DFW Office Market

[Tnekster]

They are dying to get back to the boom boom days of the late 90's.

[tamtagon]

Not again. The beginning of the end, just like in the 80s. Too much speculative up north.

It's on purpose. The biggest land owners with the biggest bank accounts force the submarket into a depression, then when all the other speculators are bankrupting their property back to the open market, those with a 15 year plan buy the cheap land and wait for the recovery.

I'm doubtful a complete crash in Collin County will happen, not like it happened downtown, however, should speculative building become too popular in Collin County, the greatest benefactor will be the CBD.

I also think the devil pictured above will find much of his downtown dormant inventory profitablly and sustainablly developed before 2010.

[X Factor]

Legal Consultants Rework Thanksgiving Tower Lease
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By Connie Gore <!--story_byline_credit_line--><!--/story_byline_credit_line-->
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Last updated: May 16, 2005 10:18am

DALLAS-Eliminating the risk of down time, the owner of Thanksgiving Tower in the CBD and a longtime tenant have inked a 13,216-sf lease to backfill class A space set to be returned in the summer. The stair-stepped pact for half of the 36th floor picks up basically as-is space now under the Bank One umbrella. The irony is the principals of Veritas Advisory Group Inc. previously occupied the office when they were with another law firm, says Art Green, managing director in Dallas for Studley. He tells GlobeSt.com that the three-year-old firm ripped up a lease set to expire in 2009 and replaced it with one that runs through 2012, adding two bumps to the rent. "It's nothing too dramatic," he says. The 1.4-million-sf building at 1601 Elm St. has a quoted rate of $18.50 per sf plus electric, according to the North Texas Commercial Association of Realtors' database.

Jon Altschuler, managing director with Stream Realty Partners in Dallas, says Veritas is expanding for the third time. The consulting group of seasoned attorneys started with 5,000 sf, then 6,500 sf and its present 7,000 sf on the 19th floor. "Now, they're at 13,000 sf," he says. "You can't ask for a better tenant."

Negotiations for the latest expansion began in fall 2004. Green says the firm's executives didn't really look outside Thanksgiving Tower's walls because they've been part of the roster, with one firm or another, since 1990.

Thanksgiving Tower's occupancy goes to 88% with the signing. Besides Green, Studley senior managing director Jim Nelms and associate Efrem Colmenero represented Veritas while Stream associate Preston Young was sitting at Altschuler's side for the talks for T Tower LP, an ownership group led by Macfarlan Real Estate Investment Management of Dallas.

"It's one of those great landlord-tenant relationships," Altschuler says. "Art takes us to the woodshed from time to time, but in the end we get the deal signed."

[X Factor]

WaMu Pits San Antonio Against Dallas/Fort Worth
<!--subtitle_line--><!--/subtitle_line--> <!--story_byline_byline_credit_line-->By Connie Gore <!--story_byline_credit_line--><!--/story_byline_credit_line-->
<!--/story_byline_byline_credit_line-->Last updated: May 18, 2005 07:20pm DALLAS-Washington Mutual Inc., with a national operations hub in North Texas, is holding a letter of intent to buy the 75-acre campus of WorldCom Technologies Inc. in San Antonio, but still has scouts on the ground in Dallas/Fort Worth. The state's latest sweetheart deal opens the door for WaMu's first regional operations center to ramp up by year's end. A WaMu spokesman tells GlobeSt.com that WaMu is holding a letter of intent to purchase the 275,000-sf, three-building campus at 20855 Stone Oak Pkwy--with 65 acres of vacant land. But, he stresses, the deal's not done. "We're leaving all our options open," he says, hinting some Dallas/Fort Worth locations have caught the financial giant's eye. "San Antonio certainly is at the top of our list." The clear advantage to the seven-year-old WorldCom campus, assessed at nearly $27.4 million by Bexar County, is the land could support up to one million sf of office space, he says.

The Clinton, MS-based WorldCom has a skeleton crew in one building, the fallout from the fall from grace as a one-time top employer in the city. A Trammell Crow Co. broker in San Antonio recently was courting tenants for a 135,000-sf building on the campus, quoting $17 per sf plus electric to open talks. But, then along came WaMu. "We never actually saw it officially come up for sale," says one San Antonio researcher.

The WaMu deal took center stage yesterday at an Austin press conference with Gov. Rick Perry and WaMu chairman and CEO Kerry Killinger, who put San Antonio as the lead horse due to "strong efforts" and "attractive incentives" by the city, county and local economic development group.

The seven-year plan will add 4,200 jobs. The size of the first hiring wave--like the location itself--is still undetermined, the spokesman says.

The regional operations center will be a WaMu first although it does operate several employee centers across the US. The decision comes just two years after WaMu seated its national commercial operations center in 50,000 sf of leased space at 555 Dividend Dr. in Coppell near Dallas.

The spokesman stresses the newest plan isn't geared toward consolidation of locations. He says WaMu intends to house back office functions in the facility although the team's still undecided which business lines will be serviced from the hub.

WaMu considered a build-to-suit, but nipped the plan. "We prefer to hit the ground running to get the operation and hiring up and running by the end of the year," the spokesman says. The Seattle-headquartered WaMu, part of a heated Texas race for branch banks, has more than 240 locations in the state and in excess of 3,500 employees.



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[Mballar]

It would be a big coup for Dallas if we could secure this deal.

[Tnekster]

^San Antonio is increasingly showing up as one of the big players in Texas.

[rantanamo]

could someone please translate that article?

[Tnekster]

Dallas has been emerging as a finance hub. I am a little surprised they would opt for SA over Dallas. Either way it will be good news for Texas. I wonder if a corporate office move will be in play in the next few years?

[tamtagon]

could someone please translate that article?

It seems like maybe a WaMu publicist (via Globest) is testing the waters to see if a better deal opens up in the DFW area? Hard to tell. SA and the gov really seem intent on replacing the WOrldcom void. But, you know, stir up some competition between SA and DFW area organizations: "strong efforts" and "attractive incentives" by the city, county and local economic development group.

This sounds like the same kind of million sq ft facility Citibank is building in Las Colinas - "regional operations center ... intends to house back office functions ...although still undecided which business lines will be serviced from the hub."

[X Factor]

<!--/image_line1--><!--/image_stack--> GlobeSt.com EXCLUSIVE: Lehman Chooses Team for Dallas Sale
<!--subtitle_line--><!--/subtitle_line--> <!--story_byline_byline_credit_line-->By Connie Gore <!--story_byline_credit_line--><!--/story_byline_credit_line-->
<!--/story_byline_byline_credit_line-->Last updated: June 3, 2005 07:27am DALLAS-Ending a face-off among all the top brokerage firms, Lehman Brothers yesterday gave the nod to Holliday Fenoglio Fowler to sell the largest block of CBD space to hit the market in quite awhile. Saint Paul Place and Harwood Center, with a combined 993,809 sf, join a growing roster of soon-to-be-marketed class A and class B-plus buildings in the metroplex.



