Worth.

Transwestern’s Kyle Poulson and Gibson Duwe facilitated the transaction on behalf of the seller.

Casey Tounget and Theron Bryant, also of Transwestern, represented the buyer. The sale price was not disclosed. Located south of Arlington Heights, the building has proximity to the Fort Worth Zoo, Texas Christian University and Colonial Country Club. Veritex Community Bank is the anchor tenant at 3880 Hulen. The new owner will also occupy space in the building and is planning property updates.

VITAL STATS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(61,264)

(123,502)

(927)

12.0%

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

10.0%

11.4%

11.0%

10.6%

8.0%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

6.0%

140,604

129,051

93,056

4.0%

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

29,664

-

4,500

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$26.38

$25.87

$25.56

TOP LEASE TRANSACTIONS

250,000 200,000 150,000 100,000 50,000 0 (50,000) (100,000)

2.0%

(150,000)

0.0%

(200,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

DELIVERIES

Q3 21

Q4 21

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES

• Elevate Credit has signed a 73,984 SF renewal at Overton Centre.

• 6100 Western Place – 104,296 SF class B vacancy

• Privia Health has signed a 22,037 SF lease in Western Place.

• 405 West Loop 820 – a 101,043 SF class B vacancy

• Underwood Law has signed a 8,741 SF lease at 600 Bailey.

• 6000 Western Place – a 86,099 SF class B vacancy

HLC DEAL

DEALS IN THE MARKET • 101 South Jim Wright Freeway – a 55K SF class B office building • 108 South Freeway – a 41,427 SF class C office building • 111 Boland Street – a 40,080 SF class A office building

NEW DEVELOPMENTS • The Van Zandt – 111,228 SF class A office building set to deliver December 2023 • 1320 Hemphill Street – a 48,594 SF class A office building set to deliver December 2022 • Triune Centre – a 30K SF class A office building set to deliver December 2022

• One Ridgmar Center – a 75,769 SF class A vacancy

SUBMARKET INTELLIGENCE

Q2 2022 DFW OFFICE MARKET REPORT 21

STEMMONS CURRENT EVENTS

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

(47,297)

178,348

51,549

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

21.3%

21.0%

22.3%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

289,048

-

-

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$19.63

$20.31

$20.39

NEW DEVELOPMENTS • West Love | 1345 Mockingbird Lane – a 600K SF class A office building (proposed) • West Love | 2345 Mockingbird Lane – a 250K SF class A office building (proposed) • The Design District Tower – a 243,100 SF class A office building (proposed) • 2122 West Mockingbird Lane – a 158K SF class A office building • 2221 West Mockingbird Lane – a 150K SF class A office building (proposed) • River Edge | 161 Riveredge Drive – a 143,260 SF class A office building • 1333 Oak Lawn Avenue – a 122,788 SF class A office building • 1400 West Mockingbird Lane – a 66,504 SF class A office building (proposed) • 111 Glass Street – a 30K SF class B office building (proposed)

VITAL STATS 24.0%

200,000 150,000

22.0%

100,000 50,000

20.0%

0 (50,000)

18.0%

(100,000) (150,000)

16.0%

(200,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

LARGE EXISTING VACANCIES • Pegasus Park – 152,071 SF • Comerica Service Center – 145K SF • The Connection at 8600 – 101,530 SF • 8777 North Stemmons – 76,968 SF • 1300 W Mockingbird Lane – 55K SF

Dallas-based TXRE Properties purchased 1701 E. Lamar Boulevard, an 80K SF, twostory building in Arlington, from The Rainer Cos. TXRE properties is an investment, brokerage and property management company that has a service capacity of over 4.4M SF throughout Dallas, Fort Worth and Arlington.

22 Q2 2022 DFW OFFICE MARKET REPORT

SUBMARKET INTELLIGENCE

UPTOWN CURRENT EVENTS The Crescent has recently added several financial firms as tenants.

New York-based Atalaya Capital Management LP has leased 4,497 SF for a new operation. The private investment advisory firm provides debt for real estate and corporate clients. Dallas-based alternate investment firm Maraboyina Capital is taking 1,474 SF of office space.

