Downtown Dallas Emerges as the Big Winner in 2018's Office Rental Race

When the fourth-quarter office leasing numbers for North Texas were finished, the big surprise wasn't just a surge in leasing.The really eye-popping result in the new data was that downtown Dallas topped the entire Dallas-Fort Worth area for net office leasing.Expanding and relocating business tenants net leased more than 354,000 square feet of space downtown in the fourth quarter. That's more office leasing that West Plano and Frisco and more than in the Telecom Corridor, according to the latest office survey from commercial property firm CBRE.What more proof do you need that the downtown real estate market has its mojo back?For years, downtown was the net loser in the competition for office tenants as companies exited the central business district for the 'burbs.Sure, Las Colinas, Legacy business park and the Telecom Corridor still get most of the big office deals.But in the final months of 2018, it was time for downtown Dallas to run up the score with new business moves."We are not used to seeing that much leasing in downtown's ZIP code," said CBRE senior vice president Fletcher Cordell. "Downtown continues to benefit from pricing pressure in Uptown and revitalization of the central business district."1900 Pearl made some big deals, and leasing in other buildings were also a factor," Cordell said. "Ross Tower and St. Paul Place made a bunch of leases."The surge in leasing downtown was strong enough that the central business district wound up as the top office absorption market for all of 2018, too, with more than 650,000 square feet of net leasing.Uptown was second with 440,781 square feet of net leasing.Even with the strong leasing in 2018, downtown Dallas has a lot of work to do. At the end of the year, almost 27 percent of downtown office space was empty -- one of the highest vacancy rates of any North Texas business district.Much of that empty space is in older buildings that are getting redone with hopes of bringing in more tenants.  Continue reading...