GlobeSt.com has confirmed the HFF win over CB Richard Ellis Inc., Cushman & Wakefield of Texas Inc., Jones Lang LaSalle Inc., Rockwood Realty Associates Inc. and Trammell Crow Co. Word on the street is the New York City-based lender has taken back the CBD high rises in a gentlemen's agreement with the Witkoff Group, which bought the buildings in the mid-1990s. Assessed at close to $70.9 million, the 273,080-sf St. Paul Place at 750 N. St. Paul St. and the 720,729-sf Harwood Center at 1999 Bryan St. are just the tip of the proverbial iceberg of all that's coming up for sale in Dallas/Fort Worth.



The piece de resistance now being groomed for a sale is JPMorgan International Towers I, II and III, 1.1 million sf of premier space along the Dallas North Tollway. An HFF team also snared that win at the interview table with its owner, Ohio Teachers Retirement System. Given market conditions and the asset's quality, the prediction is it will take close to $200 per sf to win the deed. The trio's assessment hovers $152.8 million.



Meanwhile, sources say HFF and C&W made the short list for the assignment to sell the 835,044-sf Millennium Center at 222 W. Las Colinas Blvd. The New York City-based TIAA-CREF is looking to close the books on a seven-year hold of a 22-year-old asset with a $63.6-million assessment in the Las Colinas Urban Center.



And then there's Colonnade Properties LLC, taking the lead of Equity Office Properties to set up a market exit with a 1.1-million-sf, four-building portfolio sale. A Jones Lang LaSalle team will be marketing the play for the New York City owner, who picked up the Downtown Dallas and Las Colinas buildings in 1997 and 1998. The portfolio's assessment nudges $46.8 million.



Add what's coming up to what has already debuted and it sets up one of the largest shopping sprees in the region's history. "It will really test the depth of all this capital that we continue to talk about," Jack Eimer, president of the Central Region for Houston-based for Transwestern Commercial Services Inc., tells GlobeSt.com. "The story here is there are going to be some assets brought to market that a year or two ago would not have qualified as core, but today they'll definitely be pursued by core buyers."



In days gone by, a core buy meant high occupancy within the class A walls. "Because there's so much capital currently in the market looking for class A product, they're not being scared away by vacancy," Eimer says.



The JPMorgan complex is about 75% occupied. St. Paul Place, a class B with a CBD address, is 50% leased. Harwood Center is 70% leased. Millennium Center was hanging at roughly 50% until a recent leasing flurry pushed it closer to 80%. The Colonnade package has 651,058 sf of vacant space--playing out as half full or half empty, depending on the perspective.



Not only is there an abundance of class A and B-plus product for sale, but there's also no shortage of buyers, says Jason Mattox, senior vice president with Dallas-based Behringer Harvard Funds. Buyers of "all shapes and sizes" are shopping the streets of Dallas and select suburbs like Las Colinas. "The competition is very fierce," he says. "They'll have plenty of buyers for those assets."



How hungry is the investment market for Dallas-area space? That answer probably will come when the CB Richard Ellis team starts generating buyers from a quiet marketing of the empty 220,471-sf Waterway Tower at 433 E. Las Colinas Blvd., bought in January 2004 by Dallas-based Bandera Ventures Ltd. at a bargain-basement rate. Sources say the empty building is expected to turn a tidy profit even though it's been mothballed since it was bought.

[tamtagon]

-Ending a face-off among all the top brokerage firms,
-just the tip of the proverbial iceberg of all that's coming up
-now being groomed for a sale is JPMorgan International Towers I, II and III, prediction is it will take close to $200 per sf
-Add what's coming up to what has already debuted and it sets up one of the largest shopping sprees in the region's history.
-Not only is there an abundance of class A and B-plus product for sale, but there's also no shortage of buyers
-How hungry is the investment market for Dallas-area space?

Apparently, property investors in Dallas now believe both sides of a sale can be profitable. Tennants always follow the good business relationships associated with those investors who purchase with the intent to retain and/or manage the property.

As long as the quick turn folks are not able to 'sucker away' more than a year of property value profits (back- and forward) from potential landlords, then most of this cash coming from the over-valued West Coast and N and NE big cities will remain in the Metroplex, rather than moving back to the West Coast once the potential landlords realize they are not getting a good deal. The real danger is from a swarm quick-turn investors working into a spending frenzy the potential landlords. Buy now before it's too late!!!!! Once landlords are convinced to include a Profit/Loss line item for speculative increase to property value and therefore increase in rent, then bad purchase will strip the market place of the good business relationships in which owners and tennant can both make a profit and people start going bankrupt. In a matter of five years, billions of dollars of real estate equity can be extracted from a region to manifest as deposits into the bank accounts of quick-turn property investor artists. Should this happen (again) in Dallas, the only people left standing in another decade will be those currently owning hundreds of acres (Crow Holdings) and those with the cash to come in and sweep up the fragmented mess (Craig Hall).

The worst case scenerio is very unlikely, I think. There are too many big-time players with a stake to allow for such a run on the market. The demand for residential highrise space brings an even more stablizing component to the competitive land purchases. AND, the organizations which will loan people the money to buy and/or build are not going to bend the law so they can usurp the profits from real estate transactions.

What I think is vital to the 50 year plan is a significant expansion to existing central job centers. Downtown Dallas needs to host twice as many office workers and downtown Fort Worth needs to become more of a job destination.

Anyway, the turnover outlined in the GlobeSt.com exclusive is, IMO, a very good sign.

[noelamador]

San Jacinto Tower gets new name, look
http://www.bizjournals.com/dallas/st...wscolumn7.html
Christine Perez/Staff Writer

The new owner of San Jacinto Tower is planning a multimillion-dollar repositioning of the 33-story office building, including a reorientation and new address. As of June 1, the downtown property was renamed 2100 Ross Avenue. A partnership led by Toronto-based IPC (U.S.) REIT Inc. paid more than $56 million for the 844,000-square-foot tower last December. Trammell Crow Co. was tapped to market the property and moved its corporate offices to three floors in the building about four months ago.

Matt Craft, principal at Trammell Crow, said the property's main entrance would be moved from San Jacinto Street to Ross Avenue.

"When this building was built in 1983, most of downtown's core was to the south, so a southern entrance was appropriate at that time," he said. "Since then, development has shifted to the north. Especially with all the activity going on in the Arts District, we think it's appropriate to move the main entry to the north."

