During the past few months there are many new additions of Dallas office space for rent. Because of the high demand for office space in particular markets the investors and developers are back in force adding new and remodeled Dallas office space opportunities for tenants.
No better evidence of this shift toward development is when a legendary Dallas family decides to become active in the development and investment in commercial real estate. It has been announced that Lamar Hunt family holdings is launching a a new firm Southwest Real Estate Development LLC. This new development firm is going to focus on real estate development opportunities in Dallas, Austin and Fort Worth.
So what does this news mean for the Dallas office tenant? I think it is good news for our clients. During the past year I have visited many buildings that have only one or two office spaces left to lease. This is placing and upward pressure on rental rates and a decrease in landlord concessions for tenants. Obviously some Dallas office markets are in need of new inventory. The Dallas uptown market and select areas of North Dallas are prime examples. As the new developments come on to the market they will give CEO’s what they want in an office space.
Hillwood is presently working on a possible three million square foot development on the north side of downtown Dallas. The rumored design is that it will be similar to the new State Farm campus in Richardson. They are also working on plans for a possible one million square foot high-rise at the corner of Woodall Rodgers and Field Street. This would be the first high-rise build since Chase Tower. I think that Hillwood sees a demand for Dallas office space for rent.
Throughout the Dallas area there are rumors of potential developments. An example can be found on a residential parcel of land surrounded by three cemeteries. This land is located in the McKinney/Uptown market. It appears tay a developer has approached this property owner and they want to purchase this land to develop a seventeen to a twenty five story high residential high rise. If this development is approved it will provide housing for more professionals that can attract additional companies to the area with more demand for office space.
Another outstanding development is Cypress Waters. Billingsley Company purchased this 1,000 acre property located at Beltline Road and LBJ Freeway and designed it for mixed use development. The project has many 180,000 – 250,000 square foot office buildings that have been build and plans for additional ones on the books. The Toyota finance company headquarters is presently considering a 60,000 square foot office lease at Cypress Gardens. Cypress Waters is one example of many new office park developments that are in the Dallas area that are increasing Dallas office space for rent.
The reason that the office developers can build these new projects is because rental rates have reached a level that the financing makes sense to invest in these new projects. As long as reasonable rates are available for office tenants and they are profitable enough for the developers to continue developing new projects we will continue to see an increase in new Dallas office space for rent..