WHAT IS GOING ON IN COMMERCIAL REAL ESTATE TODAY?
CAPITAL MARKETS SETTLING
Dallas, Texas
NEW CONSTRUCTION
Dallas, Texas
2023 CONVERSIONS
Dallas, Texas
2024
As the capital markets world settles in 2024 with the potential for rate cuts our team expects to see increased investment sales activity. For buyers this will create incredible opportunities to acquire quality office product at a low basis. For sellers with looming debt maturities and lending partners losing patience this will potentially sting. Either way our market needs a basis reset and we expect to see signs of this in 2024 and into 2025. Tenants are showing confidence in making long-term decisions and investors are more willing to take office deals to their investment committee, both reasons for optimism in the office market. All signs point to 2024 being a great year for the market and we remain grateful to our clients for trusting Stream with their business and hope to see you all in person at some point this year as we right the ship!
2023
2023 was a big year for new construction across multiple submarkets. Wells Fargo kicked off their 850,000-square-foot corporate campus in Irving, set to deliver in late 2025. Additionally, State Bank of Texas is building a new hub at the intersection of O’Connor Boulevard & Las Colinas Boulevard, which is 100% leased to the bank and scheduled to deliver in the first quarter of 2024. Meanwhile, Goldman Sachs and Hunt Realty started construction on the bank’s new 800,000 square foot campus at NorthEnd in Victory, and KDC broke ground on Parkside Uptown where Bank of America will be taking 238,000 square feet of the 450,000 square foot building. In the Upper Tollway there are six new office buildings under construction totaling approximately 2.0 million square feet. Collectively, these assets are 38 percent pre-leased, which means in 2024 the submarket will have 1.2 million square feet of speculative office space adding to the vacancy challenge that already exists in the Upper Tollway.
2023
This year was the year of conversions, and we expect this trend to continue as investors and municipalities work to figure out the highest and best use for obsolete office buildings in specific submarkets. As of last quarter most conversions are along the Lower Tollway (Residential & Industrial), Las Colinas (Industrial) and Downtown (Residential & Hotel). Outside of the conversion activity, Dallas-Fort Worth saw investment sales activity pick up with multiple closed transactions in the fourth quarter. A few notables included One Legacy Circle in the Upper Tollway (Landsmanas), State Farm Campus in Richardson (Robert Sarver), Plaza of the Americas downtown (Shelbourne) and Parkway Centre IV in the Upper Tollway (BH Properties).
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