Andre Staffelbach with Dallas-based Staffelbach Design has created a new look for the Ross Avenue entrance and the building's lobby. Constructors & Associates Inc., also based in Dallas, has been named general contractor.

"The building will complement all of the new construction going on in the Arts District, such as the opera house and the Wylie Theatre," Craft said. "It will be updated from an early 1980s look to a moving-forward, late 200s type of building."

Construction will get under way in July and wrap up by the end of the year.

Craft and his team also hope to find a restaurateur to lease a 2,300-square-foot lobby space that could extend into an outdoor café.

"This is a great example of how a new owner can energize a property in a marketplace," Craft said.

[gc]

I like this move.

[X Factor]

Lets get some lighting on this tower. Maybe some colored lights going up the sides.

[Tnekster]

I especially like the cafe that extends outdoors. Ross is getting hot.

[tamtagon]

Ross is getting hot.

Ya! From the West End to the Arts District, Ross should become quite a downtown street. Is this stretch of Ross included in the city's streetscape efforts for beautification and pedestrian-friendly accommodations? If not, it should be. The 10-15 walk/stroll between the Arts District to the West End could be a very nice, and very urban-big-city transition from one activity to another.

[Tnekster]

Ya! From the West End to the Arts District, Ross should become quite a downtown street. Is this stretch of Ross included in the city's streetscape efforts for beautification and pedestrian-friendly accommodations? If not, it should be. The 10-15 walk/stroll between the Arts District to the West End could be a very nice, and very urban-big-city transition from one activity to another.

Imagine in the not to distant future a new headquarters building, performing arts center, new condos and maybe if we are lucky Hall will do something with the lone star site.

[X Factor]

WASHINGTON MUTUAL BUYS IRVING OFFICE BUILDING

IRVING, Texas (San Antonio Business Journal) – Washington Mutual Inc. plans to expand in Texas and has purchased the three-story, 124,000-square-foot Royal Ridge office building. The company plans to add 4,200 jobs in the next seven years.

The building at 3929 W. John Carpenter Freeway currently is home to the company’s national operations center, which handles portfolio management operations, multifamily lending and commercial real estate loans. With the purchase agreement, Washington Mutual is looking at expansion opportunities of up to one million square feet on the property. The transaction is expected to close before the end of this month.

Washington Mutual spokesman Joe Arbona stressed that this acquisition does not mean the company has made a decision to relocate its regional operations center to the Dallas area. The company is still considering location options

[gc]

Great to hear.

[rantanamo]

great to see so many jobs going to DFW lately. I was most skeptical if the job growth could occur to fill the 10 million persons predictions. Looks like the foundation is being set for it every day.

[Tnekster]

GlobeSt.com UPDATE: WaMu Levels 1M-SF Playing Field
By Connie Gore
Last updated: June 8, 2005 07:51am

IRVING, TX-Washington Mutual has handed an edge to Dallas/Fort Worth in a battle with San Antonio over a plan to develop a one-million-sf campus. Working an off-market deal, the financial giant is buying a 123,750-sf, class A call center that abuts 46 developable acres that could support its long-range plan.
"We really haven't made a decision on San Antonio yet," a WaMu corporate spokeswoman tells GlobeSt.com. "You could say it levels the playing field for Dallas." After spending just one month as a tenant, the Seattle-based WaMu has decided to exercise an option to buy the build-to-suit at 3929 W. John Carpenter Freeway from CarrAmerica Realty Corp. The sale is scheduled to close before the month ends. CarrAmerica declined to comment on the deal.

Neither side's talking about the price, but it's a safe bet that the building's poised to change hands for far more than the replacement cost, which sources peg at $120 per sf to $130 per sf or $14.85 million to $16 million. Given WaMu's credit and guaranteed long-term lease, the building most definitely would have fetched top dollar on the open market, industry sources say. Senior vice presidents Patrick O'Keefe and Anthony Bolner with CB Richard Ellis Inc. in Dallas represent WaMu in the off-market talks, which reportedly began a year ago.

In San Antonio, it's no secret that WaMu's negotiating for the three-building, 275,000-sf campus of the Clinton, MS-headquartered WorldCom Technologies Inc. The campus has 65 undeveloped acres along Stone Oak Parkway. For previous story, click here.

When CarrAmerica finished the build-to-suit in Royal Ridge, WaMu consolidated several sales offices in Irving and got extra room for its national operations center, which also takes up 50,000 sf at 555 Dividend Dr. in nearby Coppell. The WaMu spokeswoman says the decision to buy is tied to "the expansion opportunities of up to one million sf."

The Washington, DC-headquartered CarrAmerica's 91-acre Royal Ridge contains four other buildings: 501,556 sf of class A space that's 98% occupied, according to the North Texas Commercial Association of Realtors' database. The seller's website shows the 46 open acres are platted for 747,707 sf, but obviously WaMu believes there's room to play with the density. Nonetheless, there's some market speculation that the street-savvy WaMu is using Royal Ridge as leverage to get a heftier incentive package from San Antonio's economic development chiefs.

[Geaux Tigers]

Sounds to me like WaMu is perfectly happy having all it's Texas operations based out of DFW. Perhaps they're just trying to call San Antonio's hand to see what they're playing with down there. I'd bet that if SA doesn't sweeten the pot, we're looking at a done deal for WaMu's regional operations center being based in Irving.

BTW, I've heard Texas laws aren't very advantagous for bank headquarters, so I think this may be as good as we can get. Perhaps this is why we have so few big bank headquarters in Texas?

[tamtagon]

BTW, I've heard Texas laws aren't very advantagous for bank headquarters, so I think this may be as good as we can get. Perhaps this is why we have so few big bank headquarters in Texas?

I'm not very clear about the law, but there is something in the State Constitution which requires out of state banks and insurance companies (???) to establish some sort of HQ-variation if they operate within the state. Something like that.

There are so few big banks headquartered in Texas because, 20 years ago, many of the largest Texas-based Banks and Savings & Loans were operated by crooks. They got caught, a handful were punished, the rest quietly entered politics or rebuilt influential careers in other financial services industry segments (Many of those almost criminals - those who managed to avoid a conviction - continued on the good-old-boy circuit to become vaulted pillars of the community such as the mayor of a successful satellite city, top executives to some of the countries largest public energy-related companies, congressmen and the like.

These criminals - the punished and the unpunished - removed any opportunity for a Texas-based banks to expand onto the national scene, and paved the way for out of state banks to own the banking industry in Texas. It's a damn shame.

Nonetheless, there's some market speculation that the street-savvy WaMu is using Royal Ridge as leverage to get a heftier incentive package from San Antonio's economic development chiefs.