Maraboyina Capital specializes in film, television, and media technology investments. Dallas’ Stonegate Capital Partners Inc. has also leased 1,960 SF. Additionally, The Crescent has had significant lease renewals from JP Morgan Chase, Paragon Associates, and UBS. With Uptown Dallas’ office buildings renting up ahead of schedule and at higher than expected prices, developers are hustling to get new projects started. Lincoln Property Commercial intends to start construction next year on its project at Cedar Springs Road and Fairmount Street. The 2500 Cedar Springs development would be one of the largest in the area between McKinney Avenue and Turtle Creek.

The planned office building will be twenty floors with around 525K SF of space. The development’s two residential towers will be along Routh Street facing the Quadrangle shopping center and the office building will face Fairmount.

California-based financial firm Houlihan Lokey has taken the top three floors of the Link at Uptown. The company will take more than 74K SF of space in the building, joining PMG Worldwide and Shearman & Sterling as major tenants in the 25-story highrise. The building is a project of Dallas-based Kaizen Development Partners and opened its doors earlier this year.

One of Dallas’ biggest development projects just got the go-ahead from the city’s planning commission.

Dallas-developer Trammell Crow Co. is working in partnership with Austin billionaire Michael Dell’s family investment firm to build the four-acre high-rise project on Knox Street east of Highland Park. The project includes luxury residential units, a boutique hotel, retail, offices, and a new park. A six-story office building with ground-floor retail would face Knox. The New York office of Australia-based Woods Bagot, New York-based Kohn Pederson Fox, and Dallas’ HKS are designing the development.

Absorption

vs. Prev. Qtr

vs. 12 Mths Ago

120,851

6,320

(180,575)

Vacancy

vs. Prev. Qtr

vs. 12 Mths Ago

16.9%

18.1%

16.8%

U/C SF

vs. Prev. Qtr

vs. 12 Mths Ago

833,691

833,691

1,150,982

Delivered SF

vs. Prev. Qtr

vs. 12 Mths Ago

-

-

-

Quoted Rates

vs. Prev. Qtr

vs. 12 Mths Ago

$42.52

$40.80

$41.71

TOP LEASE TRANSACTIONS • Bank OZK has signed a 110K SF lease in 23Springs.

• O’Melveny & Myers has signed a 75K SF lease at Harwood No. 14 Tower.

• Kilgore & Kilgore has signed a 10.5K SF lease at 3141 Hood Street.

HLC DEAL

• R.J. Reynolds has signed a 10.4K SF lease at 17Seventeen McKinney • Grand Caliber has signed a 7.5K SF lease in 2811 McKinney.

HLC DEAL

DEALS IN THE MARKET • McKinney & Olive – a 536K SF building with JLL

NEW DEVELOPMENTS • 2401 McKinney – a 673K SF office building (proposed) • Parkside Uptown | 1919 Woodall Rodgers Freeway – a 450K office building (proposed) • 23Springs | 2323 Cedar Springs Road – a 623K SF office building (proposed) • Harwood XII – a 542K SF office building (proposed) • Victory Center | 2371 Victory Avenue – a 466K SF office building (proposed)

VITAL STATS 20.0%

700,000 600,000

16.0%

500,000 400,000

12.0%

300,000 200,000

8.0%

100,000 0

4.0%

(100,000) (200,000)

0.0%

(300,000) Q2 19

Q3 19

Q4 19

Q1 20

ABSORPTION

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

DELIVERIES

Q1 22

Q2 22

VACANCY

• Harwood No. 14 – a 360K SF office building • The Quad | 2699 Howell Street – a 340K SF office building • 2850 Lemmon – a 180K SF office building (proposed) • Maple Terrace | 3001 Maple Avenue – a 135K SF office building • McKinney & Lemmon – a 82K SF office building (proposed)

LARGE EXISTING VACANCIES • Parkside Tower – 111,728 SF • 2501 Cedar Springs – 110,415 SF • The Centrum – 108,021 SF • The Link at Uptown – 74,805 SF • The Crescent Building 300 – 67,808 SF • 2401 Cedar Springs – 57,118 SF

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