I would not be surprised if the Irving site is chosen for Washington Mutual's regional operations center. DFW is a superior location for an operation of this sort, despite the short-term lower entry costs provided by municipal and state incentives for the San Antonio location. The image I have of WaMu seems better suited to San Antonio, though, I dont know why.

[Lakewooder]

Why does the goofy name "Royal Ridge" remind me of "Blazing Saddles"?

[barrycb]

CSFB, Faison Hand Off Landmark CBD High-Rise for About $100M
By Connie Gore
Last updated: June 14, 2005 08:24am

DALLAS-Credit Suisse First Boston has bid goodbye to Dallas in a near $100-million sale of the 1.3-million-sf 1700 Pacific, coming off a yearlong repositioning to set up one of the biggest value-add plays in the CBD. The new owner is ready to unfold an aggressive lease-up strategy.


Word on the street is the Los Angeles-based Berkeley Investments paid close to the expected value of $100 million for a landmark asset that was on the market in July 2004, pulled for a repositioning and quietly shown to the buyer earlier this year. The rumored price for the 49-story building is right in line with projected upside from a 70% occupancy and an $82.6-million assessment by Dallas County. The new owner, who's not talking about the final price, hired the locally based Lincoln Property Co. to manage the asset. Trammell Crow Co. will continue to lease it.


Berkeley's Jon Hamilton tells GlobeSt.com that he's been pursuing the high rise since Boston-based CSFB and Faison Capital Advisors of Charlotte, NC brought it to market last year. It went under contract to another buyer, fell out and then was pulled for repositioning.


After looking at several deals, Hamilton says 1700 Pacific was "the best one" to surface. "So, I put in an offer that was easily higher than the offer before and essentially convinced them to sell," he says. Start to finish, the deal took four months to close despite complexities from multiple agreements over sky bridges, parking garages and repeated extensions from longtime tenants, he says, adding the title document alone had more than 2,000 pages.


Hamilton says the biggest hurdle was convincing lenders that the deal had merit although it was trading for significantly less than the replacement cost. "Downtown Dallas office buildings do not sell well on Wall Street these days," he says. The acquisition loan was floated by the New York City-based conduit lender, Ixis North America Inc. The JV sellers, which owned the class A building since 1986, had CSFB's former man on the street in Dallas, John Alvarado, a TCC senior vice president of investment sales, steering the sale.


After last year's extensive renovation, the 22-year-old high rise landed 90,000 sf of new leases. "His leasing strategy is to come in and continue the leasing momentum that we started in 2004 bodes very well for him," says Jeff Eckert, TCC vice president.


To continue the momentum, Berkeley intends to lob an aggressive play to fill the halls of 1700 Pacific Ave., which has a 382,000-sf contiguous block on floors one through 12 and another 161,000-sf stack in the mid-rise. The old rate was $15 per sf to $16 per sf plus electric. Hamilton says the new one is $10 per sf gross for the first year and $1 per sf for subsequent years. A five-year lease would work out to $12 per sf, without a tenant improvement allowance, and a 10-year lease would average $14.50 per sf. "It will be just for six months and then it will have to go back to market rates," he says. "Whatever it takes to fill up is what we're going to do." On the retail side, the work's practically done: 39,000 sf of fully leased concourse space and 9,000 sf open at street level.


Eckert and TCC's new senior vice president, James Esquivel, will be handling the day-to-day lease-up chase under the direction of principal James Yoder. Like its peers, the TCC team is in hot pursuit of several 200,000-sf to 300,000-sf leases and one 500,000-sf deal--all eyeing CBD space.


The 39-tenant building sold with no immediate near-term lease rolls, according to Eckert. The law firms of Thompson & Knight and Akin Gump are the top space takers with 180,000 sf and 140,000 sf, respectively.





I wonder if these tenants will be new to downtown, or just shopping for a better deal?

Also GC, what ever happened to the insurance company looking to move back to the San Jacinto tower?

[gc]

I wonder if these tenants will be new to downtown, or just shopping for a better deal?

Also GC, what ever happened to the insurance company looking to move back to the San Jacinto tower?

Great question. I'll see if I can find out something.

Re: Insurance Company - It still may happen, but the urgency does exist anymore.

[tamtagon]

I wonder if these tenants will be new to downtown, or just shopping for a better deal?

It reads like they are not currently CBD tennants to me, but who knows?? I would not be surprised if first time CBD tennants enough to fill 1,000,000 sq ft of office space are getting ready move in. I'd also guess that virtually all new LoMac office space will receive tennants w/o cannibalizing the CBD (Lincoln Plaza the primary exception).

[Insidetheloop]

Commerical Real Estate is a hot commodity. REIT's and REIT funds have been beating the S&P 500 for the past 5 years by double digits. The constant shuffling of ownership by these massive investment groups is merely to gain a better rate of return. I don't think it really has a whole lot to do with the overall health of downtown and there are not really any tea leaves to read in gauging what this all means. Just a transaction.

[barrycb]

It seems we are getting some inmigration from the burbs, and a lot of people are looking at downtown...

Quartet Locks In 150,173 SF of Trophy Space
By Connie Gore
Last updated: June 16, 2005 08:28am

DALLAS-A quartet of power players in the financial and legal arenas has taken down 150,173 sf in the Crescent, setting off a series of moves that includes a shuffle of the owner's regional office. The back-to-back signings have generated the most activity in five years for the 1.1-million-sf trophy.


The Crescent, with a reputation for long-time tenants, has hit 95% occupancy with two renewals and two newcomers. The short take on the deals is Bear Stearns Cos. Inc. renewed 34,396 sf and McKool Smith re-upped 88,249 sf while Credit Suisse First Boston USA Inc. moved into 17,227 sf and Stanford Group Co. grabbed 10,301 sf. The Houston-based Stanford signed a seven-year pact and the others pledged to stay for a decade in the Uptown collection of towers at 200 Crescent Court.


John L. Zogg Jr., Crescent's managing director of asset management, tells GlobeSt.com that the team's been courting CSFB and Stanford nearly six years. With leases expiring, CSFB moved from JPMorgan Chase Tower in North Dallas and Stanford left Metroport Office Building in Las Colinas.


Bear Stearns was practically a shoo-in renewal, but that wasn't the case with the McKool Smith trial firm. The 14-year tenant eyeballed every new building rising or planned for the CBD and Uptown. "They looked hard to see if they could reproduce what they had at the Crescent," Zogg says. "At the end of the day, they came back."


McKool Smith's wheeling and dealing was limited to Victory, Rosewood Court, Harwood International and the Crescent--all in the same economic ballpark. According to street talk, the stiffest competition came from Hillwood's Victory project. McKool Smith re-upped two years early after spending one year weighing the headquarters decision. The firm's four-floor lease in the 300 Building takes effect July 1, says Tony Click, Crescent's vice president of leasing.


Zogg says the New York City-based Bear Stearns re-upped a year early. The regional office spans the entire second floor in the 200 and 300 buildings. But, the plan calls for a move Aug. 15 to the 13th floor and part of the 12th in the 100 Building. Click says Bear Stearns pitted staying put in its 10-year spot against moving into a new finish-out and decided to shuffle rather than work around renovations.


The Boston-based CSFB took over the balance of the 11th floor in the 200 Building, picking up the last of 50,000 sf vacated a few years ago by the Thompson Coe Cousins & Iron law firm. Click says the deal was timed to coincide with Thompson Coe's lease expiration.


Stanford set up shop in temporary space to allow time for a shuffle of Bear Stearns and Crescent Real Estate Equities Co.'s regional office. The regional team is taking over 10,000 sf of Bear Stearns' space when it moves and vacating the fifth floor of the 300 Building for Stanford.


The Crescent's reputation keeps the halls filled despite having the highest prices in the city: $32 per sf to $36 per sf. Still, it does occasionally lose a name. The team just learned Monday that a top law firm--a 20-year tenant--will be vacating 88,000 sf on the upper floors in the 100 and 200 buildings. The firm's partners are looking to land in the CBD. "We haven't had a block like this since KPMG left five years ago," Click says.


Click says he's already holding two request for proposals for the high-brow address, which doesn't open up until mid-2006. "There were people kind of hovering," he says. "They were waiting to see what they were going to do."


It's not always easy to get through the Crescent's door, aside from the availability of space. The landmark's owner has been careful to cherry pick the financial and legal industries for tenants. At last count, there were 70-plus financial services firms on the roster. "It's real important to get the right customer mix," Zogg says. "This customer list is as good as it gets. There's not a better list in any project in the country."


Click negotiated the deals for the owner, Crescent TC Investors LP. Carl Ewert and Jeff Staubach, both with the Staubach Co., represented McKool Smith. Paul Whitman and Brad Selner, also with Dallas-based Staubach, ran talks for Bear Stearns. CSFB's broker was Jay Annand with CB Richard Ellis Inc. and Stanford had CBRE's Peter Danna bargaining on its behalf.

[gc]

That is what I like to see.

[Tnekster]

^ditto, and IMO it is just the beginning of what we will see more of in the future.

[barrycb]

The team just learned Monday that a top law firm--a 20-year tenant--will be vacating 88,000 sf on the upper floors in the 100 and 200 buildings. The firm's partners are looking to land in the CBD.

The best case scenario is this tenant is moving to Fountain Place to help fill the void after Hunt builds his new tower. Obviously the Crescent will easily be able to replace them.

[drumguy8800]

As of June 1, the downtown property was renamed 2100 Ross Avenue

How creative.

[Columbus Civil]

The urban hipster would argue that it's minimalist.

[Mballar]

^LOLOLOLOLOLOL. Keep 'em commin CC!

[Lakewooder]

Today's DMN Living section has a photo of a "the downtown urchin look", with the following story:

On the bright side



Tangerine, magenta, royal blue – guys are giving themselves a flashy new look this season with bold, splashy colors


04:32 PM CDT on Wednesday, June 15, 2005

By DAVID COLMAN / The New York Times

If you are wondering why some of today's most sophisticated men's stores – Polo Ralph Lauren, Bergdorf Goodman Men, Barneys New York – are stocked with enough color to resemble the team uniform section of a sporting goods shop, well, perhaps that's fitting. Color has become practically a contact sport.

Retailers say that traditional two-button cotton sport coats and pinwale corduroys struck by a lightning bolt of color have become some of the hottest sellers. And in a rare meeting of minds, old-school retailers such as Paul Stuart are sharing a design aesthetic with edge-of-fashion lines such as Burberry Prorsum and Duckie Brown.

"The first thing that blew out of Barneys was all the color," says Daniel Silver, a partner in Duckie Brown.

"When we were designing it, we were thinking, 'It's so bright. Are guys really going to buy this?' But they have. It's like someone knocked down the wall between the his and hers closets."

The trend appeals to men who want to express a bold streak. But it has an august precedent as well, in the late, great NBC peacock, Johnny Carson. In 1973, when country clubs swarmed with pants and blazers of every hue, Mr. Carson's own fashion line was the best-selling men's tailored clothing line in the country, according to Homi Patel, the chief executive of Hartmarx, which owns the line. In 1973 alone, 80,000 electric-blue sport coats (with five-inch lapels!) were sold.

Unlike many looks with roots in the past, this one is a study in jarring contrasts. It has both the edge and cheek of early '80s New York, when Day-Glo color fueled the New Wave scene, and the ease and entitlement of an early '70s Republican enclave in Palm Springs.

"The roots are in that country-club thing," says Joe Zee, the editor of the menswear magazine Vitals. "The edge is in its conservative aspect."

Striped shirts and plaid jackets can play into a conservative look, but solid colors, Mr. Zee suggests, are bolder.

"Men are more used to pattern," he says. "So a pink striped shirt is easier for a lot of guys than an all-pink shirt. That's a more specific fashion statement."

No sector has taken up the call to color more than the hip-hop world, in which dandies such as Usher, Farnsworth Bentley and Andre 3000 of OutKast (hard at work on a fashion line called Benjamin) will wear, and combine, the splashiest of colors.

"You have urban rappers from Nelly to Puffy saying, 'I can wear this without being a sissy,' " says Mr. Zee.

Chris Chambers, a dapper vice president for publicity at BMG Music, feels the pull.

"There's definitely a mixture of an urban thing with classic country club," he says. "I'll wear the pink Ralph Lauren blazer but maybe not with the white slacks they show. I'll wear it with some Evisu jeans and a cool sneaker."

Still, it takes guts. "I think a solid, bold color looks fresh, but you have to have a level of confidence for it," says Mr. Chambers.

What makes the look less brash and more appealing, he adds, is its history as the one-time uniform of 19th-hole golfers everywhere.

Ross Geisel, a Manhattan fundraiser, has taken a shine to color because of its associations with a life of gentlemanly ease.

"I can get away with wearing it to work, and then if you go out afterward, you don't look like you came from the office," says Mr. Geisel.

Another reason he likes extreme color is that there are so few rules about wearing it. That, he maintains, makes it easier, not harder, to dress.

"It doesn't matter what you do," he says. "I have a loud pink shirt on today with a corduroy chocolate-brown blazer. I can wear it spring, summer or fall, with any shoe I want."

Even with his outlaw attitude, he says the style reminds him of his father's country-club clothes. But the concept of Johnny Carson as a symbol of style is lost on him.

"All I remember is Carnac," he says.

[Tnekster]

Bank One Center

Leading International Law Firm Opts for Full Floor in Bank One Center
By Connie Gore
Last updated: June 23, 2005 09:28am

DALLAS-One of the nation's leading law firms will be taking down a full floor in Bank One Center after spending nine months in executive suites. The 22,250-sf, class A lease is sealed with a five-year term and a pair of three-year options.
Morgan, Lewis & Brokius, headquartered in Philadelphia, will light the 60-story building's 32nd floor Sept. 1. The 14-attorney office, with more lawyers en route, first marched into the Southwest last fall when it started to fill the majority of the privately operated executive center on the 34th floor of the 1717 Main St. high-rise.

"We were able to drive an aggressive deal with a great deal of flexibility to grow," the law firm's broker, Marti Nemer, senior vice president for Jones Lang LaSalle's Dallas office, tells GlobeSt.com. She says the initial search crisscrossed the metroplex, but quickly zeroed in on the CBD and a short list with two class A buildings. "It became clear that this one was the best fit," she says "It certainly was to the owners' advantage that they were already in the building."

Don Dowell, Bank One's leasing director for Chicago-based Trizec Properties Inc., says several factors were key to the decision to cut into the going rate of $20 per sf to $23 per sf plus electric. "This is a large national firm so the potential for them to grow is pretty good and it's good credit so you tend to be more aggressive," he says. "We were pretty aggressive."

Law firms account for 60% of the tenants in the 90%-leased, 1.5-million-sf Bank One Center, according to Dowell who's been working on the deal since last year for joint venture owners, Fort Worth-based Crescent Real Estate Equities Co. and Trizec. Morgan, Lewis & Brokius will light one of two floors vacated in January by the Hermes, Sargent & Bates law firm and gets a first right of refusal on the other one, which has a connected stairwell to its future office, Dowell says. "That was one of the endearing aspects of this is that we could offer them future growth," he says.

Nemer says Morgan Lewis & Brokius started the Dallas office with seven attorneys, jumped to 11 and then doubled during the negotiations. The firm, founded in 1873, has more than 1,200 attorneys in 19 offices worldwide.

The 32nd floor's overhaul begins next week. JR Thompson, a Dallas construction company, is the finish-out contractor.

[gc]

As I have said before. I'll take it one slice at a time....

[Tnekster]

^The slices appear to be coming along a little faster these days.

[X Factor]

Mortgage Banker Cuts Direct Deal for Cityplace Center Floor
By Connie Gore
Last updated: June 24, 2005 09:24am

DALLAS-After a three-year stay on a subleased floor, a mortgage banking compliance firm has sealed a direct deal for 25,832 sf of class A space in Cityplace Center. The five-year lease kicks in Aug. 1 when the sublease expires.

McGlinchey Stafford & Youngblood & Bendalin narrowed its yearlong search to Cityplace at 2711 N. Haskell Ave. and Campbell Center at 8350 N. Central Expressway, but opted to keep its office as-is when negotiations headed into the final stretch, Grant Laughlin, president of Laughlin Commercial Realty Group in Dallas, tells GlobeSt.com. "They got pretty aggressive," he says. "It was a good deal and it made a lot of sense."

According to information on the North Texas Commercial Association of Realtors' website, Cityplace, owned by locally based Prentiss Properties, has its class A space on the market for $24 per sf plus electric. Campbell Center's class A quoted rate is $17.50 per sf to $18.50 per sf plus electric.

Laughlin says the New Orleans-headquartered mortgage banker began an extensive search about a year ago for replacement space. The firm occupies the 27th floor, one of two once filled by Minneapolis-based RBC Dain Rauscher Inc. Duane Henley with Prentiss Properties steered talks to retain the name for the 1.4-million-sf Cityplace Center, better known as the longtime headquarters of 7-Eleven Inc.

[noelamador]

Downtown Dallas -- comeback kid?
http://www.bizjournals.com/dallas/st...y2.html?page=2
Chad Eric Watt and Christine Perez
Staff Writers

A national law firm is expanding in downtown Dallas, becoming the first out-of-town company to sign a big new lease there in years.

Philadelphia-based Morgan Lewis, with 1,200 attorneys, is one of the nation's largest law firms. It opened shop in Dallas last September when it hired away seven lawyers from Jenkens & Gilchrest, the firm crippled by giving bad tax shelter advice.

The new Morgan Lewis team has been operating out of executive suite space in Bank One Center at 1717 Main St. in downtown Dallas. It's now taking a full floor there -- about 23,000 square feet.

Morgan Lewis now has 14 attorneys and 25 total employees in Dallas; its new office space can handle up to 90 lawyers and support staffers.

The 60-story, 1.5 million-square-foot skyscraper is jointly owned by New York-based Trizec Properties Inc. and Fort Worth-based Crescent Real Estate Equities Co.

Don Dowell with Trizec represented the landlord in the deal.

"It's great news for the market," he said. "Not only is it an indication that the legal industry feels Dallas isn't at a saturation point, that there's room for another large player, Morgan Lewis chose to move to the central business district. They see downtown as a place to be for a long time into the future."

The deal takes Bank One Center to about 89% occupied. The largest block of available space totals 75,000 square feet, but negotiations are under way with a tenant that would take about two-thirds of that, Dowell said.

"We're involved in several transactions right now; some of them, like Morgan Lewis, are new to Dallas. All of them are new to the CBD," he said.
Momentum shifts

Dallas-Fort Worth led the country in corporate expansions and relocations in 2004, according to Conway New Plant Database and Site Selection magazine, but all of the big deals went to suburban markets.


Dowell said the momentum is shifting. He points to the new $124 million tax increment finance district recently approved by the Dallas City Council; Forest City Enterprises' planned conversion of the Mercantile Complex and other vacant buidings; Billingsley's Co.'s plans to build a 23-story, $100 million mixed-use tower in the Arts District and the plethora of residential redevelopments going on downtown as evidence of the trend.

"We've been through five years of not much activity," Dowell said said. "It's good to see the market turn."

Morgan's Dallas office is made up of lawyers that specialize in employee-owned businesses, employee benefit work and intellectual property.

The Dallas attorneys knew Morgan Lewis lawyers from working on several transactions they had done, said John Kober, now the managing partner for Morgan Lewis in Dallas.

They liked what they saw about how the firm treated its clients, and its lawyers, he said.

Morgan was looking to open its first office in the South. Its nearest sister office is in Chicago.

"They didn't have a presence in Dallas, but they were here quite often," Kober said.

In its Dallas hires, Morgan has gotten a national practice specialized in employee stock option plans, led by Kober. Morgan Lewis attorneys are happy to share their clients with other colleagues, he said.

"They gave us the opportunity to get with a great group of lawyers and expand our practice," Kober said.

The Dallas office has room to grow, but it will do so methodically.

Rather than shooting for a particular quota of lawyers, Kober said, the firm is looking to add good, like-minded attorneys.

"Our goal is to grow the office with great lawyers who share the vision of Morgan Lewis," Kober said.

Morgan is not necessarily looking to build a self-contained full-service Dallas operation. Its local attorneys have the resources of the very large, full-service firm elsewhere, Kober said. Rather, it will look to add top-flight attorneys here.
Lawyers' mecca

Morgan Lewis joins at least nine other law firms that call Bank One Center home.

Marti Nemer, a senior vice president with real estate services firm Jones Lang LaSalle, represented Morgan Lewis in the deal. She said the five-year lease is a good fit for a law firm that plans to grow in Dallas.

"This was the best structure in terms of growth," Nemer said. "We looked at property ownership. In the long term we knew they'd be taken care of."

Morgan Lewis plans to move in to its new 23rd-floor office by September. Dallas-based J.R. Thompson is building out the space; Interprise, based in Addison, designed the interiors.

Mike Rosa, vice president of economic development for the Greater Dallas Chamber, said interest in urban Dallas is picking up.

"Uptown and inside the loop and even downtown have recently become more appealing to companies," he said. "Of course law firms and banks are always good fits for downtown, and at this point in time, we happen to have good office space available."

Said Rosa, "It's a good thing when businesses feel the need to have a presence in our market."

cperez@bizjournals.com and cwatt@bizjournals.com

[noelamador]

Metzler goes Galleria shopping
North Tower II purchase continues trend of West Coast interest in Dallas
http://www.bizjournals.com/dallas/st...27/story4.html
Christine Perez/Staff Writer

Another West Coast real estate investor has made its first Dallas buy.

Seattle-based Metzler North America Corp. paid more than $200 per square foot, or about $62 million, for Galleria North Tower II, a 13-story office building near the Galleria shopping center in North Dallas.

Chicago-based RREEF, which paid about $170 per square foot for the property in late 2002, was the seller. Houston-based Hines developed Galleria North Tower II in 1999.

Metzler N.A. is a subsidiary of Bankhaus Metzler, the oldest, privately held investment bank in Germany. Based in Frankfurt, the bank still is owned exclusively by members of the founding family.

Sources at Metzler did not return calls seeking comment.

According to the company's Web site, its investment strategy focuses on single and multitenant properties in good locations valued at $10 million to $200 million-plus.

Russell Ingrum and Gary Carr with CB Richard Ellis Inc. put the transaction together. The duo also represented Hines in its sale to RREEF three years ago.

Ingrum referred questions about the deal to Metzler's Seattle office, but did say Dallas is attracting more West Coast buyers.

"We've seen a lot of investors out of the coastal markets because pricing is so much more attractive here on a relative basis," he said. "Interest is very strong. We're seeing a lot of investors that have either been out of Dallas for a while, or never bought in Dallas before, all looking hard for properties here."

Andrea Peskind, senior director at Cushman & Wakefield of Texas Inc. , represented Hines in the sale of Galleria North Tower I to Chapel Hill, N.C.-based Franklin Street Partners last year, as part of a four-building, $260 million portfolio. At the time of the sale, the property was 100% leased to Tenet Healthcare Corp., which continues to fully occupy the building.

"The Galleria location is one of the few in Dallas that is irreplaceable, and institutional investors recognize it as the epicenter of the Dallas real estate market," Peskind said. "Investor interest in Dallas office buildings continues to increase due to the abundant supply of capital that's available for real estate transactions today."

Galleria North Tower II is 100% leased to 11 tenants, including Broadlane, a health care consulting concern, and Merit Energy, an oil and gas investment company. Metzler has tapped Capstar Real Estate Services to lease and manage the 310,000-square-foot building.

Jay Bailey will oversee leasing of Galleria North Tower II for Capstar.

cperez@bizjournals.com

[noelamador]

GlobeSt.com EXCLUSIVE: Atmos Adds 103,000 SF at Lincoln Centre
http://globest.com/news/314_314/dallas/135620-1.html
By Connie Gore
Last updated: June 27, 2005 08:16am

DALLAS-Atmos Energy Corp. has seated the former TXU Gas team in about 103,000 sf of class A space in a quietly orchestrated lease for Lincoln Centre II. Atmos, which houses its 145,000-sf headquarters right next door, has shopped, signed and settled in the team within three months.

The expansion runs concurrently with Atmos' headquarters lease, which was renegotiated last year with a 12-year term, Steve Jarvie, senior vice president for Dallas-based Staubach Co., tells GlobeSt.com. The group is filling the top three floors of the 19-story Lincoln Centre II at 5420 LBJ Freeway.

"We definitely looked at other places, but obviously with the headquarters and the space being there, it just made sense," says Jarvie, who teamed with Staubach executive vice president Scott Collier to negotiate the deal for Atmos. Jarvie says Lincoln Property Co., represented in house by David Quisenberry, was "very aggressive" with pricing.

"It was a good deal," Jarvie says. "It was comparable with what they got on their headquarters renegotiation."

Jarvie says the three floors of long-empty space came with a finish-out allowance pushing $30 per sf. The deal includes a first right of refusal on another full floor in the 612,462-sf Lincoln Centre II. According to a local database, the class A space's quoted rate hovers $20 per sf.

Atmos went in search of office space for the TXU team after donating its five buildings with 401,300 sf in Downtown Dallas to the city. Despite rumors to the contrary, Atmos' execs made it clear when it turned over the deeds that it never considered moving its 19-year, four-floor headquarters from Lincoln Center III at 5430 LBJ Freeway.

[Tnekster]

Fountain Place Tenant Re-Ups, Expands With Full-Floor Lease
By Connie Gore
Last updated: June 29, 2005 09:05am

DALLAS-After shopping the market for roughly 10 months, the Crouch & Ramey law firm has re-upped and expanded a trophy lease in Fountain Place. The full-floor lease for the six-year tenant will drive a relocation within the 60-story downtown landmark.
Kirby White, leasing director for the Fort Worth-based Crescent Real Estate Equities Co., tells GlobeSt.com that the firm will move before September from 14,122 sf on the 23rd story to the 18,622-sf 36th floor of the 1.2-million-sf high-rise at 1445 Ross Ave. White says the building owner, Crescent Fountain Place LP, got the floor back last month in accordance with last year's agreement with the Jenkins & Gilchrist law firm, which still occupies nine floors of the 94.1%-leased trophy.

Crouch & Ramey's broker, William McClung with Cushman & Wakefield of Texas Inc., started searching in fall 2004 for expansion space. The firm's existing lease expires at the end of this year. "We were in fairly serious talks last fall," White says, "but it took awhile to work out the details." The freshly inked deal has a four-year term, he says.

With the 36th floor staying tied to a law firm, finish-out will be minimal, according to White. "The space fits well for their needs," he says.

White has four more deals in the hopper to fill another 25,000 sf in the trophy and has bed down all significant rolls for this year. "It's been a pretty good spring and summer so far," he says. The stepped-up activity is translating into finished deals hitting closer to the building's top quoted rent of $26.50 per sf. "The average rate we've gotten in the last few months is $25 per sf plus electric," he says.

[barrycb]

GlobeSt.com UPDATE: WaMu Picks San Antonio Over Dallas
By Connie Gore
Last updated: June 29, 2005 12:12pm

DALLAS-Ending the dueling over a potential one-million-sf regional campus, Washington Mutual will plant the flag in San Antonio after nearly four months of pitting the Central Texas city against Dallas/Fort Worth. The decision, seeded by the Texas Enterprise Fund, includes the acquisition of a three-building, class A office campus from WorldCom Technologies Inc.
WaMu, Gov. Rick Perry and a host of local and other state officials dropped the news at a press conference today in San Antonio. Details about the deal will be forthcoming after officials exit the media blitz over one of the largest job creation announcements in the US to date this year. As previously reported, WaMu will add up to 4,200 jobs over the next seven years. The existing 405,000-sf MCI San Antonio campus on 75 acres at 20855 Stone Oak can hold as many as 2,250 workers, but it comes with 65 acres of developable land. For previous story, click here.

According to the WaMu's press release, the regional center will support consumer banking and home loans, but could include other business lines. The facility will come on line this year in an expansion of WaMu's enterprise contact center.

"This is the biggest project the San Antonio Economic Development Foundation and city leadership have ever pursued in terms of the number of jobs," Ed Kelley, chairman of the San Antonio Economic Development Foundation, says in the release. "Washington Mutual's regional operations center will very likely be among the largest corporate locations in the nation for 2005."

[freewaytincan]

Could have used that in Richardson.

[rantanamo]

win some lose some. The metroplex has done a great job in adding jobs this year with or without this.

[freewaytincan]

I'm going to refrain from making the obvious U2 pun.

[noelamador]

GlobeSt.com UPDATE: WaMu's Plan Still Includes DFW
By Connie Gore
http://globest.com/news/317_317/dallas/135784-1.html
Last updated: June 30, 2005 09:47am

DALLAS-With the dust now settled on the news, Washington Mutual Inc. is ready to ramp up the plan to buy and occupy the MCI San Antonio campus during the fourth quarter. And though San Antonio won the duel with Dallas/Fort Worth, North Texas isn't being left out in the cold.

Citing the strength of its multifamily business line, a WaMu corporate spokesman tells GlobeSt.com that the plan is to grow the North Texas-based division even more. Earlier this month, WaMu bought a 123,750-sf, class A call center with 46 abutting developable acres in Irving that seemingly leveled the playing field in the bid for the nation's largest job creation in recent years. "It will help with future growth in our national operations," the spokesman stresses. "It will be good to be able to have the available space." The immediate focus, though, is on MCI's 75-acre campus at 20855 Stone Oak Parkway in North San Antonio.

In 30 to 90 days, the Seattle-based WaMu will start the hiring process for the first wave of jobs, which will total 4,200 over the next seven years. The three seven-year-old buildings, totaling 405,000, are still being evaluated for modifications, the spokesman says, adding the team's also jumped into discussions about a campus expansion. Key to the deal is the site's build-out capability of one million sf.

Under the deal terms, the Clinton, MS-based MCI Communications Corp., part of WorldCom Technologies Inc., is keeping a 500-employee operation in place at one of the three buildings. WaMu's spokesman confirmed a lease has been signed, but neither side will talk about how much space or how long the group's planning to stay.

The Texas Enterprise Fund kicked in $15 million for the WaMu win. San Antonio and Bexar County anted up the economic incentives with another $3.6 million for training, renovation and site acquisition, according to the spokesman. As for the final price, buyer and seller are mum. The property, though, is assessed at $27.4 million by Bexar County. For previous story, click here.

[noelamador]

Office demand makes a jump
http://www.dallasnews.com/sharedcont....6093d6df.html
Realtors see Dallas-area leasing increase by 1 million square feet
11:27 PM CDT on Thursday, June 30, 2005
By STEVE BROWN / The Dallas Morning News

After a slow start in the first quarter, demand for office space in the Dallas area has bounced back with more than 1 million square feet of net leasing.

Of course, developers and building owners want more.

"I don't think things are as strong as they were at the end of 2004, but there are positive signs," said Matt Heidelbaugh, a director at Cushman & Wakefield of Texas Inc.

"Things are still not improving as fast as we thought they would."

Cushman & Wakefield's preliminary office market numbers for mid-2005 show about 1.2 million square feet of net leasing in the Dallas area. In the first quarter, net leasing was down about 85,000 square feet.

"We need to see more, but we will take positive absorption," said John Zogg, senior vice president of Crescent Real Estate Equities Co.

"It is consistent with what we are seeing in our buildings."

North Texas office leasing has a way to go before landlords can overcome about a 25 percent overall vacancy and raise rents, Mr. Heidelbaugh said Thursday.

"Rental concessions have dried up a bit, but it's still a tenant's market," he said.

That's especially true in places that are still losing office tenants.

The mid-cities, Arlington and even the hot Uptown and Turtle Creek office markets have lost tenants through the first half .

Other business districts that had seen big tenant consolidations and move-outs in recent years ? including Las Colinas and Richardson's Telecom Corridor ? came out on top of the leasing market. The Telecom Corridor alone accounted for more than half of the Dallas area's net leasing in the first half of 2005, according to Cushman & Wakefield.

The booming office districts at the north end of the Dallas North Tollway near State Highway 121 in Frisco and the Legacy business park have also had significant leasing.

"It certainly seems that way," said Greg Fuller, managing director of Granite Properties, which just broke ground for an office tower near the tollway.

"We have over 200,000 square feet of lease proposals out on our new building, which is a lot more activity than we had on our other two projects at this stage."

But businesses are taking a long time to do deals, he said.

"People aren't making choices quickly, and everybody scrutinizes their decisions."

So far in 2005, the increases in office leasing are in suburban buildings.

In the downtown market ? which still has about a 30 percent vacancy rate ? net leasing was down by a scant 468 square feet.

Citywide, the amount of sublease office space on the market has dramatically declined in the last year.

"Some of that space has been leased, and a lot of it has gone back into direct vacancy" as leases expired, Mr. Heidelbaugh said.

E-mail stevebrown@dallasnews.com